Author: David Klemt

Old Fashioned cocktail on table
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7 Days Until Old Fashioned Week!

7 Days Until Elijah Craig Old Fashioned Week!

by David Klemt

Old Fashioned cocktail on table

In just seven days operators, their front-of-house teams and guests will have the opportunity to participate in Elijah Craig Old Fashioned Week.

Those who choose to join in on the fun will help generate funds for crucial cause. Further, participation means joining forces with some revered heavy hitters in the industry.

For example, Broken Shaker’s Chicago and Miami locations are taking part, as is Cure in New Orleans. Birdie G’s in Los Angeles, the Denver outpost of Death & Co., and Houston’s Julep are also participating. And then there’s LA Jackson from Nashville, the legendary Leyenda in Brooklyn, DC’s Silver Lyan, and Philly’s R&D all joining the cause.

A Great Cause

As stated, this is more than a cocktail promotion. Elijah Craig Old Fashioned Week supports an important cause and fantastic organization.

The cause is providing F&B professionals who are struggling with financial assistance, and the aide comes from the Southern Smoke Foundation.

Since 2015, Southern Smoke has been dedicated to raising funds to help individuals in the F&B space. The non-profit organization strives to help our industry peers in need persevere through crises.

From raising funds for the MS Society, establishing the Emergency Relief Fund, and providing free mental healthcare, Southern Smoke consistently proves themselves a trustworthy industry partner. By 2021, Southern Smoke had donated more than $5 million in financial aid to industry workers affected by Covid-19.

Take Part

Elijah Craig, the storied small-batch bourbon and rye producer in the Heaven Hill Distillery portfolio, makes participating simple and fun.

Unsurprisingly, we at KRG Hospitality love an activation and promotion that’s easy to execute and fun for everyone in the building. This year, Elijah Craig Old Fashioned Week takes place from October 14 through October 23.

To help raise money for Southern Smoke’s crisis management mission, encourage your bar team and guests to post pictures of their Old Fashioneds to social media. All one has to do is include tag @ElijahCraig and the hashtag #OldFashioned Week. Elijah Craig will take it from there, donating $5 for every post up to $100,000.

I’m confident that over the course of ten days we can all come together and flood social media with 20,000 images of delicious, well-crafted Old Fashioneds.

To learn more about last year’s Old Fashioned week, listen to Bar Hacks episode 52. Our very special guest on this episode is Lynn House, the 2022 Best US Brand Ambassador Spirited Award winner.

Get Creative

Now, I’d normally include the particular drink recipe here but I think—I believe—we all know how to make an Old Fashioned by now. So, I’m going to encourage all participating operators and their bar teams to create a small, signature Old Fashioned LTO menu or Elijah Craig Old Fashioned Week.

Also, to get those creative juices flowing, here’s the recipe for the Elijah Craig Rosemary Old Fashioned:

  • Craft rosemary cinnamon syrup by combining 1 cup of water with 2 cinnamon sticks, 2 rosemary sprigs, and 1 medium navel orange in a saucepan over medium heat. Bring to a simmer, add one cup of Demerara sugar and stir until it dissolves. Strain into a clean, sanitized bottle.
  • Combine 2.5 oz. of Elijah Craig Small Batch Bourbon, a half-ounce of housemade rosemary cinnamon syrup, and three dashes of orange bitters in a mixing glass with ice.
  • Stir and strain into rocks glass over a large ice cube, then garnish with a Maraschino cherry on a rosemary-sprig skewer. If you so choose, light the sprig on fire for a moment to generate some rosemary smoke.

Image: CHUTTERSNAP on Unsplash

Flipping through an open book
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5 Books to Read this Month: October 2022

5 Books to Read this Month: October 2022

by David Klemt

Flipping through an open book

This month’s engaging and informative book selections will help you develop next-level leadership skills and dial in your F&B menus.

To review September’s book recommendations, click here.

Let’s jump in!

Down and Out in Paradise: The Life of Anthony Bourdain

First things first: This biography by author Charles Leerhsen about chef and modern philosopher Anthony Bourdain isn’t authorized. However, this book purports to offer a deep dive into the late, revered chef’s life, from childhood to his final days.

Just be forewarned that this book is already and for good reason considered controversial.

