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July 12, 2022by David Klemt David Klemt No Comments

What’s Up with Meat, Poultry and Seafood?

What’s Up with Meat, Poultry and Seafood?

by David Klemt

We know how plant proteins are performing with consumers but what do we know about how meat, poultry, and seafood are doing?

Well, because of a recent report from Datassential, we know many consumers are “meat-limiters.” And research from the World Resources Institute shows that plant-based performance is nuanced.

Interestingly, the performance of animal proteins on-premise appears to be following a beverage trend: Moderation. According to Datassential, more consumers are reducing their consumption of meat and poultry than increasing it in comparison with 2021.

So, meat-limiters may be indicative of the future of meat consumption.

Consumer Shifts

As the name implies, meat-limiters are limiting or otherwise reducing their consumption of animal proteins. Importantly, it doesn’t appear that a significant percentage of consumers are eliminating animal proteins from their diets.

Rather, many people are simply increasing the amount of plant-based items they’re eating. However, that increase is more aspirational than real in some cases.

Per Datassential’s survey of 1,500 consumers in the US, just over 70 percent of people are meat eaters. In contrast, nearly 25 percent are “flexitarian.” Just two percent are vegan or pescatarian, and only three percent are vegetarian.

So, the vast majority of Americans are still consuming meat, poultry, and seafood. We just now have reason to believe that more consumers may be leaning toward a flexitarian diet.

A bit over a quarter of consumers consume meat every day. Still, many people aspire to eat more vegetables, fruits, and whole grains, per Datassential.

However, there are more pescatarians, vegans, and vegetarians among Gen Z than the overall population. According to Datassential, this could indicate a shift away from animal proteins in the future.

Meat Performance is Nuanced

Just like plant-based performance, meat performance is nuanced. There are many factors at play.

Shifts in what consumers value are driving changes to the performance of proteins. Health, sustainability, the climate, taste, and affordability have an effect on all proteins, animal and plant.

Undeniably, inflation and shaken consumer confidence are impacting protein performance. Everything, it seems, is more expensive at the moment. Generally speaking, animal proteins are pricier than plant-based items.

It makes sense, then, that some consumers are reducing their intake of animal proteins and filling that void with fruits, veggies, and legumes.

Of particular note are shifts in daily and weekly consumption of animal proteins in 2022. Meat consumption once or more per week—beef, lamb, pork, veal—is up three percent. However, there’s a ten-percent increase in consumers eating poultry once or more per week.

Interestingly, daily poultry consumption is down seven percent in comparison with 2021. Likewise, daily consumption of seafood is also down seven percent, and fewer people are consuming it less than once per week.

Plant-based is Down

Despite what some would think, meat-limiters don’t appear to be driving up plant proteins significantly.

In fact, according to Datassential, the daily consumption of plant-based proteins is down. Per the research firm, seitan, tempeh, and tofu are the experiencing the greatest drop in daily consumption.

The fact is that across generations, more consumers eat animal proteins on a daily basis than their plant-based counterparts. Gen Z, per Datassential, consumes more animal proteins on a daily basis than other generations.

So, how does it make sense that people are reducing their meat intake but plant-based isn’t seeing a sizable jump in consumption?

In part, the answer is the growing popularity of plant-forward dishes. These are items, like bowls, that offer a small amount of meat, poultry, seafood or dairy. The majority of these menu items consists of plants but are not free of animal proteins completely.

The path forward may indeed be a plant-forward menu. Of course, this is heavily reliant on a specific concept or brand. Still, it’s likely many restaurants can do well offering mixed dishes, those heavier on plant proteins than animal proteins.

Image: Peter Pham on Unsplash

Note: This article is based on information from Datassential’s “2022 Plant-Forward Opportunity” report. To access a number of free reports, sign up with Datassential today.

July 5, 2022by David Klemt David Klemt No Comments

Datassential IDs LTO Keys

Datassential Identifies Limited-time-offer Keys

by David Klemt

Food and beverage market research firm Datassential turns their attention to limited-time offers in one of their latest reports.

Part of the FoodBytes series of resources, “A Look at Limited-time Offers” is a free Datassential trend report. If you have yet to do so, sign up for Datassential FoodBytes reports.

There are several ways for savvy operators to drive traffic. Loyalty programs and subscriptions are two popular modern-day solutions.

However, the LTO is tried, true, and can boost traffic, engagement, loyalty, sales, and revenue.

Of course, there are different ways to execute LTOs. There’s the recurring, anticipation-driving item: McDonald’s McRib. Then there’s the seasonal offering: Starbucks Peppermint Mocha. And the return of a popular item eliminated years prior: Taco Bell Mexican Pizza and Wendy’s Spicy Chicken Nuggets.

