Quick Service Versus Fast Casual: Where’s the Distinction?

Restaurant Tech Editors
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Quick Service Versus Fast Casual: Where’s the Distinction?

Until recently, restaurants and other dining establishments fell into two distinct categories: Full-service and limited service. Full service is your typical dine-in, table-service restaurant. It’s a simple definition, and it works.

Limited service, however, is a broad, catch-all term. Essentially, limited service is anything and everything that is not full service: Think quick service, fast casual, pizza restaurants, cafes, and more. 

The limited-service category is unhelpful because it doesn’t do justice to the vast differences in how these restaurants operate. We all know inherently how a drive-thru differs from an eat-in salad bar. That’s why these days, those in the food and restaurant industry have divided the limited-service category into sub-categories that includes the two big players, quick service and fast casual. 

Quick-service restaurants is the broader, larger category, and it shares many similarities with fast-casual restaurants. This has prompted some in the industry to ask whether the term fast casual is even relevant at all anymore. Many fast casuals find themselves committing either to speed or product quality as their core value—the former qualifying them for the quick-service categorization, the latter placing them in the casual-dining camp. If this analysis is correct, is there still a place for the fast-casual category, or has it been rendered useless?

To the consumer, these categories are different, even if they share many of the same operational functions. These differences include restaurant decor, level of service, quality of the ingredients, and even the branding. Notice how quick-service restaurants, for example, rely primarily on speed, ease, and value for money. Fast casuals, however, are more likely to use the language of quality or health, targeted at busy professionals. And even when it comes to speed, the purchase experience between quick service and fast casual is distinct. Quick-service restaurants strive for lightning speed. Fast casuals, on the other hand, may be quick, but customers can expect to wait 5–10 minutes for their food to be prepared and handed to them. 

However, we’d like to take a look at a key, distinct area where quick service and fast casual converge. The technologies powering and moving forward these two categorizations of restaurant are very similar, and several of the technology stacks used across these food and restaurant businesses are the same.

In 2020, restaurants were forced to change the way they do business overnight. This introduced many new tools and technologies to these companies to enable them to remain operational, as well as to diversify. Customer ordering preferences haven’t returned to pre-pandemic patterns, and restaurants have continued to adopt new technologies to evolve their businesses and adapt to their customers’ changing needs.

From a technology perspective, both quick service and fast casuals are expanding their respective tech stacks to include everything from third-party delivery services and ghost kitchen options to loyalty apps and new customer communication methods (SMS, social media, etc.)

All manner of quick-service and fast-casual restaurants now rely on delivery, collection, and no-contact interactions with customers—something that may have distinguished them from each other before 2020.

We’re closely following how the food and restaurant industry is using software applications to support and enhance their operational processes, and we’re excited about how these technologies can bring about new ways of doing business. There’s a wealth of apps and tools that this industry is relying on to offer its customers better service and, ultimately, to boost competitiveness and profitability. There are of course differences in how the quick service and fast casuals leverage these technologies to suit their specific purposes, but many of the goals and outcomes are the same.

While it’s an exciting time in the restaurant tech business, we are also seeing how some businesses are struggling to manage these technologies within a single ecosystem. Many of these software applications have become integral to their operations—like third-party delivery services—but they require sophisticated integration solutions to ensure the business can run smoothly. This is where we predict that we’ll see quick-service and fast casuals diverging more in the coming months and years. Which restaurants will opt for seamless integration of all their apps and technological offerings under one umbrella, streamlining operations, and even providing better data protection options for their customers? It will be interesting to see which businesses take this route, and to watch how this improvement to operational processes might improve profitability and brand positioning.

For the time being, the distinction between quick service and fast casual will remain apparent to the consumer. These two restaurant categories still serve different purposes, and we should continue to champion the choice available to consumers in the food and dining marketplace.

And for those of us working in the industry, let’s watch closely for the leaders and disruptors adopting the technology that will enable innovative, secure, and effective operations that will propel the food industry forward.

Published By: QSR

Music Can Give the Restaurant Industry a Competitive Edge

Restaurant Tech Editors
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Music Can Give the Restaurant Industry a Competitive Edge

The restaurant industry is an increasingly competitive market. And more restaurant owners are searching for ways to encourage repeat customers and successfully grow their businesses. One way to gain a competitive edge is with music – which is often overlooked. Music can help restaurants strengthen relationships with their customers and build loyalty.

It’s no surprise that music has a powerful impact on our emotions and overall satisfaction with an experience. And satisfaction with an experience is what restaurant diners expect when visiting an establishment. Today, customers anticipate more than just delicious, high-quality food. They seek memorable experiences altogether – and brand-fit music is a key element. 

Every visit to a retail location is a potential music touchpoint— and restaurants are one of the most regularly visited locations. Consumers in the U.S. make more than 90 billion visits to businesses every year and a vast 79 percent notice the music being played, reinforcing that auditory is a vital piece of a brand’s sensory puzzle. 

