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Restaurant Best Practices Blog
4 Soft Skills Your Employees Need During and After a COVID-19 World
COVID-19 is redefining jobs (1). Social distancing has radically changed the way restaurants work, causing a spike in delivery and take-out orders, and employees are taking on different responsibilities to fit these new roles in the workplace (2). Another profound shift in the industry is the way staff is now expected to interact with their customers. Soft-skills, defined by the Oxford Dictionary as “personal attributes that enable someone to interact effectively and harmoniously with other people”(3), will be more important than ever, and managers with a long-term vision for their restaurant are using this time as an opportunity to build and strengthen their team. Here are some skill sets we think will help managers manage in today’s environment and how they can teach them.
Conflict Resolution (Guest Relations)
“Conflict Resolution” refers to the way one resolves an issue or problem between two or more people (4). According to the American Management Association, a non-profit educational membership organization and leader in professional development based in New York City, conflict resolution is a core skill for managers and supervisors, not only for handling disputes efficiently, but also for leveraging potential conflict situations as opportunities for critical conversations that enhance work relationships, increasing overall performance, and preventing conflicts from hindering employees’ professional growth (5).
This skillset will hold more significance now during the COVID-19 pandemic. People (guests and staff alike) are on edge, and more sensitive at this time of uncertainty. For example, a guest might refuse to wear a mask; a guest may file a complaint on a poorly handled order via third-party delivery. Conflicts, especially concerning the new regulations around safety and sanitation, are more likely to arise and staff should be aware and prepared so they can handle situations professionally.
You can visit a step by step guide to conflict resolution in the AMA article here (4, 5), but we recommend supervisors to first create opportunities for awareness and open dialogue with their staff. It is natural for people to react instinctively and not think through how they respond, but they can also prepare and practice handling these situations beforehand and practice stepping out of their comfort zone and putting conflicts into context (12). This is why we recommend role playing as part of the staff training—so that managers can first become comfortable with conflicts and practice resolving them in a controlled space. Practice will also help to build empathy for the guests and to handle difficult situations more quickly and readily.
Internal Conflict Resolution
Internal Conflict Resolution is focused more on building trust between staff (or between staff and managers) by addressing and resolving commonly encountered conflicts within the workplace. The same guidelines apply when teaching internal conflict resolution, except that supervisors should be prepared to play a mediator’s role. Open discussion, while it may be an opportunity for the team to open up, connect and clear up misunderstandings, may also stir up emotion and create tension. As with external conflict resolution, role playing and practicing situations will help build trust and credibility with team members, create team resiliency, and help team members gain confidence in holding difficult conversations calmly and assertively (5, 6).
Worksheets can come in handy. Choosing a particular conflict to discuss and dissect as a team can help staff reflect on ways emotions affect their perception of a particular problem. By considering both sides of an issue and feelings one may have experienced, they may be able to find ways to resolve conflicts logically, or else, find a good compromise that satisfies both parties.
Situational Leadership
We mentioned earlier how the pandemic has been redefining jobs. According to Arran Heal, the Managing Director of CMP Resolutions, the sudden shifts of workload and responsibility have been making it difficult to keep a grip on workplace relationships (7). There’s more potential for misunderstandings, silences, unconsidered messaging; existing interpersonal problems are coming under renewed pressure and new conflicts are being created between employees (7).
A flexible leadership style is crucial in this current environment. One model that we’ve been introducing to our GMs is “Situational Leadership,” a leadership theory that encourages leaders to take stock of their team members, weigh the many variables in their workplace and choose the leadership style that best fits their goals and circumstances (8).
The Blanchard and Hersey model of Situational Leadership is based on two dimensions: leadership style and development level of the employees (8). Directing leaders (S1) should use specific guidance and close supervision and best paired with employees who are of a low development level (D1: low competence and high commitment); Coaching leaders (S2) explain and persuade and best when working with employees of the D2 level (some competence, low commitment); Supporting leaders (S3) share and facilitate and should work with D3 employees (high competence, variable commitment); while a Delegating leadership style (S4) should be used with D4 employees (high competence and high commitment).
While situational leadership is not traditionally categorized as a soft-skill, this particular leadership model is an excellent tool for managers, helping them to modify their leadership styles based on their evaluation of a staff’s competency and commitment levels. No one size fits all, even in leadership, and managers who can understand and utilize different leadership styles will find it easier to effectively drive behavior change, accelerate employee development, as well as manage their employees in the COVID world, where roles are constantly shifting (9).
More information and teaching materials can be found here on the main site (9). We found that situational leadership is a valuable addition to managerial training, particularly if used in conjunction with exercises to help identify leadership styles, worksheets to help define development levels, and role playing.
Effective Communication
Good communication is the foundation of good leadership, and the need for this soft skill has become more significant with the pandemic. According to Nicole Dehler, vice president of StayNTouch, a mobile hotel property management system (PMS) company based in Bethesda, Maryland, restaurant staff, especially those in front of house, literally compose the “front lines” when interacting with guests and implementing hygiene and social distancing measures (10). “If [staff] aren’t informed of your brand’s messaging on sanitation guidelines and response strategies, management will be more difficult and people could be put at risk,” she said. “It is absolutely vital that you communicate with your employees early and often, and are as upfront and transparent as possible, even if it means having difficult conversations or conveying bad news” (10).
Just as with conflict resolution and leadership skills, supervisors can teach effective communication by initiating hands-on practice, role-playing and introspection (11). To measure the effectiveness of communication, supervisors can collect qualitative information by studying employees and asking them for feedback. Long term measurements could also be taken by considering turnover rates, productivity and employee satisfaction (11).
Conclusion
Many of the soft skills overlap in that they aim to reduce friction between relationships through building emotional intelligence and flexibility. Conflict resolution (external and internal), situational leadership and effective communication will all be critical to harmonizing workplace relationships until the return to normality post-pandemic, and supervisors should consider training their team these crucial skills to improve team building and solidarity.
References:
(1) https://hbr.org/2020/04/how-the-coronavirus-crisis-is-redefining-jobs
(2) https://www.restaurantbusinessonline.com/workforce/covid-19-gives-rise-new-restaurant-jobs
(3) http://www.oxforddictionaries.com/definition/english/soft-skills
(4) https://www.amanet.org/articles/the-five-steps-to-conflict-resolution/
(5) https://www.amanet.org/conflict-management-workshop/
(6) https://www.amanet.org/articles/conflict-management-workplace/
(7) https://www.mediate.com//articles/heal-conflict-COVID.cfm
(8) https://online.stu.edu/articles/education/what-is-situational-leadership.aspx
(9) https://situational.com/situational-leadership/
(10) https://www.asianhospitality.com/article-communication-skills-a-must-in-covid-19-crisis/
(11) https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/managingorganizationalcommunication.aspx
(12) https://www.mediate.com/articles/navy.cfm
Goliath Consulting Group offers management training and a host of other services for independent, chain and franchised restaurants. Learn more at http://www.goliathconsulting.com or contact us at getresults@goliathconsulting.com
What to Do When Restaurant Staff Test Positive for COVID19
By Bora Kang and Colin Kopel
Despite your best efforts to adhere to CDC’s safety guidelines and to make your guests feel safe and comfortable dining in your restaurant, you may face an unavoidable situation where your employee tests positive for the novel coronavirus. According to Will Eadie, Global VP of alliances, WorkJam, foodservice workers are essentially on the front lines and at high risk of getting sick (1). Workers may also be exposed to the virus elsewhere and may be in a situation where a family member contracts COVID-19. So, what can do you when your staff tests positive? Here are resources and advice on what to do when it happens.
First things first. The CDC is your best source for guidelines regarding COVID prevention, intervention and control, and you should consult the website for instructions on what to do when you are faced with a sick employee. Here is a brief overview of the CDC’s content (see website for more details https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/business-employers/bars-restaurants.html ).