Down and Out in Paradise will be available on October 11. Click here to pre-order this book today.

The Ethical Leader: Why Doing the Right Thing Can Be the Key to Competitive Advantage

Written by Morgen Witzel, The Ethical Leader addressed ethical behavior in business. Far too often, for far too many business owners and leadership team members, behaving ethically isn’t a non-negotiable. Rather, doing the right thing in business is “nice,” not “necessary.”

For this leadership book, Witzel explains why gaining and maintaining the trust and respect of team members and customers is crucial to the success of any business. “Trust engenders loyalty and good reputation, which in turn builds brand value… Ethical behavior is the key to trust-building, but it needs to go deeper than something managers do out of a sense of moral duty.”

Pour Me Another: 250 Ways to Find Your Favorite Drink

It may not happen every shift but bar team members and servers do encounter the restless guest from time to time. Their go-to drink, for whatever reason, just isn’t cutting it during a particular visit. Of course, this is an excellent time to improve their visit and the guest experience. And it’s the perfect time to introduce a guest to their new favorite drink.

JM Hirsch’s Pour Me Another helps people find that new favorite. Bar professionals and servers will find it useful for guiding guests through a cocktail discovery process. Click here to pre-order this book for its October 4 release.

Twist: Your Guide to Creating Inspired Craft Cocktails

The classics are a litmus test for any bar professional. It’s all well and good to invent and craft signature drinks, but if you can’t nail the classics there’s something wrong. Author Jordan Hughes, over the course of 75 recipes, combines the classics with creation in Twist.

This new book, set for release on December 13, teaches the classics. However, Hughes also helps the reader develop the skills to riff on these timeless recipes to put their stamp on the industry. Pre-order today!

Boards and Spreads: Shareable, Simple Arrangements for Every Meal

So, you’re familiar with how much people on Instagram love a good cheese and charcuterie board. In fact, you have some artisanal, eye-catching boards just waiting to be photographed and posted to social media by your guests. But do they really just sit around until someone orders either cheese, charcuterie, or a combination thereof?

It doesn’t have to be that way. Yasmin Fahr’s book Boards and Spreads provides plenty of other uses for your fancy Instagrammable boards. Oh, and there just happen to be several dip and spread recipes to refresh your menu.

Image: Mikołaj on Unsplash

Canadian dollar bills
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Operators & Guests Respond to Rising Costs

Operators & Guests Respond to Rising Costs

by David Klemt

Canadian dollar bills

Everything is more expensive these days and both operators and consumers have their own ideas for addressing rising costs.

To gather and share insight into people’s mindsets, Restaurants Canada conducted and commissioned two surveys.

For one, the industry research and advocacy organization surveyed operators. The focus was on how much operators anticipated increasing their prices.

On the other side, Restaurants Canada commissioned Angus Reid for a survey focusing on consumers. This survey revealed potential traffic slowdowns and perceived value for money.

For your own copy of Restaurant Canada’s 2022 Foodservice Facts report, click here.

QSR vs. FSR: Consumers

As an operator, converting first-time visitors into repeat guests is paramount. Equally as important: increasing visit frequency per guest.

Of course, an immediate byproduct of rising costs is consumers pulling back and reevaluating their spending. Oftentimes, dining out is one of the first costs consumers slash in order to save money.

Therefore, operators always face the risk of reduced traffic and even losing some guests permanently when they raise prices. However, this is often a necessary risk to take to combat rising costs.

So, how dire is the situation among Canadian consumers currently? Or at least, how did they feel in Q2 of this year? Angus Reid conducted a survey of consumers to find out, and the results can be found within the 2022 Foodservice Facts report.

First, let’s look at visit frequency for QSRs and FSRs. Before we begin, 12 percent of survey respondents answer that they “don’t know for sure” if rising prices will affect their visit frequency for either QSRs or FSRs. Not helpful.

For QSRs, 19 percent of respondents say an increase in prices won’t impact their visit frequency. Thirty-six percent anticipate visiting “a little less often,” while 32 percent will visit much frequently.

As for FSRs, 16 percent of survey respondents won’t change their visit frequency. However, 37 percent anticipate visiting FSRs much less often. Nearly as many, 36 percent, will visit a bit less frequently.

