Restaurant operators may feel pressured to minimize their food waste. But eliminate it? It’s a lofty goal but one that Henry Moynihan Rich, owner of the hospitality company Oberon Group, aimed to take on in an effort to become a model for restaurants looking to minimize or eliminate waste, GrubsStreet reports. Brooklyn’s Rhodora Wine Bar, formerly named Mettā, has adopted such practices as ordering wine in compostable boxes, eliminating liquor brands that don’t use recyclable caps, using a dishwasher that uses electrolyzed water that requires no soap, sourcing cheeses with edible rinds, eliminating paper receipts and sending used wine corks to a non-profit called ReCORK that turns corks into shoe soles. Any food left on guests’ plates will be fed into a large composter. Consumer waste from restrooms is collected in containers from TerraCycle, a company that collects and recycles items that are difficult to recycle elsewhere.
Late this summer, the Mediterranean fast-casual brand Cava opened its first innovation kitchen, a technology-driven effort designed to collect and analyze consumer tastes and trends in real time – without the time-consuming hassle of organizing focus groups or experimenting with new menu items in test locations. Cava isn’t the first brand to launch such an effort and it’s further evidence of the increased pressure restaurant operators face to innovate their menus and to get them right each time. Even if you don’t have state-of-the-art technology to help you fine-tune your menu, you can still innovate your menu well if you start with the problem you’re looking to solve. Are you looking to improve the quality of your off-premise options? Increase your dine-in traffic? Then let that question drive your decisions. Chefify advises operators to keep several factors in mind when making menu changes. First, be able to back up your prices with market research and an understanding of what your guests will enjoy and are willing to spend for a particular product. Next, make sure your new menu items are extensions of what you already do well – not overeager attempts to follow the latest trends. Third, be clear about your ingredients and list them so guests (particularly those with food allergies) can make the best choice for themselves. Fourth, make sure that if you need to cut food costs, focus on your less-essential ingredients so you’re not sacrificing the quality of the core ingredients that make your restaurant appeal to guests. Finally, opt for a minimal, easily understood menu that allows guests to make decisions quickly when they’re hungry and allows you to both minimize your food waste and improve your order accuracy.
Restaurant owners are stepping up to the challenge of minimizing their food waste. That was one conclusion of Toast’s recently released Restaurant Success in 2019 Industry Report, which surveyed 1,253 restaurant owners, operators and staff, along with a similar number of restaurant guests, about the experience of operating and dining at restaurants. Toast asked restaurant professionals to share how they’re reducing food waste in 2019. The responses included such actions as using leftover ingredients from one recipe in another (38 percent), offering multiple portion choices for guests (26 percent) and composting (25 percent). Others said they limit the number of items they prepare for service, offer an a la carte menu and cross-utilize ingredients in an effort to reduce food waste. Still, there is room for improvement as a considerable portion of those surveyed (26 percent) do nothing at all to reduce food waste at their business. The consequences aren’t just environmental but also financial: A reFED study found that the approximately 11 million tons of food waste generated by restaurants annually costs businesses about $25 billion per year – and that every dollar invested in food-waste reduction can save restaurants $8. The industry report emphasized that while you can’t control what someone eats or leaves behind, you can control your inventory. Your first course of action in managing waste is to keep close tabs on your shelves to reduce spoilage and avoid a tendency to over-order items – your inventory management system can help you take the best action.