Set the Tone for Customer Dining Experience 

Music sets the tone and creates a mood that adds to the experience, which can have a significant influence on guests. Playing the right kind of music at the right time of day is as important to a restaurant’s popularity as the food on the menu or the décor of the room. The music played impacts customers’ reactions, inspiring them to linger and relax, order more or leave an establishment quickly because of the incorrect choice of music.

The perfect music creates the right atmosphere for restaurant’s seeking to build their brand. The emphasis on Italian restaurants, for example, is on the quality of food and service. But music’s role should be to enhance the experience – not detract from it. Typically, music selections for Italian restaurants may include crooners, modern Italian pop and Italian ballads, all of which can set the stage for an enjoyable customer and employee experience. 

Frequently, restaurants ineffectively spend valuable time creating playlists that miss the mark, they are perhaps not long enough to cover a full week or month of programming or lack the proper demographic appeal and brand fit. Today, restaurants can leverage top business-to-business (B2B) music streaming platforms’ expert curation and customization capabilities to save time and increase the value of their brand experience. Emerging technologies are allowing these platforms to offer restaurants larger music libraries cleared for commercial use, curated playlists by genre, artist and theme, sound and business type, and mobile apps for ease of use and customization. Modern solutions are designed to manage the specific needs of multiple restaurant locations, unlike obsolete systems.   

Immersive Experiences and Driving Customer Loyalty 

Music evokes emotions and in turn motivates actions. It is a vital and often overlooked component of building true customer loyalty and creating an alluring experience. The strategic selection of music can help communicate and strengthen a brand’s identity, influence customer behavior and increase sales. A recent MRC study reveals that 65 percent of respondents find it’s important for businesses to create a compelling atmosphere through music and 54.9 percent have stayed longer at a business location because of the music.The study strengthens the overall idea that the appropriate music played can positively influence guests and their impression of a business – and ultimately increase the time and money spent at an establishment.

The right attention and thought put into which music is being played is an important consideration. HUI Research, the Swedish Institute of Retail, co-sponsored a case study for a renowned global quick-service restaurant chain that explored the effects of random music, brand fit music and random hits played and compared sales when brand-fit playlists only included well-known songs against playlists containing a mix. Data from this case study shows that sales decreased by 4.3 percent when random hits were played compared to no music at all while sales jumped 9.1 percent when customers heard a mix of hits and lesser-known songs chosen to fit the brand. Most significantly, purchases of desserts went up 15.6 percent when the playlist fit the brand and mixed popular and obscure songs. 

The takeaway is that it’s imperative for restaurants to tailor music to their brand and target demographic as it can increase profit, while playing random hits can decrease sales. 

Restaurants Must Stream Music Legally 

Many successful restaurants leverage music to connect with their customers. But some don’t realize they need proper clearance to do so. More than 70 percent of businesses are misusing music streamed in their commercial settings, which can be devastating to music creators and rights holders. This is because artists must be paid royalties when music is played in all businesses and commercial settings. Performing rights organizations were established to help ensure that artist and music public performances were tracked and protected. Music is an essential element of the brand experience but is still the property of the artist. Restaurants can easily stream licensed music while supporting artists through legal B2B music streaming platforms.

Many restaurant owners are not aware that works of music are subject to copyright protection and that they can be fined for copyright infringement if they play music in their establishment without a commercial license. Section 106 of the Copyright Act is the right to control public performances of copyrighted work. Playing a song in a restaurant without a license, for example, is a type of public performance that would violate this law. Consumer streaming services do not fulfill this requirement, as they are not licensed for any commercial use. Statutory damages can range from $750 to $30,000  per infringement.  Four performing rights organizations (BMI, ASCAP, GMR and SESAC) monitor infringements of this right and collect payments for public performances of copyrighted music. A restaurant in Linden, New Jersey was forced to pay $24,000 in fines for playing four songs, including the Rolling Stones’ “Brown Sugar,” without obtaining the necessary licensing. This is just one of numerous instances where restaurant owners were sued for misuse and illegally streaming music at their establishments. 

Playing music in restaurants is different from listening to music at home or playing it on a website – and it’s important for businesses to stream music that is cleared for public and commercial spaces. Select B2B music providers take the guesswork out of performance and licensing fees and cover both in one affordable monthly or yearly subscription payment. 

Restaurants that recognize both the value of artists’ rights for music use and giving their customers a curated experience through music, will rise to the top in terms of loyalty, engagement and true return on investment.  

Published By: Modern Restaurant Management

As Menu Prices Climb, So Does the Hunger for Deals

Restaurant Tech Editors
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As Menu Prices Climb, So Does the Hunger for Deals

Fewer consumers are dining out. But with the right incentives, restaurants can bring them back in.

