It may seem like ghost kitchens have experienced a lot of growth in the past year, but there’s still a long way to go. According to Euromonitor, ghost kitchens could create a $1 trillion global market by 2030. Between now and then, expect a lot of innovation in the space, along with a range of ways for operators to make them a part of their business model. If you’re considering a ghost kitchen as a means of diversifying your sales capabilities, make sure you start from a place of strength when it comes to your digital brand. If you plan to have a scaled down brick-and-mortar presence, you still need a reliable way to get in front of consumers – particularly a strong digital connection, such as an Instagram account that gets regular engagement from followers and a customer database that allows you to segment your mailing list and target guests with informed promotions. On the latter point, operating a ghost kitchen will be most effective if it is set up within a small radius of the customers most likely to buy food from it, so understand the tastes of the surrounding area. If you have the brand connection with customers and you’re close enough to them that you can get their favorite dishes to them shortly after they’re out of the oven, you’re in a good position to succeed – and if you’re sharing your ghost kitchen space with complementary businesses that can enhance your own promotions, all the better.
While surviving the pandemic was one challenge for the restaurant industry, coming out of it is another: Stress on the food supply could make it more likely that restaurants will offer promotions of foods that end up being inadequate in supply, inflated in price, or unavailable altogether. Strains on labor are contributing to the challenges in food distribution as well. As Mark Allen, chief executive of the International Foodservice Distributors Association, told the Wall Street Journal recently, “Over the last six weeks, we have seen the market come roaring back faster than anybody would have anticipated. The start-up has been, in many ways, as difficult as the shutdown…Everybody is trying to turn it on immediately and the capacity might not be there.” However, having a multi-tiered back-up plan can help you manage when you’re caught short on key supplies. As you consider your menu in the coming months, lean on the systems you have on hand to track pricing fluctuations and supply. If you have a dish you want to keep intact with no substitutions, you should be aware of multiple routes you might take to recreate it using different suppliers in case there is a food supply or safety problem in a particular country or region. If you’re open to changing up a dish with substitutions, identify first- and second-runner-up ingredients and brands that could help you recreate the dish if your first-choice options suddenly became scarce.
At a time when restaurant operators are scrambling to find staff like never before – and perhaps lowering standards to do so – Chipotle managed to attract nearly 24,000 applicants through an online job fair recently. This occurred a week after the brand announced it was raising its minimum wage to $15 per hour. It’s no coincidence: Restaurant workers are demanding greater financial stability. While not every restaurant has the resources to raise hourly wages, it’s still a good time to scrutinize labor expenses and address weak points. Even before the pandemic, the turnover rate in the hospitality sector was higher than the turnover rate in nearly all other sectors. According to The Restaurant Technology Guys even an $8-per-hour employee can end up costing a company around $3500 in direct and indirect turnover costs. The more you invest in recruiting and retention up front can minimize your costs in recovering after an employee leaves. Even if you’re unable to raise wages, taking steps to prevent payment inaccuracies and ensure employees can access their wages and tips right away can boost morale and retention. Restaurant Dive report says, 31 percent of financially insecure workers have quit a job because of a lack of financial wellness. On the flip side, more financially stable employees (87 percent) are likely to remain in their job in the next year, as opposed to workers who are financially unstable (58 percent). Every little thing you can do to promote financial stability can help you keep the people you hire.
Seemingly all restaurant operators have had to adjust how they operate during the course of the pandemic, whether by enabling curbside pickup, designing delivery-friendly menus, redesigning a strip of sidewalk to accommodate tables in any weather, or otherwise. But even as we ease back into more normal conditions, it will likely benefit you to retain many of the changes you have made. For one, make your outdoor dining areas usable year-round with the help of solid structures, sturdy weather-resistant canopies, heat lamps and even those dining bubbles used widely last winter. This is simply about scrutinizing your entire real estate footprint so you are making money from each square foot. Along those lines, try flexing your space to better accommodate carryout and delivery orders during lunch, or offering promotions to remote workers looking for a temporary workspace or snack break during your quiet periods. Your takeout menu is another area that needs to hold strong with foods that travel well, coordinated cocktails and special touches like notes or candies included in the bag. Continue to seek out technology that will help you streamline ordering and payment, minimize lines and turn tables faster. Finally, maintain your efforts to show your commitment to cleanliness. Hand sanitizers should be ready for guests as they walk in your doors – and asking guests to sanitize their hands before they sit can help you show them you care about safety.