Some LTOs have been going strong for years, others are leveraging a sense of nostalgia. In fact, some appear to be a direct response to Internet chatter.

Which LTO?

Per Datassential, 63 percent of LTOs most recently purchased by consumers were impulse decisions. And when the firm dives into LTOs in general, they find that one product stands above the others.

The top-performing LTO food item in terms of order frequency is the burger.

Now, does that mean you have to menu an LTO burger to succeed with this type of promotion? Of course not.

A successful LTO is one that’s authentic to your brand. And, clearly, it needs to be one that interests your guests. If you’ve been reading KRG Hospitality articles for a while, you know what I’m going to say next.

But for those who are new around here, I’m going to tell you to review your consumer data. What items are performing best? What flavors are resonating with your guests?

Now, look at the industry. What flavors and items are trending? How can you leverage them—in an authentic way—into an LTO?

If a burger may not work, will a different type of sandwich do the job? How about nuggets, breakfast items, a dessert, or a beverage?

Know your brand, know your guest, know what’s bringing the heat.

How Long?

Once you know what you’re offering, the next question should be obvious. How long are you going to make it available?

Every concept is different. What works for one may not work for another. However, analyzing what others do in terms of LTO duration and frequency can help inform you.

And as it turns out, Datassential’s latest FoodBytes report addresses “LTO cadence.”

The majority of operators—43 percent—run an LTO once every one to three months. Considering the popularity of seasonal LTOs, this frequency makes sense.

Interestingly, a quarter of operators offer an LTO more than once per month. Just about as many execute one every three to six months.

Far, far less common is running an LTO once every six to 12 months. In fact, this is the approach of just seven percent of operators. A mere two percent of operators run an LTO less than once every 12 months.

Again, there’s no “right” answer here. Some operations can succeed with multiple LTOs each month, some find success rarely offering one at all.

Takeaway

Operators know their brands best. They should know their guests equally as well, or at least strive to do so. As such, an operator should have an idea of what to offer in terms of LTO food or beverage items.

And, of course, operators should data-obsessive. That’s the only real way to have an idea of what LTOs will work, how often they should run, and how frequently one should be available.

But there’s more to know. Datassential also reveals challenges that deserve serious consideration before executing any LTO:

Do you have time to train staff on the new item?
Is your staff strong when it comes to upselling?
Will your guests complain when the new product is no longer available?
Do you have to source one or more ingredients for this item?
Is/Are the ingredient(s) necessary readily available?

The LTO is a proven marketing and promotion tool when done well. Challenging, yes, but worth the effort.

Image: amirali mirhashemian on Unsplash

June 29, 2022by David Klemt David Klemt No Comments

This Year’s Big Trend: Moderation

This Year’s Big Trend: Moderation

by David Klemt

Beverage-top media platform Ripples is reporting 2022’s big drink trend, focusing heavily on Gen Z imbibing habits.

The unique company produces devices that make it possible to print images atop drinks. With beverages of all types as their focus, the company is a great position to study drink trends.

Interestingly, Ripples focuses primarily on Gen Z drinking habits. However, the company’s data identifies an intriguing trend that transcends a single generation.

Let’s jump in.

Zero-proof Beverage Growth

At KRG Hospitality, we appreciate numbers; we’re a data-driven agency. Well, amongst all the stats Ripples latest findings reveal, two are massive.

First, in comparison to 2019, zero-alcohol products are up 166 percent. Second, the non-alcohol category is growing four times faster than its low-ABV counterpart.

Another impressive number? Non-alcohol spirits have grown by over 113 percent since 2020.

Per Ripples, Gen Z is driving the growth in the no-alcohol space. According to the beverage-tech company, this is likely due to social media presence.

I’m sure you read articles at least from time to time about Gen Z social media habits. Those written by their older counterparts make it seem like Gen Z doesn’t understand the risks of recording their every action.

Well, it’s highly likely that much of Gen Z would rather not have their drunken shenanigans on display on every social platform.

Values Drive Purchase Decisions

Beyond risk aversion, Ripples identifies values as key to Gen Z purchase and consumption decisions.

Generally speaking, members of Gen Z value transparency and authenticity. Brands that share those values are more likely to succeed with Gen Z.

And, again, speaking broadly, smaller, independent brands are often perceived as more transparent, authentic, and responsible. Large, mainstream brands are often seen as anything but green and responsible, never mind transparent or authentic.

Ripples posits that small indies aren’t encountering daunting barriers to entry. So, small-batch, craft non-alcohol brands are apt to find Gen Z support.

