This year has demonstrated the power of managing your inventory like a pro. As operators have had to shift to offering takeout only, inventing new business models, partially opening their dining rooms, and responding to evolving consumer habits all within the space of days or weeks, they have had to ensure their inventory can keep pace. The next several months could bring even more ups and downs for restaurant businesses, so what is the best way to ensure you’ve got enough (but not too much) of the right ingredients at the right time, when you your traffic may be difficult to predict? Befriend your freezer and stock it with batches of foods ranging from soups to sauces to vegetables in an effort to extend your inventory and minimize waste. Prepare some extra portions of frozen meals that can be promoted and sold individually to guests – or offer a promotion to dine-in guests who may want to purchase extra portions of their favorite fresh dishes. Consider brining vegetables as shelf-stable (and on-trend) side dishes – and preserve fall fruits in dried form or in sauces or chutneys. If you have operated as a grocerant in recent months, keep it going. Do a detailed assessment of each item on your menu to confirm its actual cost to make sure you’re minimizing waste and maximizing profit.
Even before the pandemic, ghost kitchens were on the rise for their ability to ensure faster, less expensive food preparation and more efficient delivery to customers looking for off-premise dining options. Now, many restaurant operators are looking at ghost kitchens as a critical way forward at a time of great uncertainty for the industry. They may be on to something: Recent research from Euromonitor found that the global market for ghost kitchens could reach $1 trillion by 2030 – and in the process, capture big slices of industry segments including drive-thru sales, take-out foodservice, ready-to-eat meals, pre-packaged cooking ingredients, dine-in foodservice and packaged snacks. But when you’ve been running a traditional brick-and-mortar restaurant, what actions (and investment) are required to pivot to the ghost-kitchen model? Food distributor US Foods is aiming to give operators a hand with that transition through its newly launched US Foods Ghost Kitchens program. The company promises that for an average start-up investment below $5,000, they can help operators open a ghost kitchen concept in about three weeks and achieve an average profit margin exceeding 35 percent. The program includes market research, marketing support, a digital technology framework, menu optimization and management guidance.
As if it wasn’t important to know your true food costs before the pandemic, it’s all the more crucial now as many restaurants around the country are having to operate at a reduced capacity, rethink their menus and determine where to best allocate diminished resources. By getting an accurate handle on your waste, over-portioning, theft and even the shrinkage of ingredients, you can see what menu items are really costing you – then adjust your promotions so you encourage guests to select your highest-margin items. A recent webcast from Restaurant365 reinforced the power of tracking actual vs. theoretical food costs as a means of accomplishing this. Theoretical food costs are what your food costs should be based on the cost of your ingredients, while actual food costs are what your restaurant actually spent. There will be variance in those numbers, but getting a more precise understanding of where it comes from can help you minimize it. While there are a number of places to focus to help cut waste, it can be most helpful to analyze your individual ingredients and identify those with the greatest cost variance. Drilling down like this can help you zero in on what needs attention or adjustment, whether it’s your portion control of a certain dish, the prices you are getting from a supplier, or the need for a substitute dish on the menu.
Does your menu look different right now? Scrutinizing it will help you make sure you’re not only staying on trend but are also providing value, minimizing waste, spending money wisely, considering the production capacity of your staff, and offering foods that are best suited to where customers are most likely consuming them – whether that’s in your dining room or off-premise. New research from MicKinsey entitled “How Restaurants Can Thrive in the Next Normal” advises operators to start out by offering their usual menu, emphasizing core dishes and comfort foods. Then attract customers to your value items and upsell from there. It will likely be necessary to reprice some items to compensate for current market fluctuations. A separate report from Johnson & Wales advises operators to identify ways to reduce the work needed to prepare menu items, particularly if they’re working with a scaled-down team. Consider keeping a mix of proteins, pasta and vegetarian items on hand, then rotating in a new category on a two-week rotation to keep things interesting. Even if you have a loyal following looking to come in and dine with you, your current seating capacity guidelines limit how many in-house meals you’re able to serve. When in doubt, err on the side of bolstering your takeout menu and offering items that travel and reheat well.
Last year, restaurant prices climbed 3.1 percent year over year, according to the U.S. Department of Agriculture, and they are set to increase again this year between 1.5 and 2.5 percent. If you’re among the many operators that must raise prices this year, consider how you might achieve that without turning off your guests. First, try adding some value to the dishes you serve and the experience you provide. Some low-cost ideas that guests may perceive as adding to their experience could include offering fresh-baked bread or a larger side salad with a meal – or finding ways to make your menu more memorable, whether that means writing a guest’s name in chocolate sauce on a dessert plate or creating specialty artwork in the foam of a latte. Could you do a better job of explaining the quality of the ingredients you use? If guests get some extra detail about the steps you’re taking to provide a quality product, they may not mind paying a premium. If you have plans to upgrade your branding or marketing materials (to include your menu design), make pricing changes at the same time so you’re not simply taking your existing menu and plugging higher prices into it. Next, focus on your loyalty program – if you’re offering your best guests a chance to get something at a discount or for free, even if it is just once in a while, you can make higher prices easier to swallow. Finally, at a time when consumers value transparency, consider sharing your cost dilemma with them via social media or your email list – it helps if you haven’t raised prices in a while and can say you’re not willing to cut corners on quality. Of course, be sure to encourage them to share their feedback about what’s working well and what isn’t so they feel they are contributing to your success.