1. Advise Sick Employees of Home Isolation Criteria
2. Isolate and Transport Those Who are Sick
3. Clean and Disinfect
4. Notify Health Officials and Close Contacts
Damage Control
Once you have followed these steps you can proceed to damage control. While it is recommended that restaurants temporarily close so that the business has time to clean and disinfect the restaurant, as well as having the rest of their staff tested, the rules regarding closures vary from state and region. For example, the State of Massachusetts now lawfully requires restaurants to immediate shut down for 24 hours (3). Some restaurants opt for closures voluntarily, even though they are not bound by law to close. A running list of restaurants and bars that are temporarily closed in Atlanta, GA, are listed here (4).
Unfortunately, not all restaurants can afford to shut down operations. Most restaurants do not have any form of a safety net left and closing can be devastating. Many operators will close for a few hours to disinfect the restaurant. There are third party companies that will come in and spray the entire facility with bio-friendly solutions. If they do close, restaurateurs leverage programs like Unemployment Insurance to hold their staff over on wages.
Overall, being flexible and prepared to act quickly and take necessary steps to sanitize the workplace will help operators expedite this process.
Notifying the Public
Transparency may be a difficult decision to make as an operator, especially given the financial loss that comes from temporary closures and the possible negative profiling of restaurants that report cases of COVID-19. First consider your number of staff and where their exposure came from. For example, if you have a small number of employees you may be able to narrow down the path of contact, isolating the cases so that you can prevent further exposure; if you discover that one of your staff has had close contact with someone who contracted the virus recently while outside of the workplace, you may be able to manage and contain the situation by asking the employee to stay at home until they fully recover.
Many experts have expressed a more positive outlook for restaurants that have chosen transparency. According to a social media survey by Taylor Adams, “Would You Eat Where Someone Tested Positive?” some diners showed support for restaurants who were honest with their customers (6). One commented: “There are most definitely restaurants that have remained open despite employees testing positive. I am thankful for those that have been transparent and are clearly taking this issue seriously. I hope that we collectively support them” (6). Meanwhile, one prominent restaurant in Colorado faced scrutiny when they failed to report their first COVID positive case to their guests (7).
The topic of transparency can be a difficult issue, and what works for one restaurant is not always going to work for another. Communicating a commitment to sanitation and promoting any vendors that are hired to sanitize the building or additional programs the restaurant is undertaking such as ServSafe Covid-19 Training is key. A restaurant’s commitment to extra safety precautions is a cornerstone to showing guests you are providing as safe as possible dining experience.
Reinforcing Safety Protocols
A staff testing positive can be a much-needed wake-up call for businesses. Operators should use this opportunity to remind your staff about safety and re-training them so that they adhere to the sanitation policies in place, most importantly—masks, gloves, hand-washing and social distancing, such as one provided by the CDC (2). Some operators have added regular temperature checks and deep cleaning into their routines because of growing concern among their employees (8). The Centrolina Restaurant in DC, for example, are enforcing stricter safety policies such as hand washing every 30 minutes, hourly cleaning, and twice-daily temperature checks for staff, after reopening after a positive COVID-19 case (8). Managers should accept staff call-outs due to medical reasons, allowing them to be excused from work if they are not feeling well. who express concerns they may have been exposed should be taken at their word. Many states require wellness contracts that outline symptoms such as fever that require them to stay home until they have recovered.
Communication
Collaborating with your employees is the key to effectively communicating important COVID-19 information, according to the CDC (9). We recommend operators to communicate with their employees about planned changes and, most importantly, seek their input. It may be difficult at first to balance an appropriate level of communication, to decide whether you tell your staff if an employee was exposed or tested positive, even after getting the employee’s written consent to share their personal results. Communication transparency is important for good company culture. While restaurants are open during the pandemic there is already an unease among staff and, coupled with another negative industry history of undervaluing hourly employees, there is a certain amount of skepticism towards management.
If someone tests positive, remind them of the environment we are in and that vigilance is their best tool to protect themselves. Let them know all the additional safety measures the restaurant is taking and, most importantly, listen to them. Ask them what would make them feel safer and, when feasible, accommodate the staff. They are the ones on the front line, and you cannot run a successful business without well-trained staff. They need to feel safe and know that the restaurant is here to support them.
Returning to Work
Individuals who have tested positive can return to work when they have fully recovered. There are certain tests individuals can take to determine whether an employee can safely return to work, but go-to resource should be this CDC website where a “Return to Work Criteria” is listed for businesses (10).
Conclusion
Exposure to the COVID-19 virus is possibly unavoidable given the spread of the pandemic, and there is no one right strategy to prepare for its impact on businesses. Overall, operators who can act quickly to employees testing positive, as well as possible closures, will benefit by avoiding further confusion and panic (1). Our recommendation to operators is to keep your staff informed about updates, ensuring that the communication lines are open and streamlined so that staff can be up to date on new safety policies, scheduling, as well as hours and staffing.
References:
1. https://www.fsrmagazine.com/labor-and-employee-management/how-take-care-restaurant-staff-through-covid-19-crisis
2. https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/business-employers/bars-restaurants.html
3. https://www.masslive.com/coronavirus/2020/05/read-the-coronavirus-protocols-massachusetts-restaurants-must-follow-when-they-reopen-in-phase-2.html
4. https://atlanta.eater.com/2020/6/22/21299372/atlanta-restaurants-bars-closed-temporarily-positive-covid19-coronavirus-employees
6. https://www.dallasobserver.com/restaurants/restaurants-close-reopen-covid-staff-coronavirus-11921164
7. https://www.10news.com/news/local-news/san-diego-news/prominent-coronado-restaurant-apologizes-over-transparency-regarding-sick-employees
8. https://www.washingtonian.com/2020/05/08/restaurant-workers-are-testing-positive-for-covid-19-what-businesses-do-next-is-uncertain/
9. https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html
10. https://www.cdc.gov/coronavirus/2019-ncov/hcp/return-to-work.html
Contact us at getresults@goliathconsulting.com or visit our website at goliathconsulting.com to get information on our training and consulting services.
Managing Bar Supply Chain During the Covid-19 Pandemic
Every bar manager experiences recurring nightmares of that one delivery day. We all know the one. It is the middle of the lunch rush and trucks keep showing up at the loading dock during times the restaurant has deemed inappropriate for deliveries. The cases of product continue piling up and floor management responsibilities are preventing the bar manager from vigilantly checking in each order. When the dust clears and a proper inventory of each order is finally manageable, the frustration of back ordered product sets in. How can the restaurant operate without a domestic light beer on tap? Does the bar just 86 top shelf tequila for the weekend? Reopening restaurants with current supply chain issues makes this once rare scenario seem to be a weekly occurrence.
With the increasingly frustrating variables in the current restaurant industry, beverage supply chain does not need to be the straw that breaks the camels back. With modified inventory procedures, increased communication and planning, and appropriate training, bar managers can rein in the uncertainty and provide their guests and staff with a consistent product.
Inventory
Start with the basics of operating a bar. How often are you counting a detailed inventory? Most bar managers will cite a monthly inventory and order each week off either a product mix or visual count. The thought of increasing inventory to a weekly process is daunting and time consuming. The dilemma of limiting inventory counts is outweighed by necessity of knowing what the bar always has on hand and the inventory of comparable product in the event the restaurant runs out of a customer favorite. With the current supply snags, the concept of inventory can readjust to consider like products as a single count. For example, if you carry the same domestic light beer on tap as in a bottle, count them together and reconcile the number with your average weekly combined sales. Compartmentalize top shelf spirits into one count. The restaurant can use a strategy of guaranteeing an equivalent product is always in stock in the event a popular item is back ordered. Consider adding platforms like BevSpot or Barkeep to decrease the amount of time spent counting. Most modern POS systems such as Toast and Revel have built in Inventory options for operators looking to consolidate their programs.