Craft sodas, RTDs offering health benefits, and zero-proof cocktails in cans or bottles are flooding the market. And they’re finding success. In fact, according to Ripples, RTD sales are up 400 percent on Drizly since 2019.

The Big Trend

If you’re a listener of our Bar Hacks podcast you’ve likely heard our episodes with David Allison. If you haven’t heard them, they’re episode 46 and episode 67.

As the founder of the Valuegraphics Project, Allison isn’t a fan of focusing on demographic stereotypes. Instead, he recommends a focus on values in conjunction with demographic and psychographic data.

In part, the Valuegraphics Project approach encourages business owners and operators to identify and target their customers’ values. This is, according to Allison, far more powerful than focusing on age and sex. As important is the fact that demographics tend to divide us, and stereotypes are dangerous.

So, he and the Valuegraphics Project team probably wouldn’t like all the focus on a single generation in this article and Ripples’ findings. Well, there’s some good news and it pertains to what’s likely this year’s biggest drinking trend.

Across all generations, one drinking trend is common: Moderation. An interest in no- and low-alcohol beverages is shared among all generations.

In fact, according to Ripples, 78 percent of consumers purchasing zero-proof drinks aren’t doing so exclusively. These consumers are still buying they’re favorite full-alcohol beverages.

Takeaway

Leveraging the moderation trend is fairly simple. The growth of all zero-proof categories means operators can succeed with alcohol-free spirits, beer, and wine.

RTD cocktails—full-, low- and zero-proof—are selling very well and work in restaurants and bars.

In short, ensure you have low-ABV and zero-alcohol versions of your full-ABV drinks on your menu. Include these in a dedicated non-alcohol section.

Operators don’t need to be afraid of guests drinking more moderately. The stereotype that guests who choose zero- or low-proof drinks are bad for the bottom line simply isn’t true.

Image: Chris Curry on Unsplash

June 20, 2022by David Klemt David Klemt No Comments

Eatertainment Poised to Come Roaring Back

Eatertainment Poised to Come Roaring Back

by David Klemt

People are eager to return bars and restaurants, and that focus is beneficial to the growth of one hospitality category in particular: Eatertainment.

As the name suggests, an “eatertainment” venue operates as both an entertainment space and restaurant.

Those who have been to such a concept know the key elements that define eatertainment. A robust F&B program; an array of bar games and other entertainment; room enough to play games and attract groups, but so large it draws massive crowds; and an interest in extending guest stays rather than constantly turning and burning.

Pre-pandemic, the eatertainment category was heating up, steadily growing in popularity. As recently as 2019, SevenRooms and YouGov partnered to study these concepts. When your category draws the attention of data-focused platforms and research firms, you know it’s a winner.

So, what did SevenRooms and their research partner conclude? That eatertainment venues are the new nightclub.

Eatertainment Muscles in on Nightlife

Per the SevenRooms report from 2019, nightlife preferences in the United States were shifting away from traditional nightclubs. This switch was, according to SevenRooms, partially driven by three factors:

Nightclubs draw large crowds;
they play very loud music; and
such venues embrace exclusivity.

Now, that isn’t to say that the nightclub is dead. Particularly in destination cities like Las Vegas and Miami, nightclubs are a major draw.

However, as people reach their thirties or seek out more casual spaces, eatertainment becomes increasingly attractive. For the most part, people can leave work and go straight to an eatertainment concept to meet up with friends. They’ll be able to carve out a space, grab a bite and a drink, and socialize while engaging with an array of entertainment options.

Such venues also tend to be open seven days per week, from noon or early afternoon into late night. Their F&B programs, focus on entertainment, and hours of operation position them to play an important role: the third place.

Home Away from Home

As any dive or neighborhood bar operator knows, becoming a person’s third place is crucial. The third place, for those unfamiliar with the term, is the spot you go to in between the workplace and home.

So, becoming someone’s home away from home is a big deal. It’s the ultimate in consumer loyalty. Become someone’s third place and you’ll be on your way to building an army of brand advocates.

The third place is where we unwind after work. We’re friendly with the staff: they know us, know our usual orders, and know what recommendations to make.

Now, what if a regular’s third place offered not just quality F&B but also entertainment and an atmosphere that shifted with dayparts? You’d have a supercharged third place, a.k.a. an eatertainment concept.

Eatertainment will Continue to Grow

Where should people go when they decide they’re beyond their nightclub years? Feeling uncomfortable in a nightclub doesn’t mean the interest in nightlife simply disappears.

Well, they turn to eatertainment. And why do they find these concepts appealing? For several important reasons driven by shifts in consumer behavior.

One, I think we’re all tired of endless text and DM exchanges attempting to organize an outing. An eatertainment venue is a restaurant, bar, entertainment space, and nightclub in one place. No more planning to travel to a restaurant, then a bar for drinks afterward, and then a nightclub, concert, or lounge.