Skyrocketing menu prices are putting a dent in consumer wallets and taking a bite out of restaurant traffic. According to a recent study, 64 percent of consumers say dining out has become too expensive. They haven’t given up on going out, though—after two-plus years of social distancing and activity restrictions, they’re hungry to do it. But they’re craving deals. And restaurants that can satisfy them will win their business. 

Consumers have plenty of options. When it comes to making choices on what and where to eat as inflation continues to rise, it boils down to two things: rewards and discounts. To capture their attention—and dollars—restaurants need to understand how customer expectations and spending habits are changing and ensure their coupon and loyalty reward programs accommodate them. 

Focus on Value

According to a recent Vericast survey, consumers choose restaurants largely on the offers they receive. And now, more than ever, they’re looking for deals. In January of this year 50 percent of consumers selected restaurants based on receiving a coupon or discount. Given the right value-based promotions, more than half polled (53 percent) would be willing to try a restaurant they have never been. 

Serve up Savings

Nearly 45 percent of consumers order from restaurants more often when they have print coupons or discounts, according to the same Vericast study. When they have incentives for fast-food restaurants, 51 percent spend more, using the savings they achieve to upgrade or add items. Even when customers don’t redeem them, coupons can drive sales. Close to 60 percent of consumers say they proceed with orders even if they forget to take them to restaurants or apply to in-app or online purchases. On the flip side, nearly a quarter of consumers won’t order from a restaurant unless they are offered a discount, and 34 percent have recently switched from fast casual to fast food to save money. 

Reward Loyalty

Customers want to be rewarded for their patronage. In fact, 30 percent say that if a restaurant doesn’t reward loyalty with coupons or discounts, they will switch to one that does. Nearly 70 percent of consumers have at least one loyalty app installed on their mobile device, and 35 percent check them for promotions before deciding where to dine. 

Cross Channels

When it comes to how they receive offers, consumers expect a personalized experience across multiple channels. Many (40 percent) prefer to get restaurant incentives in the mail, but they also want them delivered via email, and through restaurant apps, websites, and loyalty cards. Direct mail packages, such as Save, are also an important channel, as 68 percent of consumers who browse the circular do so to find restaurants and secure deals that will allow them to spend more when they visit.

While there’s been some debate about coupons causing deterioration on revenue, overall gross margin dollars will grow with the acquisition of new customers. The investment put into a smart incentive strategy can drive traffic, build sales, and create long-term loyalty. By keeping a finger on the pulse of the market and evolving consumer needs, restaurants can develop and execute effective coupon programs that bring customers in the door and make them hungry for more.

Published By: QSR

Key Takeaways from the 2022 FDA Food Code

Restaurant Tech Editors
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Key Takeaways from the 2022 FDA Food Code

In the waning days of 2022, FDA issued an updated Food Code with several important updates. FDA is responsible for more than a quarter of the U.S. economy, and the Food Code impacts virtually every American.

According to FDA, the Food Code:

represents the FDA’s best advice for a uniform system of provisions that address the safety and protection of food offered at retail and in food service, and while it is a model code that is not required, it has been widely adopted by state, local, tribal and territorial agencies that regulate more than one million restaurants, retail food stores, vending operations and food service operations in schools, hospitals, nursing homes, and childcare centers. 

Let’s examine the key new provisions of the 2022 Food Code.

Why were these changes made and what are the key impacts on restaurants?

The Food Code is updated to reflect best safety practices while taking account of societal changes and practical realities at food establishments. According to FDA, adherence to the Food Code will promote:

  • The reduction of foodborne illness risk within food establishments, protecting consumers and industry from potentially devastating health consequences/financial losses;
  • The creation of uniform standards for retail food safety that reduce complexity and better ensure compliance;
  • The elimination of redundant processes for establishing food safety criteria; and
  • A more standardized approach to inspections and audits of food establishments.

Many of the key changes in the 2022 Food Code relate to food allergens.  Specifically, the code (1) adds sesame as a major food allergen to reflect that the Food Allergy Safety, Treatment, Education, and Research Act of 2021 established sesame as the ninth major food allergen; (2) requires that consumers be informed, in writing, of major food allergens as ingredients in unpackaged food; and (3) requires labeling of major food allergens in bulk food that is available for consumer self-dispensing.

These concerns reflect FDA’s increasing commitment to ensuring that Americans with allergies are aware of the potential allergens in their foods and impose commensurate duties on restaurants and food producers in order to further that commitment.

How does this modify cooking requirements? 

Generally speaking, FDA continues to leave a wide range of discretion to food service providers. That said, the new Food Code does contain two new requirements.

First, commercially packaged food that bears a manufacturer’s cooking instructions shall be cooked according to those instructions before use in ready-to-eat foods or offered in unpackaged form for human consumption.  There is an exception to this rule – which may be limited in the restaurant context – if the manufacturer’s instructions specify that the food may be consumed without cooking (e.g., dried soup mix with instructions to be cooked as a soup or used uncooked in preparing a dip).