With an inventory consolidated, look for holes in product areas. What products does the restaurant lack a comparable alternative? Are you able to stock up on inventory or bring on an additional alternative to prevent a menu hole? Do your sales reps have any feedback on short-term availability of the product?
Distributors
Sales representatives from distributors are one of the most under-utilized resources in times of supply shortages. Distributors possess the ability to maneuver delivery days and are more than willing to provide restaurants with weekly warehouse inventories of kegs, wines, and other products. They are also in tune with estimated inventory shortages at the beginning of the week and can advise customers on alternate products. Keep in mind if a distributor is out of a popular product, the restaurant may need to seek a product from a different distributor. My recommendation to our clients is to order product on Mondays and move delivery days to Tuesdays. This provides an additional three days to work with distributors on off-day deliveries for any products that are out of stock and keep the restaurant well-prepared for volume weekends.
Training
Training is the component that brings the tumultuous supply chain together. Staff appreciate transparency and frequent updates that prevent them from feeling the fool when they are unaware of lack of inventory. Maintain an 86 board that is easily available to all staff. A dry erase board in a well-traveled area works great. While it is tempting to scribble the 86’d item on the board, take the time to write out an alternative item. Secure time during lineups to cover the out of stock items and educate on the alternate options. Keep management proactive in updating the restaurant’s point of sale to reflect current inventory levels. Management will find consistent staff training and communication appreciated and reflected in staff morale. Bartenders and servers thrive on consistency and minimizing variables.
Implementing a solid bar strategy can reduce one of the larger headaches of reopening a restaurant during a pandemic. While most of management’s effort and focus is on sanitizing and maintaining a safe environment, it is common to neglect operational concepts such as supply chains. Curious about the state of your inventory or looking for assistance adjusting menu content/pricing to maximize your brand during these fluid times? Goliath Consulting Group can assess your current food and beverage menus/inventories and make recommendations to set your restaurant up for success. Contact us at GetResults@GoliathConsulting.com
Upcoming Restaurant Tech Trends of the Post-COVID-19 World
The restaurant industry had to adapt to changes in consumer behavior during the COVID19 pandemic, testing out operational innovations and relying on technological solutions that allowed for social distancing and ensuring sanitation (1, 2). But even after the pandemic, sanitation and safety concerns are expected to remain, and the restaurant business model may have to evolve in a way that utilizes more tech-driven service systems. Here are some upcoming tech trends below:
Social Distancing Tech
With widespread concerns of a pandemic rebound, customers will now be more cautious of eating out in crowded places after the COVID-19 outbreak. According to Restolabs, a restaurant management software that offers online ordering systems, continued social distancing measures are expected to bring about an upward trend of automation for customers (3). New delivery systems are likely to be implemented so that food can be delivered in a faster, more convenient and more hygienic way, like drones and autonomous vehicles launched in some restaurants in California (4). Improved AI could even bring about cashier-less drive thrus—much like Amazon’s cashier-less automated checkout systems (3). According to Technomic, even the automat has returned with renewed interest for restaurants now turning to tech-driven service systems (1).
And clearly, online delivery will start to become an indispensable part of the dining culture as customers dine-in less. More restaurants may pivot to self-delivery instead of third party delivery to mitigate fees and have more control over the safety of their food (5).
Tech for Touchless, Contact-Free Dining
According to Toby Malbec, Managing Director of ConStrata Technology Consulting featured in Hospitality Tech Magazine, higher level of protection and assurance of safety measures are necessary to alleviate customers of their health concerns and persuade them back to dining in (6). Contactless-dining is expected to trend as a result. “Germs can exist on plastic surfaces for several days, and the newly educated customer base will be sensitive to the notion of being handed a menu that could easily be cycled a dozen or so times during this period,” says Malbec (6). “Restaurants should look to providing an option for a guest to pull up the menu on their own device as well as look to leverage digital menu board technology wherever possible.” Anti-Microbial POS Screens and other device surfaces may be another component of using digital menus (3).
Payment solutions will have to change as well. Conventional payment models of cash and plastic credit cards carry a high risk of person-to-person transfer of contagions, and the mitigation of this transfer, according to Malbec, can be greatly reduced when restaurants change to contactless solutions such as EMV, tap and pay, and mobile wallets (6).
A growing demand for hands-free, no-touch equipment will result from the COVID-19 pandemic (7). Automatic doors, motion-activated faucets, touchless soap dispensers, automatic paper towel dispensers have been around for a while in the restrooms, but these touchless options have only been “grudgingly” adopted elsewhere (6). More hands-free options are likely to become increasingly implemented in the kitchen area, from touchless trashcans, doors, glove dispensers, sauce, to beverage dispensers.
Employee Health
While hands-free equipment and systems may certainly alleviate consumer concerns about the safety of their food and dining environment, operators may find themselves more invested in the health of their employees. Hygiene and sanitizing apps may start to appear in the workplace, as sanitation becomes priority for most restaurant operators. For instance, artificially intelligent cameras will soon make it possible for operators to monitor safe practices and verify whether employees or customers are following critical safety measures, including all front of house, back of house and delivery processes (8). Similarly, time clocks may have come with the ability to conduct a temperature check on employees, either through some biometric means as part of the clocking in process (6). And, though not yet proven to work against COVID-19, some restaurateurs, as those in Atlanta (9), may install high-tech air filtration and sanitation systems such as UV lights to purify and filter the air for the health of their customers and employees.
Conclusion
The COVID-19 pandemic has changed consumer behavior as we know it and it has changed the status quo of what is expected out of restaurants—sanitation, automation or otherwise. “The only way for us in the industry to keep pace is to digitize, modernize and monetize the guest experience,” says Christopher Siefken, the head of technology for Xenial, a Global Payments company that serves over 135,000 restaurant and retail locations in the U.S.(2). By embracing the shift in consumer behavior and implementing technology that consumers demand, operators can reap the benefits of staying ahead of the game while keeping people safe.
References:
(1) https://www.technomic.com/technomics-take/coronavirus-foodservice-view
(2)https://www.qsrmagazine.com/outside-insights/where-technology-fits-covid-19-response-restaurants
(3) https://restolabs.com/blog/social-media-and-trends/what-will-restaurant-technology-look-post-covid-19
(4) https://www.forbes.com/sites/lanceeliot/2019/06/21/self-driving-cars-paired-with-autonomous-drones-for-faster-fast-food-delivery/#3392b2ba2d3a
(5) “Future of Food Delivery” https://www.goliathconsulting.com/blog/
(6) https://hospitalitytech.com/restaurant-technology-post-covid-19-world
(7) https://www.wasserstrom.com/blog/2020/05/08/touchless-restaurant-equipment-may-be-the-future/
(8) https://atlanta.eater.com/2020/6/5/21281786/atlanta-restaurants-safety-equipment-air-filtration-systems-covid19-dining-rooms
(9) https://www.forbes.com/sites/jennysplitter/2020/04/23/this-ai-camera-can-help-restaurants-show-that-their-food-is-safe-from-covid-19/#fcd368025b9d
Responding to COVID-19’s Impact on the Restaurant Supply Chain
by Bora Kang
The COVID-19 pandemic has proven to us all just how interconnected our food system is in the US if not, the world. The supply chain failure and the domino effect of its impact have been a wake-up call for even the veterans of the food industry. Nationwide outbreaks have forced manufacturers to shut down their plants, leading to disruptions in operations downstream in the supply chain (1). Restaurateurs who were eager to reopen their doors after lock-down only a few weeks ago are having to confront temporary product shortages and price inflation, vulnerable to spontaneous out of stock notices or unexpected shipment delays. Perhaps more unsettling is the uncertainty of it all. It’s just impossible to predict consumer behavior, especially when the pandemic is new to all of us.
