Food hall | KRG Hospitality

January 17, 2023by David Klemt David Klemt No Comments

American Trends 2023: Technomic

American Trends 2023: Technomic

by David Klemt

Foodservice research firm Technomic has some interesting predictions for the hospitality industry in the United States of America this year.

On the topic of operations, Technomic foresees more negotiating power among workers. Additionally, the firm looks at both the economy and pent-up guest demand.

When it comes to food, the US and Canada have a trend prediction in common. And as the image atop this article signifies, a particular color may be a hit on menus in 2023.

Before we jump in, Technomic’s 2023 Canadian trend predictions are here. Last year’s Technomic predictions for America are here. Curious readers can review the firm’s 2023 predictions in their entirety here.

Okay, let’s go!

Think Pink

I want to address this prediction first. According to Technomic, pink is going to be the F&B color of 2023.

As they explain, the color is fun, nostalgic, and photogenic. Yes, operators must still consider the Instagram-worthiness of their menu items. That may change one day, but it’s not today.

Per Technomic, pink also signals that a food or drink may have antioxidants.

Some of the items the research firm names specifically: pink pineapple, pink salt, pink celery, cara cara oranges, and schisandra berries.

Pickle It

This is the culinary trend that, per Technomic, Canada and America will share in 2023.

Along with fermenting, pickling gives the kitchen and bar teams a unique experimentation method to explore. So, encourage these teams to get creative and add pickling and fermentation to your next menu update.

Of course, that’s not the only reason to consider putting pickling front and center. For many, these preparations indicate a healthy F&B choice. Think kombucha, as an example.

As we know, healthy choices continue to be top of mind for many guests.

One more note: Technomic suggests being transparent and identifying the pickling and fermenting processes your team leverages to produce each menu item.

Economics

For those looking for a bit of optimism in these trying times, Technomic may have what you’re looking for. This year’s report, What We Foresee for 2023, says the following about the possibility of a recession:

“There is reason for optimism in the coming year, however, as any recession is expected to be relatively mild.”

Yes, that’s just one source’s opinion. However, Technomic is known for their voraciousness when it comes to data. So, if this firm is optimistic it could be a solid sign that things are looking up in 2023.

“Pent-up consumer demand” and variations thereof have been making the rounds since 2o21. However, it’s still a relevant phrase.

As it pertains to 2023, Technomic believes on-premise dining may “bounce back” this year. In fact, the firm suggests that people want to socialize and dine in person now more than ever.

Also, delivery and pickup times appear to be growing. So, plenty of people will see in-person dining as the more appealing option in 2023.

Operations

In part due to legislation addressing minimum wage and workplace conditions, employees may have the upper hand this year.

Add the fact that many people seeking work know many operators are dealing with a labor shortage and their negotiating position looks even stronger.

So, we could finally be in for a significant change when it comes to how the industry looks at compensation. More and more workers—and the guests they serve—are taking issue with tipping. Instead, many people outside and inside of the industry want to see operators pay staff a competitive, living wage.

Of course, there are also the hospitality professionals who prefer tips to minimum wage. In 2023, the industry could experience the start of a sea change. Time will tell.

For more predictions and this Technomic report in its entirety, please click here.

Image: Alex Gruber on Unsplash

January 16, 2023by David Klemt David Klemt No Comments

5 Toxic Mindsets that Hinder Success

5 Toxic Mindsets that Hinder the Success of Your Business

by Jennifer Radkey

Your frame of mind matters, and if you want a team and business that’s thriving and growing, it’s time to examine your own mindset.

How you show up day to day in your business and in your life will either hinder or promote your success. Like the popular phrase goes, “It starts from the top.”

You can set the tone for the day with the energy you bring. As Anese Cavanaugh, author of the book Contagious You, states, “Whatever we put out there and whatever we take on affects our ability to influence, lead, and create the impact we want.”

A positive mindset is contagious: it can inspire, motivate, and make others feel good. A toxic mindset is equally as contagious: it can halt growth, increase unhappiness, and lower productivity.

Here’s a list of five toxic thoughts that lead to a negative mindset and can hinder success.

Blame Game

Always looking for someone else to lay the blame on when things go wrong is a surefire way to a toxic team environment. If you’re quick to blame others when things go wrong, perhaps it’s time to take a step back and examine why something went wrong in the first place.

Was there inadequate training provided? Are there no clear systems to follow? Do you have an environment that’s hostile to asking for help? Fault rarely lies in one person only; there are typically several factors in play.

A positive mindset will examine facts, look at all potential causes, and then come up with solutions. Blame never enters the picture.

Second Guessing

Not being confident in the choices you make hinders growth. Uncertainty in your decision making leads others to question or doubt your role as leader.

If you don’t have the utmost confidence in making decisions, and it’s your business, how can you expect your team to have confidence in you or the work that they do?

This doesn’t mean that you have to make snap decisions without thinking them over. Planning and deliberating over the right move to make is critical to success. But once the decision is made…it’s made. If it doesn’t work out you can then problem solve to get back on the right path.

