Data | KRG Hospitality

Friends toasting with Champagne outside during the winter

November 29, 2021by David Klemt David Klemt No Comments

Things Looking Up For December

Things Looking Up For December

by David Klemt

Food and beverage research and analytics firm Datassential’s end-of-year insights point to a positive outlook for restaurants in December.

While many consumers still have reservations about spending time in public, others are eager to return to “normal.”

Restaurants and bars are expected to play an important role in reaching normalcy this holiday season.

Let’s take a look at Datassential’s 2021 Holiday Issue statistics.

Hesitancy Waning?

Let’s get the less-promising data out of the way first. Some consumers still find the idea of in-person restaurant visits uncomfortable.

Nearly half of Boomers surveyed by Datassential (46 percent) said they’re “significantly less likely” to visit a fast-casual or fast-food restaurant in December.

And, interestingly, 42 percent of men gave the same answer for visiting traditional sit-down restaurants.

However, of all the in-person options presented to participants by Datassential, restaurants performed the best.

More than half of all respondents—men, women, Gen Z, Millennials, Gen X, Boomers—plan to visit fast-casual, fast-food, and sit-down restaurants more in December than they have in recent months.

It’s most likely that anticipation for restaurant visits is driven by the desire to gather and celebrate the holidays.

Overall, 57 percent of respondents plan to visit fast-casual and fast-food restaurants more. And 47 percent expect to visit sit-down restaurants more.

That makes those two options the top answers.

Only 16 percent of respondents indicated they don’t plan on visiting any on-site foodservice venues.

Regarding bars, sports bars, lounges, and nightclubs, men are “significantly more likely” (23 percent) to visit those types of venues in December.

Holiday Opportunity

According to Datassential’s report, the opportunity for holiday bookings is out there.

More than likely, gatherings will simply be smaller than they were prior to the pandemic.

Asked about plans to gather at restaurants in December, get-togethers are expected to be “moderately sized.”

Almost half of survey respondents (44 percent) plan on gathering at restaurants in parties of seven to twelve.

Just over a quarter (29 percent) plan on get-togethers of six or fewer of people. Only 18 percent of respondents are planning large (13 to 18 people) gatherings at restaurants in December.

As far as parties of 19 or more, just nine percent of respondents plan “very large” gatherings.

Of course, individual operations’ results will vary. However, this information gives us an idea of what traffic may look like for many operators.

2021 Spending

This is where the news looks even better for restaurants, bars and nightclubs in December.

When asked about spending money on going out to eat and for drinks, just 18 percent of respondents said they planned to spend less this year than in 2020.

Very nearly half (49 percent) plan to spend the same as they did last year. However, 32 percent said they think they’ll increase their spending.

When it comes to New Year’s Eve, the numbers shift a bit. However, 50 percent of respondents plan to spend the same on NYE in 2021 as they did in 2020.

Twenty-six percent plan to spend more on NYE in 2021. Just 24 percent plan to spend less this year on NYE.

Per Datassential, Millennials are most likely to splash out for NYE this year.

So, things won’t be returning to pre-pandemic normalcy by 2021’s end. However, if Datassentials findings prove accurate, things are looking healthier for December.

Image: Christine Jou on Unsplash

November 26, 2021by David Klemt David Klemt No Comments

How is Plant-based Performing?

How is Plant-based Performing On-premise?

by David Klemt

With plant-based food options making their way to global fast food chains, it’s clear the category is continuing to heat up.

In fact, it’s likely time to stop referring to plant-based menu items as a trend. Obviously, they’re here to stay.

But how are these items actually performing on-premise? Is the category experiencing real growth or barely noticeable?

“Proliferation”

We’re full throttle into the holiday season. People are focusing on spending time with family and friends.

And what does that mean? Gathering for meals.

So, if restaurant traffic is going to tick up, it makes sense to see if plant-based should be more prevalent on menus.

To that end, Datassential revealed data on this category two weeks ago during their “Holidays Ahead!” webinar. Of four trend-tracking designations—Inception, Adoption, Proliferation, Ubiquity—Datassential notes plant-based menu items are in the Proliferation stage on-premise.

Analyzing data from 2011 to 2021, Datassential showed that the category started growing in terms of menu placement in 2018. As of this year, plant-based items are on nearly five percent of restaurant menus.