Interestingly, however, is perceived value. More FSR guests believe they receive excellent or good value for their money than they do from QSRs. More QSR guests believe they receive fair, poor, or very poor value for their money.

Overall, though, 90 percent of Canadian consumers feel positive toward the value they receive from QSRs and FSRs.

QSR vs. FSR: Operators

Clearly, it’s good news that the vast majority of Canadians believe they receive good value for their money when dining out.

Nobody enjoys paying more but it appears that both QSRs and FSRs in Canada can increase their prices. At least, they can do so for now while consumers are mostly understanding about inflation.

Restaurants Canada asked QSR and FSR operators a simple but revealing question for their 2022 Foodservice Facts report. The question? How much higher do operators expect to increase their prices by the end of Q4 of this year in comparison to last year?

The majority of operators in both categories anticipate they’ll increase menu prices by more than seven percent. Twenty-seven percent of QSR operators have that expectation. That number rises to 35 percent for FSR operators.

Twenty-two percent of QSR operators anticipate raising prices five to seven percent before the end of 2022. In comparison, 32 percent of FSR operators expect to raise prices in the same range.

At the moment, Canadian consumers appear to be willing to endure these increases. However, it’s likely they expect prices to drop back to “normal” (pre-pandemic prices) or close to it sometime in 2023. That is, unless Canada slides into recession.

Image: PiggyBank on Unsplash

White clock on red background
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Restaurants in Canada: Daypart Performance

Restaurants in Canada: Daypart Performance

by David Klemt

White clock on red background

For both in-person dining and off-premise consumption, more Canadian consumers are ordering from restaurants across all dayparts.

As Restaurants Canada points out in their latest report, traffic and sales remain lower than pre-pandemic levels. However, there are reasons to be positive.

For one example, Restaurants Canada predicts 2022 sales to return to pre-pandemic levels by the end of the year. The foodservice research and advocacy organization’s 2022 Foodservice Facts report provides another positive outlook.

Just looking at Q1 of this year versus Q3, all dayparts are seeing increases in traffic.

To read more about the report and grab your own copy, follow this link.

Numbers Tell the Tale

Per Restaurants Canada, the breakfast daypart slid significantly in 2020. During that time, it fell 20 percent that year.

For the first half of this year, however, Restaurants Canada reports that breakfast traffic is just four percent lower in comparison to 2019.

On a positive note, the breakfast daypart has risen steadily from March of this year to July, or Q1 versus Q3. In fact, all dayparts have grown.

According to Restaurants Canada, 43 percent of Canadians ordered breakfast from restaurants in March 2022. That number grew to 50 percent by July of this year.

In terms of snack purchases, 55 percent of Canadian consumers made purchases from restaurants. By July, that percentage rose to 62 percent.

Continuing along, 64 percent of Canadians placed lunch orders in March. Four months later, that number had increased to 73 percent.

Per the 2022 Foodservice Facts report, a significant percentage of Canadians are placing lunch and snack orders. In fact, Restaurants Canada says that Canadians are making purchases from restaurants during those dayparts two to three times per month.

Of course, there’s one more daypart we need to discuss…

Dinner is King

By the numbers, the dinner daypart is outperforming all others in Canada.

In March of 2022, 85 percent of Canadians had placed dinner orders at restaurants. That number rose to 87 percent in April but dipped to 86 percent in May.

However, dinner saw growth again in June and July, rising to 88 and then 89 percent, respectively.

As the numbers show, dinner orders are outpacing lunch orders 14 percent. Snacks are being outpaced by dinner by nearly 30 percent. Of all dayparts, breakfast is the weakest.

In fact, dinner outperforms breakfast by nearly 40 points. This makes sense when we consider the work-from-home effect.

More people working from home means, in theory, many less people commuting to work. Restaurants that once saw great breakfast daypart traffic are seeing a significant dropoff. Less people commuting means less people popping into a restaurant for breakfast.

It appears that instead, people are clocking in, working until break time, and then going to get a snack. And when lunch rolls around, why not place an order for lunch?

Naturally, after working all day, people are tired or eager to meet up with friends and family to socialize and decompress. So, dinner ruling the daypart roost makes complete sense.