Second guessing your decisions along the entire way is only going to slow you and your business down.

Absolutism

“It’s my way or the highway.” Absolutism is the inability or refusal to consider others’ ideas. This toxic thought process destroys team culture and growth.

As an owner, you’re heavily invested in your business. Therefore, it can be challenging to let go of how you think things should be done and consider different approaches. However, failing to listen to the ideas of others on your team will build walls and possibly create resentment. That’s definitely not a positive atmosphere to work in.

Be open-minded to doing things differently and show interest in the recommendations of others to promote instead of hinder success.

Hyper-negativity

Sometimes when you want to succeed it’s easy to zone in on the negatives: “This isn’t good enough.” “We aren’t making enough money.” “We don’t have enough followers online,” etc.

The desire to do well can make you hyper-focused on what isn’t right in order to fix it, instead of noticing what’s really great and celebrating that instead. Yes, you need to be aware of areas that need improvement, but you also need to be equally aware of the positive and promote it.

Think of a conversation with two random people you meet at a party. The first person grumbles about the weather, complains about the food, music, etc., and scowls. The second person is smiling, laughing at jokes, and genuinely interested in getting to know you.

Who would you rather be around?

Settling for Average

Nothing will kill growth and success faster than settling for the way things are because “that’s the way it’s always been,” or because “it’s working.” You want more than just “it’s working.”

You want to thrive, to make more money, to gain more followers, to hire more team members, to open more locations. If you aren’t living your absolute best life, if your business isn’t performing at its absolute highest level, then there should be no settling.

Settling for average teaches your team to settle for average, and that means your customer is settling for average. Avoid this toxic mindset by continuously setting goals (even small ones) and looking for ways to do better, feel better, and be better.

While it’s completely normal to fall into these toxic thoughts from time to time, it’s refusing to allow them to become you daily mindset that’s important.

The amazing thing about the human mind is that it can be changed—you can work on improving your mindset. Trust me when I say that you will not regret it.

Cheers to professional and personal growth!

Image: Nathan Dumlao on Unsplash

January 13, 2023by David Klemt David Klemt No Comments

We Ask ChatGPT About Robots and AI

We Ask ChatGPT About Robots and AI in Restaurants

by David Klemt

Earlier this week we had “a conversation” with ChatGPT, the now (in)famous chatbot from artificial intelligence research and development company OpenAI.

For my first time interacting with this type of tool, I keep things simple. I attempt to phrase my questions correctly, focusing on the topic of AI and robots in hospitality.

Initially, I receive a response that probably isn’t much of a surprise. But as you’ll see, the chatbot highlights an item or two that aren’t always top of mind with this topic.

Below you’ll find ChatGPT’s responses to one request and two questions.

Please write 400 to 500 words about robots and artificial intelligence working in restaurants, from the perspective of robots and AI.

“Robots and artificial intelligence (AI) are becoming increasingly prevalent in the restaurant industry. This is in part due to the many benefits that these technologies can offer, such as increased efficiency, improved safety, and reduced labor costs. However, it is also important to consider the perspective of the robots and AI systems themselves, and how they are integrated into the restaurant workforce.

One of the main ways that robots and AI are used in restaurants is through automation of tasks that would otherwise be performed by human workers. For example, robots can be programmed to cook food, mix drinks, and serve customers. This can help to improve the efficiency of the restaurant, as robots are able to work faster and more accurately than humans. Additionally, robots can be designed to perform tasks that are dangerous or difficult for humans, such as handling hot oil or sharp knives. This can help to improve safety in the kitchen and other areas of the restaurant.

However, the use of robots and AI in restaurants also raises some important ethical and social issues. Some people may worry that robots will take jobs away from human workers, especially in an industry that already has high turnover rates. Additionally, there may be concerns about the social and emotional impact of having robots as a major presence in the workplace. For example, some people may find it uncomfortable or strange to interact with robots in a social setting, such as a restaurant.

The robots and AI perspective, they are programed to perform their task efficiently without any error. They don’t have any emotions or preferences hence they are not impacted by the same issues that human employees may face like fatigue, stress or burnout. They can work in any environment without needing breaks or vacation days, this can help reduce labor costs, as restaurants can operate with fewer employees. However, it also means that human workers may need to be trained in new skills that allow them to work alongside robots and AI systems.

In conclusion, the integration of robots and AI in the restaurant industry can provide many benefits, including increased efficiency and improved safety. However, it is important to consider the ethical and social implications of these technologies, and to ensure that they are implemented in a way that benefits both the restaurant and its employees. With proper planning and training, robots and AI can be an [sic] valuable asset to restaurant workforce.”

Can you explain to me, in 300 to 400 words, what the ethical implications are for restaurant, bar, and hotel operators using artificial intelligence and robots to complete tasks?

For the most part, ChatGPT repeats talking points from our first interaction. This is likely due to the phrasing of my question. Also, this chatbot is still in its “infancy.”

