Restaurant profits are in the news again. Chef Danny Meyer’s plan to eliminate tipping in his restaurants is drawing both applause and concern. What’s more, state minimum wage increases are further putting a squeeze on restaurateurs (California’s is set to increase in 2016). Here are three quick reminders to help keep profits on track:
- Know your costs: Don’t use a top-shelf ingredient when a less expensive substitute would do. Order key items in bulk and purchase in partnership with other restaurants. Track what you expect to sell, what is actually sold and how many staff you need throughout the day.
- Educate your staff: They should know which menu items draw the most profit, which can be successfully cross-sold, and what language to use when presenting them to customers.
- Bring people in: Offer meal promotions during slow periods, an email newsletter to build relationships with customers and encourage return visits, and a take-out menu to reach a broader audience.
Take your show on the road
Food trucks can help launch a new brand or expand an existing one. The industry is experiencing faster revenue growth than the broader food service sector, according to an IBISWorld market research report, but that growth could plateau as more businesses enter. If you have an established brick-and-mortar location already, the National Restaurant Association recommends you use food trucks to complement your existing product – not compete with it – and consider tapping into opportunities to cater at homes or businesses if you’re trying to get a foothold in a saturated market. Finally, cross-promote your locations using social media, your web site, signage and your phone hold recording to drive traffic to each location.
All-time high for investment in food and beverage startups
Startups in the food and beverage industry attracted $542.4 million in investments this year, a new record, according to Dow Jones VentureSource. Specialty foods were the big winners with $191.6 million, followed closely by companies producing general food products and companies producing nonalcoholic beverages. Investors say consumer preferences for high-quality, homemade food and beverages are a key reason for the entrepreneurial brand boom.
Beef with the WHO’s news on meat
The World Health Organization sparked a frenzy last week when it classified processed meat as a carcinogen in the same category as tobacco. Lovers of bacon, hot dogs, ham and other processed meats weren’t the only ones to cry foul. Why? The WHO’s International Agency for Research on Cancer considers the strength of the evidence proving a substance causes cancer without weighing how much it increases a person’s risk of getting cancer. As a report in WIRED put it, smoking increases a person’s lung cancer risk by 2500%, while eating two slices of bacon daily increases colorectal cancer risk by (a more digestible) 18%.
It’s only natural
Early next year, the Organic and Natural Health Association will launch a certification program offering companies a “natural” seal on products. The products cannot be genetically modified and must be free of artificial colors, flavors, preservatives and sweeteners. While the FDA does not regulate natural products, a survey from the National Marketing Institute found that 46% of consumers thought that the government regulated the use of the “natural” label and 50% thought the term meant the food contained no pesticides or genetically modified ingredients.
Waste not, want not
About 40% of America’s food is wasted. The USDA and U.S. Environmental Protection Agency hope to chip away at that figure and recently set a goal to reduce food waste by 50% by 2030. Now Rep. Chellie Pingree of Maine is taking on the cause. Last week, the Congresswoman said she plans to introduce a bill designed to help stop food waste in homes, restaurants, stores, schools and farms across the country. The legislation would offer incentives for farmers and stores to donate ugly produce that might not otherwise be sold, change school lunch programs’ food procurement policies, and educate consumers about how to interpret “sell by” or “best by” labels on products.
Better, faster, healthier
Can fast food be good for you? That’s what a headline in the latest New Yorker asks. As more people seek out sustainably sourced food that omits pesticides and other chemicals, new fast casual outlets with healthy fare are finding a growing audience and traditional fast food giants are reinventing themselves (kale made it onto the McDonald’s menu in May). Lyfe Kitchen and Sweetgreen, two newer outlets aiming to bring healthy options to fast food, focus on nutrition and sustainability. Sweetgreen sponsors a program to educate kids about nutrition and the importance of relying on seasonal produce. As Mindy Armstrong of FoodIQ said at the Fast Casual Executive Summit last month, “61% of consumers want to know where their food comes from but 39% don’t believe that companies are being truthful about it.”
Coffee gives a jolt to new foods
Coffee prices have tumbled over the past year and analysts expect them to drop even further. It’s also a $48 billion market. So it’s not shocking that the country’s favorite morning brew is popping up in unexpected places on restaurant menus nationwide. A Nation’s Restaurant News report from menu trends analyst Nancy Kruse said restaurants nationwide are adding coffee as a flavor enhancer to everything from truffles to poultry to filet mignon. It’s also making its way into more specialty cocktails, beers and snack foods. Coffee jerky, anyone? It’s out there.
Too sick to work?
