Survey | KRG Hospitality

August 24, 2022by David Klemt David Klemt No Comments

Are You Surveying Your Team?

Are You Surveying Your Team?

by David Klemt

Successful recruitment is only one element of overcoming the current labor shortage—retention is another crucial element.

In fact, employee turnover can be incredibly costly. According to the Center for Hospitality Research at Cornell, employee turnover costs nearly $6,000 per hourly team member.

Now, consider what it costs to hire a single employee. On average, it costs $3,500 to hire that worker in the first place. So, the math is simple: Losing an employee costs an operator more than hiring one.

Unsurprisingly, turnover cost more than doubles—nearly $14,000—for a restaurant manager. In short, employee retention is arguably more important than recruitment and hiring.

Labor Shortage

Per Datassential, 33 percent of 801 survey respondents say the labor shortage is their greatest challenge in 2022. More than 70 percent of those respondents are independent operators.

However, independent, chain, and franchise operators appear to agree on one particular element of the challenge. Across segments, hiring hourly back-of-house employees is the most difficult.

In fact, Datassential’s latest FoodBytes report states that restaurants are coming up short in the kitchen. Two-thirds of restaurants are struggling to fill open hourly cook positions.

So, what’s the solution? Higher starting wages? Bonuses for remaining in role for 90 days? Benefits like health insurance and a 401K?

Each of those does work—for recruitment and hiring. What keeps a new hire from leaving after 90 days with their bonus cash, heading down the road to the next restaurant or bar?

It’s commonly agreed that the first 90 days of a new hire’s employment are the most crucial. Wages and benefits keep them in role for roughly three months. During that time, they’re deciding if their role and the employer’s culture are for them.

Employee Engagement

If you’re an owner, operator, or member of the leadership team, you know the importance of data. In fact, you should be obsessed with data collection and analysis.

Truly, the best way to make decisions that will impact the business is with information. Guesswork just doesn’t cut it. Yes, you should pay close attention to your “gut.” However, you should avoid acting on gut instincts before analysing the relevant data.

Wisely, many operators encourage their guests to complete satisfaction surveys. After all, their feedback is crucial to the success of any business. But what about employee surveys? Your team is equally as important as your guests.

Unhappy team members, unhappy guests. Unhappy guests, reduction in traffic. Team members fleeing your business? Your guests pick up on turnover. Eventually, you won’t have a business.

Now, you can assume your team is happy. You can feel like your leadership team is ensuring employee satisfaction and engagement. Or, you can know.

How do you know? You ask.

Satisfaction Surveys

Call it a satisfaction survey, call it a happiness survey… Either way, you’re asking your team members how happy they are with you and their role.

Operators will likely want to keep these surveys anonymous. Several sources that address employee surveys claim most employees prefer anonymity. Unfortunately, this is due to a fear of retribution from ownership or the leadership team.

Even with a healthy workplace culture, anonymity is probably the best for these surveys. Of course, if you’re implementing a 90-day happiness survey for new hires, anonymity doesn’t make much sense.

As far as company-wide survey frequency, there are several options. Once per year is obviously the bare minimum. Therefore, it’s not very effective. Every six months is better but is checking in on your team’s happiness twice per year enough?

The sweet spot appears to be quarterly surveys. More than that—monthly or bi-monthly—will likely get annoying.

Survey Questions

Below are a few questions to consider for your surveys. You’ll have to decide if you want to use multiple-choice, yes or no, matrix, or open-ended questions, or a mix of each type.

Another consideration is how your team will access the survey. The process needs to be as painless as possible. So, consider pushing a link via your scheduling platform, text, or QR code.

How happy are you working here?
How happy are you in your current role?
Would you recommend us to friends and family as a good place to work?
Does the leadership team make you feel valuable?
Do you see yourself working here a year from now?
Are we helping you succeed in your role?
Are we giving you what you need to progress in your career?

Image: Roman Kraft on Unsplash

Guests sitting at the bar inside a restaurant

August 23, 2022by David Klemt David Klemt No Comments

Datassential’s State of the Operator 2022

Datassential’s State of the Operator 2022

by David Klemt

The latest addition to the Datassential FoodBytes research series shares insights into the top three challenges most—if not all—operators are facing.

Now, some of what the report reveals paints a bleak picture. Inflation, the labor shortage, and supply chain issues persist even past the midway point of 2022.

However, operators are a tenacious and innovative group of business owners. Of course, that tenacity seems to manifest in people thinking this industry can weather any storm. That perception can come at operators’ detriment. Exhibit A: The Inflation Reduction Act of 2022 not including replenishing of the RRF. But, I digress.

“The State of the Operator & the Road Ahead,” which you can download here, is helpful and informative. As you may be aware, we’re fans of Datassential and their FoodBytes reports. In fact, you can find our synopses of FoodBytes reports here and here.

Below are some key points that operators should be aware for consideration. I strongly urge you to download this free report today.

Operator Outlook

First, let’s take a look at traffic. As Datassential points out, some hospitality business segments are performing better than others currently.