However, ChatGPT brings up a few new points, and expands on others.

“The use of artificial intelligence (AI) and robots in restaurants, bars, and hotels raises a number of ethical implications that should be considered by operators. One of the main concerns is the potential for these technologies to displace human workers. In an industry that already has high turnover rates and relatively low wages, the use of robots and AI could make it even more difficult for human workers to find and keep jobs. This could lead to increased unemployment, reduced income and work-life imbalance among the impacted employees.

Another ethical concern is the impact that these technologies may have on the customer experience. For example, some customers may find it unsettling or uncomfortable to interact with robots in a social setting, such as a restaurant or hotel. Additionally, customers may feel that the use of robots and AI detracts from the human element of the service experience, and could harm the overall reputation of the business. There may also be concerns about how the data collected by these systems is used and protected, raising question about data privacy and security.

Additionally, some concerns about the way these AI and robots are designed and how they make their decisions, there could be potential for bias, especially when the systems are provided with data that is not representative of the whole population. This could lead to unfair treatment of customers, employees and other stakeholders.

There are also concerns about how the maintenance and repair of these technologies are managed and who is responsible for any accidents or malfunctions that may occur. This is particularly important for safety critical tasks, such as cooking or cleaning. Operators need to ensure that the AI and robots are designed and maintained to the highest standards to prevent any harm to employees or customers.”

Are there risks that human designers and engineers will introduce bias to customer-facing artificial intelligence and robots?

Since ChatGPT mentions bias in response to my first question, I run with that train of thought.

Below is what the chatbot has to say about that topic as it relates to AI and robots.

“Yes, there is a risk that human designers and engineers may introduce bias into customer-facing artificial intelligence (AI) and robots. This can happen in a number of ways, including:

Data bias: If the AI system is trained on a dataset that is not representative of the population it will be serving, it may make decisions or predictions that are biased towards certain groups of people. For example, if an AI system used in a hotel is trained on data from primarily white and wealthy guests, it may have difficulty understanding and serving guests from other backgrounds.
Algorithm bias: The way an AI system is designed and the algorithms it uses can also introduce bias. For example, if an algorithm is designed to prioritize certain inputs over others, it may make decisions that are biased towards certain groups of people.
Human bias: Human bias can be introduced into AI systems through the decisions made by designers and engineers about what the system should do, how it should work and how it should interact with people. For example, if a designer and engineers decide that the robot should be more polite to older customers, it may be less polite to younger customers, or if the system is designed to recognize only certain languages, it may not be able to understand and serve customers who speak other languages.

It is important for human designers and engineers to be aware of the potential for bias in AI systems, and to take steps to minimize it. This can be done by using diverse and representative data when training the AI system, being mindful of the potential for bias in the algorithms used, and involving stakeholders from diverse backgrounds in the design and testing process. Additionally, monitoring and audit the system performance regularly, and providing ways for users to provide feedback on the performance and make adjustments accordingly.

It is important to remember that this is an ongoing process and it requires continuous monitoring and adjustment as the data and environment changes. There is also a need for more research in the field of explainable AI, which would allow human designers and engineers to understand why the AI system is making certain decisions, which can help to identify and mitigate any biases that may have been introduced.”

Takeaways

Obviously, I don’t think ChatGPT “speaks” for the machines. And I don’t think the chatbot was attempting to convince me of anything. There’s nothing overtly nefarious afoot here—this was mainly an entertaining exercise with a newsworthy tool.

That said, I’m not entirely certain how I feel about my interaction with ChatGPT. On one hand, the answers in favor of AI and robots are what one expects: efficiency, speed, consistency, cost reductions, improvements to safety.

But what about what ChatGPT says about biases, programming, representation, and human interactions with tech? To alter a phrase, “Who watches the programmers?”

Hospitality is about the human element. It’s about service and the guest experience. Personally, I don’t think the world will be in a better place if we reduce human interaction.

Dropping baskets into hot oil? Slicing and dicing? Sure, send in the robots…maybe. Reducing the human element in the name of efficiency and profits? I don’t see a benefit worth the risks.

Image: Rock’n Roll Monkey on Unsplash

January 11, 2023by krghospitality krghospitality No Comments

KRG Makes First Addition to Team for 2023

KRG Hospitality Makes First Addition to Team for 2023

Jared Boller joins the KRG Hospitality team, serving as the agency’s in-house beverage educator, trainer, and menu developer.

TORONTO, ONTARIO—Today, KRG Hospitality is delighted to announce a new addition to their team. Jared Boller, a professional mixologist with two decades of experience, will be available to the agency’s clients for beverage menu development and training. He’ll serve as KRG’s master mixologist for North America.

Boller’s creativity, passion, and humility as a professional mixologist have led him on a journey around the globe. He has established himself as an industry leader, developing award-winning beverage programs in restaurants, bars, hotels, and casinos in several markets, including Denver, New York, Florida, Toronto. Throughout his career, Boller has won several cocktail competitions, educated teams for brands and industry organizations, and appeared in numerous publications.

