Chelsea van Hooven is global industry advisor at Choco.
After over a year of lockdowns, reopenings and more lockdowns due to the ongoing global pandemic, the United States seems to be stabilizing thanks to an improving vaccine supply and distribution.
Based on similar outbreaks in the past — such as the 1918 Spanish Influenza outbreak, which gave way to the Roaring '20s — and the pent-up energy of people eager to go out and reconnect with other human beings, a restaurant renaissance will soon be underway with a boom in dining out expected in the latter half of 2021.
Here's what the restaurant renaissance may mean for operators and what they can do to proactively manage a surge in customer demand.
Evaluating the food supply chain
The U.S. food supply chain continues to be stretched as the pandemic economy hampers production and distribution of goods. According to a survey of roughly 800 companies by business advisory firm Vistage Worldwide, 44% of small businesses reported temporary shortages or other supply chain problems in March 2021. According to The Wall Street Journal, multiple factors are at play here, such as a spike in customer demand as vaccines are distributed, relaxed business restrictions and a backlog in key U.S. ports and manufacturing facilities. In the Bay Area, a potential shortage of tapioca is threatening the availability of boba milk tea in cafés, and a meat shortage last year has prompted the government to fund grants to support smaller and medium-sized meat processors. Pandemic-induced shortages are not limited to food, either. Gloves and mason jars are two non-food items that continue to be out of stock as restaurants operate with higher safety standards and offer takeaway drinks. Being on top of these macro trends will help restaurant operators plan ahead and communicate potential menu changes to customers.
Diversifying the vendor list
One way restaurateurs can make sure there's enough supply to meet the rise in diner demand is to diversify the suppliers they work with and buy from local vendors. According to Choco's internal data, U.S. restaurants on average reduced the number of vendors they worked with from seven to three during the pandemic. As restaurant recovery is underway, local suppliers will help operators stay on top of their game in terms of quality and food cost. Evan Kelamis, a restaurant owner in Tulsa, Oklahoma, told The Wall Street Journal he is concerned about bacon supply during the period of restaurant recovery since, "seventy percent of bacon consumption [in the U.S.] is in a restaurant setting." By buying from local suppliers, however he was able to stockpile and get ahead of potential inventory challenges. Buying from local suppliers also means restaurants get to support local businesses and source high-quality ingredients for their kitchens, benefiting the upstream food producer and distributor ecosystem.
Leveraging technology and menu engineering
One of the biggest trends coming out of the pandemic is that technology has become an integral part of restaurant operations as restaurateurs pivoted their businesses from dine-in to online delivery and carryout. This digitization is also coming to the back of house because digital tools can help operators better manage vendors and address backlogs in the food supply chain.
To help with inventory management, technology that is user-friendly and low cost will help all members of the kitchen team stay on top of what is needed on a weekly basis. Technology that fosters better supplier communication and adds transparency to purchasing will help owners keep track of expenses and have a layer of data analytics on their food cost. Point-of-sales systems like Toast, Restaurant 365 and Upserve provide menu engineering that will help chefs optimize for profitability as ingredients go out of stock, and can help replace items with innovative substitutes. Lastly, tools that help restaurants do outbound research into local suppliers and diversify their vendor list will help lower the risk that supply shortages will negatively impact the restaurant's bottom line. For many restaurants, some of which are still "in the red," these types of technologies will help to streamline processes and eliminate unnecessary purchases, ultimately benefiting their bottom lines.
As the U.S. economy continues rebound and vaccines are distributed to the general public, the restaurant industry can finally see the light at the end of the tunnel. The restaurant renaissance brings both opportunities and challenges to the segment. The entire food supply chain, not just restaurants, is in recovery mode, and keeping up supply amid a surge in diner demand will be of key concern for the next several months. It is vital that restaurant operators continue to use a collaborative mindset when approaching their recovery. By diversifying their vendor list and using back-of-house restaurant technology, operators can stay on top of their game and make sure customers are coming back for more.