Two, today’s consumer is seeking out restaurants and bars that offer more inclusive, more welcoming, more personalized experiences. Again, eatertainment hits all those marks.

According to SevenRooms, there are key datapoints that indicate eatertainment will continue to grow. And while their report was published in 2019, their findings are still relevant given the past two years:

Around a quarter of Americans want more eatertainment venues close to them.
A quarter of Americans prefer a venue that combines quality food and drinks with fun activities in one space.
Nearly 30 percent of Americans consider food quality when deciding where to spend their time and money.
Close to 20 percent want a venue to offer something to do beyond drinking.

More recently, May of this year, in fact, Datassential also found that eatertainment is on the rise again. Per their data, half of consumers “are very interested in revisiting an eatertainment experience.

Takeaway

Eatertainment concepts are positioned to perform well moving forward.

Think about it: people are eager to socialize without being packed together; guests are showing interest in innovative, high-quality F&B items; people want entertainment that spans live music and DJs to cornhole (or bags, if you want to have that argument), axe throwing, and arcade games; and having access to an incredible, personalized experience in one venue is an attractive prospect.

Punch Bowl Social, Topgolf, Pinstripes, and Flight Club are among the best representatives of the category. Do you have the idea for the next big eatertainment brand? Let us know!

Image: Elevate on Unsplash

June 6, 2022by David Klemt David Klemt No Comments

Back of House Report: The Labor Challenge

Back of House Report: The Labor Challenge

by David Klemt

A recent report from Back of House reveals opportunities for operators amidst the current staffing challenge.

In their report, the restaurant technology platform suggests effective hiring and retention solutions. For example, helping staff find meaning in their work.

To download and access the report in its entirety, please visit BackOfHouse.io.

For some of the platform’s insights into staffing, keep reading.

Why People Leave the Industry

Obviously, people take jobs for a variety of reasons. Often, a person’s first job has one or two motivations: money and/or experience.

Some estimates put a gig in the restaurant industry as the first job for a third of Americans. In Canada, restaurants are the top employers for those under 25 years of age.

However, Back of House sees value in looking at a different metric: Why people leave the industry.

As Back of House states, knowing why someone would leave their job helps an operator determine what benefits to offer to retain talent.

Now, it may be tempting to assume pay is the top reason people leave jobs. Per Back of House, however that’s not the case. Broken down by age group, below you’ll find the reasons people are leaving hospitality:

Pay: 26 to 35
Schedule: 46 to 55
Lack of opportunities: 26 to 35
Lack of benefits: 26 to 35
Work environment: 18 to 25

Look at these issues through the lens of someone moving through life. When first entering the workforce, more people want to find the right employer and workplace. From their twenties to thirties, more concern is placed on moving up, making more money, and receiving benefits. And, per Back of House’s findings, time becomes more of a consideration as people age.

Meaning and Value

Per Back of House, there are two important elements of employment that keep people engaged.

One, meaning in the work they do. In other words, feeling that their work has value. Two, staff want to feel that they’re employers value them.

Of course, both make sense, no? If a person doesn’t see their role in the industry as valuable, they’ll always be looking for the escape hatch. And if they feel that they’re employer doesn’t value them, why would they continue working for them? People, as they say, quit bosses, not jobs.

So, Back of House recommends that operators demonstrate they value their team members by:

investing in their staff;
supporting their staff; and
respecting their staff.

Now, good leaders should already do all of the above. It should go without saying but if someone feels a lack of respect, support, and interest from their employer, they’re not going to remain in their role for long.

And who could blame them? That seems like a terrible workplace and a waste of a hospitality professional’s valuable time. Time, of course, that can be better spent finding a good leader to work for who will help them progress in their career.

There are further insights one can glean from Back of House’s report. To download “Understanding the Staffing Challenge,” please click here.

Disclaimer: Neither KRG Hospitality nor its representatives received compensation to promote this report. The team at KRG simply feels all operators will find value in downloading and reading it, and considering the information contained therein.

Image: Joao Viegas on Unsplash

May 4, 2022by David Klemt David Klemt No Comments

SevenRooms Reveals Hotel Guest Study

SevenRooms Reveals Hotel Guest Study Results

by David Klemt

Americans eager to get back to normal and make up for lost time are traveling in droves, and hotels will have to adapt in order to earn their business.

To give hotel and resort operators an edge, SevenRooms today reveals the results of their latest study.

“Booking Behaviors: Exploring Hotel Guest Loyalty,” contains datapoints all hotel operators should know.

The report, a collaboration with YouGov, focuses on two types of travelers.