So the question is: how do you respond? Here are the top three actionable steps we think will help operators overcome the supply chain crisis.
Multiple Sourcing and Backup
If you haven’t considered multiple sourcing before, now is the time. According to John Davie, CEO of Dining Alliance, “Restaurateurs who are reopening and asking what they should do regarding supply chain should prepare to engage smaller suppliers who have multiple sources of product” (2). This is because “as restaurants open fully, most distributors will experience some shortages. Restaurants wanting to make sure they have everything they need should have a few different channels to rely on, especially when it comes to specialty products” (2).
And research seems to agree. According to Costantino and Pellegrino’s study of choosing between single and multiple sourcing based on supplier default risk, single sourcing has the advantage of a strong partnership between buyer and suppliers while lowering purchase price, but this dependency between the two creates vulnerability and increased risk of supply interruption (3). Meanwhile, multiple sourcing allows operators to “reduce probability of bottlenecks due to insufficient production capacity to meet peak demand.” It has the advantage of allowing the operator to have alternative sources of materials in case of delivery stoppage by the supplier, as well as the flexibility and agility to react to unexpected events that could disrupt the supplier’s capacity (3).
Mahesh Rajasekharan, CEO of Cleo, a software company that provides wide ranging big data integration solutions between businesses and applications, suggests that companies become more agile in their efforts to connect with multiple suppliers for the same product (3). “If Supplier A has 50 cases of [a product] for $800, and Supplier B has 25 cases for $750, the buyer can purchase all 50 from Supplier A, and then source the rest from Supplier B based on prior buyer trends,” he wrote in Supply and Demand Chain Executive (SDCExec) Magazine. The key is to adopt a “holistic view of the supplier ecosystem. A company can find the best price at any point in time and refactor supplier integrations accordingly” (4).
You must consider the worst-case scenario and have backup plans in case your food-supply is unexpectedly compromised, especially for your priority products. According to Yerkes, Vice President of Business Development in Supply Chain at Consolidated Concepts in Boston, MA, operators should consider a wide range of options and communicate with your supplier for when a product cannot be delivered—for example, “if you don’t have this product can you do with another substitute?” (5). Other sources recommend using ready-made pre-cut items to save on labor, as well as shifting to different cuts of meat—for example, moving to ham which is more readily available in foodservice (2). We think the best operational strategy is establishing a contingency plan for the items you know you can’t do without, especially in dairy, meat where we’ve seen shortages; upscale restaurants may be struggling most because they require specialty products and are more specific (5).
Menu Changes and Flexibility
Menu changes have become a widely-adopted solution to a variety of supply issues facing operators. Akash Kapoor, CEO of Bay Area-based franchise Curry Up Now, is simplifying his menu by combining. “We used to garnish with four different microgreens, but now we’ve gotten rid of that,” said Kapoor in an interview with Berkeleyside News (6). “We’re back to a simple mix of cilantro, mint and chives. And whatever we use, we also use in some other way on the menu. It can’t just exist as a garnish. It has to have a purpose on the menu.”
In some ways, the COVID-19 crisis has created opportunities for restaurants to rethink and evolve their menu. “One thing we can do is just go back to being chefs, which I think is kind of cool,” said Kapoor (6). “You can just go to the market and do with what you’ve got.”
Like Kapoor, restaurateurs may be starting to think about shrinking down their menu and working with items that are not (yet) subject to volatility. According to Tim Hand and Bruce Reinstein from Kinetic12 Consulting, this kind of simplification “allows fewer moving parts and gives the restaurants the ability to be significantly more productive by requiring less labor, fewer deliveries, lower waste, and improved execution” (7).
Unfortunately, Yerkes says some changes will be difficult because operators are “emotionally tied down to their menus” (5). Differentiation in foodservice is what gives a restaurant its unique identity, and often what gives restaurants its competitive edge. Sometimes, an operator may believe that losing their specialty products and items that differentiates them from the competitors may also lose their competitive edge. “While this is true if you are not careful, the brands we work with are making changes very thoughtfully,” said Yerkes. “Slimming things down a bit and having alternative solutions will help [brands] survive. The reality is everyone has to adjust in some capacity but everyone is very focused on the guest’s experience still and that will get them far” (5).
Likewise, Hand and Reinstein support simplification over differentiation, saying that the former “eliminates some of the emotional decisions that create broad and complex menus that are too big for restaurants to execute profitability and consistently, and results in too many ingredients that only have one use” (7). In conclusion, differentiation “must now go hand in hand with simplification, efficiency, and profitability” (7).
Communication
All the working parts of the food industry, as we’ve experienced first-hand, are interconnected and interdependent. As such, communication and transparency is a necessary component of recovery.
The first step operators should take is communicating with their suppliers. According to Hand and Reinstein, operators should “reach out to their top suppliers for assistance on driving both front-of-house and back-of-house efficiencies. This can include streamlining the food preparation process through labor saving products, new equipment innovation, new order-taking technologies, supply chain simplification ideas and finding efficient no-touch solutions for self-serve condiment and beverage stations.” This streamlining process is necessary, as “[suppliers] must have a clear understanding of what each restaurant brand is focused on and support their operator partners with the types of products, insights and innovation that are necessary to help drive revenue while maintaining and improving efficiencies” (7).
Consulting an expert helps, too. According to Yerkes, this is because “partners have a line of sight into what else is going on….we can offer multiple solutions because it wouldn’t be the first time we’d encountered similar issues” (5).
Another important consideration for operators is communicating to the staff about their supply status. For example, if your supply shortage prevents you from including certain items in the employee meals do they understand why? What about issues concerning reducing food waste? Having a transparent, honest relationship with your staff, suppliers and customers will help your business tremendously in the long run.
The food industry has been hit hard by the pandemic and operators may find themselves restless as restaurants reopen and they readjust to the new normal. The good news is that you don’t have to brave this alone. This pandemic has opened up new communication channels for people. “We may have our own agendas, but people have been genuinely helpful, trying to support each other in these times,” said Yerkes (5). “Free resources are being available. New webinars are popping up everywhere like LinkedIn, available to everyone.” She also added that “[these times] have “won me a lot of friends….The silver lining of this is good relationships.”
Conclusion
If the pandemic taught us anything it is that we cannot take anything for granted. “Nothing will surprise me at this stage of the game,” said Yerkes. “The resurgence of the virus is expected, making all this unstable” (5). While we do predict a “semi-permanent” impact on the shortage of sanitary items, such as face masks and vinyl gloves through the rest of 2020, the supply situation can change at any given time, and no strategy is guaranteed to work or fail.
Preparing your business for product shortages and future outbreaks is necessary for the recovery process. It will take some time for us to win back the consumer confidence around safety, and until then, you should consider multiple supplier options, be creative and nimble in your menu changes, and communicate with vendors, staff and your customers about what’s to come.
And remember, no change should compromise quality. The fundamentals still are what they’ve always been and the most resilient of us will find ways to win small victories, even if there have been losses along the way.
