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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.

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March 22, 2021by krghospitality krghospitality No Comments

NRN Shares Inclusion Insights Report

NRN Shares Inclusion Insights Report

by David Klemt

Featuring insights from their 2021 Power List, an inclusion report from American trade publication Nation’s Restaurant News is now available.

Overall, NRN’s 2021 Power List consists of C-suite and executive heavy hitters from some of the most influential restaurant groups.

For example, Domino’s, Yum Brands, &pizza, and Momofuku Restaurant Group, are on this year’s list.

To compile their 2021 Power List: Leadership & Inclusion Insights report, NRN asked their power players to identify a team member who embody inclusivity.

Lessons Learned from 2020

NRN’s report is broken down into five sections; this is the first.

Reading through the insights in this section, you’ll find that agility and adaptability are crucial to navigating crises. That will come as no surprise to many.

However, what really strikes me are the words of Donnie Upshaw, SVP for people at Wingstop. Upshaw cites the importance of culture and core values:

“Our core values, known as ‘The Wingstop Way’—service-minded, authentic, entrepreneurial and fun—have been and will continue to be our guiding light through all seasons of our business.”

Those core values, along with Wingstop culture and a focus on retaining top talent, are keys to their successful navigating of the pandemic.

Accomplishments During a Pandemic

The pandemic has torn apart the hospitality industry and continues to do so. In America, we’re just now seeing specific relief targeting foodservice businesses.

Given the situation, just surviving the pandemic is an accomplishment.

Still, chain and independent operators are forging paths forward and inspiring others inside and outside of the industry.

Erika Palomar, COO of the Independent Restaurant Coalition, says the group “faced the darkest hours, together.”

Palomar continues: “They held fast to their commitment to change the most lives possible. This group has the remarkable ability to look beyond their door and inspire others to take action and make bold changes that will serve this industry and our society for the better.”

Importance of Leadership & Impact

The job of owners, operators, managers, and mentors is to lead. Doing so is one of the most effective tools for growing a business and retaining talent.

Adversity, of course, is one of the—if not the—greatest challenges to leadership.

Beth Scott, president of Fleming’s, says building trust is the first step in realizing the core of what it means to be a leader: inspiring and influencing, not commanding.

Jason Crain, CRO of Slutty Vegan, says, “Leading is dynamic and solution oriented.” Crain points to knowing when to implement different forms of leadership as a crucial element.

Further Insights

NRN’s report has two more categories, “Fostering Diversity & Inclusion” and “The Future of Foodservice.” There are insights from several more power players who drive the missions of inclusivity, diversity and equity.

We encourage you to follow this link and review the report for invaluable motivation and inspiration for your own business.

Image: Free-Photos from Pixabay

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.

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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.

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February 23, 2021by David Klemt David Klemt No Comments

Datassential Finds Operators Optimistic

Datassential Finds Operators Optimistic

by David Klemt

The latest report from Datassential finds that the vast majority of operators are optimistic or at least confident their businesses will survive the pandemic.

Per Datassential, operator outlook appears to be more positive than it was in December.

That’s largely due to the distribution of the Covid-19 vaccine.

Datassential Covid-19 Resources & Reports

Datassential has been releasing informative Covid-19 reports throughout the pandemic to provide helpful industry, consumer and operator data.

“Trending Upward” is Datassential’s 46th installment, and the research firm provides their Covid-19 resources at no charge.

For this report, Datassential surveyed 400 “decision makers for restaurants and on-site foodservice locations.”

Operator Outlook

Most of the operators surveyed, 220 or 55 percent, are still concerned about the challenges facing them and the industry. However, they’re “fairly confident” that their businesses will make it through.

That 55 percent represents no change from December of last year, when Datassential last gauged operator outlook.

The next two survey respondent segments tell the tale of optimism.

Of the 400 operators surveyed, 148 or 37 percent are “cautiously optimistic.” In fact, they expect to be even stronger post-pandemic.

Compared to December, that’s a seven-percent increase in operators who feel optimistic. That seven percent shifted from the “very nervous” segment,

Just 32 of survey respondents (eight percent) reported that they don’t think they’ll survive the pandemic. Losing any businesses to the pandemic and its terrible impact on the industry is beyond horrific, and the results of this Datassential report in no way minimize that awful truth. However, the percentage of operators who feel “very nervous” or otherwise pessimistic reducing by nearly half provides at least a semblance of hope for the future of the industry.