That may not seem like impressive growth. However, there was zero-point-zero-percent growth between 2011 and 2014. In 2015 and 2016, Datassential shows that only 0.1 percent of restaurants offered plant-based menu items. That growth doubled in 2017 (0.2 percent), then doubled again in 2018 (0.4 percent).

In 2019, the category quadrupled to inclusion on 1.6 percent of restaurant menus. Last year, that growth more than doubled to 3.5 percent.

According to Datassential, 28 percent of consumers like or love plant-based menu items. Interestingly, the research agency finds that all types of consumers like plant-based items, not just vegetarians or vegans.

The Datassential breakdown of plant-based menu proliferation by restaurant category is as follows:

Fast Casual: 11.5%
Casual Dining: 5.4%
Midscale: 3.9%
Quick Service: 3.4%
Fine Dining: 1.8%

Chains are more likely, at this time, to feature plant-based menu items.

Upscale Options

Wanting to include plant-based options and knowing where to start are two different things.

As it happens, Datassential featured a timely real-world menu to that should inspire operators this season.

Watercourse Foods in Denver, Colorado, offers mains and sides that will resonate with holiday diners:

Seitan Roast (wheat, soy, blend of herbs) which stands in for roast turkey.
Pot Pie consisting of carrots, celery, onions and mushroom.
Root Vegetable Stuffing made with root veggies (obviously), savory herbs, and housemade bread.
Mac and Cheese featuring shells tossed in cheese fondue and topped with shiitake “bacon” bits and breadcrumbs.

As you’ll notice, you don’t need to limit your menu to products from Beyond or Impossible. Obviously, you can leverage their brand recognition but you can also utilize your current plant-based inventory to create housemade menu items.

If you’re ready to embrace plants at your restaurant or bar, activate your kitchen team. With a bit of creativity you can take advantage on the rise in popularity of everything plant-based.

Image: Hermes Rivera on Unsplash

Two shot glasses garnished with salt rim and lemon wedges

November 24, 2021by David Klemt David Klemt No Comments

Thanksgiving Eve by the Numbers

Thanksgiving Eve by the Numbers

by David Klemt

Tonight, guests will be looking to celebrate a bar holiday that’s traditionally lucrative for operators: Thanksgiving Eve, a.k.a. Drinksgiving.

It’s difficult to imagine that any operator or hospitality worker is unaware of Thanksgiving Eve’s status.

Sure, some mark the start of end-of-year celebrations with Halloween or Thanksgiving. However, I feel Thanksgiving Eve truly ushers in the holiday season.

I’d also argue that while retailers have Black Friday and Cyber Monday, operators have the night before Thanksgiving. Yes, New Year’s Eve is also huge, but Thanksgiving Eve is considered the busiest night of the year for bars.

Interestingly, this is a holiday that benefits bars across the nation. In fact, it’s not exclusive to destination cities.

After all, the reason it’s so big, traditionally, is that people are traveling back to their hometowns. And while Thanksgiving is for their families, Thanksgiving Eve is for catching up with childhood and high school friends.

Obviously, there are fantastic bars located in cities outside of their destination counterparts. Hot take, I know.

So, does Thanksgiving Eve deserve its hype ?

The Evidence

Unfortunately, data from 2020 isn’t readily available, for obvious reasons.

However, we do have some data, largely thanks to restaurant management and POS platform Upserve.

One of the simplest ways to analyze Thanksgiving Eve’s impact is to compare it to the previous Wednesday.

Per Upserve, guest counts rose 23 percent in 2018 when compared to the Wednesday prior to Thanksgiving Eve.

Looking at data from more than 10,000 restaurants and bars, Upserve found that guest count totaled 496,883 on November 14, 2018. One week later, that number rose to 643,637.

As Upserve content marketing coordinator Stephanie Resendes says in her Thanksgiving Eve article, “More people = more money.”

Of the 10,000-plus Upserve clients whose data was analyzed, net sales were $17.250 million on the Wednesday preceding Thanksgiving Eve 2018. That number jumped to $22.296 million.

So, looking just at a relatively small sample size from 2018, Thanksgiving Eve’s impact doesn’t seem overblown.

The Drinks

According to Upserve, beer was the year-over-year winner through 2018. It saw the most growth by far on Thanksgiving Eve 2018 when compared to the Wednesday prior and the same period in 2017.

Spirits and wine, at least for Thanksgiving Eve 2018, were nearly tied for second place.