Competitive Incentives

Before I address the who, let’s take a look at data that highlights the what.

According to the SevenRooms and YouGov report, nearly half of consumers say that loyalty programs are important. Per SevenRooms, loyalty programs influence hotel choice for 44 percent of guests.

Regarding American hotel guests specifically, 34 percent of guests will consider rebooking if their loyalty status receives recognition upon check-in.

However, loyalty status recognition isn’t enough for guests to book a hotel again. To understand what will influence that decision we need to take a look at SevenRooms’ traveler types.

Leisure

SevenRooms and YouGov look at two travelers for their report. There’s the Personal Patron and the Business Traveler.

Let’s focus on the former first. Per SevenRooms, to say the Personal Patron is eager to return to travel is an understatement.

The Personal Patron is a leisure traveler who has been climbing their walls for more than two years. They’re planning to travel “with a vengeance” this summer.

Diving deeper, the Personal Patron is most probably a female over the age of 35.

While recognizing this traveler for their loyalty program membership is smart, it’s not enough to influence a rebook. Rather, the Personal Patron places greater value on:

receiving more loyalty program points in exchange for dining and drinking at property-operated restaurants and bars;
enhanced credit card rewards; and
earning dining credits upon reaching a new loyalty program tier.

However, there’s a problem inherent to the Personal Patron and loyalty programs. Just 45 percent—so nearly half—of this traveler type are loyalty program members.

The reason for that low program buy-in? Almost 60 percent don’t think they travel enough to benefit from hotel loyalty programs.

Per SevenRooms, there’s a rather simple solution: local benefits. Tempt Personal Patrons with staycations and access to amenities at hotels in their home markets. Another idea is to offer points exclusively for dining that this traveler can use where they live.

Business

Obviously, the business traveler is now different. In fact, SevenRooms considers two versions of the Business Traveler.

On the one hand, there’s the extended-stay version traveling all over the country. And on the second hand, there’s the long-distance Business Traveler who’s seeking a midweek “home base” hotel.

Either way, the Business Traveler is most likely a male aged 18 to 34.

Per SevenRooms—and as most hotel operators likely know—this traveler probably doesn’t have time (or interest) in exploring off property. Therefore, the Business Traveler can be influenced to rebook through incentives that make their stays better.

These include:

receiving more loyalty program points in exchange for dining and drinking at property-operated restaurants and bars (like the Personal Patron);
receiving recognition for being a loyalty program member; and
getting a complimentary drink on check-in; or
being given a choice of an F&B amenity on arrival.

Unsurprisingly, the Business Traveler is more likely than the Personal Patron to join a hotel loyalty program. Per SevenRooms, 55 percent of Business Travelers say that the ability to participate in such a program influences their hotel choice.

Focusing on perks that “reward” the Business Traveler for their hard work can convert a Business Traveler to become a loyal guest for a particular hotel or hotel group.

SevenRooms suggests priority reservations for the lunch daypart at restaurants on property. Also, providing their favorite drink (wine, cocktail, beer, etc.) with their room service orders can be influential.

Takeaway

Travel is gaining steam, restaurants and bars are seeing an influx of reservations, and hotel operators need to prepare for summer travelers.

As a reservation, guest experience, and guest retention platform, SevenRooms can ensure operators can easily collect guest data. Guest data, for example, like F&B and room preferences.

More importantly, the platform makes it simple to use that data responsibly, effectively, and simply.

To learn more about SevenRooms, click here.

Image: JESHOOTS.COM on Unsplash

High contrast image of blue cocktail with lemon zest

April 27, 2022by David Klemt David Klemt No Comments

Forward Progress: Trends by Venue Type

Forward Progress: Trends by Venue Type

by David Klemt

One notable difficulty with considering new trends is that they’re not all necessarily a universal fit for all venue types.

For example, what may work well in an upscale restaurant perhaps won’t perform as well in a sports bar. Pursuing a trend that isn’t a good fit, obviously.

As any operator with experience knows, chasing fads and trends just to chase them can be costly. Doing so costs money (inventory, training, labor hours) and time deserving of better allocation.

However, failing to embrace any trends can also be costly. Watching a lucrative trend pass by can cost an operator guest engagement, perception, and traffic.

Take, for instance, the success of White Claw. Plenty of operators and consumers scoffed at the hard seltzer category as a whole at first.

Then, some people decided it was a drink category “for women.” As it exploded in popularity, hard seltzers proved immensely popular with men.

Basically, it’s an incredibly strong beverage alcohol category that resonates with a wide range of consumers. On some menus, hard seltzers are listed alongside beers.

So, hard seltzer, led largely by White Claw, showed itself to be a worthwhile trend to adopt.