Staff Cuts

According to Datassential, more than 80 percent of operators who were forced to cut staff at some point during the pandemic have been able to bring back some of their workers.

Of the 400 respondents surveyed by Datassential, 21 percent of operators reported they hadn’t laid off any of their employees

Another 20 percent had to cut staff but were able to rehire all of them.

Nearly half (48 percent) have only been able to hire some of the staff they laid off back. Twelve percent have been unable to rehire any of the staff they had to let go.

Takeaway

Optimism is great for emotional and mental health. So is targeted relief. Operators and employees will likely feel far more confident and relieved if the industry receives actual targeted relief. This Datassential report’s findings are positive but we need Congress to act.

Click here to tell your representatives to pass the RESTAURANTS Act now.

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Chef preparing burgers inside restaurant

February 15, 2021by David Klemt David Klemt No Comments

This Generation is Most Likely to Dine In

This Generation is Most Likely to Dine In

by David Klemt

The National Restaurant Association’s 2021 State of the Restaurant Industry report revealed the generation most likely to dine in-person at a restaurant.

That is, of course, if such restaurant service—from quick-service to fine dining—is permitted where they’re located.

So, do you have a guess? Because we have the answer.

Most Likely to Dine In

Per an NRA survey, Gen Z is most eager to return to in-person restaurant dining.

However, it’s more of a simple majority that’s after a restaurant experience beyond delivery, takeout and curbside pickup than an overwhelming one.

Just 53 percent of adult members of Gen Z surveyed by the NRA are willing to dine inside restaurants over the course of the next few months.

Overall, 67 percent of Gen Z, Millennial, Gen X and Baby Boomer adults would like to engage with restaurants like they did before the pandemic. That’s not a huge stretch, of course; we all want to return to normal and put Covid-19 behind us.

Still, the survey results make it clear there’s demand for in-person dining. The convenience of interacting with and ordering from restaurants is here to stay. However, that convenience hasn’t replaced the desire to dine (and socialize) out.

So, Who’s Most Likely to Order In?

You’d be forgiven for assuming the answer to this question is also Gen Z. After all, just about every development regarding technology and how people engage with the world has been laid at their feet.

When Gen Z isn’t being accused of “killing” a tradition, sense of normalcy or an entire industry, the finger is pointed at Millennials.

Well, it turns out the usual finger-pointing suspects are the consumers most likely to order from restaurants.

According to the NRA’s report, 81 percent of Boomers and 80 percent of Gen X will continue to order from restaurants, at least for the next few months.

Put it All Together

At least for the next several months, the industry’s recovery will hinge on the full-strength return of in-person service and the convenience of delivery and takeout.

In other words, some consumers are champing at the bit to once again make restaurant visits a regular part of their lives while others plan to proceed with caution. Successful restaurant operations will maintain a mixture of traditional and digitally-driven services.

Nearly 90 percent of adults surveyed by the NRA say they enjoy going out to restaurants and that doing so with family and friends is a better way to spend leisure time than cooking at home.

“Restaurants are the cornerstone of our communities, and our research shows a clear consumer desire to enjoy restaurants on-premises more than they have been able to during the pandemic. We’ve also found that even as the vaccine becomes more available and more social occasions return to restaurants, consumers will continue to desire expanded off-premises options going forward. Both will continue to be key for industry growth,” said Hudson Riehle, senior vice president, Research and Knowledge Group, NRA, in a press release announcing the Association’s 2021 State of the Restaurant Industry. “With more than half of adults saying that restaurants are an essential part of their lifestyle, we are confident that, with time, the industry is positioned for successful recovery.”

The NRA predicts foodservice sales to reach $731 billion in 2021, an 11 percent increase over 2020. Unfortunately, that estimate is about 15 percent lower than sales generated in 2019.

Still, that’s a reason to be optimistic. Consumers are pent-up and eager to make restaurants a significant part of their lives once again.

Nobody is more eager, evidently, than Gen Z.

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