Now, looking at the data for Thanksgiving Eve 2019, spirits saw the most growth overall. Resendes shared that shot sales increased 173 percent on Thanksgiving Eve 2019 when compared to the Wednesday prior.

Tequila led the charge for spirits, rising 156 percent. Vodka saw a 144-percent boost, rum increased 120 percent, whiskey went up 65 percent, and gin saw a lift of 47 percent. For its part, beer sales rose 65 percent.

Not content to simply look at traffic and sales numbers, Upserve also split their clients into four regions. In this way, they identified who parties hardest on Thanksgiving Eve and who needs to ramp things up.

The four regions and their net sales growth from Thanksgiving Eve 2019 compared to the Wednesday prior are below:

Midwest: 34 percent
Northeast: 34 percent
South: 33 percent
West: 22 percent

Clearly, there was still growth in the Western region. However, the Midwest and Northeast led the way, with the South just behind them.

We’ll have to wait to see how Thanksgiving Eve 2021 plays out. We’re still waiting on the numbers from 2020. However, Upserve’s data shows that Thanksgiving Eve remains crucial to restaurants and bars throughout America.

Image: Alena Plotnikova on Unsplash

McDonald's French fries close up in package

November 5, 2021by David Klemt David Klemt No Comments

Extend Your Reach with a Loyalty Program

Extend Your Reach with a Loyalty Program

by David Klemt

It’s increasingly important to stay top of mind with your guests. Now more than ever, that means finding yourself on their screens.

For likely the one-billionth time, allow me to point out something we should all know by now: We’re all on our phones and tablets all the time.

From texts and emails to app notifications and social scrolling, there’s always a reason to check screens.

So, how can operators invade people’s devices? By collecting guest data via a loyalty program.

Fluctuating Support

Not so long ago, industry experts bristled against the mention of rewards and discounts.

Guests, the thought was, had zero interest in signing up for loyalty programs. People would soon frantically seek out “unsubscribe” links after receiving one too many marketing emails.

However, people are quickly thawing, warming to the idea of loyalty programs. Once thought of as too invasive, now marketing experts believe “too intrusive” doesn’t exist.

After all, businesses need to ensure they’re highly visible. Operators must meet guests where they are. Where are they? Their devices.

Rewarding Loyalty

Your staff aren’t the only people engaging with the incentive economy.

Today, it appears that a guest liking your brand isn’t good enough to ensure their loyalty. They want rewards beyond experience, consistency, and delicious food and beverage.

With so many brands competing for your guests’ dollars, you have to stand out to keep them coming back.

Now, there are still industry experts and operators who will tell you to avoid discounting at all costs. Offering a discount, they argue, starts you down the road of devaluing your brand.

Well, the great news is that when creating your own loyalty program, you can offer whatever you see fit. If you fall into the Never Discount camp, none of your rewards have to be discounts.

Free is Better than a Discount

So, let’s remain in the Never Discount realm. What else will encourage guests to sign up for your loyalty program—and actually engage with it?

We can use the loyalty program launched in July by a global fast-food juggernaut as a great example.

Over the summer, McDonald’s launched MyMcDonald’s Rewards. How successful was the launch? More than 12 million people opted into the program.

In exchange for signing up, agreeing to receive alerts, and handing over their data, guests received a free medium French fry.

McDonald’s selected 66 loyalty program members to receive one million MyMcDonald’s Rewards points. One lucky member also received free French fries for life.

Create Your Program

“But David,” I hear some of you arguing, “isn’t free even worse than a discount?”

The short answer is no. A discount can devalue a brand because guests get used to paying less for select items or entire visits. Over time, they perceive the lower price as the standard price. Soon, they’ll wonder when the next discount is coming. You’ll have to either further discount your food and beverage or work harder to re-engage your guests some other way.

If a rewards program is structured correctly, members will have paid for any free item they earn several times over. Most commonly, guests receive points in exchange for dollars spent. They can then exchange those points for a free menu item. This doesn’t devalue the brand, it incentivizes program members to become loyal, repeat guests.

Operators not quite ready to build their own apps can utilize text messages and emails. Of course, the former is the most intrusive (in a good way). Texts can inform members of promotions and encourage them to visit or place an order online. Emails can let members know their current balance and what incentive their close to earning.

Additionally, be generous. Don’t exclude your guests’ favorite items from the program. Why would a loyalty program member remain loyal if they can’t exchange their points for “the good stuff”?