“Restaurants, bars, hotels, and hospitality are in dire need of not only great employees but educated employees who can execute an owner’s vision,” says Boller. “I look forward to the next stage of my hospitality career with KRG, helping to inspire the future generations in everything related to beverage. My life’s journey has led me to the perfect opportunity with the team at KRG to collectively build future and existing brands.”

Additionally, he was the featured guest on episode 12 of the Bar Hacks podcast. People curious to learn more about Boller can listen to his Bar Hacks episode on Spotify, Apple Podcasts, and Google Podcasts.

With a growing list of accolades and numerous publications to his name, Boller most recently spent three years as the national whiskey ambassador for Proximo spirits. He prides himself on educating consumers and future bartenders on artistry behind the bar and providing history lessons to everyone that will listen. Boller is eager to share his extensive knowledge of spirits, cocktails, menu development, beverage innovation, and service.

“It’s an exciting time for KRG Hospitality, adding to the team just days into 2023,” says David Klemt, director of business development at KRG. “With Jared on the team our beverage programming, menu development and curation, training, and consulting will be even stronger. I know we’re all looking forward to our clients having the opportunity to work with Jared.”

About KRG Hospitality

KRG Hospitality is a storied and respected agency with proven success over the past decade, delivering exceptional and award-winning concepts throughout a variety of markets found within Canada, the United States, and abroad since 2009. Specializing in startups, KRG is known for originality and innovation, rejecting cookie-cutter approaches to client projects. The agency provides clients with a clear framework tailored to their specific projects, helping to realize their vision for a scalable, sustainable, profitable, memorable, and consistent business. Learn more at KRGHospitality.com. Connect with KRG Hospitality and the Bar Hacks podcast on social: KRG Twitter, Bar Hacks Twitter, KRG Media Twitter, KRG LinkedIn.

Image: KRG Hospitality

Tortilla with beans, cotija cheese and egg

January 10, 2023by David Klemt David Klemt No Comments

Canadian Trends 2023: Technomic

Canadian Trends 2023: Technomic

by David Klemt

Restaurant, bar, and hotel operators will find this year’s data-driven trend predictions from Technomic for 2023 insightful.

Interestingly but perhaps not surprisingly, some operators may be looking beyond North America for inspiration.

Per Technomic, Central and South American cuisines could influence menus in Canada this year. Other food trends that might take hold are “retro” health items, and all manner of pickled foods.

Of course, not every Canadian trend prediction involves F&B. According to Technomic, tech and the guest experience will play important roles.

To review last year’s Technomic predictions, click here. Now, let’s jump into Technomic’s 2023 predictions.

Guest Experience

Certainly, the guest experience should always be top of mind for operators, their leadership teams, and their staff.

In this instance, Technomic isn’t suggesting that the guest experience in general will be a trend. Obviously, with as important as it is to the success of any business, it’s a cornerstone.

Rather, Technomic predicts that guests will continue to feel the need to rein in their spending due to ricing costs and prices. However, the foodservice research firm also believes there’s still heavy desire for social interaction.

So, both those financial and social influences translate to the following: overdelivery.

Operators and their teams must ensure they position their brands well; make guests feel special every visit; and really dial in the guest experience. Specifically, Technomic suggests focusing on younger generations and menus with at least a couple specialty items that aren’t easy for a guest to replicate at home.

In other words, do whatever it takes to entice guests with memorable experience and quality menu items, and keep them coming back for more.

Technology

Multiple industry sources believe that 2023 is the Year of Tech for the hospitality industry. In particular, some sources believe that POS systems will receive significant attention from operators looking to upgrade.

Compellingly, Technomic sees the situation a bit differently. In particular, they’re suggesting that QR code menus may find themselves on the sidelines. Traditional menu, according to Technomic, will make their comeback this year.

Also making a (possible) resurgence? Per Technomic, in-person ordering for carryout and in-person dining.

As far as tech innovations that Technomic expects to take off this year, they see the following as standouts:

loyalty programs;
enhanced/upgraded cooking equipment;
automated inventory software/platforms; and
digital menu boards for back of house.

Culinary

As hinted at above, Central and South American cuisines are expected to take off in Canada, per Technomic.

The research firm provides specific—and delicious—examples:

Honduras: Baleadas tacos
Dominican Republic: Wasakaka sauce
El Salvador: Curtido slaw or relish
Peru: Aji amarillo and rocoto peppers
Bolivia: Saltenas, similar to empanadas

Another culinary trend Technomic predicts will perform well in Canada? Pickled everything.

Okay, maybe not everything. However, Technomic expects “pickling, fermenting, dehydrating and freeze-drying” to “increasingly pop up on menus.” The firm expects that operators will offer a wide range of “unusually pickled items outside of the typical veggies, including proteins and seeds.”

So, if you’re an operator reading this, it may be time to motivate your back-of-house staff to get creative with their pickling ideas.