In large part, this is due to two factors: People working from home, and people returning to travel. So, operators who rely heavily on commuters and in-person workers are struggling. On the other hand, operators inside or around hotels are, per Datassential, performing the strongest at the moment.

Interestingly, though, nearly half of operators (47 percent) are seeing an increase in traffic in comparison to pre-Covid levels. Fourteen percent of operators are reporting no change in traffic. Unfortunately, traffic is lower for 39 percent of operators.

Next, sales. In comparison to pre-Covid times, more than half (51 percent) of operators report an increase. Again, 14 percent of operators are experiencing no change. But 35 percent of operators are experiencing a decrease in sales.

Finally, profit margins. Half of operators may be seeing increases in traffic in sales, but profit margins are taking a hit. On average, the industry’s profit margin is now hovering at 13 percent. That’s an eight-percent drop in comparison to pre-Covid levels.

Segment Performance

The findings regarding profit margins are likely to be the most alarming to operators. Historically, our industry has operated on razor-thin margins for decades. Dropping from an average of 21 percent to 13 is concerning.

However, context is important. The segments seeing the lowest profit margins in 2022 are: Business & Industry (B&I), Healthcare, and Colleges & Universities (C&U). Again, remote work (and learning) are largely responsible for those particular segments watching their profit margins tumble.

The strongest performers are: Quick-Service Restaurants (QSR) at 17 percent; Fast Casual at 15 percent); and Midscale, Casual Dining, and Fine Dining, each at 13 percent. Lodging is just below the current average at 12 percent.

Operator Adaptation

Inflation, rising food costs, supply chain issues, labor shortages… Operators are finding ways to cope, and in some situation, thrive.

Unsurprisingly, the vast majority of operators are increasing menu prices. In the past 12 months, 77 percent of operators have raised menu prices at least once.

These increases range from one percent a staggering 30 percent. However, the majority have kept these increases to one to ten percent. Most (31 percent) have implemented increases of no more than five percent. Just one percent of operators boosted prices between 25 to 30 percent.

Of course, raising prices isn’t the only strategy operators have at their disposal. Forty percent of operators are streamlining their menu, reducing the sizes of their menus. However, it’s wise for operators to review their menus at least every three months to eliminate poor performers.

Other strategies include focusing on value for guests (27 percent); utilizing LTOs and launching new menu items (26 percent); eliminating a specific daypart or portion of the menu (25 percent); and making portion sizes small, or “shrinkflation” (18 percent).

There’s much more revealed in Datassential’s latest FoodBytes report. Download your copy today.

Image: Luca Bravo on Unsplash

Maximalist interior bar or restaurant design

August 5, 2022by David Klemt David Klemt No Comments

Datassential Identifies Top Design Trends

Datassential Identifies Top Design Trends

by David Klemt

For their latest FoodBytes research topic, Datassential tackles some of the top restaurant design trends.

Click here to download Datassential’s “Foodbytes: Restaurant Design Trends” report. If you haven’t already, you’ll need to sign up for FoodBytes reports.

As the title states, this Datassential resource addresses the state of restaurant design. Now, we recommend reading the report for yourself but below you’ll find the points that really stand out to us.

If you’re among the 22 percent of operators that Datassential says are either considering a dining room redesign or have completed one, this report is particularly relevant to you.

Back-0f-house Design

Unsurprisingly, most people envision the interior dining area when considering restaurant design. However, as Lauren Charbonneau of Reitano Design Group says in Datassential’s latest FoodBytes, “Restaurants are living spaces that need to be agile.”

That means considering the entire space, not just the front of house. There’s also this stat from Datassential: 64 percent of operators think shrinking their footprint would be detrimental. If that’s the case, making the BoH smaller rather than the front may be the way forward.

So, let’s take a look at what Charbonneau identifies as BoH design trends to consider.

Clearly, it’s crucial operators consider their back-of-house teams. Providing a better workplace experience and improving efficiency can be done through design. Per Charbonneau, operators can use clever design and equipment choices to reduce steps, movement, labor, footprint, and costs.

Additionally, sustainability is not only crucial to responsible operation, being sustainable can reduce costs. Selecting Energy Star, Water Sense, and multi-functional equipment can make tasks easier for BoH teams, make a business more sustainable, and, again, drive down costs.

Maximalist Design

Finally, it seems, the minimalist design trend is losing its stranglehold on restaurant design. Of course, if that approach and design language works for a particular concept, it works.

However, maximalism is growing in popularity. For this type of design, think lots of color and bold patterns. Then, think about using multiple patterns and textures, including on the floors.

So, wallpaper, artwork, plush seating, loud tiles… Per Datassential, maximalism appeals to younger guests. In part, this is because these spaces can offer so many Instagrammable moments.

Monochrome Design

Okay, before we begin, “monochrome” doesn’t only mean a black-and-white palette. While that can work very well depending on the concept, monochrome also means using different tones of a single color.

Of course, there are multiple ways to approach this design trend. For example, if one does want to select a black-and-white scheme, Matte Black Coffee in Los Angeles is compelling.

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A post shared by Coffee . Food . Experience (@matteblackcoffee)

Not only is the design monochrome, guests feel as though they’re inside a two-dimensional image. Per Datassential, this type of design is growing in popularity across the US specifically.