At a time when restaurant finances are getting squeezed from many directions, do you know which budgetary battles are most important to fight? In other words, when you’re managing such expenses as labor, ingredients, rent and third-party delivery, does your balance sheet give you clear answers about how much each of those expenses is impacting your bottom line? It needs to, since your gut instinct may not be correct. Case in point: The results of a recent study by New School Center for New York City Affairs and the National Employment Law Project found that restaurants in New York City were more negatively impacted by rising occupancy costs and the fees charged by third-party delivery services than they were adversely affected by the near-doubling of the minimum wage paid to hourly employees in the past five years, Restaurant Business Online reports. The Fight for $15 wage battles of recent years had many operators concerned they would need to boost menu prices beyond what guests were willing to pay – and minimum wage escalation isn’t an insignificant expense for operators to be sure. But while New York isn’t like every market, the rising minimum wage in the city has had a smaller-than-expected impact in a diversity of regions, whether in Manhattan, Queens, Brooklyn or the Bronx. As the minimum wage has been ascending in geographical regions across the country for years, you may be able to protect your bottom line by focusing on negotiating more favorable terms with a third-party delivery company, adjusting your business model so you can occupy a smaller or different footprint, or getting a stronger handle on hidden back-of-house costs.
Across the restaurant industry right now, profits range from 0 to 15 percent, according to Toast, and profits between 3 and 5 percent are most common. That doesn’t leave much wiggle room for making errors or adapting to industry changes such as the rising demand for off-premise dining. Operators have to be continuously creative when it comes to finding and mining sources of revenue, whether from new products, services or partnerships. (Note the current fervor around restaurant brands partnering with Beyond Meat, with Subway and Hardee’s being just two of the latest companies to tap into the meat substitute’s popularity.) Restaurant Nuts suggests operators consider options such as joint ventures – for example, partnerships with grocery stores to sell your products can help you promote a special offering while lowering your sales and marketing expenses. Or, as All Food Business suggests, you can partner with a corporation to offer expense accounts, business dinners, client programs or events that can generate income. You can align with a business or charity whose mission complements yours if it helps you to expand your audience, offer a special event you wouldn’t be able to offer on your own, or tap into resources (such as technology or delivery capabilities) that benefit both parties. Within your business, building out a catering menu can help you make the most of your food costs (and minimize waste) while serving lucrative off-premise and corporate customers. Depending on your business, there may also be opportunity to offer retail products like clothing or take-home versions of signature sauces that your restaurant is known for.
Any chef can confirm it: Running a restaurant well can require the skills of a lawyer, doctor, designer, HR manager, mechanic, janitor, and the list goes on. And that’s on top of having to offer an appealing, in-season menu that can be readily adapted to different nutritional needs. While that ever-changing environment can bring interest and variety to each day, chances are you were drawn to the restaurant industry more because of the food than for your ability to negotiate a beneficial contract or identify the best cleaning supplies. Further, the multitasking often required in a restaurant setting can kill productivity: A University of Michigan study found that when a person attempts to accomplish more than one task at a time, productivity drops by 40 percent. Team Four’s Palette program can serve as an extra pair of hands, taking on some of the responsibilities on your plate so you can multitask less and focus more on parts of the business that suit you best. For example, Palette can help you fine-tune your brand, including redesigning your menu or updating your graphic identity on your website, signage and marketing materials. You can also access restaurant equipment, linens, office and cleaning supplies, along with services for managing waste collection and pest control. And in case your menu or inventory needs attention too, we can help you develop new recipes, identify cost-effective menu substitutions, improve your food safety record and offer negotiated contract pricing to help ensure you’re getting the products you need at the best value. You can access the full list of services included in Team Four’s Palette program at www.palettefoodservice.com.