Finally, pandemic-driven, health-based trend foods like turmeric and ginger may start to fade in popularity. Instead, predicts Technomic, items with “classic” health descriptors such as “natural,” “real,” “free,” “reduced,” and “lower” will get attention from guests looking to eat and drink healthier.

For your own copy of this Technomic report in its entirety, click here.

Image: Roman Odintsov on Pexels

January 9, 2023by David Klemt David Klemt No Comments

Minimum Wage Rises for Most of USA

Minimum Wage Rises for Most of USA

by David Klemt

More than half of the states across America are either now seeing a boost to minimum wage or plan to increase the hourly minimum by the middle of this year.

In total, minimum wage is up in 27 states. However, the rise isn’t yet in place in a handful of states, including Nevada.

Now, the federal minimum wage still has yet to go up. That rate remains at $7.25 per hour, where it has been since 2009. For the curious, if a person works 40 hours per week and is compensated at the federal minimum rate, that’s just over $15,000 per year—before taxes.

Per Motley Fool: “If we factor in inflation, [federal minimum wage] would have had to grow to $10.20 to let people buy the same amount of goods and services today [as in 2009]. In real terms, the current minimum wage has shrunk by almost 30% since it was set.”

You’ll see below that I didn’t list the increases for tipped workers. As an operator, you should already be well aware of the minimum rate your tipped workers must be paid. In all likelihood, your suite of software is already updated to the current requirements (but check yourself to be certain).

The list will provide an idea of what you’re up against. It’s difficult to recruit rock stars if you’re unable to offer wages above minimum wage, never mind at minimum wage.

Today, for most workers, the minimum isn’t going to cut it. So, when you’re looking at what you can offer, keep in mind the minimum wage for both tipped and un-tipped workers in your area.

Also, know what other operators are paying. To remain competitive, consider what else you can offer, including your values and culture.

States Increasing Minimum Wage

Below, the states with an increase to the minimum wage. Rather than organize the list by hourly rate or rate of increase, I set it up alphabetically.

Alaska: $10.85 per hour
Arizona: $13.85 per hour
California: $15.50 per hour
Colorado: $13.65 per hour
Connecticut: $15 per hour (June 1)
Delaware: $11.75 per hour
Florida: $11 per hour (September 30)
Hawaii: $12 per hour
Illinois: $13 per hour
Maine: $13.80 per hour
Maryland: $13.25 per hour
Massachusetts: $15 per hour
Michigan: $10.10 per hour (could rise further; lawsuit pending)
Minnesota: $8.63 per hour (small employer); $10.59 per hour (large employer)
Missouri: $12 per hour
Montana: $9.95 per hour
Nebraska: $10.50 per hour
Nevada: $11.25 per hour (July 1)
New Jersey: $14.13 per hour
New Mexico: $12 per hour
New York: $14.20 per hour (excluding some areas); $15 per hour for fast food workers
Ohio: $10.10 per hour
Rhode Island: $13 per hour
South Dakota: $10.80 per hour
Vermont: $13.18 per hour
Virginia: $12 per hour
Washington: $15.74 per hour

Among the states on the list above, four are lifting minimum wage to at least $15. Those states are Connecticut, Massachusetts, California, and Washington. Additionally, the minimum wage is $15 per hour in parts of New York.

Interestingly, employers in Nevada can reduce the minimum wage by one dollar if they pay qualifying health insurance. In such a case, the hourly minimum will be $10.25.

Only one of these states, Montana, will remain under $10.

Cities, Counties, Districts

As stated above, some parts of New York have a minimum wage higher than $14.20.

There are also cities, counties, and districts boosting the minimum wage.

Denver, Colorado: $17.29 per hour
Long Island, New York: $15 per hour
New York City, New York: $15 per hour
Washington, DC: $16.50 per hour
Westchester County, New York: $15 per hour

Overall, more than half the country either already increased the minimum wage or will do so later this year.

Image: Adam Nir on Unsplash

January 6, 2023by krghospitality krghospitality No Comments

Dynamic Pricing or Dynamic Menus?

Dynamic Pricing or Dynamic Menus?

by Doug Radkey

A key phrase used throughout 2022 was “the new normal.” In 2023, a key term you will likely hear a lot is “dynamic pricing.”

What is dynamic pricing? It can get quite complex, but the global consulting company, McKinsey, defines dynamic pricing as “the (fully or partially) automated adjustment of prices.”

The term is not entirely new to hospitality. Hotels and the overall travel industry have used modules of the pricing model for years. But for restaurants and even bars, yes, it is something new.

It is also a model getting a lot of attention of late, which begs the following question: Why?

As the bar and restaurant industry recovers from the effects of the pandemic, a dynamic pricing model that optimizes revenue opportunities may seem quite attractive. After all, our industry is looking to rejuvenate its sales to pre-pandemic levels.

Essentially, a dynamic pricing model within this industry would work like this: increase prices when demand is up (peak periods), decrease prices to draw guests in when demand is down (off-peak times).

