Many restaurant brands tend to look to millennials for hints of where foodservice trends may be heading, particularly when it comes to off-premise sales. But some recent research completed on behalf of the National Restaurant Association demonstrates that baby boomers are showing traits that operators would be wise to watch when it comes to offering food for take-out and delivery. Research conducted for the association found that 51 percent of boomers, which it defined as consumers between the ages of 55 and 73, say they aren’t ordering takeout and delivery as often as they would like. In comparison, 43 percent of millennials, consumers aged 21 to 38, shared that feeling. The data found that millennials are just about as eager to eat at a restaurant as they are to eat restaurant meals off-premise, while baby boomers are less likely to want to eat at restaurants more often – only 38 percent expressed that preference. If you’d like to fine-tune your efforts to market to boomers, consider several tactics: Provide a fair price and promote the value of your menu, since a majority of boomers will choose a restaurant based on its perceived value. Expand your breakfast menu options. Offer healthy menu choices with quality ingredients and make healthier items readily identifiable on your menu. Create new twists on classic dishes. Experiment with ethnic spices and dishes with bold flavors. Finally, when it comes to technology, offer tech-driven, mobile-friendly ordering functionality and loyalty programs that make it easy to not only place off-premise orders but also to reap rewards for continuing to order with you.
Food packaging technology is evolving so fast that it’s making plastic cutlery seem almost quaint. A startup called Planeteer LLC, for example, has taken on the challenge of packaging waste and developed a variety of cutlery that isn’t merely compostable but also edible. The company has created a spoon that it promises will hold its shape for 25 minutes in hot soup and 50 minutes in a cold dessert, The Spoon reports. Planeteer cofounder Dinesh Tadepalli said it is vegan, all-natural, rich in protein and composts in days if not consumed. The company will be presenting its product at the Smart Kitchen Summit’s Future Food Competition in October.
This fall, a sweeping bill is likely going to be introduced in Congress that will ban many single-use plastics, set recycling targets and require deposits for beverage containers, the National Restaurant Association reports. In response to the legislation, the association’s food and sustainability director has emphasized the lack of existing national infrastructure to support such a ban – and the stress that could cause businesses forced to comply. Regardless of whether the legislation passes, the global climate activism on display in recent weeks is a sign that the issue of how restaurants manage their packaging waste (and the need for restaurants to understand new packaging technologies) isn’t going away. If you’re looking for ways to improve your practices, the Food Packaging Institute is working with its members, foodservice operators and other entities to share packaging options and has also developed a strategic sourcing guide to help restaurants identify new suppliers.
As delivery ramps up, are drive thrus on the way out? Minneapolis may have set a precedent recently by banning the construction of new drive thrus in the name of health and safety: The city wants to cut back on vehicle noise, idling and traffic and make sidewalks safer for pedestrians. Existing drive thrus in the city will remain intact, however.
“I’d have a tough time sleeping at night if I was handing our food to an untrained, random third-party driver to then carry that over to our customer, because what happens when you have a service failure or you have a product quality problem in that situation?” That’s what Domino’s CEO Ritch Allison said during an April 2019 earnings call. Of course, Domino’s has the scale to be able to manage delivery orders in-house (and also a vested interest in making consumers doubt the reliability of third-party delivery providers). But if you’re using third-party providers, it’s worthwhile to note – and attempt to manage – their shortcomings, since consumers are more likely to blame the restaurant for service failures than the delivery provider. A recent nationwide survey of 1,000 consumers by Steritech asked questions about the pluses and minuses of delivery and offered suggestions on how to address challenges. When the surveyed consumers have had problems with delivery, they included such challenges as the food taking too long to arrive, the packaging not keeping the food at the proper temperature/containing spills/preventing tampering, and order inaccuracy. Steritech advises taking a range of actions to help: To better resolve service issues, consider printing phone numbers for problem resolution on receipts, packaging or seals – or create an online portal for resolving disputes. Minimize phone orders in favor of online orders for better accuracy. Prioritize order accuracy and quality checks before food leaves your restaurant. Provide real-time delivery tracking or time estimates and send text alerts when food is en route. Offer online tipping options. Communicate your fee breakdown clearly so consumers understand where their money is going. Finally, it’s worth mentioning that some brands are trying to provide the best of both worlds: Panera, for one, is offering a hybrid system whereby it relies on third-party providers to take orders but then uses its own fleet for delivery to better manage quality control.