Clearly, however, hard seltzer doesn’t resonate with all guests on all occasions in all types of hospitality venue types. For instance, generally speaking, a bucket of White Claws likely to be a top seller in a high-end restaurant specializing in seven- to nine-course meals.

Drink Trends by Venue

During Bar & Restaurant Expo in March of this year, Amanda Torgerson of Datassential presented 2022 drink trends operators should know.

One trend has essentially proliferated the industry. Really, it’s likely wise for us to all view this trend—hard seltzer—as mainstream now.

In the context of Torgerson’s presentation, Datassential is saying that hard seltzers are here to stay.

Among other trends, Torgerson shared Datassential’s data-backed view of drink trends segmented by venue category.

While every venue is unique and not every trend will work for every bar or restaurant in a given category, the results are no less intriguing.

Pubs: Dry-hopped beers, pastry stouts, and hard or spiked coffee.

Sports Bars: Mini-beers, hard seltzer, and reusable growlers.

Casual Bars: Seltzers with unique flavors, hard tea, hard lemonade, and drinks featuring local ingredients.

Upscale Bars: Negroni, wine-barrel-aged spirits, and flaming cocktails.

Nightclubs: Hard seltzers served with spirits, cocktails and punch bowls served with dry ice, and flaming cocktails.

Casual Restaurants: Wine cocktails, elevated brunch cocktails, and tea-based alcohol beverages.

Upscale Restaurants: Flaming cocktails (smoked may be better), all-natural wines, and made-to-order cocktail cart presentations.

Hotels, Resorts and Casinos: Made-to-order cocktail carts, alcohol vending machines, and drinks made with cold-pressed juices.

Interestingly, a few of the above trends identified by Datassential appear in multiple venue types.

The main things for an operator to keep in mind is what will resonate with their guests and what’s authentic to their brand. When it comes to trends, one size doesn’t fit all and an individual venue’s mileage will vary.

However, the above list should at least show operators what Datassential sees resonating with guests in an array of venues.

Image: Ozge Karabal on Pexels

April 20, 2022by David Klemt David Klemt No Comments

Chain Restaurants: Present & Future

Chain Restaurants: Present & Future

Technomic presented the state of chain restaurants, now and next, during Restaurant Leadership Conference 2022 in Scottsdale, Arizona.

Obviously, the entire hospitality industry is facing significant struggles. Rising costs, supply chain chaos, labor shortages and challenges, inflation… The past two-years-plus haven’t been easy.

However, there’s reason for operators and their leadership teams and staff to be optimistic. Additionally, independent and small-chain operators can learn from Technomic’s findings.

Challenges & Threats

Well, let’s take our medicine first, starting with the supply chain. In short, it’s bedlam.

Joe Pawlak (standing in for David Henkes) and Richard Shank of Technomic said as much during RLC 2022. Per their data, 35 percent of operators dropped at least one manufacturer between 2020 and 2021.

Whether because of rising costs, an inability to consistently deliver product, or other factors, operators had to adapt. Clearly, there’s a nasty trickle-down effect when an operator drops a supplier.

And then there’s inflation. Interestingly, Shank calls what we’re seeing currently as “existential inflation.” Relating to consumers, this means their confidence is shaken in terms of spending.

Of course, this type of consumer perception manifests in several ways. For example, some guests cut down on visits. Others will cut down on ordering, skipping appetizers and desserts. Perhaps they have one less beer, glass of wine, or cocktail.

Also, some guests “trade down.” Meaning, there are consumers who opt for casual restaurants rather than fine dining. Or, they’ll move from fast-casual to QSR.

Looking at the numbers, however, nearly 40 percent respondents to a Technomic survey say they’re visiting restaurants less. This makes sense, as 81 percent are concerned about how inflation will impact them personally.

On the operator side of inflation comes pricing. During Pawlak and Shank’s presentation, they used QSR dinner pricing as a real-world example.

According to Technomic, the tipping point for guest perception of good value is just $7. At only $10, consumers feel things are getting expensive.

As Pawlak and Shank pointed out, this is a problem. After all, the average price for dinner at a QSR is $10.08. That number may already be higher today.

Opportunities

Medicine taken, we can move to the good news.

First, Technomic predicts a strong Q3 this year. Additionally, they don’t expect double-digit year-over-year inflation.

In terms of labor, Technomic doesn’t expect costs to go down. However, they do anticipate that they’ll level off rather than rise.

Then there are the numbers. For the top 500 chains in the US in particular, 2021 was a “banner year,” according to Pawlak. On an aggregate basis, sales for the top 500 (McDonald’s is number one, for those wondering) are up 17.9 percent.