But should this be a model that disrupts the industry in 2023 and into 2024?

While I am all for a little disruption, the industry needs to tread carefully through this potential transition to dynamic pricing (or perhaps just around the phrase itself) that’s based on demand levels.

Guest Experiences

We all know (or should know) that we do not sell a product. What we sell is an experience.

If we can create a positive, memorable guest experience first and foremost, the revenue will follow.

While hotels and travel, as examples, have boasted “positive financial results” over the years through their different approaches to dynamic pricing (while still trying to focus on the end-user guest experience), independent bar and restaurant brands must be careful not to create a hostile brand perception.

Why? Because many consumers view changing prices based solely on levels of demand as being unfair.

Being unfair will certainly create a negative guest experience and/or brand perception. The hotel and airline industries have been able to navigate this perception successfully by offering alternatives. For example, different rooms and amenities or less convenient flight times at different price points. Essentially, companies in lodging and travel provide options and flexibility before customers make the choice to spend.

What about rideshare and surge pricing as another example? Many of you reading this have likely been burned by surge pricing as a consumer, which can be by definition a form of dynamic pricing.

Have you ever tried to book a rideshare during peak periods in a major market? What would normally be a $20 ride is suddenly $40 to $60 (or more) because of their dynamic pricing model.

What did I do in this situation during a recent business trip? I walked another 25 feet up to the cab staging area of the airport and got my ride for $25.

The end results? I had a negative customer experience with the rideshare company, first and foremost. Additionally, that negative experience drove me to the competition. The key here is I was given a choice.

Now let’s switch that scenario to a restaurant.

The Restaurant Scenario

You book a table at your favorite restaurant and order that incredible steak dinner you always enjoy. But instead of it being $50 like you have grown accustomed to, it is now $75 or more. How are you as a consumer going to feel about this new price just because you visited your favorite spot during a “peak period” on a Saturday night? Were you given a choice before the spend?

Of course, this can work in the opposite direction: ordering a meal during a non-peak time and getting it for a cheaper price, thereby getting a discount.

But should we be confusing our customers based on their chosen, convenient time to visit your restaurant or bar? Should you also focus on “discounting” to drive people to your business?

I have even seen recommendations for offering an increased price for peak period but using what was the previous regular price during the non-peak times, labeling the normal price a “discount.”

Should we be framing our regular priced menu options as a discount just so we can charge and make more during a peak period? Is this being fair and ethical to your loyal customers? Should we be going down this road?

With this model (and the phrase “dynamic pricing”), which is based on demand, it is very easy to see how you can quickly confuse or alienate your loyal guests. Unless the industry in its entirety migrates over to this demand-driven model, a similar scenario as outlined above can play out for you and your guests.

Without extremely strong but transparent communication systems in place (which will be a challenge in itself), it is safe to assume that they will likely visit another restaurant up the street and/or provide negative feedback because they feel your pricing model is confusing or unfair.

Dynamic Menus

The phrase that is much more simplified and will be more easily embraced by both operators and guests is “dynamic menu.”

So, what’s the difference?

While it is still by definition “the (fully or partially) automated adjustment of prices,” it is not based on demand throughout the day. Rather, pricing is based on simple supply chain and operational cost adjustments.

According to the National Restaurant Association:

95 percent of restaurants have recently had significant supply delays or shortages of key food items; and
75 percent of restaurants have had to change their menu because of supply chain issues.

With a more dynamic menu, you can adjust pricing to suit those changes accordingly, through the lens of real-time ingredient cost, labor costs, productivity levels, and even the availability of certain menu items.

This simply means that the incredible steak dinner a guest has always enjoyed at your place is perhaps now $53 instead of $50 because the price of beef went up the past week or month. This ensures that as an operator, you will have a minimal gap between your theoretical and actual food costs.

Again, this should work both ways, meaning if the price of beef has gone down, so too should the price.

This means that your guests are paying an accurate value for each item, based on your intended sales mix and contributions, without a loss in margin on your end or negative experience on the guest end.

This means that everything on your menu is “market price” or MP. Where have we seen that before…?

Market Price

We all know restaurant menus will commonly deduct a price and replace it with the term “market price” (often abbreviated to “MP”). This means the price of the menu item depends on the market price of the ingredients, and the price is available upon request. It has been used for years for seafood in particular—most notably lobsters and oysters—in many restaurants.

Therefore, this pricing model is not entirely new. So, why should it stop at just high-priced seafood?

The reason many operators would use the abbreviated MP was because they did not want to reprint menus every single day as the prices fluctuated greatly.

As we move towards digitally savvy restaurant operations, implementing integrated technology and menus, we can begin to find alternatives and ensure that we are actively pricing our menus accordingly based on the market (and overhead costs) to strengthen top- and bottom-line results.

Knowledge is Power

To make a dynamic menu work, whether you’re a QSR, sports bar, casual-dining or fine-dining concept, or any other category of bar or restaurant, you need to know your target customers, provide a targeted menu, and know your numbers (the data).