In other words, operators looking to streamline should consider this Restaurants Canada data. The dayparts that require the most labor currently are lunch and dinner, so operators should plan accordingly if that’s viable for their business.

Image: CHUTTERSNAP on Unsplash

Closeup of bartender's hand pouring shot
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2022 World’s 50 Best Bars: 51-100

2022 World’s 50 Best Bars: 51-100

by David Klemt

Closeup of bartender's hand pouring shot

As we approach the ceremony to announce the 2022 World’s 50 Best Bars we now know which bars across the globe are on the 51 to 100 list.

It’s crucial to keep in mind that these are 50 of the most impressive bars not just in the US, not just in Canada, and not just in North America. Rather, these are among the absolute best bars in the world.

Of particular note, Singapore continues to prove itself as a dominant cocktail destination. There are eight bars on the 2022 51 to 100 list, and I predict that at least three more from Singapore will appear on the 1 to 50 list.

Also, the UK and Cape Town each claim four spots among the best 51 to 100 bars, and Paris boasts three. Operators, bar professionals, and tourists should keep their eyes on Cape Town as it continues to transform into a cocktail hot spot.

Among the 51 to 100 list, four are from the US and, sadly, none are in Canada. Overall, 15 bars on this list are new entries, as are five of the cities represented.

1 to 50: One Week Away

Of course, this leaves us all with a few important questions.

When will we find out about bars 1 through 50? Which bars are on that list? And which bar will be number one this year?

Well, I can answer one of those questions for you. A week from now, October 4, the World’s 50 Best Bars will announce the top 50 bars in the world during a ceremony in Barcelona, Spain.

To learn more about the World’s 50 Best Bars and this year’s ceremony, listen to Bar Hacks episode 82 with Mark Sansom. Also, make sure you’re following the World’s 50 Best Bars on Twitter and Instagram.

For now, scroll down to check out bars 51 to 100. Congratulations to the bars below!

The World’s 50 Best Bars 2022: 100 to 51

  1. Sin + Tax (Johannesburg)
  2. Tesouro (Goa)
  3. Zapote Bar (Playa del Carmen)
  4. Tag (Kraków)
  5. The Dead Rabbit (New York)
  6. The Bamboo Bar (Bangkok)
  7. Sweet Liberty (Miami)
  8. Mace (New York)
  9. The House of Machines (Cape Town)
  10. Antique American Bar (Bratislava)
  11. Republic (Singapore)
  12. Donovan Bar (London)
  13. Art of Duplicity (Cape Town)
  14. Re (Sydney)
  15. Freni e Frizioni (Rome)
  16. Danico (Paris)
  17. Le Syndicat (Paris)
  18. Bar Goto (New York)
  19. Indulge Experimental Bistro (Taipei)
  20. Lost & Found (Nicosia)
  21. Dead End Paradise (Beirut)
  22. Vesper (Bangkok)
  23. Röda Huset (Stockholm)
  24. The Court (Rome)
  25. Candelaria (Paris)
  26. Side Hustle (London)
  27. Nutmeg & Clove (Singapore)
  28. Camparino in Galleria (Milan)
  29. Three Sheets (London)
  30. Tjoget (Stockholm)
  31. La Sala de Laura (Bogotá)
  32. No Sleep Club (Singapore)
  33. Hero Bar (Nairobi)
  34. Atlas (Singapore)
  35. El Barón (Cartagena)
  36. Analogue (Singapore)
  37. Brujas (Mexico City)
  38. The SG Club (Tokyo)
  39. Tan Tan (São Paulo)
  40. Presidente (Buenos Aires)
  41. Caretaker’s Cottage (Melbourne)
  42. Schofield’s (Manchester)
  43. Mimi Kakushi (Dubai)
  44.  MO Bar (Singapore)
  45. Quinary (Hong Kong)
  46. 28 HongKong Street (Singapore)
  47. La Factoría (Old San Juan)
  48. Cause Effect Cocktail Kitchen (Cape Town)
  49. Barro Negro (Athens)
  50. Sago House (Singapore)

Image: Louis Hansel on Unsplash

Chef inside commercial kitchen
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Canada’s Restaurant Labor by the Numbers

Canada’s Restaurant Labor by the Numbers

by David Klemt

Chef inside commercial kitchen

While there are positive signs for Canada’s foodservice industry, recruiting and retaining labor continues to be a challenge.