Structure your program correctly and you’ll increase visits per guest and spends per visit. Couple your guest data collection with a platform like SevenRooms and you’ll truly supercharge your revenue.

Image: Brett Jordan on Unsplash

October 27, 2021by David Klemt David Klemt No Comments

Sales Jump Shows Guests Will Pay More

Chipotle Sales Jump Shows Guests Will Pay More

by David Klemt

Chipotle’s latest earnings report may show that guests are willing to pay more at their favorite restaurants.

In Q3, the fast-casual giant’s net sales grew by nearly 22 percent. Per reports, same-store sales rose by just over 15 percent.

Is it possible that Chipotle’s earnings—which exceeded Wall Street estimates—indicate that guests will tolerate price hikes?

Rising Costs

No, it’s not a “hot take” to state the obvious: Everything is more expensive.

All operators and managers are aware that costs are rising across the board. Beef, chicken wings, cooking oils… Prices are increasing and the trend is expected to continue.

Not that any of us need a real-world example, but Chef Brian Duffy shared on episode 53 of the Bar Hacks episode that he now has to price a pound of chicken wings at $13.

One reason that Chipotle made the choice to raise prices comes down to rising beef prices. Another is increased freight costs.

As every armchair economist knows, when a business’ costs rise that increase falls on its customers.

The reason is fairly simple: If prices remain the same while costs rise, the situation becomes untenable, the business doesn’t generate enough revenue, and doors close.

So, Chipotle’s decision was simple. The fast-casual chain announced in June that menu prices would increase by about four percent to defray rising costs.

Rising Wages

Chipotle’s June announcement followed one the company made in May.

Six months ago, Chipotle announced the hourly wage for their restaurant workers would increase to $15 by June.

How did the company afford to raise hourly wages, offset ingredient costs, and deal with rising freight rates? The aforementioned menu price hike.

Now, Wall Street didn’t seem to anticipate backlash toward Chipotle for increasing their prices. However, plenty of other people have said—and still say—that customers won’t support restaurants or bars that raise prices.

It appears that a significant percentage of brand-loyal customers will remain loyal and continue to support the businesses they like even through price hikes.

Is This the Way?

I’ll address a crucial detail: Chipotle is a fast-casual brand valued at close to $52 billion.

They’ve got incredible brand recognition and tremendous purchasing power. Reportedly, there are 2,857 Chipotle locations in the United States. In fact, the company announced in February of this year that it planned to open 200 more locations this year.

So, no, there’s not a direct comparison to be made between Chipotle and an independent restaurant or bar.

However, that doesn’t mean there’s no lesson to be learned here.

Chipotle was transparent about the reasons for their price hikes. The Great Resignation has shined a spotlight on wages, and Chipotle addressed that concern.

The pandemic has also unleashed havoc on supply chains. Again, Chipotle was forthcoming about the challenges the company was facing.

Moving forward, it may be wise for restaurant and bar owners to address menu price increases. There does seem to be some level of understanding among the more rational guests out there that if they support increased wages for hospitality workers; understand supply chain challenges; and know costs are up for everything, they’re going to see price hikes.

You very likely need to raise at least some of your prices. When you do so, consider telling your guests why. You may be surprised by the support you receive.

Image: fancycrave1 from Pixabay

Canadian flag in downtown Toronto, Ontario, Canada

September 17, 2021by David Klemt David Klemt No Comments

Canadian On-premise Sales Stabilizing

Canadian On-premise Sales Stabilizing

by David Klemt

A report from Restaurants Canada and Nielsen CGA shows that on-premise sales are steadying and, in some provinces, growing.

In fact, with the exception of Alberta being slightly down, Canada’s nationwide sales velocity looks promising in comparison to 2019.

Overall, Canada’s on-premise velocity is on the rise. Let’s take a look at how the three main provinces KRG Hospitality services are performing.

Alberta

To say that Alberta is down is a tad misleading. The province’s performance is nearly on par with 2019.

In comparison to 2019, Alberta is just -1 percent below in velocity levels.

Now, in comparison to 2020, the province is +46 percent. However, 2019 is a far more accurate gauge of performance.

While being down one percent is on the surface negative, growth in Calgary and Edmonton is highly encouraging.

In the week to August 21, Calgary’s velocity rose +4 percent, while Edmonton grew +10 percent. Those two cities are responsible for overall growth in velocity in Alberta of +4 percent.