Curating and engineering a menu should be a simplified process. To be honest, this should have been streamlined prior to the pandemic.

Your menu should be developed based on data, consumer sentiment, regional ingredients, regional suppliers, and local talent within the confines of the overall concept. Food and beverage programs should be developed with thought, care, speed, precision, execution, and last-but-not-least: consistent profits in mind.

Keeping menus “small” (10 to 12 or even 15 items at maximum) will be the new threshold of a successful, more profitable operation. This size of menu will allow bars and kitchens to operate more efficiently; keep inventory costs both low and controlled; control training and labor costs; and provide guests with the most flavorful and exciting items that they truly want.

Be Nimble

You also want to provide menu flexibility by continually reviewing your supply chain. Maintaining a strong personal relationship with your suppliers is imperative. You must also review your costs and inventory on a daily and weekly basis to make dynamic menus work.

To keep inventory, purchase orders, and potential waste to a minimum, it will be crucial that you to ensure your menu is small but innovative. The only way to accomplish this is through effective data management.

However, the new challenge for many independent brands is making data timely, relevant, digestible, and actionable for operators and their leadership teams. The ability to collect, interpret, and effectively react to key datapoints is going to be crucial for anyone who wants to implement a dynamic menu, and for moving forward in general.

At the end of the day, profiting from a dynamic menu is all about making decisions based on accurate cost and productivity data. Of course, there’s only one way to obtain data: embrace technology and create strategic clarity around it.

The Tech Stack

The key to successfully implementing a dynamic menu is integrating a stack of technology that provides real-time data and trend reports.

From point-of-sale software and reports to accounting software, inventory and recipe management software, and invoice management software or a suite that includes all of the above that’s integrated and working together, you can obtain real-time data to adjust your pricing based on real-time ingredient and productivity costs on a daily or weekly basis.

You want seamless movement of data from front- to back-of-house that will position you to make decisions and have a more complete picture of inventory stock levels, costs, and ordering needs, plus itemized sales, contribution margins, and productivity levels.

In Summary

While we must find ways to be innovative, potentially price-gouging our guests during peak periods and discounting during slow periods is not the way for this industry to recuperate and build loyal customers.

Building a strong brand through the creation of memorable experiences and by building connection with your community along with strategic planning, effective marketing, the elements of culture, and efficient operations, you can build sustainable revenue and profit channels.

By following a more dynamic menu approach within your operations, you can still maintain transparency with your guests with less challenging communication methods, remain a fair and well-respected brand within your community, and improve your margins by three to five percent or more with the right people and systems in place.

That sounds like a pretty good deal to me. The question here remains: Are you Team Dynamic Pricing or Team Dynamic Menus?

Image: Joe Neric on Unsplash

January 4, 2023by David Klemt David Klemt No Comments

Celebrating the Baltic Porter

Celebrating the Baltic Porter

by David Klemt

In just over two weeks we celebrate a rich, dark beer style with sweet malty characteristics that traces its history back to the 18th century.

Once a favorite among the working class in London, Baltic Porter is seeing a resurgence. This is, unsurprisingly, driven largely by interest from the craft beer world.

Tracing its own history to 2016, Baltic Porter Day celebrates its namesake beer. The beer holiday takes place every third Saturday in January. So, this year we celebrate Baltic Porter Day on January 21.

That should give operators enough time to prepare. One of the best ways to drive interest in this holiday—and beer style in general—is to look into local breweries. Craft breweries, brewpubs, and microbreweries around the world release Baltic Porters to celebrate this holiday.

Locality and hyper-locality are, as we know, important to many guests. That makes it a smart move to develop relationships with local brewers, distillers, farmers, vintners, etc.

Operators who don’t yet have those relationships need to commit to changing that this year. And, hey, Baltic Porter Day is an excellent reason to begin that change and approach local brewers.

What’s Baltic Porter?

In the 1700s, high-hop Pale Ale wore the beer crown in England. However, some small breweries made a run at the throne. They wanted to see a dark beer on top.

So, according to some beer historians, brewers looking to take on Pale Ale began with sweet brown beer. The beer was higher-hopped, dark, and higher alcohol with cocoa, chocolate, and coffee notes.

Porter was born, named for the working class people who embraced it: dock and street workers.

Eventually, the production and reach of Porter of small brewers was overtaken by larger breweries. This is largely due to maturation time, which translates to higher costs; it can take six to twelve months for a Porter to mature.

Over time, Porter found its way to Northern Europe, including Estonia, Latvia, and Lithuania. Those three countries are known as the Baltic states.

Brewers in those countries tried their hand at Porter production. Importantly, Baltic state brewers put their own spins on Porter. Notably, they replaced ale yeast with lager yeast.

Additional changes include replacing British hops with Baltic hops, and blending pale and dark malts. Baltic brewers roasted the malts in a drum kiln. The invention, created by Daniel Wheeler, allowed brewers to roast malts without burning them.