Also, every category of restaurant is performing better. The top 500 chains, for instance, are up 18 percent year-over-year. Midscale restaurants are up 38.5 percent. Casual is up 30.2 percent while fast is up 22.2 percent, QSRs are up 13.2 percent. As far as the biggest bump, fine dining is up 56.9 percent.

Looking at 2019 for obvious reasons, the industry was down 49.1 percent in sales in April 2020. However, the industry was down just about a single percentage point in February of this year compared to the same time in 2019.

So, how do we keep sales trending upward when facing inflation and other threats? Pawlak, Shank, and Technomic have some advice.

Operators, for instance, can implement the “balanced barbell” pricing strategy. In this model, high-value items drive business alongside premium offerings. In other words, don’t discount the entire menu just to entice guests to keep visiting.

Once guests get a taste for falling prices, they’ll consider the lower prices the standard. After that, any increase can be perceived as “too expensive.” Of course, discounting the whole menu also impacts guest perception of the brand negatively.

In addition, Technomic suggests offering higher net profit discount bundles, and implementing off-premise, large-party strategies.

Should Technomic’s predictions prove true, the industry may see an even stronger Q4 and start to 2023.

Image: Alex Haney on Unsplash

December 27, 2021by David Klemt David Klemt No Comments

Global Trends 2022: Technomic

Global Trends 2022: Technomic

by David Klemt

What? You didn’t think we would focus only on Canada and America when it comes to 2022 trends, did you?

It’s difficult to keep up with restaurant, bar, and cuisine trends if you keep your focus too narrow.

Technomic is acutely aware of this. So, we took a look at senior research manager Aaron Jourden’s 2022 Global Restaurant Trends Forecast report.

One specific item, a coffee, is a striking standout. But we’ll get to that in a moment…

Operations

First, let’s take a look at restaurant and bar operations.

It’s not just North America that’s facing a labor shortage. And in 2022, Technomic expects this challenge to persist.

There are a few ways we can look at labor shortages and other challenges.

One: We can make no internal changes, pretending hope is a strategy and things will work themselves out magically. Two: We can get cynical and hostile, putting the blame on workers.

Three: We can look at the industry as a whole and operations in particular to make meaningful changes. Working conditions can be improved, leadership skills can be developed, operations can be streamlined, inventory can be cross-utilized and maximized. What are we offering workers and guests? What can be changed to reduce costs, and to increase traffic and revenue?

In other words, operators are in a position to adapt, innovate, and make meaningful changes that will ensure our industry’s long-term survival.

Labor, supply chain, and cost issues will continue in 2022. However, Technomic predicts that 2022 will be the year of measurable recovery.

Fading Ghosts

Technomic isn’t saying that ghost kitchens are going put to rest.

Rather, the firm expects the hype around them to fade away. To be sure, ghost (and virtual—not the same thing) kitchens enjoyed quite a bit more than 15 minutes of fame in 2020 and 2021.

However, we’ve seen recent reports of certain ghost kitchen chains facing logistic and legal troubles. The shine very much seems to be dulling on this pandemic trend.

Again, Technomic doesn’t think ghost kitchens will suddenly disappear. But the incessant coverage? That may be on the way out in 2022.

Food & Flavor Trends

Now, the fun stuff. If Jourden’s report proves accurate, menus throughout the world are going to see some intriguing additions:

Breakfast Comes Back. With people heading back to the office and children back in school, the breakfast daypart will return. Operators who did away with breakfast may see value in bringing breakfast food and beverages back.
Chicken or the Egg? Per Jourden’s report, the egg sandwich is in a position to knock chicken sandwiches off their pedestal. So, chicken wins either way. Jourden points to an interesting element of this prediction: Eggs are fun, allowing for puns on menus, marketing, and branding.
Regional vs. Global. A number of regional brands will stand out against global brands in 2022. Regional brands speak to what today’s consumer wants: locality and hyper-locality; sustainability and responsible business practices; and a focus on healthfulness.
What Coffee?! Jourden’s report identifies a number of truly innovative and intriguing F&B trends for 2022. The one that grabbed my attention immediately? Avocado coffee. Already popular in Indonesia, avocado coffee is expected to find its way onto menus across the globe. Other items Jourden thinks will gain traction in 2022: Pão de queijo (Brazilian cheese bread), Mexican flatbreads, vegetarian-friendly meat alternative halloumi, mutabal or moutabal (baba ghanoush’s cousin), regional comfort soups, and plant-based eggs.
Functional Foods. If you didn’t find avocado coffee intriguing, what about dessert foods imbued with healthful characteristics? Jourden identifies a few desserts that do more than satisfy a sweet tooth: Hand pies that boost immune systems, macarons made to enhance moods, and even ice cream that will enhance a person’s skin health and appearance.