Should the upward trend continue, Alberta will match and surpass 2019 quickly.

British Columbia

Of the three key provinces in which KRG Hospitality operates, BC is the second-best performing in comparison to 2019. Against 2020, BC is the third top performer.

Per Restaurants Canada and CGA, BC velocity is up +12 percent in comparison with 2019’s sales. The province is up +33 percent when compared to 2020.

In Vancouver, velocity is flat rather than experiencing negative growth. Any negative trends, according to the Restaurants Canada and CGA report, is coming from Victoria. That city is down -6 percent.

Ontario

Of our key Canadian markets, Ontario is performing the best overall.

Compare velocity to 2020 and the province is up +48 percent. In comparison to 2019, Ontario’s velocity is up +13 percent.

One can attribute current growth to Toronto. The Ontario city’s performance in the week to August 21 is +4 percent.

Canada

According to the report, sales velocity in Canada is up +2 percent overall.

Compare the country’s overall performance against 2020 and 2019, and Canada is trending upward. The nation’s on-premise velocity is up +41 percent in comparison to 2020 and +11 percent against 2019.

Clearly, the expectation is for the country’s on-premise performance to experience further growth as consumers return to in-person dining and restrictions loosen.

However, it’s important for operators to not simply return to pre-pandemic operations. Consumer behaviors have changed and many pandemic-driven habits—delivery, for example—are now permanent.

Further, now’s the time for those considering proceeding with plans to open restaurants, bars and hotels to move forward. In fact, Travis Tober, the guest from our milestone 50th episode of Bar Hacks, believes there’s no better time than now to open a hospitality venue.

Image: Lewis Parsons on Unsplash

Reviewing and analyzing customer data on a laptop computer

July 27, 2021by David Klemt David Klemt No Comments

How SevenRooms Improves Operations

How SevenRooms Improves Operations

by David Klemt

It’s true that SevenRooms is a reservation management platform. However, it’s so much more powerful than that.

Simply put, if the platform wasn’t simple to use and integrate with other systems, they wouldn’t be celebrating their tenth year.

A recent interview via Clubhouse highlights why now, more than ever, operators need to seriously consider SevenRooms.

Background

Guy Clarke, founder of Sizzle Dining, spoke with two key SevenRooms team members in a casual but informative Clubhouse chat.

Allison Page, SevenRooms co-founder and Chief Product Officer, and Marybeth Sheppard, senior vice president of marketing, fielded Clarke’s questions.

Interestingly, Page admits SevenRooms took five to seven years to really fine-tune operations. In fact, she says that the team didn’t quite know exactly what they were offering for the first year or two.

Now, the “reservation” platform has truly hit their stride. The company doesn’t just manage reservations, it provides powerful solutions: a full suite of operational tools; table management; and guest experience and retention capabilities.

Of course, many tech platforms claim to help operators. However, SevenRooms is now enjoying a decade in business.

Their longevity is, in part, due to their approach to hospitality. As Page tells it, the founders didn’t just enter the industry believing they could “fix it” with tech.

Plenty of tech folks have identified problems in hospitality, boasted about their “common sense” solution, and exited after finding out how challenging the business is.

Instead, the SevenRooms team spent time in the trenches. According to Page, they took reservations, checked coats, and more. They spent time with hospitality workers after hours and got to know them.

What’s with that Name?

I’ve written several articles about SevenRooms. However, I’ve never addressed why the founders chose that name.

When asked by Clarke during the Clubhouse chat, Page provided the answer.

Turns out, the name is a loose nod to Graydon Carter’s “Seven Rooms Theory.” The theory speaks to navigating social status in New York City. In short, it posits that the NYC social scene consists of seven consecutive “rooms,” each with a secret door. Find the secret door, move to the next room.

Of course, SevenRooms isn’t about exclusivity. Instead, SevenRooms is helping operators reach the seventh “room,” which is a lasting relationship with a guest. The six previous rooms are a journey toward understanding that guest and making them loyal by delivering incredible guest experiences.

Why SevenRooms Works

If this seems like a shameless plug for SevenRooms, well, it sort of is. They didn’t pay me, Doug or KRG Hospitality to promote the platform; we just like what SevenRooms can do for operators.

In an industry that has until recently been slow to innovate when it comes to tech, the platform has been improving restaurant and hotel operations for years.

