— By Russ Spencer —
Strategies for restaurants in an evolving landscape.
A new year symbolizes new beginnings, particularly within the restaurant industry’s evolving landscape. While some trends may persist from the previous year, Q1 presents an opportunity to reset, recalibrate and plan strategically. These include, but are not limited to, updating menu items, solving staffing challenges and implementing improved ways to reduce waste. Operators who focus on the trends shaping this year and pounce on them will get ahead of competitors and run a successful restaurant in 2024.
Preparing for Changes in Inflation
Even though inflation is expected to slow in 2024, operators need to consider the effects the high prices of consumer goods will have on operations and thoroughly plan to avoid any setbacks in case they rise again. Initiating the planning of holiday menus for Valentine’s Day and Mother’s Day well in advance allows for strategic decision-making and minimizes the impact of inevitable price increases. Proactive measures can include working with suppliers to find the best value, sourcing vendor rebates, exploring cost-effective alternatives such as speed scratch items and considering menu adjustments to maintain profitability despite market fluctuations.
Procrastination in menu planning can have significant financial consequences. In light of rising costs, early planning allows for the exploration of unique and creative menu offerings. This is where menu engineering will become a critical part of your business plan. Running LTOs (Limited Time Offers) provides an opportunity to gauge customer feedback before they become mainstays on the menu. While certain high-cost items like filet mignon and lobster are unavoidable during the holiday season, creative additions such as lobster meat tempura or lobster tail lollipops can elevate the dining experience and drive additional incremental profit on these already high-cost items.
Preparing Your Protein
Beef, chicken and seafood are staples of a commercial kitchen — so staying on top of the fluctuating price changes is imperative to avoid being caught off guard and compromising profits.
The palate of today’s consumer is much more educated on flavor profiles, food trends and more, thanks to the help of network shows such as Hell’s Kitchen and Iron Chef. Now, accompany that with the power of social media sites like TikTok and Instagram, and everyone is all of a sudden an expert in the restaurant industry. Operators should leverage their profits by taking advantage of this. For instance, with the domestic beef market expected to rise, use this opportunity to explore global options. Products from Australia and New Zealand present viable alternatives, often matching or surpassing the quality of domestic cuts. The narrative of grass-fed or ethically sourced meat adds an appealing dimension to your offerings, potentially elevating your establishment’s reputation. A critical evaluation of the necessity of premium cuts, through blind taste tests, ensures that the chosen items align with both your culinary standards and cost considerations. By offering alternatives like this, the operator ensures that their brand is considered on trend and drives customer excitement, which in turn prevents the customer from becoming bored with the current offerings. Now, use the heightened awareness to steer traffic to items with the highest profit margin.
The rising cost of chicken demands a reassessment of suppliers and cuts. Historical lows in chicken breast prices are a thing of the past, necessitating a search for comparable quality without compromising taste. Seafood, particularly crab meat, lobster tails and shrimp, has witnessed substantial price increases. Diversifying sourcing options and exploring the world of quality shrimp varieties can safeguard your profitability. Engaging in early discussions with suppliers for volume commitments is a proactive step to mitigate potential cost spikes this winter season.
Catering Menus: The Importance of Ingredient Cost Control
For catering menus, controlling ingredient costs is paramount. Collaborating closely with suppliers to find the right ingredients at the right price, especially for limited center-of-the-plate options, ensures cost predictability. This early negotiation not only secures your business but also allows for meticulous planning and execution of catering events. Integrating vegan and plant-based options into catering menus aligns with evolving customer preferences and expands your market appeal.
Dynamic Pricing in the F&B Industry: A Glimpse into the Future
The ever-evolving landscape of the food and beverage industry requires adaptability. COVID-19 accelerated the adoption of online ordering and touchless payments, underscoring the need for technology to enhance customer experiences. Dynamic menu pricing emerges as a potential game-changing tactic for operators. Utilizing technology solutions empowers operators to make real-time, data-driven decisions. This includes adjusting prices dynamically based on fluctuating costs, allowing businesses to maximize profits and navigate the complexities of a dynamic market. The adoption of such technology is not just an option but a strategic necessity for staying competitive and resilient in the industry.
Solving Staffing Challenges
It is projected that there will be 15.5 million jobs in the food industry by Q1 2024. Employees now have more options than ever, which means if they feel mistreated or underpaid, they can easily leave for a better-paying position or a company with a healthier culture. To avoid losing your shining stars, invest time in training your employees by using what we like to call ‘Employee Engineering.’ Consistently meet with new hires throughout their onboarding process to answer any questions and ensure they are trained by the top caliber of employees to help them improve and move up the ranks at a faster rate. Review your profit margins to see if there is room to pay your employees a little more or give a small bonus here and there.
Reducing Waste, One Back-of-House System at a Time
Most operators don’t have the time to frequently go over their profit margins and waste percentage, so we recommend investing in a back-of-house technology system to do the heavy lifting for them. Most restaurants waste an average of about 4% to 10% of their inventory, which can cut into the profit margin. Audits of use and waste in the kitchen will help operators see where they’re spending the most money, and what products they need to order less of to reduce waste. By utilizing technology that does this math automatically, operators will consistently be checking their profit margins and making adjustments to save money and reduce waste.
A multifaceted and strategic approach to these considerations in 2024 can position your restaurant for success amidst challenges and foster a culinary experience that resonates with your customers.
— Russ Spencer is the senior director of restaurant success at Craftable, a cutting-edge technology company that empowers restaurants, bars, hotels and hospitality businesses, both big and small. Bringing over 30 years of experience as an accomplished multi-unit operator working in day-to-day hospitality operations, Spencer has a strong understanding of the benchmarks needed for a restaurant’s financial success. Visit https://craftable.com/home-pr/.