Second, food for which the manufacturer has provided information that it has not been processed to control pathogens, when used in ready-to-eat foods or offered for human consumption, shall be cooked according to a time and temperature appropriate for the food. That revision still leaves discretion to the restaurant (such as determining the time and temperature appropriate for the food), but it requires the restaurant and chef to carefully make those determinations and apply them to all customers.

What do restaurant owners need to know about food donations?

One-third of all food in the U.S. goes uneaten. The new Food Code specifically addresses food donations for the first time, which FDA says is part of the “Administration’s National Strategy on Hunger, Nutrition, and Health.” The strategy “provides a roadmap of actions the federal government is taking to end hunger and reduce diet-related diseases by 2030 – all while reducing disparities.”

To prevent food loss and waste across the food supply chain and help ensure safe, good-quality food gets to those who need it most, the 2022 Food Code has clarified that food that is stored, prepared, packaged, displayed, and labeled according to Food Code safety provisions can be donated. Restaurants should take care to store their packaged food in accordance with all applicable safety provisions if they wish to take advantage of this new donation program.

What are changes regarding pet dogs in outdoor dining spots?

Dog lovers, rejoice! The new Food Code allows customers to bring pets into outdoor dining areas where pet dogs are otherwise allowed. A few key points.

First, the Food Code does not supersede state and local rules governing the allowance of pet dogs in dining areas. If applicable law prohibits pet dogs in specified dining areas, then pet dogs remain prohibited in those dining areas.

Second, a restaurant may still prohibit pet dogs in outside dining areas if it chooses to do so – provided that the prohibition does not run afoul of applicable laws regarding reasonable accommodations for patrons who need pet dogs for service purposes or to otherwise cope with a medical condition. I recommend that restaurants that prohibit pet dogs err on the side of allowing pet dogs for patrons if there is a question about whether the pet dog is presented as an accommodation for a medical condition.

Third, cat lovers and lovers of other pets will need to wait until the next Food Code update unless, again, the animal is for a medical condition.

The Food Code is an important guide for restaurants in making broadly applicable policies for a group of customers that is as diverse as the United States. The issues above are modest suggestions for how to incorporate the new provisions of the 2022 Food Code into restaurant policies and procedures.

Published By: Modern Restaurant Technology

How do delivery app algorithms actually work?

Restaurant Tech Editors
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How do delivery app algorithms actually work?

A restaurant’s placement on apps like DoorDash and Uber Eats is based on a variety of factors, including marketing fees. But the specifics are still something of a mystery. Here’s a look at what we know.

When a customer picks up their phone and opens their favorite food delivery app, the options that pop up are not random. They’re determined by an algorithm—a set of rules designed to show restaurants that will appeal to that customer.

Those rules play a big role in the traffic a restaurant can expect to get from each app, and are therefore of great interest to operators—especially mom and pops, who have less brand recognition and smaller marketing budgets than big chains.

Delivery algorithms have been in the spotlight recently because of contentious legislation in New York City that would ease the city’s cap on what delivery apps can charge restaurants. In essence, the amendment would allow restaurants to pay the apps more in exchange for better visibility on their marketplaces.

But marketing commissions are not the only factor that determine where restaurants show up on the apps. And the big delivery providers—DoorDash, Uber Eats and Grubhub—have not been especially forthcoming about how exactly visibility is determined. 

“There’s a lot of mystery around how the algorithm works,” said Michael Fuquay, co-owner of The Queensboro restaurant in Queens, during a hearing before the New York City Council last week. The lack of transparency is one reason The Queensboro has stopped using third-party delivery providers. 

The reason for the apps’ caginess is understandable: Their algorithms are proprietary, and they aren’t eager to make those secrets public. The formulas are also complex and apparently difficult to explain, even for those in the know. 

“It’s a complicated algorithm,” said Joshua Bocian, Grubhub’s senior manager of government affairs, during the hearing. “I will freely admit that the tech guys know a lot more about it than I do.”

Though specifics are hard to come by, we do know that a restaurant’s location, popularity, accuracy and speed can play a role in placement, as do those pesky marketing commissions. Here’s a look at some of the key checks and balances that govern delivery algorithms.

Marketing commissions

The marketing commissions that restaurants pay delivery providers go a long way in determining where they will show up on the apps.

In recent years, all three big delivery providers have started offering a tiered pricing structure for restaurants that includes both delivery and marketing services. Restaurants that opt in to a higher pricing plan can expect more exposure. Prices differ by app and range from as low as 5% of each order total to as high as 30%.

What those commissions do for restaurants also depends on the app. Restaurants that choose the lowest-priced plan are paying at the very least for the right to be listed on the app’s marketplace. Their ability to boost themselves beyond that varies.