Unfortunately, this isn’t a challenge unique to Canada. Operators throughout North America and indeed across the globe are facing labor shortages.

Restaurants Canada addresses this topic in their 2022 Foodservice Facts report. The non-profit research and advocacy group predicts sales will reach pre-pandemic levels by Q4 of this year.

However, restaurants, bars, and nightclubs may have to achieve traffic and revenue growth despite a significant labor deficit.

Please click here to access the 2022 Foodservice Facts report yourself.

Labor Shortage by Category

In their latest report, Restaurants Canada crunches the numbers for three distinct venue categories. These are quick-serve restaurants, full-service restaurants, and bars and nightclubs.

The organization finds that QSRs and FSRs are facing the greatest shortages. In fact, in response to a survey from May of this year, at least half of QSRs and FSRs aren’t operating with fulls staffs.

For QSRs, 52 percent of respondents say they perceive restaurants and bars they’ve visited to be understaffed. A bit over a third (36 percent) think staffing is “about right.” Unhelpfully, 12 percent “don’t know” if restaurants and bars have enough staff.

So, let’s switch gears to FSRs. Precisely half of survey respondends say restaurants and bars don’t have enough staff. Just like their QSR counterparts, 36 percent say that staffing seems to be at the ideal level. Fourteen percent respond that they “don’t know,” which doesn’t tell us much.

Per Canadians who responded to Restaurants Canada’s survey, bars and nightclubs are fairing better…at first. Frustratingly, a staggering 37 percent of respondents “don’t know” if bars or nightclubs have appropriate levels of staffing. Thirty-two percent think they’re understaffed, 31 percent think staffing levels are “about right.”

Industry professionals are probably already putting two and two together here. As long as guests receive the level of service they expect, from greeting to speed of service, to closing out their check, they think things are fine. If they’re made to wait longer than they want, they’ll likely say a restaurant, bar or nightclub doesn’t have enough people on shift.

Labor Shortage by Role

Okay, so the May 2022 Restaurants Canada wasn’t entirely helpful. It still provides interesting insight. That is, we know how guests perceive staffing in at least most instances.

So, let’s get down to hard numbers: shortages in specific roles throughout the industry.

Here, Restaurants Canada provides compelling information, even if it’s not what we want to see. In comparison to 2019, every role is down by thousands of people. In some cases, tens of thousands.

Below you’ll find the deficits by role:

  • Foodservice supervisors: -3,100
  • Chefs: -10,900
  • Bartenders: -17,600
  • Maîtres d’hôtel and hosts/hostesses: -21,100
  • Restaurant and foodservice managers: -22,400
  • Food counter attendants, kitchen helpers, and related support occupations: -43,200
  • Cooks: -44,400
  • F&B servers: -89,500
  • Other: -18,800

Add that up and that’s a shortage of 271,000 people throughout Canada’s foodservice industry. For further context, the industry boasted 1,265,700 workers. In 2021, the industry was down to 994,700.

Unfortunately, from 2020 to 2021, just 4,100 jobs were recovered, according to Restaurants Canada. This situation clearly shows that operators need to change their approach to staffing.

Now, more than ever, operators must focus on effective recruitment, onboarding, and retention. For tips on making improvements, click here. To learn how to implement employee surveys to boost retention and avoid costly turnover, click here.

Image: Brian Tromp on Unsplash

Canon accounting calculator
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Restaurants Canada Reveals Pandemic Impact

Two Years On, Restaurants Canada Reveals Pandemic Impact

by David Klemt

Canon accounting calculator

Restaurants Canada looks at the impact of the pandemic on the foodservice industry in their latest Foodservice Facts report.

Canada’s foodservice industry research and advocacy non-profit sees a return to pre-pandemic operations. However, the path forward toward pre-pandemic traffic and sales levels won’t be without its challenges.

“While nominal sales are expected to return to pre-pandemic levels before the end of the year, traffic still remains below what it was before,” says Restaurants Canada president and CEO Christian Buhagiar.

To access your own copy of 2022 Foodservice Facts, click here.

Industry Still Struggling

As an owner, operator, or foodservice professional, you probably have the answer to a specific question in mind.