In terms of colorful monochrome, a great example is NYC’s Pietro Nolita. Not only have they chosen pink for their palette, it’s a core element of their branding: Pink AF.

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A post shared by Healthy Italian cuisine (@pietronolita)

Yet another way to approach this trend is for operators to use varying tones of particular colors to delineate different spaces. So, the dining room may be tones of pink while the bar is green and a private dining room is blue.

Nostalgic Design

As we’re all well aware, the pandemic derailed people’s plans. In particular, people hit the pause or cancel button on travel and vacations. Now, people appear to restarting their travel plans and getting back out there.

However, we’re also dealing with inflation. So, many people are holding off on spending money on travel. This is where restaurant design comes into play.

According to Datassential, “nostalgic escape” is a trend to watch moving forward. While very specific, this trend combines a dive into the past and capturing vacation vibes.

Per their FoodBytes report, Datassential identifies the following elements as key to this design approach:

Soft shades of colors. In particular, pink.
Tropical designs.
Fifties, Eighties, and Nineties design elements.

One concept that leverages this trend and did so before the pandemic is the Hampton Social. Currently, there are eight locations and two more are on the way.

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A post shared by The Hampton Social (@thehamptonsocial)

Of course, it’s imperative that operators commit only to design language that’s authentic to their concepts. Pursuing a trend simply to pursue it is a clear path to disaster. That said, these design trends have massive appeal and can work for many operators and their brands.

Image: Davide Castaldo on Unsplash

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 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 26, 2022by David Klemt David Klemt No Comments

Forward Progress: 2022 Drink Trends

Forward Progress: 2022 Drink Trends

by David Klemt

Curious about what drink trends to leverage throughout 2022 to fulfill guest desires and expectations? Datassential has answers.

Of course, nobody has a crystal ball. However, as their name suggests, Datassential has something similar: data.

A trove of their valuable data was shared during Bar & Restaurant Expo 2022. Amanda Torgerson, senior account manager at Datassential, revealed the trends operators should be aware of this year.

Datassential MegaTrends

During this informative session, Torgerson shared what Datassential has identified as three “megatrends.” In other words, two trends that are particularly noteworthy.

First up, self-service. Whether beer, wine, or cocktails, Datassential thinks today’s guest wants more control.

Self-service beverage alcohol taps offer control in multiple ways, pour size and customization among them.

In addition, guests don’t have to wait for servers or bartenders when serving themselves. And, of course, self-service cuts down on front-of-house labor costs.

Second, experiential imbibing. In this context, this doesn’t simply relate to occasion, service, location, and ambiance.

Rather, the drink itself is an experience. Experiential cocktails engage multiple senses and include:

color-changing cocktails (those using butterfly pea powder, for example);
cocktail carts (similar to tableside guacamole preparations, tableside cocktail prep and service);
fire and smoke: smoked, charred, and burnt cocktails;
drinks that invoke nostalgia and guests’ childhoods;
frozen drinks; and
beer, wine, spirit, and cocktail flights.

Finally, botanicals. As we know, scent is a crucial component of taste. Botanicals, obviously, activate one’s olfactory sense.

Additionally, botanicals can affect a drink’s appearance and taste. So, break out the Chartreuse, Lillet, and elderflower liqueurs.

And while your team is at it, consider how else scent can be used to entice guests and enhance the drinking experience.

Best of the Rest

Treating this as more of a speed round, let’s review Datassential’s trend predictions in four major categories.

Seltzer/Beer

When it comes to hard seltzer, Datassential has (re)confirmed what we all know: This category has staying power. And as many operators found out during the pandemic, seltzers can boost to-go and delivery sales.

Beer cocktails are also trending up, per Datassential. Mini-bottles of beer also having a moment, and can easily tie into the beer cocktail trend.

Finally, heirloom beers—those made with heirloom grains—are proving popular with consumers.

Wine

According to Torgerson, wine seltzer is poised for a moment. Relating it to the hard seltzer trend, consider this Wine Cooler 2.0, as Torgerson said.

Other key wine trends are frizzante and red sparkling wines, orange wines, and canned sake.

Then there’s fruit wines, which means any wine not made from grapes. During her session, Torgerson suggested using these in cocktails.

Cocktail

In addition to cocktails on tap, Datassential sees the following as cocktail trends to watch:

Drinks made with genever.
Hybrid rums, blends of light and dark rums.
Ranch Water (typically a highball made with tequila and lime juice, topped with Topo Chico).
Single-serve, premade cocktails such as RTDs. These are great for off-premise sales.
Boozy frozen desserts.

Global

Focusing first on increasingly popular spirits, Datassential’s data shows that pisco, mezcal, and Japanese whisky are trending up.

In terms of wine, operators should look into regions that are perhaps “lesser known” in North America. Some examples from Torgerson’s presentation are Georgian and Hungarian wines.

And finally, what Datassential identifies as “drinking for a cause.” Such causes and beverage activations can be local or global as the world is so much more connected.

Image: ABHISHEK HAJARE on Unsplash

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