On Uber Eats, for instance, the Lite plan (15% commission), allows a restaurant to be discovered only when a customer deliberately searches for it. 

But on DoorDash, restaurants that choose the Basic plan (15%), can still be included in prominent in-app carousels that show the fastest deliveries or most popular restaurants nearby.

“You’re still getting valuable placement based off of that algorithm, even at the 15% option,” said Sascha Owen, senior manager of government relations for DoorDash, during the City Council hearing.

With Grubhub, marketing fees are just one factor determining placement, Bocian said. “It is not the defining factor.”

Of course, restaurants that go with a pricier plan will get a bigger boost. Here’s a quick look at what higher commission tiers can do for restaurants’ visibility on each app.

DoorDash: Plus and Premier tiers give restaurants access to DashPass subscribers and a wider delivery radius.

Grubhub: Plus tiers give access to Grubhub+ subscribers. Premium tier gives access to promotion and loyalty tools and the ability to respond to customer ratings and reviews.

Uber Eats: Plus tier gives access to Uber One subscribers and better discoverability. Premium tier unlocks matching advertising spending up to $100 a month.

DashPass, Grubhub+ and Uber One are the delivery apps’ subscription programs. Customers can pay $10 a month in exchange for zero delivery fees. These customers are valuable for restaurants because they tend to order more often.

So marketing commissions are a sort of baseline for restaurants’ exposure on delivery apps. But there are other factors that play a role, some of which restaurants can control and others that they can’t.

Restaurant performance

In the race to the top of delivery apps, it behooves restaurants to be fast, accurate and tasty.

On Uber Eats, a restaurant’s visibility can be affected by historical order size, customer ratings, average food preparation time, and the restaurant’s accuracy and speed. Those last two variables are apparently measured by the number of errors, cancellations and customer complaints a restaurant gets.

Performance metrics could also be factors for DoorDash and Grubhub, but Restaurant Business was unable to confirm that.

Location

This one is obvious: Apps will only surface restaurants that are within a customer’s delivery area, although the precise radius is unclear. 

“If you live in Coney Island, we’re not going to show a restaurant on the Upper West Side, regardless of their marketing fee,” Bocian said.

Customer ordering habits

The apps take into account users’ past orders when determining what restaurants to promote to them. If a person orders a lot of pizza, they will see more pizza on their app relative to other cuisines.

“Someone who orders from the same restaurant once a week is going to see that more prominently than one that they’ve never ordered from,” Bocian said.

On Uber Eats, a restaurant’s “general popularity” also has an impact, although it was unclear how popularity is measured.

Customers can also filter restaurants by cuisine, price, speed and ratings, which obviously will change what they see. But the default view appears to be largely determined by the algorithm. 

Promotions 

All three apps allow restaurants to pay for promotions in addition to their per-order commissions. They can choose to subsidize free delivery for a period of time or offer discounts, for instance.

Offering promotions can help a restaurant rank higher. And the apps also reserve special space for restaurants that are running deals. On Grubhub and DoorDash, there is an “Offers” section, while Uber Eats highlights discounts on a page labeled “Latest Deals.”

What we don’t know

What is still unclear is how the above factors rank relative to one another. If a restaurant is close to the customer but tends to be slower, will it rank lower than a restaurant that is farther away but faster? Will an independent burger joint take precedent over the nearest McDonald’s? We may never know.   

Published By: Restaurant Business

How Restaurants Can Streamline Expense Management with Virtual Credit Cards for Employees

Restaurant Tech Editors
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How Restaurants Can Streamline Expense Management with Virtual Credit Cards for Employees

Technology has changed the way small and medium-sized businesses (SMBs), including restaurants, approach expense management. Once the domain of large corporations, the company credit card is now a powerful tool for SMBs, thanks to the tech innovation that has enabled features such as virtual card issuance, Just-In-Time funding, and transparent analytics. These features help provide peace of mind for employers and streamline expense management for employees.

For restaurants specifically, there are a number of unique challenges when it comes to expense management. Restaurants have a large number of consumers walking through their doors everyday while also navigating highly variable costs – making the total number of transactions much higher than other SMBs. In addition to volume and highly variable costs, staff attrition rates in the industry are significant, adding another layer of complication to expense management. In this complex environment, the need for flexible spend controls make restaurants the ideal business for a modern approach to corporate cards.

Why Restaurants Need Virtual Card Issuance & Spend Controls

One of the key features that the restaurant industry should look for in an expense management partner is virtual card issuance. The ability to issue tokenized cards in real-time allows for a more flexible approach to managing expenses. This is particularly important in the restaurant industry, where employees often have shifting schedules and may not be on the payroll for long periods of time. Virtual card issuance enables employers to issue cards quickly and securely, without the need for physical cards.