The Baltic Porter was born.

Characteristics of Baltic Porter

Curious operators and teams can find the official Beer Judge Certification Program guidelines for the this style here.

As a quick summary, the following are keys to Baltic Porter:

Appearance: Opaque dark brown to dark reddish-copper. Not black in appearance.
Aroma: Rich, malty sweetness with some dark malt characteristics. No hops on the aroma.
Flavor: A roasted but not burnt flavor. Rich, malty sweetness. Caramel, nuttiness, toffee, molasses. Dried fruit and alcohol.
Mouthfeel: Medium to medium-high carbonation keeps the beer from feeling “heavy” on the tongue. Smooth but full-bodied.
Finish: Licorice or roast coffee.

Since this beer tends to range in ABV from 6.5 to 9.5 percent, it’s wise to serve this beer with food. Think hearty fare, like barbecue, chili, and burgers, and Gouda as a cheese pairing.

Of course, local brewers should be able to offer up their own ideas for food pairings. After all, they know their beer better than anyone else.

As some sources note, people often serve Baltic Porter in a snifter. However, a pint glass is perfectly acceptable for this beer style.

Image: Peter Fischer from Pixabay

"Think about things differently" neon sign

January 2, 2023by David Klemt David Klemt No Comments

Program for Unique Holidays: January 2023

Program for Unique Holidays: January 2023

by David Klemt

Do you want to stand out from from other restaurants and bars in your area? Change how you think about holiday promotions.

Several holidays are set against every date on the calendar, and January is no exception. These holidays range from mainstream to esoteric.

Pay attention to the “weird” or unique holidays to raise eyebrows, carve out a niche for your restaurant or bar, and attract more guests. Why do what everyone else is already doing? Why program only around the same holidays as everyone else?

Of course, you shouldn’t try to celebrate every holiday, strange or otherwise. Focus on the days that are authentic to your brand; resonate with your guests; and help you grab attention on social media.

You’ll find suggestions for promotions below. However, the idea behind our monthly holiday promotions roundup is to inspire you and your team to get creative and come up with unique programming ideas.

For our December 2022 holidays list, click here.

January 5: National Whipped Cream Day

There’s a ton you can do with whipped cream when it comes to your F&B. From garnishing shots to piling it on desserts, whipped cream is just a fun time.

This is also the perfect holiday for party spots to offer Whipshots or feature whipped cream-flavored vodkas.

January 6: National Technology Day

There are several ways to approach programming for this day. To focus on one, this would be a great day to highlight your cool bar tech. One item that comes to mind is the Ripple Maker.

For those unfamiliar, this is a device that prints images on top of frothy or foamy drinks via food-safe media. Ripple’s next-gen device, the Ripple Maker Pro II, is available now.

January 7: Old Rock Day

The purpose of this holiday is to celebrate the planet. Earth is an “old rock,” after all. Two programming ideas that come to mind are: celebrating classic rock; showcasing spirits that have been on the market for decades (or even centuries).

January 10: National Cut Your Energy Costs Day

By now we all know that sustainability and responsible business practices matter to many guests. National Cut Your Energy Costs Day is a great time highlight your own eco-friendly policies, potentially raising money for “green” causes.

January 11: Learn Your Name in Morse Code Day

If you want to have some fun with your guests, print an LTO menu with F&B item names in Morse code. Include descriptions that aren’t in Morse code that give guests an idea of what to expect from each item.

There are several Morse code translators online, like this one.

January 17: National Bootlegger’s Day

This is the holiday to celebrate brands or cocktails that:

survived prohibition;
were created during prohibition; or
produce or feature moonshine.

January 20: Penguin Awareness Day

Are you aware of penguins? You’re not? That’s odd.

Anyway, there’s an almost startling amount of cocktails with “penguin” in their name. So, why not create an LTO menu of “penguin” cocktails? Bonus points if some proceeds can go to a penguin-focused charity.

January 21: Squirrel Appreciation Day

Do you appreciate squirrels? Well, you should—it’s believed they plant three billion oak trees every year.

Now, I bet you can guess what I’m going to suggest: celebrating the classic Pink Squirrel. And why not? It has been around since the 1940s and is an icon, after all. If you really want to go all out, slap some foods into a Jell-O mould and get crazy.

January 29: National Puzzle Day

As with other holidays, there are a few ways to celebrate National Puzzle Day. You can provide guests some small puzzles to keep them busy (and keep them at your restaurant or bar for longer). Alternatively, get your hands on a very challenging puzzle, set it up on a card table, and encourage guests to work on it together. Or even ask guests to bring in their own puzzles.

January 31: National Backward Day

Programming for this holiday can be as simple as printing your menu backwards. Of course, you can also get much more immersive—it’s all in the details and recognizing opportunities to help guests walk away with memories.

Image: Ivan Bertolazzi on Pexels

December 30, 2022by David Klemt David Klemt No Comments