When will we be “back to normal?” And, of course, the natural followup to that question. Will the industry surpass 2019 traffic and sales?

Restaurants and bars throughout Canada have survived six waves of Covid-19 over the course of two-plus years. There have been an inordinate amount of lockdowns that inarguably forced the permanent closure of far too many businesses.

As Restaurants Canada states (and the rest of us know all too well), there’s no telling if another Covid-19 variant will rear its ugly head. It’s conceivable (but with any luck unlikely) that Canada could face future lockdowns.

At the moment, according to Restaurants Canada, foodservice sales are currently 11 percent below 2019 levels. And yes, that’s after adjustment for inflation. Speaking of which, one reason traffic and sales remain below those of 2019 is consumer confidence. Many Canadians are concerned about a possible recession.

In addition, operators in Canada continue to face a labor shortage.

News Not All Bad

Now, anyone who read the previous section would be justified in lacking confidence in the industry. However, there is good news.

First, let’s compare Q1 of 2022 to Q2. Per Restaurants Canada, just 15 percent of restaurants were able to seat guests with zero restrictions. By April, though, approximately 90 percent of restaurants in Canada could serve in-person guests restriction-free.

Second, Q2 had more positivity in store for operators. According to Restaurants Canada, the FSR segment endured an 18-month decline in traffic when Covid-19 took hold. When restrictions were lifted, the floodgates of consumer demand burst. By Q2, traffic was a mere one percent lower in comparison to 2019.

Going a bit granular, QSR performance also improved in Q2. Per Restaurants Canada, QSR traffic lagged eight percent behind pre-pandemic levels. However, that number improved to just two percent under pre-pandemic levels by Q2.

Compellingly, Q2 still wasn’t done with foodservice industry positivity. While QSRs outpaced FSRs three-fold in terms of traffic, their numbers combined bring the industry back to 2019 Q2 levels.

Restaurant Canada’s positive outlook predicts that the industry will return to pre-pandemic levels by Q4.

Image: StellrWeb on Unsplash

Closeup shot of double cheeseburger
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Will Virtual Kitchens Persist?

Will Virtual Kitchens Persist or Go Brick-and-Mortar?

by David Klemt

Closeup shot of double cheeseburger

Virtual kitchens and virtual brands are back in the headlines after a record-setting grand opening in Rutherford, New Jersey.

Well, I should clarify: A restaurant may now hold a specific record.

The restaurant in question is the first brick-and-mortar MrBeast Burger location. And the record it may hold claim to is most burgers sold in a single day by a single restaurant.

 

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A post shared by MrBeast Burger (@mrbeastburger)

Now, if you don’t spend much time on YouTube, you may not know MrBeast. So, here’s a quick rundown: He’s Jimmy Donaldson, a YouTube personality known for “expensive stunts.” In fact, he may be the pioneer of that type of content.

Right about now you may be wondering what this all has to do with virtual kitchens and brands. It’s quite simple, really. MrBeast was among the highest-profile virtual brands to launch during the pandemic.

Incredibly, MrBeast Burger boasts more than 1,700 virtual kitchen locations. And now, one brick-and-mortar MrBeast restaurant.

Leveraging Demand and Popularity

So, you’re an influential YouTube content creator with tens of millions of subscribers. Obviously, your channel is monetized. What else can you do to leverage your popularity?

Well, if there’s a pandemic crippling the globe and people are stuck at home, maybe you notice the demand for takeout and delivery. And perhaps you learn about something known as a “virtual kitchen.”

If you’re a foodie or maybe just a savvy businessperson, maybe you’d jump into the virtual space. It is, it goes without saying, much less expensive than opening your own restaurant. And if you perform well, that’s an excellent way to collect data and guest feedback.

Also, an efficient way to hone your brand without a lease, buildout or the overhead of a physical restaurant. In a way, a virtual brand is akin to a pop-up restaurant, only you can test hundreds of markets simultaneously.

Okay, so now let’s say you reach a rare milestone in the creator space: 100 million subscribers. MrBeast did just that in July of this year. Do you think you’d want to leverage the support of millions of fans willing to support you and your brand?

The first physical MrBeast Burger opened last week at the American Dream mall in New Jersey. Reports claim that over 10,000 people waited in line for the grand opening.