Spend controls are another important feature of modern expense management programs. By setting maximum transaction amounts, limiting the frequency of transactions, and restricting the merchants at which a card can be used, employers can empower employees to cover variable expenses like fuel, utilities, and supplies, while minimizing the potential for fraud. This feature is especially important in the restaurant industry, where high-volume transactions and high employee turnover can create opportunities for fraud.

Making Analytics & Risk Control A Priority

Modern risk control features are also a must-have for any expense management program. By leveraging machine learning to spot fraudulent patterns and provide real-time alerts, employers can proactively identify and address potential issues before they become a problem. This is especially important in the restaurant industry, where small-scale fraud can quickly add up and have a significant impact on the bottom line.

In addition to these core features, a modern expense management program should also offer transparent analytics. The ability to track and analyze spending patterns in real-time allows employers to identify areas where they can optimize spending, as well as potential areas of risk. This level of transparency provides peace of mind for employers and empowers them to make data-driven decisions that benefit the business as a whole.

Bringing it All Together

In conclusion, the company credit card is no longer just a perk for large corporations. Thanks to technology, it has become a powerful tool for SMBs, including restaurants, that want to streamline their expense management processes and gain greater control over their spending. Virtual card issuance, spend controls, risk control features, and transparent analytics are all essential features that the restaurant industry should look for in an expense management partner. By partnering with a provider that offers these features, restaurants can better manage their expenses, minimize the risk of fraud, and optimize their spending for greater profitability.

Published By: Restaurant Technology News

Nation’s Restaurant News study: 9 in 10 restaurant operators likely to increase investment in technology this year

Restaurant Tech Editors
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Nation’s Restaurant News study: 9 in 10 restaurant operators likely to increase investment in technology this year

2023 Restaurant Tech Outlook from Nation’s Restaurant News Intelligence reveals the tech strategies of nearly 400 restaurant operators.

Nation’s Restaurant News, the leading independent media brand serving the foodservice industry, has released its 2023 Restaurant Technology Outlook, outlining the technology strategies and investment priorities of hundreds of restaurant operators.

The survey of nearly 400 restaurant operators, which was conducted by Nation’s Restaurant News Intelligence, the brand’s research and insights platform, found that the vast majority of operators, or 92%, are likely to increase spending on new technology in the next 12 months, with 39% saying they “definitely” will add new technology and 53% saying they “probably” or “possibly” will. 

Related: Turning to voice AI for your restaurant’s drive-thru? Ask these 6 questions first

As for where they’re directing those investments, respondents repeatedly cited strong interest in digital tools that supported a few key areas: customer experience and loyalty, employee productivity and operational efficiencies.

“The past few years have been a time of dramatic digital transformation for the restaurants and, as our report reveals, the pace of change is likely to accelerate,” said Christi Ravneberg, director of research and insights for Nation’s Restaurant News. “The 2023 Restaurant Technology Outlook offers a fascinating look inside the minds of today’s restaurant operators, who overwhelmingly told us that digital innovation is a non-negotiable to stay competitive — and that they’re ready to embrace new tools that address their biggest business challenges.”ADVERTISING

Related: How the new generation of AI will impact the restaurant industry

Other key findings of the report include:

  • Limited technology budgets remain a factor, with 74% of respondents citing cost as a top challenge.
  • Customer experience is king, with 57% of operators saying they’ll be investing in digital tools designed to enhance service and convenience for guests.
  • Data remains an untapped opportunity, with 70% of restaurant operators questioning if they’re optimizing the information, they collect about their guests.
  • Labor issues loom large, with 37% of respondents citing employee retention and productivity as a primary application for technology in their businesses.

Uncover even more insights from the full report here.

Nation’s Restaurant News Intelligence will dive further into the survey findings in an upcoming webinar.

The 2023 Restaurant Technology Outlook was sponsored by Boom, Panasonic and LifeLenz.

The report is the first release from Nation’s Restaurant News Intelligence, a new line of research-backed thought leadership products. New data-driven Intelligence reports are also in development for Nation’s Restaurant News’ sister brands: Supermarket News, Food Management and Restaurant Hospitality. 

Nation’s Restaurant News, the leading independent media brand serving the foodservice industry, has released its 2023 Restaurant Technology Outlook, outlining the technology strategies and investment priorities of hundreds of restaurant operators.

“Nation’s Restaurant News is already the leader in educating and connecting the foodservice industry through award-winning content and events. The crucial next step is empowering the industry through exclusive data and insights to help both our audiences and our partners identify business opportunities,” said Joe Donnelly, group publisher of the Informa Restaurant & Food Group. “Nation’s Restaurant News Intelligence is investing in research to explore complex questions, examine shared challenges, and showcase the thought leadership of our partners, in order to help the industry better prepare for the future.”