At a time when labor challenges are at an all-time high in the restaurant industry, a number of brands are taking a look at the experience of restaurant work and improving the aspects that need help. One of the areas moving to the forefront right now is employees’ mental health, which has been hit hard during the pandemic. Historically, the restaurant industry has not been known for its focus on employees’ mental health needs – and to be sure, mental health has been a growing concern for employers across industries during the pandemic – but now a number of restaurant brands are trying to change that as a means of attracting and retaining staff. Last fall, Noodles & Company added free in-person and online counseling sessions to its benefits plan. In May, Chipotle, which already offers in-person, phone or virtual visits with a licensed counselor for employees and their families, announced it was also bolstering its support of mental health via a new virtual platform called Strive. A Restaurant Business report says the Strive platform provides one-on-one coaching and support, and according to Chipotle, “gamifies each employee’s wellness experience” by giving them an opportunity to win gift cards and save money on health insurance, among other benefits. While such benefits aren’t widespread across the industry, they may gain momentum as restaurants vie for staff and need to think of creative ways to enhance the working environment for employees. Further, mental health benefits aren’t the only ways restaurants can improve upon a culture that needs a boost. As this Restaurant Dive report indicates, restaurants that have simply communicated clearly and considered employees’ home situations and financial concerns throughout the pandemic have had an easier time retaining people.
According to a recent poll from global data intelligence firm Morning Consult, 59 percent of Americans now say they feel comfortable eating at a restaurant. So as pandemic-related dining restrictions are lifted and consumers look for more in-person dining experiences, where does this leave ghost kitchens? In the near future, some ghost kitchen operators that didn’t start as brick-and-mortar locations may have greater challenges in getting the word out about their brand. Others like C3 are even considering reverse-engineering into small physical locations – how quickly times change. But delivery isn’t going away, and though we can hope there won’t be another pandemic any time soon, business disruptions happen and restaurants need to have plans in place to manage both large and small challenges that arise. Regardless of what portion of sales you generate from off-premise business, the big lesson of the pandemic may be to build a business model that can flex as much as possible – and to adopt the tools that enable quick pivots. For restaurants, that could mean having some kind of customer-facing physical presence (even just a small brick-and-mortar location or food truck) to keep the brand interesting and front-of-mind for consumers, ensuring that every square foot of your real estate footprint is paying for itself, leaning on delivery to scale business up or down in response to a range of conditions, and adopting technology that can help you adjust staffing, inventory and menus on short notice.
Even before the pandemic, labor recruitment and retention was a major challenge for restaurant operators. Now that we’re in a position where business is suddenly ramping back up and all restaurants are looking for staff at once, that challenge has ballooned. It’s causing operators to create new talent pipelines, rethink roles and find ways to automate more tasks. Along those lines, the fast-casual chicken chain PDQ is expanding upon its relationship with Best Buddies International, a nonprofit organization that seeks to create opportunities for people with intellectual and developmental disabilities. Nation’s Restaurant News reports that the chain has set a goal of hiring at least one person from the organization to each of its 45 locations in Florida. Wage increases aren’t feasible for all restaurants, but some brands are trying that too, in addition to taking steps to recast restaurant jobs as careers: Chipotle, for one, is raising its hourly wage to $15 and also creating a new career path for aspiring restaurateurs that allows managers to earn salaries of $100,000 in as little as three and a half years. Finally, operators are assessing ways to speed up or automate tasks so they are less reliant on labor fluctuations. Robin Gagnon, co-founder of We Sell Restaurants, told Modern Restaurant Management that robotics are being tested at every position at a restaurant, ranging from cooks to table service, and that we’ll see more ordering via app and kiosk now that consumers have grown accustomed to it. In the kitchen, Gagnon predicts that more concepts will look to get food out more efficiently by preparing items in advance and assembling them rather than offering full service.