Looking to streamline your off-premise business? Many restaurant industry experts are placing their bets on ghost kitchens as the future of the industry. They have their benefits: For small brands and large, these spaces can help ease labor and rent burdens, meet growing off-premise demand and help restaurants connect their food with customers quickly. On the negative side, restaurants with ghost kitchens are generally relying on (and paying) third-party providers to deliver food to customers, and in the absence of a front-of-house team, they may also encounter challenges in connecting customers with their brand – unless it’s already well established. As the ghost kitchen industry expands, various models are emerging. Check out this map of the landscape from Spoon to get a sense of where different providers and restaurants are building a presence – and where you might fit in.
More isn’t more when it comes to your menu. As Fred LeFranc, managing partner of Results Through Strategy, told Restaurant Dive recently, operators can expect menus across restaurant segments to become simpler this year. There are a number of benefits your restaurant can generate by slimming down its menu – both for your financials and for your guests. The blog Chef Works suggests that a smaller menu will help you ensure your menu is a clear reflection of your brand, since extra items can muddy guest perceptions of a restaurant and the values behind it. It can also help your chef shine by focusing on the dishes and concepts that are his or her central strengths. As for your guests, you will make their decision simpler and easier to customize, minimizing the potential regret they may feel after ordering an item they’re uncertain about and making it easier for you to adapt items to their tastes and tolerances. (On that point, a smaller menu makes your business more efficient too, with fewer ingredients to prepare, potentially fewer suppliers to manage, fewer invoices to pay, and less waste.) Finally, having a smaller menu may give your restaurant more of a boutique feel, making each dish feel more special – not like a large collection of items offered in the hopes of appealing to every possible appetite.
Team Four’s corporate chef expects the year ahead to bring an increase in smaller meal offerings – that includes more snacks on demand, as well as a range of smaller entrée portion sizes. These changes can be opportunities for chefs to test new ingredients, offer more health-conscious options and minimize food waste and cost. For example, as snacking grows in popularity and replaces the three-square-meals mindset in some cases, you can develop your menu with items that aren’t simply comfort food but also pack some nutritional value and dietary functionality. A recent Technomic report found that in the past two years, 40 percent of consumers said they were snacking on healthier foods. So when it comes to your snack menu, think plant-forward tapas, hummus sharing plates, vegetable-based dips and chips made from ingredients beyond the potato: lentils, quinoa, eggplant or kale to name a few. As for entrées, reducing your plate size – or offering the option of half-plates to help guests customize their experience with you – can ensure plates come back cleaner. A Danish study found that if the size of a plate shrinks by just 9 percent, food waste can be reduced by 26 percent.
As waste management continues to be a top priority for restaurant operators, news headlines appear every day about new technologies that can give companies in the food supply chain a leg up. In recent weeks, edible coatings and stickers for produce, as well as sachets that can be packed in crates of fruit, have all made news for their potential to significantly prolong the shelf life of produce and other fresh foods. Your suppliers will no doubt be adopting such technologies in an effort to compete in the marketplace, but there are a number of steps you can take right now in your business to make sure you’re making best use of the fresh products you buy. As Restaurant Owner & Manager advises, follow the first in, first out rule by adding a use-by date to new products you receive and then placing them behind older products in storage. Store food in airtight containers to help protect the hygiene of your products and minimize the potential for cross-contamination. Keep meat on the bottom shelf of your refrigerator. Ensure proper temperatures in both your refrigerator (40˚F or lower) and freezer (0˚F or lower) and have employees check those temperatures regularly. Finally, store food without overloading your storage areas and clean your shelving, equipment and storage units daily to prevent the buildup of contamination.
The single-use plastic toys that have long been associated with children’s meals at brands including Burger King and McDonald’s could soon be part of restaurant history. As the New York Times reported recently, Burger King has pledged to eliminate all non-biodegradable toys in its restaurants worldwide by 2025, and efforts are already underway in Britain to collect old toys from customers, then melt and recycle them into playground equipment and tray tables. While McDonald’s hasn’t gone that far as yet, it has scaled back its distribution of plastic toys in markets beyond the U.S. and has also launched an effort to reduce the impact of its toys. When you look at your brand, are there areas where you could be more environmentally friendly – with both your children’s meal giveaways and beyond? J. Ottman Consulting, an environmentally focused marketing firm, runs a community website called WeHateToWaste.com, where consumers can weigh in on how restaurants can adjust their practices to minimize waste and enhance their brand as it relates to the environment. For one, consumers see oversized portions as a waste and appreciate flexible (or shareable) portion choices and prices, which can also help broaden the appeal of a dish to seniors or other guests who are watching their diets or aren’t looking for large servings. Next, rethink any all-you-can-eat branding, which makes waste inevitable. If and when guests ask to take food home, make it easy for them by offering eco-friendly packaging that also includes instructions for reheating leftovers and keeping them fresh – or incentivize those who take the initiative to bring their own to-go containers. Your efforts may play a role in their decision to choose your restaurant over another.