Published By: Nation’s Restaurant News

The Definitive Guide To Creating A Restaurant Business Plan

Restaurant Tech Editors
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The Definitive Guide To Creating A Restaurant Business Plan

What is a Business Plan?

A business plan is a short document that describes the how and why of starting a new business. New businesses must create official written documents outlining their long-term goals and the strategies they will use to achieve those goals.

One of the most important steps in opening and successfully operating a restaurant is to write a restaurant business plan. A business plan outlines your objectives, tactics, and financial projections and acts as a road map for your restaurant. Businesses who adopt business plans from the beginning have a 7% higher likelihood of experiencing rapid growth than those who don’t. Without a thorough business plan for your restaurant, you’re just aiming randomly and it’s improbable that you could get an investor to support your ambition of opening a restaurant.

Essential steps to drafting a thorough restaurant Business Plan

  1. Executive Summary: A restaurant business plan should always start off with an executive summary. The executive summary is a brief overview of your restaurant business plan. It should include the restaurant’s concept, mission, target market, location, and financial projections. Its primary goal is to entice the reader—often an investor—to continue reading your restaurant business plan.
  2. Company Description: This section should provide an overview of your restaurant’s legal structure, ownership, management team, and location. It should also include a brief history of your restaurant and its achievements. This part of the restaurant business plan is where you thoroughly introduce the company. Provide the name of the new restaurant you are launching here along with its address, phone number, and other pertinent details. Provide the owner’s information as well as a brief account of their background. This is where you can express your creativity, showing how passionate you are about your work.
  3. Market Analysis: A thorough evaluation of your company’s target market and the competitive environment within a particular industry is called a market analysis. This section should analyze the local restaurant industry and your target market. This should include information on the size of the market, demographics, competition, and trends.
  4. Menu: You cannot forget about your restaurant menu now, can you? Without it, your restaurant has nothing to serve. The centerpiece of your restaurant is the menu. You should outline your menu’s special offerings in this area. In addition, details on menu prices, food sourcing, and seasonality ought to be included.
  5. Marketing Plan: This section should outline your marketing strategy. This includes advertising, public relations, social media, and promotions. You should also include your target audience and customer acquisition strategy. How you want to promote your restaurant both before and after opening should be covered in detail in the marketing and publicity section.
  6. Operational Plan: An operational plan is a document that specifies an organization’s main aims and objectives together with a strategy for achieving them. The daily operations of your restaurant should be described in this section. Information on staffing, inventory control, vendor relations, and hardware requirements has to be included.
  7. Financial Plan: The most vital part of your restaurant business plan is the financial section. Financial predictions such as income statements, cash flow statements, and balance sheets should be included in this part. An examination of the beginning expenses, finance options, and profit margins should also be included.
  8. Appendices: Any additional information pertaining to your restaurant business plan should be included in this area. This could comprise information from market research, a geographic study, legal documents, and the resumes of the team’s key players. To sum it all up, writing a detailed restaurant business plan necessitates having a solid grasp of the sector, the target market, and the financial forecasts. You can get money, draw in investors, and direct the expansion and profitability of your restaurant with the aid of a well-written plan.

Published By: Applova

The Food And Beverage Industry Showing Signs Of Resilience Despite Declining U.S. VC Deal Volume

Restaurant Tech Editors
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The Food And Beverage Industry Showing Signs Of Resilience Despite Declining U.S. VC Deal Volume

Poor exit environment, macroeconomic downturn, and the unexpected collapse of Silicon Valley Bank are driving U.S. venture capitalists to increasingly withdraw from investing in late-stage deals, causing deal count to fall more than 25% year-over-year in Q1 2023, according to the latest PitchBook data.

There were only 19 late-stage mega-rounds during the period compared with 98 a year ago, which “not only has widened the funding gap between startups seeking capital and investors willing to provide it, but has also put downward pressure on deal pricing,” Susan Hu, senior analyst of PitchBook, wrote. Particularly, the median valuation of late-stage VC pre-money fell 16.9% from the 2022 full-year figure to $54.0 million, while the average pre-money valuation dropped by more than $100 million.

However, U.S. VC activity in the food and drinks sector has remained relatively stable in Q1 with an accumulated 1030 transactions driving deal value to $1 billion, an increase from $800 million, respectively, in Q3 and Q4 of 2022. Although the overall deal value has slightly decreased from $1.3 billion in Q1 2022, it remained on par with those in Q1 of 2020 and 2021, respectively, and increased from $600 million in Q1 2019.

PitchBook noted how U.S. food and beverage VC deal count reached its peak in Q4 2021 since the beginning of 2019 with 2316 deals generating a total of $2.3 billion in value during the period.

Late-stage food and beverage deals also dominated the U.S. VC market during the first quarter of 2023 with alternative protein company Meati completing a $172 million series C round in January. Business-to-business plant-based ingredients supplier, Lemnature AquaFarms, raised $50.7 million, while Guayaki raised $75 million in its latest financing round, the equivalent amount of how much Athletic Brewing Co. raised in last November.