Next year is going to be challenging. That simply isn’t up for debate. But it’s also going to be rife with opportunity and innovation for savvy operators.

Image: Jon Tyson on Unsplash

December 24, 2021by David Klemt David Klemt No Comments

American Trends 2022: Technomic

American Trends 2022: Technomic

by David Klemt

Two weeks ago, I reviewed and shared Technomic’s “Canadian Trends: Looking Ahead to 2022” report, and now it’s America’s turn.

Not too surprisingly, the US and Canada are similar in terms of a few 2022 trend predictions.

And while the Omicron variant of Covid-19 is causing some restaurants and bars to close, there is some good news from Technomic.

Salt

First, a difference between America and Canada. As you may recall from my review of Canadian predictions, Technomic predicts butter will be even more important next year.

Interestingly, salt is the big prediction for the United States. The reasoning is similar: people are seeking out comfort in these difficult times.

Technomic’s “2022: The Year of the Climb” report states flat out that, “Salt is the new fat.”

The industry intelligence firm predicts that salt will be increasingly important in kitchens—and on tables—in 2022.

For example, Technomic expects operators to focus salt-cured fish and meats. Of course, that doesn’t just meet a predicted consumer demand. Cured foods can be preserved for longer, which is appealing to operators.

Seaweeds, salt blends, and salty sauces will be used in the kitchen. According to Technomic, some of those will replace (or accompany) traditional salt on tables.

Going further, Technomic predicts that salt will find its way into cocktails. This can be in the form of salty ingredients or salt water, a trend from a few years ago.

Creative Prep

Let’s stick with the kitchen a bit longer.

This is one of the strongest similarities shared by the US and Canada. Technomic predicts that operators will need to focus on cross-utilization and creativity.

As you’ve likely already figured out, this is because of supply chain issues. The more ways items can be used without introducing new SKUs, the easier things may be for operators.

Some examples of cross-utilization suggested by Technomic:

Roasting, grilling, and blistering items normally served raw.
Pickling ingredients.
Fermenting items.
Turning some items into jams.
Aging some ingredients.

Labor Challenges

Obviously, the labor shortage is felt throughout North America. Unfortunately, this is another similarity when comparing Technomic’s American and Canadian 2022 trend predictions.

KRG Hospitality has addressed the need for the industry to make significant changes several times this year. In particular, founder and president Doug Radkey published a book, Hacking the New Normal, calling for change to improve working conditions and the industry’s long-term survival.

Technomic is suggesting the same. The firm predicts the following for 2022:

Wage increases across the board.
Benefits (healthcare, emergency child care, 401(k), and more).
Virtual hiring events.
Referral and signing bonuses.

However, more needs to be done. The industry doesn’t simply need to revamp its image, it needs to:

address—and not dismiss—issues raised by current hospitality professionals;
solve the problems that led to so many hospitality workers quitting jobs and giving up on the industry;
implement real solutions for the problems the industry has faced and, frankly, nurtured for decades.

And that’s just the start. If we don’t face our industry’s challenges head-on, there won’t be much of an industry in the future.

The Battle for Comfort

Yes, comfort food will be important next year. Hence the entire section on salt above.

However, when I mention comfort in this section I’m referring to personal comfort levels.

You’ve likely been hearing from industry peers and seeing on social media that a number of bars are closing until December 29 or December 30. These temporary closures are due to spikes in positive Covid-19 cases, mostly driven by Omicron.

Many Americans, eager to return to a semblance of their pre-Covid lives, want to spend time in restaurants and bars. However, people need to balance their comfort levels with their desire for social experiences.

In response, Technomic predicts that operators will need to balance the on-premise and off-premise. In other words, omni-channel operators must dial in their offerings.

Per Technomic, operators have to figure out their mix: interactive in-person experiences, takeout, and delivery.

Good News

Technomic is making two 2022 predictions that should come as a relief to operators.

First, Q1 of 2022, per Technomic, “will reveal a particularly strong year-over-year performance” in comparison to 2021.

Overall, the firm projects a 10.4-percent sales increase for 2022 when compared to 2019 sales.

There is, however, a caveat. We’ll have to take rising menu prices into account when analyzing this year’s and next year’s sales levels.

For those wondering which category is predicted to perform the best, Technomic identifies limited-service restaurants will recover quickest.

In contrast, full-service will see slower recovery. Business, leisure, and indeed “bleisure” travel will have an impact on full-service traffic.

So, 2022 isn’t going to magically return to pre-pandemic “normal.” However, should Technomic’s conservative sales prediction prove accurate, recovery is on the menu.

Image: Jason Tuinstra on Unsplash