*Special thanks to Meredith Yerkes, Vice President of Business Development in Supply Chain at Consolidated Concepts in Boston, MA, for providing her expert insights
References:
(1) https://www.technomic.com/technomics-take/coronavirus-foodservice-view
(2) https://www.restaurant.org/articles/news/a-supply-chain-take-on-the-post-covid-19-world
(3)https://www.researchgate.net/publication/240167996_Choosing_Between_Single_and_Multiple_Sourcing_Based_on_Supplier_Default_Risk_A_Real_Options_Approach
(4) https://www.sdcexec.com/sourcing-procurement/article/21134023/cleo-the-covid19-supply-chain-impact-avoiding-the-bullwhip-effect
(5) Yerkes, Meredith. (2020, June 11). Telephone interview
(6) https://www.berkeleyside.com/2020/05/18/east-bay-restaurants-brace-for-instability-in-food-supply-chain
(7) https://www.fsrmagazine.com/expert-takes/simplification-covid-19-era-what-it-means-restaurants-and-suppliers
For more information on services provided by Goliath Consulting Group visit or website at goliathconsulting.com or contact us at getresults@goliathconsulting.com
Defining a Post-COVID19 Consumer: What Your Guests Will Look for When They Walk Through Your Doors
by Bora Kang
You’ve re-opened your restaurant, congratulations! But much has changed since you’ve last had dine-in guests; consumer spending behavior and eating habits have been reset. Other than your most loyal customers, there is no guarantee that your old guests will return to dine with you while social distancing and other public health recommendations remain in effect. So how will your restaurant appeal to your guests when they walk through your doors? We’ve come up with a short list of items that we think will be important to your guests based on available research.
A Safe Environment with a Touch of Convenience
First, we know that consumers will continue to regard safety and sanitation in high importance, possibly going towards 2021 (1). According to Philip Daus, partner with Simon-Kucher & Partners, a global strategy and marketing consulting firm, consumers are expected to “remain vigilant about staying safe and limiting potential exposure to COVID-19… (This) value driver will stick around for a long time, at least until mass vaccination has been rolled out” (1). This sentiment is illustrated in a recent survey conducted by Technomic, a research and consulting firm servicing the food and foodservice headquartered in Chicago, IL: about half of survey takers felt that they would be comfortable dining at restaurants that had at least a 6-ft distance between tables (2). An additional 25% said they would be comfortable with table 9-15ft apart.
We think restaurants should implement transparency and visibility to alleviate these fears. “It will not be sufficient to have the proper sanitation procedures in place,” said Daus (1). “Restaurants need to openly communicate their safety standards to their customers and make sure they are being perceived as a safe establishment.” For example, Datassential, a market research firm for the food industry in Chicago, IL, recommends that restaurants have a staff member to frequently wipe down high touchpoints (i.e. door handles, soda fountains, and condiment bottles, kiosks, tables, public restrooms) in plain view of their customers (3). It would also be helpful to give customers as many touchless/self-service options as possible, such as automatic doors, self-checkout or touchless pay. The latter would not only eliminate the need for your staff to constantly sanitize, but offer a touch of convenience that may not have been available for your customers before the pandemic that your guests are sure to appreciate.
With social distancing behaviors expected to last long term, we may see an upward trend in food delivery. McKinsey’s analysis of the Chinese consumer response during the COVID19 crisis revealed that consumers were more likely to spend more on food delivery, prepared goods and groceries than they did pre-pandemic (3). According to Datassential, “high-risk,” environments such as arenas, movie theaters, buffets, bars, cafeterias, and anywhere else one could be exposed to large crowds were likely to be affected most (4). A recent survey they conducted also found that 54% would most likely decrease their visits to sit-down restaurants (4). Delivery (particularly, self-delivery*) and curbside could be what keeps operators afloat during these trying times.
*more on self-delivery discussed in our previous blog articles
A Sensible, “Value-Driven” Menu
Next, restaurant-goers may be more selective with their spending and spending decisions after the pandemic. The economic downturn would have affected job security, especially those in the lower socioeconomic groups, people of color, women and the young (5) and consumers will seek value to compensate the loss of income and save money.
Datassential, in their “Money Matters” article released in April, found that 38% of consumers planned to get restaurant food less often; 23% find and use more coupons; 22% choose less expensive restaurants; 19% choose less expensive menu items (6). Technomic, too, found that coupons and promotions were significant restaurant drivers, especially popular among consumers with children under the age of 18 (55%) and consumers in the age range of 25-34 (54%) (2). What this data shows us is the shifting perception of consumers regarding their eating habits. Brands, quality, flavors and convenience will still matter, but their decisions will also be influenced by the price and value of a menu item. This is not to consumers will be less willing to pay, just that they will be “more deliberate as to where and how they will spend their money” (1).
In accordance with these changes, some operators are remodeling their menu so that they “make sense.” Restaurants will have to rethink how they will get their vendors to supply ingredients and whether they are cost-effective to serve. For example, The Spillover Restaurant in Miami is changing its menu to an appetizer-entree-dessert format, focusing more on salads, sandwiches and entrees (7). They will be removing the shareable dishes—to emphasize guest safety—and implementing the $12 lunch specials during the weekdays. As the restaurant owner remarked, “a customer may not casually choose a $15 burger in the future” (7).
Trust, a Human Element
According to Danny Klein, Director of Digital Content at Food News Media and contributor to QSR and FSR Magazine, “Trust will mean everything to restaurant customers after COVID-19” (8). But you’ll have to earn it. The pandemic would have affected consumers more than just financially, and consumers who discover you through social media, as well as those who return to your establishment after lockdown will start to evaluate whether you truly care about their well-being. As we discussed earlier, transparency will be vital. Ask yourself these questions constantly: are you adhering to sanitation practices as posted? Are you producing quality food? Are the items offered in the menu in stock and fresh? Are the new contactless / touchless systems (self-checkout, touchless pay, for example) functional and convenient? Are your staff trained to use these new systems? Expect to be reliable and strive to be consistent. Customer loyalty will be valuable after the pandemic. Reliable consistency is how you will retain your guests.
While “trust,” as discussed above, comes from operators earning it through measurable results and transparency, it is also important to note how trust is also a human element built on emotions. Monica Ho, from Modern RestaurantManagement.com, recommends that businesses “lead with empathy,” focusing on connection and awareness (9). Many restaurants in the Atlanta area as well as other urban cities have actively participated in providing meals for food kitchens, for out of work restaurant employees and many frontline workers in the hospitals, while others have contributed to community issues by fighting hunger (10). Similarly, consumers have been very eager to support local restaurants and local food sources during lockdown, buying more take-out and ordering from local food suppliers to help small operators stay in business (8). It is this collaborative relationship that may have helped many small and local businesses navigate through the COVID-19 lockdowns.
Independents have been predicted to be most vulnerable to closures in this pandemic due to “minimal off-premise presence, limited digital capabilities, low emphasis on value-based menu items and because of their unfavorable economics (thin margins and poor access to capital) according to this McKinsey & Company research (11). Projected consumer spending for restaurants overall is also at a negative: people are expected to continue cooking at home and recovery is not expected to start early (11). Despite the odds, however, some restaurants have managed to thrive. Eric Rivera, owner of Addo Restaurant in Seattle, reported higher than last year’s sales and doubling of staff to 10 since the beginning of the month (12). His secret was systemic change: first, he shifted order to pick up and delivery only and sending his staff to make drop-offs rather than relying on third-party delivery. He also decided to continue to offer a new menu every day, ranging from simple $9 bowls to family style meals, such as a $45 pasta for two with a bottle of wine or a $105 Hawaiian feast for two. He’s also removed higher-end menu items and implemented a system where customers can “pay forward” the $9 bowls to a local homeless shelter (12). More details of this and his social media strategy can be read in the Wired article referenced here (12), but the key takeaway from Rivera’s success story is that a restaurant’s future outlook is not limited to what is defined by projections. The wonderful thing about trust is that it’s got a human element that cannot be predicted. Consumers are people, and these people will support and return to restaurants they trust and want to be associated with.