Restaurant operators often have a love-hate relationship with delivery: They want to accommodate customers’ need for it but often see it as a minefield of challenges. A newly released RestaurantOwner.com survey of 1,000 operators confirms these mixed feelings. More than half of the operators surveyed (56 percent) offer some form of delivery at their restaurant, yet 47 percent of those operators plan to make some changes to their delivery offering. Delivery is worthwhile on the whole -- 67 percent of operators surveyed who use third-party delivery said they were satisfied with the service -- but those who were dissatisfied had feedback that fit three key themes explaining why: the high fees charged by third-party providers, poor service delivered by drivers at those companies, and a lack of control over food quality and presentation. If you’re in the latter category, understanding the overall landscape may help you adjust your delivery strategy. In terms of costs, there was a wide range of fees charged by third-party providers – enough variation to indicate that operators may have some wiggle room when landing on their ideal revenue model: Most operators surveyed are being charged between 21 and 30 percent of the sale but 11 percent being charged less than 6 percent and 3 percent aren’t being charged at all (the delivery service places the order and charges the fee to the customer). To gain more control over the service and overall experience provided, operators who are making changes are taking such steps as adjusting the packaging they use for delivering food (perhaps to both keep food at the proper temperature and to prevent driver tampering), integrating their POS with delivery, limiting delivery to weekdays when the restaurant is in greater need of business, and even – much like large brands like Panera and Domino’s who are showing how it can be profitable and protect the customer experience -- taking on the management of a delivery fleet themselves.
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.
Restaurant operators know it’s important to offer off-premise dining. But what isn’t always clear is how to get your restaurant to the front of the pack. At the recent National Restaurant Association Marketing Executive Group’s annual conference, representatives from such brands as Kitchen United, Technomic, Le Pain Quotidien and Dunkin’ gathered to share their insights about how operators can stand out among the competition in the delivery space. First, put yourself in your delivery drivers’ shoes — or better yet, drive around with them for a shift to observe their experience with other restaurants. Note which brands make it easiest (or even most pleasant) for drivers to collect orders, whether that be via providing separate parking spaces, pick-up windows or shelves, or offering reliably friendly treatment from your staff or a free soda to go. Then note what sort of service those best-performing restaurants get in return (e.g. having their orders picked up fastest or delivered first). That said, make sure you label orders with a stamp detailing the time the order was complete and ready to go — if food arrives late, it can help you and the customer understand who is responsible. Next, offer ordering incentives that will help lift check totals without too much effort on the customer’s part. Offer a free appetizer for a customer ordering food for $25 or more, for example. Finally, pay attention to the factors that boost your delivery numbers. Is there rain in the forecast? At Dunkin’, that means sending out a marketing offer to local customers or posting a promotion on Facebook to help bolster delivery orders.
Last year, restaurant catering grew 50 percent faster than the industry as a whole, according to research from Technomic and ezCater. At a time when restaurants are scrambling to meet consumer demand for off-premise dining despite the challenge of making delivery profitable, focusing on catering can be a wise business move for foodservice operations. (If you need a rule of thumb for catering profitability, Sandy Korem of The Festive Kitchen in Dallas aims for 67 percent profit from catering and prices food at three times its cost and beverages for twice their cost.) As grocery stores and other businesses eat into the off-premise dining market for individual meals, catering can help you set your business apart. If you haven’t given significant thought or investment to your catering business, you’re not alone: The research cited above found that even though 90 percent of restaurant operators believe catering is somewhat or very important to business, only 28 percent have made a strategic investment in it. Restaurant Nuts offered some tips from operators who have made catering pay off. First, develop a catering-friendly menu that comprises your greatest hits (not new recipes) that travel well or can be started at the restaurant, then easily completed onsite. Make pricing easy for customers by creating sample menus of entrées and appetizers at different price points, and when discussing options with a customer, have an idea of what different prices per head will provide. Make sure you have temperature-stable containers, along with other equipment that holds your food at the proper temperature while in transit. Start with small, manageably spaced events and then expand from there so you can build a reputation for reliability and quality — low prices tend to be less of a priority for catering customers. Finally, make sure you offer a catering-specific loyalty program to entice people to invite you back.
New research from the National Restaurant Association found that delivery, drive-thru and takeout food are on track to comprise 63 percent of restaurant sales this year – and many industry insiders see off-premise sales as the industry’s key growth engine. Recent consumer data demonstrates the potential. For example, Foodable reports that more than 80 percent of consumers younger than 35 are using on-demand food ordering apps about twice a week, and Food On Demand reports that delivery sales are 75 percent higher than in-store sales. At the same time, a declining percentage of consumers want to talk to others when visiting a restaurant, according to a recent study from Harvard Business Review. Clearly consumers still crave a restaurant experience but the best way to engage those people may no longer be via an in-person conversation. Harnessing technology to drive off-premise sales is key to tapping into the off-premise opportunity. Do you have a technology blueprint for driving off-premises sales? As of this writing, we were a few weeks away from the 5th annual Takeout, Delivery & Catering Symposium, which will gather industry leaders to forecast what’s ahead for off-premise sales, as well as how operators can use customer analytics to drive sales and engagement, and how technology can make a restaurant operation more efficient. Stay tuned for details from the event in the coming weeks.