The love-hate relationship between restaurants and third-party delivery providers continues to show some cracks. As of this writing, there had just been a hearing in New York to hash out differences regarding the fees that third-party vendors charge restaurants for their services, which tend to range from 12 to 30 percent of each check total, according to the AP. In the meantime, some restaurants have alleged that the charges from third-party delivery companies aren’t stopping there. A class-action lawsuit filed in Pennsylvania in May claimed that Grubhub was charging for calls to restaurants that were made through the Grubhub app even if the call did not result in an order. (For example, a New York Post report said calls for reservations and customer complaints were being charged.) And there’s yet another wrinkle: A new report in New Food Economy found that Grubhub had purchased more than 23,000 potential restaurant website domain names, which would enable the company to prevent the restaurants from using those domains (without Grubhub’s involvement, anyway) to support their businesses. The sites appear to be for the restaurant in question but phone numbers shown on them direct users to Grubhub and then are forwarded (and charged) to the restaurant. Grubhub then receives a commission between 3 and 15 percent per order placed this way. For its part, Grubhub told New Food Economy that it purchased the sites to give restaurants an additional source of restaurant orders and that any affected restaurants could request to have their domains transferred to them. Regardless of the outcome, at a time when delivery has become compulsory for restaurants, restaurant operators would be wise to screen their contracts carefully — and to consider the future of their web presence. Third-party delivery vendors can help smaller brands compete with larger ones that have the resources to manage their delivery in-house but it’s important to understand where the costs may outweigh the benefits.
Between rising labor costs and falling traffic, there is no shortage of factors squeezing restaurant profits right now. Raising prices to meet margins is one option, but how much are your guests willing to pay before they take their business elsewhere? And what if sales shortfalls are simply due to shifting trends — or your competitor across the street offering a similar product for less? If you use data analytics to manage your food costs, you can uncover helpful information about your inventory. Since your inventory likely eats up 25 to 35 percent of your operating budget, it’s a good place to find lurking costs that can be minimized so you can better manage your spending. To identify opportunities, look at your supply chain and product mix. Do you know how many times your product changes hands and how prices shift with each transition? If you’re looking for help with this and much more, ask about Team Four’s Palette program. We can assess your supply chain, purchases and product mix and then recommend action steps that will help you lower food costs without sacrificing your quality standards. That might involve substituting quality products that still reduce food costs, or identifying trend changes, purchases that aren’t in line with your product specifications, or pricing that doesn’t reflect current trends. Learn more at www.palettefoodservice.com
As you contemplate ways to boost your restaurant’s bottom line, don’t forget about small changes you can make to your equipment that can generate significant savings in the long term. For example, is there room to reduce your restaurant’s water and power consumption? As QSR Magazine reports, the U.S. Energy Star program can help you identify energy-efficient equipment ranging from small ice machines and coffee markers to large commercial ovens. Or start with even smaller changes. Swap out incandescent light bulbs for LED or CFL bulbs, or update pre-rinse spray valves or use low-pressure sinks and dishwashers to reduce the wastewater your facility generates.
Digital ordering and delivery have grown 300 percent faster than dine-in traffic since 2014, according to Upserve. Thinking of isolating production lines in your restaurant to better accommodate off-premise traffic? Chili’s is seeing the value of it. The brand changed its kitchen structure to allow for better production-line preparation of menu items, and pared down its menu to include more profitable items. It has generated consecutive quarters of double-digit off-premise sales increases as a result. As restaurant operators contemplate how to adjust their business model to accommodate off-premise sales, companies continue to spring up to offer solutions. While ghost kitchens and cloud kitchens have made headlines, alternatives to those alternative spaces are becoming available. One example is KitchenPodular, a new company that develops modular, portable kitchen kits that contain electrical and plumbing, sinks, a walk-in cooler, and a ventilation hood and offer the option of a drive-through or walk-up window — operators supply their own oven and stove. The kit (each costs an average of $150,000 and ranges from 206 to 430 square feet in size) can be set up in a restaurant’s existing parking lot, on the outskirts of a city as part of a hub-and-spoke structure, or placed in another preferred location. KitchenPodular CEO Mike Manion, who was featured on a recent episode of The Takeout, Delivery and Catering Show, said these kits can provide restaurant with a turnkey solution for isolating production lines and churning out food to different customer bases more effectively. While they may not be for everyone — as The Spoon points out, they’re still facilities that need to be managed and staffed, and they don’t offer any shared labor for cleaning and dishwashing that one might find in a cloud kitchen — it’s another option to consider if you’re looking for a way to adapt on an ongoing basis to new streams of traffic.
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