Conclusion
There is a big question mark over when the restaurant businesses will return to pre-COVID19 levels. The fact remains, there is a lot that remains unknown about future consumer behavior, as this pandemic is new to all of us. But studies have so far illustrated that nationwide spending has been gradually ticking upwards and that most businesses are expected to bounce back in 2021 (2). An article from Escoffier School of Culinary Arts even forecasted a positive outlook: that “extreme social distancing has created pent-up demand for social interaction. And once the economy opens up, customers will likely prioritize those businesses that have adapted the quickest to the new trends” (13).
It will be a difficult battle ahead, and every restaurant will be striving to regain what they’ve lost during the lockdown. It takes courage to transform and let go of your old business formula, and we’ll all have to proceed despite uncertainties. But like with all success stories, we think it’s the operators who are willing to learn and evolve with the time who will reap the benefits of tomorrow.
Reference:
- https://www.qsrmagazine.com/consumer-trends/restaurants-greatest-competition-post-covid-19-home-cooked-meals
- https://www.technomic.com/technomics-take/coronavirus-foodservice-view
- https://www.mckinsey.com/industries/retail/our-insights/delivering-when-it-matters-quick-service-restaurants-in-coronavirus-times
- https://blog.datassential.com/covid-19-and-the-impact-on-consumer-eating-habits
- Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, M., & Agha, R. (2020). The socio-economic implications of the coronavirus pandemic (COVID-19): A review. International journal of surgery (London, England), 78, 185–193. Advance online publication. https://doi.org/10.1016/j.ijsu.2020.04.018
- https://datassential.com/wp-content/uploads/2020/04/Datassential-Coronavirus13-04-16-20.pdf
- https://www.garestaurants.org/news/how-the-coronavirus-will-change-restaurant-menus
- https://www.fsrmagazine.com/consumer-trends/trust-will-mean-everything-restaurant-customers-after-covid-19
- https://modernrestaurantmanagement.com/how-multi-location-businesses-can-navigate-localized-marketing-through-covid-19/
- https://www.forbes.com/sites/michelinemaynard/2020/05/06/four-things-restaurants-must-address-to-come-back-from-covid-19/#4f6417c45ef8
- https://www.mckinsey.com/industries/retail/our-insights/how-restaurants-can-thrive-in-the-next-normal
- https://modernrestaurantmanagement.com/independent-restaurants-find-creative-ways-to-stay-open-during-covid-19-shutdown/
- https://www.escoffier.edu/blog/food-entrepreneurship/how-will-restaurant-consumers-change-covid-19/
For more information on services provided by Goliath Consulting Group visit our website at goliathconsulting.com or contact us at getresults@goliathconsulting.com
Menu Development and Business Planning Resources
In the last few months, we have all seen a historical change in how restaurants operate and how restaurants have adapted to the new business environment that is a result of the coronavirus pandemic. In response to the “new normal” and evolving response to Covid-19, the following two guides were developed to assist the restaurant operator in navigating the best way forward.
Goliath Consulting Business Plan Guide
This is a guide for restaurateurs to help mitigate the impact of the Covid-19 pandemic and maneuver their concept through the coming months. The next 18 months will be a challenge for every restaurant brand. The outline below will get you started on building a plan to optimize your business to keep your doors open and be prepared to capitalize on opportunities that will present themselves into 2021.
Goliath Consulting Menu Development Guide
Our new normal is developing in front of us. What your menu looked like a few months ago is most likely not the menu you will have this summer and going forward. The paradigm shift for restaurateurs is coming fast and menu changes started in March for many operators. As we move forward, menu strategies new and old will converge as we adapt to the right mix of price points, value, menu items and differentiation that will appeal to consumers.
This document is a guide to developing a competitive menu that will excite guests and allow you to grow your revenue.
For more information on services provided by Goliath Consulting Group visit or website at goliathconsulting.com or contact us at getresults@goliathconsulting.com
How to Grow Your Catering Business
by Bora Kang
Catering has grown significantly over the last few years thanks to the widespread demand for this one word: convenience. Whether they be for office parties, conferences, birthdays or weddings, catering profits from the promise of efficiency, safety and most importantly—safe of mind.
But as consumer spending on catering grows, so does the competition. And while a little competition never hurts, continuing investments in your catering program will be paramount to your business’s success. Here are four strategies you can use in your existing catering business to gain a competitive edge in the crowded catering landscape.
EXPLORE NEW CATERING VERTICALS
Exploring new catering verticals is key to expanding your catering business. You may be used to catering for corporate meetings, office parties, weddings or cocktail parties, but what about outdoor festivals, picnics and movie sets? You may even get client requests you’re not used to, like having to add a food truck or using non-traditional type venues you would have never thought of using (1). But that’s what makes it a perfect opportunity. Take some time to explore what you can achieve as a business. Stepping out of your comfort zone is never easy, but challenging yourself to take on new catering opportunities will set you apart from the competition and increase your business exposure. It will also provide a marketing platform where you can meet new people and gain new leads.
INVEST IN TECH
It can be stressful to manage a growing catering business without relying on technology. From venue information, menus, pack lists, hiring, timelines, etc., there will be logistical challenges in trying to keep track of every detail without a business management software. According to Daniel Smith, writer for QSR Magazine, “technology is playing a prominent and escalating role in catering. Those who can harness technological tools like online ordering and loyalty programs are better positioned to succeed ,,, minimizing friction for the end user” (2).
If organization is important to you, you may want to invest in a management/ catering software that can automate a large portion of your business. A good management software should be able to track your sales, managing your staff scheduling and most importantly, boost the overall efficiency of your business so that you can dedicate more time and energy into helping more clients, as explained in detail in this CaterEase article (3).
We also recommend that you start utilizing some of these catering/lunch service apps (if they are available in your area) to increase exposure and volume:
Fooda (4, 5)
• A workplace food program that brings in a different pop-up restaurant to serve as the office lunch vendor each day
• Works in dense urban areas and suburban surroundings
• Primarily geared toward employers that have more than 400 or 500 people in a location.
• Roughly 75 to 80 percent of the restaurants Fooda works with are local, independent restaurants and about 20 percent are chains.
Foodsby (6)
• Serves in 15 cities, see reference:
• Connects employees in office buildings with local restaurants.
• Requires restaurants handle deliveries
• These employees can pre-order a meal from a restaurant in the Foodsby network, which Foodsby then aggregates and sends the collected orders to the restaurants. Your restaurant would deliver these pre-ordered meals in one single delivery. It’s basically delivering mass meals to one location.
• Advantage: restaurants can plan their labor and production days in advance.
• Because Foodsby acts as a marketplace, with the restaurants handling their own deliveries, the fee is much less than traditional third-party delivery services.
Foodee (7, 8)
• Works exclusively with corporate clients. Orders are typically a minimum of $200, restaurants are given 24-hour advance notice, and orders are prepared during non-peak hours.
• Orders are placed by clients either online or through staff. Foodee confirms and passes the order to the restaurant, and the restaurant prepares the food by the indicated pickup time, where Foodee drivers will take, package and present to the clients, including catering set up and quality assurance. They also offer all serving utensils with compostable options.
TAKE ADVANTAGE OF TRENDS
We expect the Coronavirus pandemic to have changed catering trends significantly. In an interview with Mike O’Hanlon, head of catering partner business at ezCater, with FSR Magazine, orders on ezCater containing individually packaged menu items have more than doubled as the result of the Coronavirus pandemic (9). Likewise, home delivery of family meals and to-go orders have been added to the catering software company CaterZen so that operators could diversify their services and meet this new demand (10). This trend of individual servings and lunchbox type meals is expected to continue for the remainder of 2020, and catering businesses will surely benefit from taking advantage of this trend as catering orders are expected to recover slowly, at least as social distancing and small gatherings remain in effect.