It’s note that Athletic Brewing Co. backed by Alliance Consumer Growth, David Chang, J.J., Keurig Dr Pepper, and Naomi Osaka, was among the top most-funded brands in 2022 that self manufacture, alongside Good Culture and Mush, consumer database FABID recently shared.

California-based seafood company, Pescavore, that manufactures tuna jerky strips, earned second place on the top U.S. food and beverage VC deals by value size, raising $100.3 million in a seed financing.

Additionally, PitchBook data showed Siddhi Capital topped the list of U.S. VC food and beverage by deal count, investing in three separate deals in Q1, including better-for-you instant ramen brand immi and David Chang-founded Momofuku Goods that offers a line of restaurant-grade pantry essentials. Other institutional and individual investors on the list that made an average of two deals during the period include David Grutman, Morrison Seger, Naomi Osaka, MavenHill Capital, Stray Dog Capital, Plug and Play Tech Center, as well as Palm Tree Crew Investments.

Published By: Forbes

How to Keep Up with Post-Pandemic Food-Shopping Pattern Changes

Restaurant Tech Editors
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How to Keep Up with Post-Pandemic Food-Shopping Pattern Changes

“What do you want for dinner?” should be easy enough to answer, right? But when adding the complexity of where that meal comes from, how you’re going to get it and all the ways it can be modified, the answer might rival a chemistry equation. Top that with finding out how the food was sourced, grown, or genetically tampered with, the answer could be compounded further.  

A report by YouGov reveals 80 percent of millennials feel quality is key to their food purchasing decisions. Further, nearly two-thirds of them expect transparency regarding their food choices. Whether that is having access to health information or their food’s journey from farm to plate, these outlying aspects continue to add heightened importance to critically planning your diners’ experiences.

Not only has diners’ new eating habits become a top concern, but today’s quick-service restaurants must consider everything from interaction, signage, content, wayfinding, curbside pickup and more. If not executed strategically, it will negatively impact today’s sales and tomorrow’s purchase decisions.

What matters most to shoppers/diners

As many factors play into dining decisions, today’s fast-food restaurants are given the challenge of identifying the drivers that keep customers coming back for more. Although the current priority for diners is to fuel their bodies, two important factors that play a role in this selection game are convenience and affordability.

The proliferation of alternate delivery and dining options has given businesses the opportunity to produce more offerings that align with customers’ expectations.

As those options increase, customers will likely expect more from food-delivery services, prioritizing the following features:

  • speed of delivery, with a goal of under 30 minutes being a differentiator among platforms
  • quality of food, with an expectation of restaurant-quality meals even after transit time
  • 100 percent order accuracy and completeness for regular items as well as special requests
  • variety in cuisines and meal occasions

How consumers get what they want

The plethora of last-mile services including curbside pickup, drive-thru delivery and buy online pickup in store (BOPIS), has increased substantially as the new era of dining continues to settle.  

Last-mile services have become a dynamic offering and consumers can’t seem to get enough. U.S. food delivery more than doubled during the pandemic, expanding access to many more foods and to more than just fast-food delivery.  

As such, quick-service restaurant powerhouses continue to rethink their design approach in light of the growing delivery market.

Burger King, for example, unveiled plans for a restaurant that is 60 percent smaller than its traditional stores, accommodating the influx of to-go orders with features such as pickup lockers and dedicated curbside-delivery parking spots. Taco Bell and KFC have also altered formats to accommodate new consumer needs and demands.

These businesses mentioned and more continue to invest and adapt to ever-changing trends that allow them to cast a wider net and attract new, loyal customers.

What’s on tap for 2023

With all of this in mind and as the pandemic wanes, tapping into innovation can start now.

Geo-experimentation: As consumers return to offices, their eating, shopping and other social behaviors in group settings may have changed. They might no longer frequent the same areas. Their new traffic patterns may take them to other locations or new retailers.

DEI considerations: Instacart reported nearly a quarter of Americans (23 percent) have researched locally run or owned brands. Plus, interest in women- and Black-, indigenous- and people of color (BIPOC)-owned brands is evident with 14 percent of consumers having researched such brands.

Openness to try new things: During a pandemic or a Black Swan event, consumers are much more willing to try something new, creating opportunities for businesses to present different options that bring in more revenue.

Efficient delivery: Consumer demand for food delivery is here to stay. As competition and costs heat up, food delivery providers will need to become more efficient, while satisfying diners’ needs for speed and meal temperatures to be as they should.

Keep a pulse on the patterns

Every single aspect of food consumption is changing, from harvesting to processing to preparing to serving and/or delivering. Navigating the changing consumer habit migrations will be a challenge, even for more seasoned restaurateurs and owners.

Published By: QSR

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