According to Page, SevenRooms has a simple operating philosophy that drives the company: “Make small big, make big small.” SevenRooms is driven to help small, independent operations punch well above their weight class. The platform gives independent operators the same capabilities as their large chain counterparts.

Conversely, SevenRooms gives enterprise operators an effective way to deliver the engaging experiences that independents offer their guests.

However, there are other reasons SevenRooms is so worthy of consideration: simplicity.

SevenRooms is all about collecting data. Of course, data does no good if an operator doesn’t know what to do with it. If they had to analyze and leverage it on their own, they’d need to employ data scientists and an entire marketing team.

Well, SevenRooms employs those people instead so operators don’t need to. An operator doesn’t need to be a data scientist to use the information they collect through the platform. Marketing campaigns are automated and engaging, and require little effort from the end user.

Reduce Costs, Increase Revenue

As Sheppard explains, SevenRooms manages and, more importantly, helps maximize a restaurant’s floor.

Looking to increase turns? Done. Want every seat to generate revenue? Smart seating makes that possible. According to Sheppard, SevenRooms’ auto-assign seating functionality is worthy of operators’ trust. Additionally, the platform’s CRM, table management and marketing tools help staff upsell guests.

Speaking of automated functions, Sheppard provides insight into SevenRooms auto-tagging. The platform assigns automated tags that make it simple for staff to understand the guests they’re serving. Some examples are:

Burger lover
Red wine lover
Big tipper
Loves expensive wine
No-showed twice

Just those five examples show how SevenRooms helps operators and their teams maximize the guest experience to generate revenue. So, how does the platform reduce costs?

First, investing in SevenRooms reduces an operator’s overall tech stack investment. It integrates with around 50 POS systems and offers several tools (modules), meaning an operator doesn’t need to purchase several platforms that may not integrate with one another.

Second, the reservation and table management tools streamline an operator’s business. When team members are focusing on revenue-generating tasks, the floor is being sat more efficiently, and guests are being wowed, costs are driven down and revenue is driven up.

Then, there’s the “hidden” benefit. As Sheppard says, hospitality is a passion-driven industry. Unfortunately, there are many “non-passion” tasks that must be accomplished for operators to make money and keep their doors open.

Those tasks can take a toll, leading to an operator to fall out of love with the industry and their own concept. Well, SevenRooms takes several of those tasks (sifting through data, creating marketing campaigns, figuring out how to maximize the floor, etc.) and automates them.

Therefore, operators have more time to program menus, mentor team members, forge relationships with guests by touching tables, and more.

To request a SevenRooms demo, click here.

Image: John Schnobrich on Unsplash

Friends and family around a dinner table at home

June 29, 2021by David Klemt David Klemt No Comments

Consumers May Keep Eating at Home

Consumers May Keep Eating at Home

by David Klemt

A recent report suggests that consumer interest in eating at home more will continue even after we return to “normal.”

This is the finding from a survey conducted by the Food Industry Association (FMI)l, formerly known as the Food Marketing Institute.

The FMI surveyed grocery shoppers to determine habits influenced by the pandemic.

Emphasis on Nutrition

I look to a wide variety of sources to analyze consumer behavior. Even their grocery habits can be valuable for operators to know.

In this case, knowing about the dining habits of today’s consumer provides important insights. For instance, knowing what types of food items shoppers are purchasing can be very telling.

Per the FMI, nearly half of survey respondents (49 percent) indicate they’re choosing healthier foods when grocery shopping. Clearly, living through a public health crisis is influencing this decision.

Today’s consumer, with more information at their fingertips and the purchasing power to demand more transparency from company’s, has become increasingly focused on their health. That interest grew stronger during the pandemic as a healthier lifestyle can lead to a reduced risk for illness.

This particular finding should tell operators a few things. First, they may want to consider updating their menus with healthier items. Second, that’s not limited to food—many guests are interested in no- and low-ABV drinks. Third, operators who use healthier ingredients should make that clear via their menu item descriptions.

At-home Dining

The FMI also found that 41 percent of survey respondents plan to prepare and enjoy more meals at home moving forward than they did before the pandemic.

That ties directly to 44 percent saying they “like” or ‘love” cooking at home more now.

While this survey was intended to provide consumer behavior insights for grocers, there’s clearly value for operators.

As many learned during the pandemic, guests are interested in supporting restaurants and bars buy ordering meal and cocktail kits.