INVEST IN SOCIAL MEDIA
It’s never been more important to market yourself online. According to Nation’s Restaurant News, strategic social media marketing ideas for restaurants can drive sales and increase foot traffic (11). Especially now because of the pandemic, “Consumers are afraid to go out, so they are likely canvassing their social media much more than usual,” said New York City-based Four Corners Communications President Drew Kerr in QSR Web (12). Izea, a social media content provider, even found that about 63% of consumers expected their usage of YouTube and Facebook to increase during the quarantine (12).
Managing your online presence will be key, so make sure you have the basics: a Google listing of your business, an updated website with an online menu and a Facebook page are musts. Get your business on Instagram and even Twitter and share with your audience regular updates on the catering business, testimonials, expert tips on event planning and more. (More ideas can be found in our earlier blog, “5 Steps To Do Social Media Right.”) Be sure to take advantage of trending hashtags, especially ones involving food-specific holidays such as these upcoming ones #nationalhamburgerday (May 28), #nationaldoughnutday (June 5), #nationalsushiday (June 18), etc.
Lastly, consider utilizing these media outlets to send out a compelling brand message. Now that the pandemic has upturned our daily routines, many are creating new habits and behaviors, even the kind of food they eat. A compelling message and awareness of your audiences’ needs and trends will help establish yourself and to draw in new customers for your business. Kate Finley, CEO of Belle Communication, a restaurant digital marketing company in Columbus, Ohio, recommends that you “humanize your brand” (12). Businesses should form local, community ties and build bonds; offer foods that give people a sense of comfort, safety and nostalgia (12). Your business can also address current concerns by posting updated sanitation policies online and communicating these messages to your audience to show that your business prioritizes guest safety above all else. As Finley stated, “Now, is the time for social listening and proactive engagement. Devote time to proactively connecting with consumers. Pay attention to what’s important to your audience right now.”
We hope this brief guideline helps you build a framework for your catering program to move forward. Are you interested in managing your catering program?
Goliath Consulting Group, headquartered in Norcross, Georgia offers a dynamic array of business development solutions, tailored to meet the needs of each individual client – in addition to a full suite of knowledge and tools that help make restaurants more profitable, including strategic planning, menu development, project management, new restaurant development, branding, marketing, franchising, equipment, technology, evaluations, outsourcing, and more. The company also has a management division that manages full-service restaurants. Goliath Consulting enjoys a ten-year track record of creating client success among local, regional and multi-unit national restaurant chains.
Goliath Consulting Group is actively involved in the Foodservice Consultants Society International and is an allied partner of the Georgia Restaurant Association.
Reference:
(1) https://www.caterease.com/manage-fast-growth-within-catering-business/
(2) https://www.qsrmagazine.com/restaurant-operations/why-its-critical-perfect-your-restaurants-catering
(3) https://www.caterease.com/manage-fast-growth-within-catering-business/
(4) https://www.fooda.com/restaurant-partners
(5) https://www.chicagotribune.com/business/ct-fooda-orazio-buzza-exec-qa-0702-biz-20170628-story.html
(6) https://foodondemandnews.com/06142018/foodsby-brings-lunch-to-suburbia-on-the-cheap/
(7) https://www.food.ee/blog/why-foodee-parnerships-work/
(8) https://www.food.ee/how-it-works/
(9) https://www.fsrmagazine.com/leader-insights/restaurant-catering-coronavirus-age
(10) https://www.fsrmagazine.com/content/catering-software-company-helps-brands-combat-coronavirus-crisis
(11) https://www.nrn.com/technology/how-social-media-can-impact-foot-traffic
(12) https://www.qsrweb.com/articles/is-your-restaurant-speaking-the-covid-19-era-customers-language/
Catering for Restaurants
Important points to consider before starting a catering program
Off-premise catering is undoubtedly a compelling business opportunity for restaurant owners. Aside from boosting revenue, catering can boost business during slow performing times, reduce excess food waste, allow for menu changes, and helps to increase employee retention as they gain new skills and varied tasks that challenges and keeps them busy (1). Catering also gives businesses brand exposure and valuable marketing opportunities. Instead of waiting for customers to walk through their doors, businesses can bring its brand to the customers in a catering environment (2). As for profit, the percentage is largely variable dependent upon the business model, size, and marketing strategies, but high-end caterers have boasted impressive sales—a pretax profit of over 25% (3). But on average these numbers are much more modest.
For example, Catersource magazine reported 7 to 8 % as the average pretax profit in the full-service restaurant industry (3). Nevertheless, we think it is a good time for caterers as recent studies have made clear the growing demand and popularity for catering. Chicago-based foodservice research firm Datassential, for example, reported that consumer spending on catering was capturing growth that is on par, if not beyond, that of other restaurant categories (2). A more recent research from Technomic reported that business catering brought in $22 billion in 2018, with catering expecting to grow 5.6% annually through 2019 (4). As Gene Lee, the CEO of Olive Garden parent Darden Restaurants said in an interview with RestaurantBusinessOnline.com, “(Catering) makes a lot more sense for us to market and pursue than running around delivering $10 entrees at this point in time” considering that the average order for a large-party delivery catering in Olive Garden is $300 (5).
With that said, there are several factors restaurants must consider before starting a catering program for their restaurant. While it may seem like a big opportunity, off-premise catering is also a lot of work—requiring your time and energy for adding necessary staff, purchasing delivery vehicles, acquiring needed equipment, and paying for miscellaneous expenses that come with the service (2). It is therefore imperative that when starting out, restauranteurs tread slowly and carefully. A successful catering service may take years of adapting and fine-tuning before it is perfected. The personnel, storage capacity and vehicles are dimensions that can be added to the business as volume increases (2).
Possibly the most overlooked element in operating g a successful catering program is good organization. An absence of organization, according to catering experts Maulik Suthar and Nishin Sura, creates a huge time strain and causes simple tasks to take up an unnecessary amount of your day (6). Imagine being too late or too early to the venue because you did not factor in delivery timing, underestimating the amount of food or bringing incorrect food due to miscommunication. Making your guests impatient and uncomfortable is the last thing you want to establish a good impression of your brand. We recommend that you set up a system in place that will allow you to keep track of venue information, menus, pack lists, hiring, timelines and more.
Alternatively, you can invest in a catering software to do this for you. First, find a catering software that can help you organize more catering orders. Basically, a catering software manages business functions for the catering, event planning and banquet management industries, and you start by compare product reviews and features here (7). We recommend that you find one where the invoicing is automated, such as Gather (8) or Total Party Planner (9). BEO (Banquet Event Order) binders, used by event professionals and venue managers to outline all the details on a particular event, such as food and beverage orders, A/V requirements, room info, decor, signed receipts, staffing and more, are also all managed digitally thanks to software like these (10). Other good features to have are integrated/shared team calendar, task management, communication tracking (for proposal or invoice re-reads or reviews), 3rd Party Integrations from excel spreadsheets, credit card payment processing and business insights.
Next, you should assemble your catering team. Having a point person who is dedicated to directing catering, to oversee operation of the catering business and handle with employee training, customer concerns and safety compliance, is a must because it helps catering operations to run more smoothly (5, 12). You’ll also need to cross-train some of your employees so that they can serve as backup staff for your catering service, as catering programs often require irregular staff scheduling and flexibility to handle catering orders that vary in size and complexity (13, 14). Having employees who can multi-task or who can work on a flexible schedule can help. You can also hire a catering salesperson, someone that who will manage business and customer relationships by sales calls, networking, advertising, and social media.