Oh, and that’s when the location may have claimed the aforementioned record: 5,500 burgers sold in one day. After just one day of operation, MrBeast wondered if the brand should franchise:

Virtual to Physical

This (potential) record-setting event brings virtual kitchens and brands back into the spotlight.

Of course, most virtual brands don’t have the same origin story as MrBeast. One hundred million supporters? That’s rarified air.

At any rate, virtual kitchens do offer potential physical restaurant operators a less expensive method of testing their concepts. Couple data collection and feedback with an accurate feasibility study and taking the next step may make sense. And it may make a tidy profit.

It’s possible we’ll see MrBeast franchise off the success of two years of operating virtually and opening a physical location. And it’s possible we’ll see other virtual brands expand beyond the virtual kitchen.

However, it’s important that virtual brand owners keep a few things in mind. One, online success doesn’t always translate to brick-and-mortar success. Two, the restaurant space doesn’t care about your subscriber count—the KPIs are entirely different here. Three, potential operators need to perform the proper studies—or retain an agency with experience performing them—rather than rushing into the restaurant space.

It’s highly likely we’ll see more virtual brands enter the physical restaurant world. How many will do so successfully remains to be seen.

Image: Eiliv-Sonas Aceron on Unsplash

Two full shot glasses on a bar
by David Klemt David Klemt No Comments

Addressing Substance Abuse in the Industry

Restaurant Business Articles Address Substance Abuse

by David Klemt

Two full shot glasses on a bar

Two revealing Restaurant Business articles paint a startling picture of the industry’s struggles with drug and alcohol abuse.

Unfortunately, the subject of substance abuse in restaurants and bars isn’t new. This has long been a pervasive, prevalent issue in the hospitality industry.

There are, as Restaurant Business authors point out, several reasons our industry continues to grapple with substance abuse.

Since we’re nearing Sober October, this topic’s importance seems particularly poignant. Of course, the health of hospitality industry professionals should always be a paramount operator concern every day. It shouldn’t take a specific month for us to address this issue, just to forget about it after 31 days of consideration.

Hospitality workers should feel supported by the business owners and operators for whom they work. Additionally, they should feel safe among the leadership team and their fellow team members. In part, this feeling of security and safety should manifest in being comfortable speaking about substance abuse in the workplace.

A significant element of creating a supportive, safe, and healthy culture is removing the stigma of struggling with substance abuse that persists today. How can operators, leadership, and team members help one another if they make peers feel shame for struggling with drugs or alcohol?

A crucial step toward addressing the issue of substance abuse is fostering a culture of respect, support, and safety. If anyone in any role—from ownership and leadership to front of house and back of house—feels as though they can’t speak with someone safely about their struggles, we can’t address this topic effectively. And if we can’t address it in a meaningful way, we can never effect real change that can improve and save lives.

Pervasive Struggles

A Restaurant Business article from last week addresses substance abuse and culture. “How Restaurants Feed a Culture of Substance Abuse” reveals disturbing statistics.

At the start of their article, editors Peter Romeo, Heather Lalley and Joe Guszkowski share a horrific story. In February of this year, Colorado law enforcement found six adults and a toddler in an apartment. The six adults had all overdosed on fentanyl-laced cocaine; five had died. All six adults worked in chain or independent restaurants.

Four years ago, Delaware officials investigated the state’s opioid crisis. They found 10 percent of Delaware residents who died due to opioid overdoses were foodservice workers. According to Restaurant Business, state officials concluded that foodservice experienced a higher rate of opioid deaths than any other industry.

Among the most-shocking revelations in the Restaurant Business article pertains to the US workforce as a whole. Frustratingly, the US government hasn’t researched illicit drug use in the workforce since 2015. So, for all we know, the numbers I’m about to share have either increased or decreased.

In a typical month in 2015, 8.6 percent of the US workforce was using illicit drugs. However, that number pales in comparison to the rate of illicit drug use among restaurant and hotel workers: 19.1 percent.

Examining Substance Use Disease (SUD), a term encompassing drug and alcohol abuse, the numbers expose the weight of our industry’s struggle. In 2015, 9.5 percent of the US workforce suffered from SUD. For restaurants and hotels? That number was nearly double: 16.9 percent, higher than any other industry.