It’s flu season and more than half of workers in the food industry are coming to work sick. That’s according to the newly released Mind of the Food Worker study, an annual survey from the Center for Research and Public Policy. The study surveyed 1,200 workers at all stages of the supply chain in restaurants, grocery stores, processing plants, cafeterias and farms across the U.S. and Canada. The workers cited lost wages and not wanting to let down coworkers as the main reasons why they report to work sick.
Buying salmon? It’s a wild card
That wild salmon you paid for may actually be a cheaper farmed variety. That’s according to a study from the conservation group Oceana, which tested DNA samples from the fish and found that almost half of the salmon caught in the U.S. is mislabeled – particularly when it’s out of season and the supply is down. Many restaurants and stores have unknowingly purchased the fish at higher prices. The group said the mislabeling is happening at various levels of the supply chain and called for new regulations to better track the seafood at each step.
Starbucks investment in mobile takes off
Mobile payment technology is becoming a must-have for many restaurants. Now Starbucks has numbers to show how quickly the technology can attract business. In October, mobile payment accounted for 21% of all sales, with mobile ordering and payment accounting for about 5 million transactions, according to Nation’s Restaurant News. Not bad, considering Starbucks rolled out the technology in September.
UberRUSH helps thousands of restaurants deliver
ChowNow, a food-ordering platform based in Los Angeles, has partnered with UberRUSH to make it possible for more than 3,000 restaurants in cities across the country to deliver food to their patrons. According to Food +Tech Connect, the partnership could encourage the 50% of ChowNow’s restaurant clients that do not currently deliver to do so without increasing overhead costs, while helping the ones that already deliver to lower their costs and broaden their reach.
Ovens on wheels keep Dominos deliveries hot
How can you ensure the food you deliver stays warm from the time it leaves the restaurant to the time it arrives at the customer’s doorstep? Install ovens in your delivery vehicles, of course. Dominos Pizza wants to make lukewarm food deliveries a thing of the past with the Domino’s DXP, a Chevy retrofitted with a warming oven and a gutted interior for large orders, according to Nation’s Restaurant News. The delivery vehicles just launched in 25 markets.
Restaurateurs Find A Reason To Love Food Labels
While there has been quite a commotion made by restaurants dreading the need to properly label its food offerings, they now have a reason to at least warm up to them. According to a recent article in Fast Casual, there are several reasons to love labels. Primary among these is the ability for chains to standardize brand and taste through consistency. And with consistency comes predictability, especially in a restaurant’s food costs. It also levels the playing field with a single rule for everybody in the business. Finally, customers like it, want it, and the customer is always right!
A Little BBQ History
According to John Shelton Reed, professor emeritus of sociology at the University of North Carolina Chapel Hill, Southern BBQ is the closest thing the U.S. has to Europe’s cheeses or wines, The New Yorker reports. Crediting the South’s fierce sense of localism, the good professor and author of Holy Smoke: The Big Book of North Carolina Barbecue says that pride of place has led to a wide variety of BBQ flavorings that seem to change every 100 miles or so. The demarcation line seems to be spreading. Just take a drive along a major U.S. highway where portable BBQ trucks continue to spread the good word to every corner of the U.S. and beyond. If your restaurant is not yet on board with BBQ specials, you are missing out.
The Importance Of Soup
Don’t dismiss the power of soup, Restaurant Smartbrief is reporting. One of the most popular menu items in fall and winter, soups and stews are the perfect mediums to create special vegan, gluten-free, and even adventurous creations that feature subtle or bold flavors that your patrons will love. Make it a season to savor and get your kitchen to create a regional favorite soup. From vibrant fall veggies to hot chiles, squash, and fresh seafood, nothing takes the edge off a chilly day than a great bowl of soup.
How To Stand Out In A Food Crowd
Gas prices are low and the economy continues to improve. So where is all that extra cash in our pockets being spent? If your restaurant has not seen an uptick in customers and sales, it is time to wonder why. According to QSRweb, women control most of the savings, and women want memories, not just stuff. Sarah Quinlan, senior vice president of Market Insights for MasterCard Advisors, says it is important that restaurants not forget that fact. "Millennials are all about the experience," Quinlan says. "They're spending more on eating out than on eating at home. Masses drive the price. It's volume times price." That is why a unique dining experience is so important. At the end of the day, that is what sets you apart from your competition. Never forget it.
Quickservice Foods Are Keepers
Think quickservice restaurants will eventually fade into history? Think again, The New Yorker reports. The ancient Romans invented the quickservice food concept with street vendors, which has given rise to some great food concepts over the millennium – from burgers to two-minute Pad Thai. What’s the next big thing? No one really knows. What is a sure bet is restaurants that pay attention to consumer trends will thrive. If that strikes you as a “Duh” moment, consider how many of your own favorites restaurants are no longer in business.