Since it’s important to meet guests where they are, operators may want to keep such kits on offer. People have shown they’re eager to engage with restaurants and bars via virtual tastings and cooking classes. Clearly, many are also happy to order meal kits from restaurants to make in the comfort of their own homes.

Yes, there’s pent-up demand set to be unleashed. And yes, people are eager to get back out there and socialize. But there are also financial, health, and safety concerns that will keep some people from dining out as often as they did pre-pandemic.

That doesn’t mean they’re out of reach of restaurants and bars entirely. However, it does mean operators will need to adapt and get creative to earn their business.

Image: fauxels from Pexels

March 15, 2021by David Klemt David Klemt No Comments

SevenRooms Reveals Third Party Impact

SevenRooms Reveals Third Party Delivery Impact

by David Klemt

New findings from SevenRooms, the powerful reservation and guest relationship platform, show the impact third-party delivery has on restaurants.

In partnership with YouGov, a respected internet-based market research and data analytics firm, SevenRooms finds that direct delivery saves operators thousands of dollars per month.

The overall finding of the “Data & Dollars: Revealing the Impact of Third-Party Marketplaces” report is startling. Operators are relying on a technology that in reality is harming them and their bottom line.

Cost of Convenience

Foodservice operators and workers, along with being hospitable in their mission to serve others, are adaptable.

The industry proves this time and time again. This is particularly true of the past 12 months.

Nimble operators pivot quickly, so it makes sense that so many restaurants, bars and other foodservice businesses embrace delivery, takeout and curbside pickup. Doing so is a direct and seemingly logical response to a major shift in consumer behavior to lockdowns, restrictions, and health concerns.

Most operators are well aware that state third-party delivery platforms take a 30-percent commission on average. However, the cost goes beyond devastatingly high fees: operators also lose control of the guest journey.

Real-world Example

SevenRooms illustrates the negative financial impact third-party delivery platforms with three examples: a high-end Italian restaurant in New York; a high-end steakhouse in Los Angeles; and a high-volume casual restaurant in California.

Let’s take a look at the last example.

Over a six-month period, the restaurant fulfills 19,000 combined orders. Delivery makes up 75 percent of these orders, takeout/pickup account for 25 percent. The average order is $33, and over the six-month period the total order volume is $617,500. Had the restaurant implemented direct delivery rather than third-party, they would have saved about $154,000.

Break those savings down and the restaurant would save approximately $25,600 per month that could go to:

PPE: 853 boxes of face masks or 196 boxes of gloves.
Takeout: 101,000 food containers.
Guest experience: 522 tanks of propane to keep guests warm on patios.

Using an average rent amount of $6,000-15,000 per month in Los Angeles, that’s also two to four months’ rent.

Guests Support Direct Delivery

The impact of third-party delivery on restaurants isn’t lost on consumers. Many view ordering food as more than just convenient, they see it as a way to support their favorite businesses.

Luckily, consumers are supportive of ordering delivery, takeout and pickup directly from restaurants.

Per SevenRooms:

Firstly, 37 percent of Americans are eager to do anything they can to help restaurants.
Nearly half, 48 percent, think it’s more economical to order directly from a restaurant.
28 percent who say they prefer ordering directly to third-party delivery feel that way after seeing their favorite restaurants suffer.
23 percent are informed and think third-party delivery platforms charge restaurants too much in fees.
16 percent feel that the harm done to restaurants by third-party delivery outweighs any benefits.

Leverage Direct Delivery Support

SevenRooms identifies several ways in their report that operators can succeed in getting consumers to order directly.

One way is the platforms’ own Direct Delivery solution. We speak to SevenRooms CEO Joel Montaniel about this solution on our Bar Hacks podcast.

Then, of course, there are an array of incentives consumers are willing to accept in exchange for direct delivery and ordering:

41 percent of Americans would order directly over ordering via third-party if a restaurant has its own app with features such as tracking and communication.
37 percent consider a complimentary item such as an appetizer, drink or dessert in addition to their order an appealing incentive.
32 percent like the idea of a personalized promotion applied to a future order or in-person visit.
28 percent indicate interest in a personalized promotion for their meal such as a discount code or comp item.
17 percent are fans of restaurants using ordering history to customize their menu and experience.

Read the entire report here. To learn more about SevenRooms, please click here. Connect with SevenRooms on Twitter, Facebook, LinkedIn and Instagram.