Other questions business owners should ask and answer before you start catering is whether your business has the right equipment, storage capacity and the delivery logistics in place. According to Aaron Hoffman, CEO and co-founder of DeliverThat, a third-party delivery service provider in restaurant catering delivery and setup, how restaurants implement their catering delivery strategies have changed much in these recent years due to growing popularity of third-party delivery (15). According to his article, restaurant owners who implement a hybrid approach to delivery—using both self-managed fleets and third-party delivery providers—have shown the highest customer and employee satisfaction rates. For example, a small fleet of delivery drivers and branded vehicles will cover a few daily runs while third-party providers will handle the most of restaurants’ catering deliveries or overflow on days with higher volume. “The hybrid approach also works well for brands that handle large catering volumes, see seasonal fluctuations, or have VIP clients that prefer one delivery channel over another” (15).
Whether it is simply dropping off the goods or offering more extensive services like buffets or a full dining service, catering is an excellent opportunity for your restaurant to draw in more vertical revenue streams. We hope that these considerations should give you a foundation you need to start your business, but the most important advice for a successful catering program is presenting a professional service that is organized, timely and executes on its promises.
References:
- https://www.caterease.com/boost-revenue-adding-catering-restaurant/
- https://www.fsrmagazine.com/fsr/events/right-way-cash-restaurant-catering
- https://www.catersource.com/business-operations/what%E2%80%99s-fair-profit-margin-caterer
- https://www.technomic.com/
- https://www.restaurantbusinessonline.com/operations/catering-strategy-key-driving-premise-dollars
- https://www.fsrmagazine.com/expert-takes/3-strategies-running-successful-catering-business
- https://www.capterra.com/catering-software/
- https://www.gatherhere.com/
- https://totalpartyplanner.com/catering-software/
- https://www.gatherhere.com/blog/gather-makes-beo-binders-obsolete-heres/
- https://www.catersource.com/business-operations/how-hire-great-salesperson
- https://www.catersource.com/restaurants/four-steps-building-successful-premises-catering-operation
- https://www.ezcater.com/lunchrush/restaurant/catering-feed-hospitality-training-chaz-patrick-podcast/
- https://www.restaurant-hospitality.com/food-trends/6-smart-tips-deliver-successful-catering-program
- https://www.qsrmagazine.com/outside-insights/how-hybrid-approach-eases-catering-delivery-challenges
Interested in setting up a catering program for your restaurant?
Goliath Consulting Group with headquarters in Norcross, Georgia offers a dynamic array of business development solutions, tailored to meet the needs of each individual client – in addition to a full suite of knowledge and tools that help make restaurants more profitable, including strategic planning, menu development, project management, new restaurant development, branding, marketing, franchising, equipment, technology, evaluations, outsourcing, and more. The company also has a management division that manages full-service restaurants. Goliath Consulting enjoys a ten-year track record of creating client success among local, regional and multi-unit national restaurant chains.
Get our latest update on menu development at www.restaurantsrise.com/resources
Goliath Consulting Group is actively involved in the Foodservice Consultants Society International and is an allied partner of the Georgia Restaurant Association.
Contact: getresults@goliathconsulting.com
Future of Food Delivery
How will restaurants deliver after COVID-19?
The coronavirus crisis has challenged restaurants to rethink the way they deal with food delivery for good. Larger franchises have offered free delivery (McDonalds, Applebee’s, IHOP, Panera Bread, Wingstop and Chipotle Mexican Grill, among many others) to accommodate decreasing on-premise sales (1). Meanwhile, smaller restaurants had to turn to third-party delivery services like Doordash, UberEats, Grubhub to deliver food to their customers. The topic of switching to self, or in-house delivery has been a widely-debated issue among independents these past couple of years, and it will most definitely be a hot topic as restaurants begin to open their doors again. So where is food delivery headed post-COVID-19?
In our previous blog article, we briefly touched on the various advantages of third party delivery services, like how outsourcing delivery to a third-party service has an advantage of allowing smaller, local restaurants to get started quickly (2). By partnering up with these big companies, restaurants have been allowed to take advantage of the software and support they offer and use these popular apps as a marketing tool—a way to attract new customers and gain brand recognition (3). Even larger brands, like that of the sub/sandwich franchise Jersey Mikes, relied on third-party delivery as a way of managing within its capacity (4).
However, the main issue with these third-party services have been their exorbitant fees, often ranging from 25 to 30 percent of sales (4). Other complaints have been unreliable delivery time and unsatisfactory food temperatures upon arrival (5). A report by the US Foods even found that 1 in 4 food delivery drivers admit to eating the food they were supposed to deliver (5). These issues collectively have made the shift to self-delivery so appealing.
The food delivery marketplace has exploded in the recent weeks due to the COVID-19 shutdown. Portillo, a Chicago-style comfort food restaurant in Illinois, for example, reported a 90% delivery sales increase through its third-party delivery since shutdown and 60% delivery increase through its website and mobile app (1). But for restaurant owners who had to rely solely on third-party delivery, this jump in food delivery has not entirely been welcome, driving them to look for alternative delivery measures despite some third-delivery services suspending some fees to accommodate for the crisis (6).
Having your own in-house delivery service allows you to have more control over your staff and drivers, reduce transit time and give you options to give better customer service (7). Having the same drivers deliver to your customers also come with perks of building long term driver-customer relationships.
Just as the third-party delivery model has its pros and cons, so does in-house delivery. While in-house delivery models are great in that you get more control and own the transaction from beginning to end, an in-house delivery route would require you to pay upfront costs to hire drivers to deliver your food (7). It also means you’d have to hire, train and pay new staff for this job including paying for insurance and vehicle expenses. For restaurants that have enough volume to keep their drivers busy the expenses will be worthwhile, but for up and coming restaurants that are in the process of building a customer base, self-marketing will be key whether it be by word of mouth, online listings or by keeping an active social media presence.
The good news is that in the long run, restaurants who have self-delivery services can expect higher returns (16, 17). As more restaurants fight back third-party delivery fees and lack of control, we could be seeing a lot more restaurants adopt self-delivery in the near future.
So, in summary:
Third Party Delivery
- Pros:
- Doubles as advertisement that increases exposure of your restaurant.
- Provided drivers/ No training required
- Cons:
- High Fees
- No control over the delivery time
- No control over the condition of the food once it leaves your restaurant
Self/ In-House Delivery
- Pros:
- More control over your profit margin/transaction fees
- More control over your driver
- You can offer faster delivery
- Offer better customer service
- Allows you to build driver-customer relationships
- Cons:
- You’ll need to hire, train and pay your driver
- Not recommended for low volume restaurants
- You have to actively promote on social media to make up for the marketing
Interested in setting up self-delivery?
Goliath Consulting Group with headquarters in Norcross, Georgia offers a dynamic array of business development solutions, tailored to meet the needs of each individual client – in addition to a full suite of knowledge and tools that help make restaurants more profitable, including strategic planning, menu development, project management, new restaurant development, branding, marketing, franchising, equipment, technology, evaluations, outsourcing, and more. The company also has a management division that manages full-service restaurants. Goliath Consulting enjoys a ten-year track record of creating client success among local, regional and multi-unit national restaurant chains.
Goliath Consulting Group is actively involved in the Foodservice Consultants Society International and is an allied partner of the Georgia Restaurant Association.
Contact: getresults@goliathconsulting.com
Reference:
- https://www.restaurantbusinessonline.com/operations/why-coronavirus-shutdown-will-upend-delivery-services-good
- https://www.qsrmagazine.com/sponsored/how-third-party-delivery-helps-brands-drive-sales-growth
- https://www.qsrmagazine.com/restaurant-operations/house-versus-third-party-delivery-debate-rages
- https://www.qsrmagazine.com/reports/delivery-dilemma-rages-restaurants
- https://www.qsrmagazine.com/ordering/delivery-question-whats-happening-my-food
- https://www.restaurant-hospitality.com/delivery-takeout-solutions/what-third-party-delivery-marketplaces-are-doing-and-not-doing
- https://www.qsrmagazine.com/fast-casual/house-or-third-party-delivery-whats-better