Fentanyl Deaths

Restaurant Business Editor-in-Chief Jonathan Maze reveals how “restaurants are ground zero” for fentanyl overdoses.

Fentanyl is cheap to produce and transport. It doesn’t take much to be deadly. And most people who have the misfortune of consuming it do so unwittingly. As it turns out, drug dealers lace all manner of other drugs with it because it’s so powerful. So, cutting drugs with fentanyl is more “cost effective” for drug dealers.

This particular excerpt from Maze’s “As Fentanyl Deaths Soar, Restaurants Are Ground Zero” is startling: “Throughout the country, restaurants and bars are such common places for overdose deaths among customers that advocates are training bartenders and servers to administer Narcan, a medication used to treat opioid overdoses. They are also becoming sources for fentanyl test strips so customers can see if the drugs they’re taking are laced with the powerful drug.”

Further, this troubling excerpt: “The fentanyl epidemic is particularly troublesome in the restaurant industry given the generally high rate of drug use among workers. Restaurant work is notoriously intense. The hours are long and late, and employees are on their feet all day. They often get hurt on the job and can turn to painkillers, legal or otherwise.”

When I say that we need to address substance abuse in our industry to save lives, I’m not employing hyperbole. I mean it quite literally.

Please take the time to read these two Restaurant Business articles in their entirety. We need to take action today.

Image: cottonbro via Pexels

Close up of stack of credit cards
by David Klemt David Klemt No Comments

Swipe Fees Cost Over $77 Billion in 2021

Swipe Fees Cost Merchants Over $77 Billion in 2021

by David Klemt

Close up of stack of credit cards

A bill that intends to lower the credit card fees merchants pay by creating more competition within the industry is before Congress.

This bill, the Credit Card Competition Act of 2022, has bipartisan support. The two sponsors behind it are Sens. Richard Durbin (D-IL) and Richard Marshall (R-KS).

Of particular note, the bill seeks to amend the Electronic Fund Transfer Act. Specifically, the amendment targets the networks that merchants use to process electronic credit card transactions.

In short, banks that issue credit cards would have to merchants at least two processing networks. According to experts in this space, the bill prohibits banks from making those networks Visa and MasterCard.

Billions in Fees

So, why are Visa and MasterCard in the crosshairs of this bill?

According to the Merchants Payments Coalition (MPC), Visa and MasterCard control 87 percent of credit (and debit) card markets. Per the MPC, Visa and MasterCard account for about 576 million credit cards.

In the U.S. alone, transactions amounted to $3.49 trillion in 2021. Eye-wateringly, those transactions were accompanied by $77.48 billion in merchant fees for the two processing behemoths in the same year.

For additional context, Visa and MasterCard swipe fees totaled $61.6 billion in 2020. That represents an increase of 137 percent over the decade prior. Adding the merchant fees for all cards, the 2020 total was $110.3 billion, which is an increase of 70 percent from the previous ten years.

As veteran operators are well aware, swipe fees are among the highest costs for restaurants and bars.

Merchants Payments Coalition Sends Letter to Congress

Compellingly, the MPC is urging Congress to investigate the Visa-MasterCard duopoly. In their view, the two processors’ dominance is stifling competition; harming business owners and consumers; and contributing to inflation.

“The two giant card networks and their partner mega-banks routinely use their market power to stifle competition and charge merchants the highest swipe fees in the industrialized world,” reads the MPC’s letter to Congress.

Further, the letter states, “It is difficult to imagine any other market in the U.S. economy in which two entities set prices for thousands of businesses that should be competitors. That lack of competition or downward pricing pressure has resulted in out-of-control swipe fees and increases inflation throughout the economy.”

The MPC is urging Congress to act quickly and effectively: “It is crucial for Congress to act swiftly and implement real reforms to bring true competition, transparency and equity to the U.S. payments market.”

National Restaurant Association Supports the Bill

Interestingly, the National Restaurant Association says they’re working with the MPC.

The NRA is also working with other organizations to drum up support for the the Credit Card Competition Act of 2022.

You can read about their support for the bill on their website. Additionally, you can tell Congress to pass the bill here. As it stands currently, no action beyond the bill’s introduction to the Senate on July 28 has taken place.

Image: Pixabay

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