Image: cottonbro from Pexels

February 24, 2021by krghospitality krghospitality No Comments

Bacardi Predicts How We’ll Drink in 2021

Bacardi Predicts How We’ll Drink in 2021

by David Klemt

What will alcohol consumption look like this year? Bacardi has answers.

In association with the Future Laboratory, Bacardi’s second-annual cocktail trends report—a well-sourced 25-page document—is available.

As is the case when we begin a new year, we’re being deluged with trend predictions and reports. I’d say the Bacardi 2021 Cocktail Trends Report goes deeper than most.

The report is organized into five macro trends identified by Bacardi Limited. Let’s get to it!

Reinventing the Bar

I’m not presenting Bacardi’s macro trends in order. Instead, I’m starting with the trend arguably most relevant to operators: bar reinvention.

Industry experts have been pointing to the ease of access to knowledge along with consumer interest in learning more about spirits and cocktails as an important trends for years now. It’s no longer a trend—it’s standard that guests are better informed.

Like other sources, Bacardi predicts guests will seek out more personalized experiences. They also predict guests will want to connect more with bartenders. However, the brand goes deeper in their report.

Bacardi thinks to-go cocktails, cocktail and meal kits, and e-commerce will become standard. Going a step further, the report posits that some venues will create cocktail menus that will change according to weekly inventory; sommeliers will add spirits knowledge to their skillset; and that guests will be eager to try drinks they’ve never had before.

Perhaps most importantly, Bacardi predicts bar culture will become more positive and inclusive, resulting in gender stereotypes—including those inherent to bottle design—will fall to the wayside.

Purpose and Transparency

According to a study conducted by IBM and the National Retail Federation and cited in Bacardi’s report, a massive 70 percent of American and Canadian consumers think it’s important that brands are eco-friend or sustainable.

Bacardi predicts sustainability, transparency, and the authentic embrace of social causes will be crucial this year and beyond.

In response to climate change, sustainability, eco-friendliness, and the zero-waste movement, Bacardi plans to wipe out 80 million plastic bottles with their new biodegradable bottle design, rolling out in 2023.

Pointing to a statistic from ZypMedia—that 36 percent of consumers plan to keep buying from local businesses post-pandemic—Bacardi predicts hyperlocality will grow stronger in 2021. Operators who source more local items, including beverage alcohol, will likely find more support from consumers.

Mindful Drinking

Per a Bacardi survey, 22 percent of consumers across the globe are drinking alcohol less. More than half (55 percent) of “mindful drinkers” are drinking low-ABV options.

Bacardi predicts low- and no-ABV drinks to perform well this year. Spritzes, for example, is on the rise as a bar culture in its own right.

Per Bacardi, zero-proof spirits are getting the most attention of any other category, worldwide.

Mindful drinking is also affecting how spirits are made. Consumers, more conscious of their health because of the pandemic, are showing a preference for beverages free of artificial ingredients. Furthermore, Bacardi expects consumers to seek out drinks that have health-boosting benefits.

The report, as an example, cites a Global Wellness Institute finding that in 2019 alone, “U.S. sales of ginger rose by 94%, while turmeric and garlic sales were up by 68% and 62%.” Today’s consumer is seeking out functional cocktail ingredients.

Drinking by the Numbers

Bacardi’s report puts all the brand’s cards on the table. Operators looking to program or reprogram their menus will find this information helpful.

Consider the info below for delivery and to-go drinks since Nielsen finds that 40 percent of US consumers are interested in make-at-home cocktail kits, 37 percent are interested in pre-made bottled cocktails, and 37 percent are interested in grab-and-go cocktails.

Flavor and Experience: Extreme heat (chilies), Super-sweet, Sour, Bitter, Smoked

Experiences: Pleasure, Nostalgia, Escapism, Quality over quantity, Light-hearted drinks, Flavor-filled indulgences

Most Popular Cocktails, Globally (Descending Order): Low-ABV, Other spritzes, Negroni, Classic cocktails with a twist, G&T (including riffs), Non-alcohol, Whiskey Highball, Espresso Martini, Old Fashioned, Vermouth cocktails

Premiumization Opportunities: Gin, Rum, Tequila

Top 5 Spirits (by Interest): Gin, Mezcal, Tequila, Vermouth, Bitter/Amaro Liqueurs

Top 5 RTDs in North America: Vodka Soda and flavors, Margarita, Moscow Mule, Low-ABV, G&T

Click here to read the report in its entirety.

Image: Helena Lopes on Unsplash