FALL/WINTER 2021
INSIDE: GEN Z | RESTAURANT OF THE FUTURE | GHOST KITCHENS | AND MORE...
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TABLE OF CONTENTS
FALL/WINTER 2021 04 Editor’s note 06 Trend pages 10 Engaging Gen Z 14 The Restaurant of the Future report 17 Ghost kitchens fueling expansion 21 Text marketing statistics 23 2022 Menu trends
BUSINESS Executive Editor Rick Zambrano contactrick@eaterypulse.net Eatery Pulse Director of Photography Anthony Torres Assistant Editor Margaret McConnell Editorial Designer Ashley McCarty
About Restaurant C-Suite Magazine Restaurant C-Suite Magazine is distributed by Eatery Pulse Media. Eatery Pulse is a primary source of national restaurant industry news and content, providing information services, consulting and a creative, customcontent studio for business. This digital magazine was specifically created for multi-unit restaurant executives. It delivers the most highly-impactful news for the restaurant industry’s top leaders and visionaries. Today’s C-suite executives and their managers need information that is carefully selected, meaningful and delivered in a seamless, cohesive fashion. Stay updated with all our content at subscribe.restaurantcsuite.net. Copyright 2021 - 2022 Eatery Pulse Media.
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Powered by On the cover: Photo by Anna Sullivan. Photo left: Photo by Louis Hansel.
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C3 by sbe operates digital and physical restaurant brands out of its Citizens New York culinary center at Manhattan West. Photo by C3.
Editor’s Note As the nation goes back to work and the economy reignites, there are a myriad of challenges for restaurant operators of all sophistication. Staffing shortages, increases in pay, a COVID disease that does not want to go away, and rising supplier costs are challenges. But there is also plenty of opportunity. These nuggets of hope come in the form of technology. Advances in robotics, automation and cloud kitchens will lay the groundwork for a new era for the restaurant industry. Consumers are adjusting to a new “COVID world order” by adopting technology and spending more on carryout and delivery orders. We know that the youngest generation of consumers,
Millennials and Gen Z, are more than happy to use technology to increase convenience in their lives. As we close 2021, it is also a good time to look at how restaurants are engaging with Gen Z and how fast-casual concepts are gaining appeal at the tail end of the pandemic. Certainly, ghost kitchens, including cloud and dark kitchens are worth exploring and we do that on page 17. These topics and more are worthy of further exploration in this issue. The What’s Hot Forecast this year called out the 2022 menu trends. The top overall trends weren’t led by a food item at all, not surprisingly, but by better packaging, as off-premises dining
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experiences continue to see incredible appeal. We thank you for your support as we reorganize to better serve the industry, while also launching an expert and executive series to broaden our scope with robust insights from around the industry.
Sincerely,
Rick Zambrano Executive Editor, Eatery Pulse Media contactrick@eaterypulse.net
Eatery Pulse will capture both the essence and the process of restaurants moving into full recovery in a new, three-part video series, using Washington, DC as a backdrop. Tapping into a cross section of independent and multi-unit operations, the publisher will tell these important stories in cinematic format, and with thoughtful narration. The Point restaurant. Photo by Fish and Fire Food Group.
STAYFALL TUNED FOR OUR TRENDS ISSUE! NEXT ISSUE: 2020 XX
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TOP MENU
TRENDS
WHAT’S HOT FORECAST 1. Packaging: Sustainable, reusable/recyclable
8. Plant-based sandwiches
2. Packaging: Food quality, travels intact
9. Packaging: Food security, tamper-proof
3. Packaging: Retains hot & cold temperature
10. Alternative, natural sweeteners, such as maple sugar and coconut sugar
4. Zero food waste/sustainability 5. Immunity-boosting snacks 6. Menu streamlining: reducing number of menu items 7. Immunity-boosting/functional ingredients
Source: National Restaurant Association What’s Hot Forecast.
Photo by Jess Torre.
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TECHNOMIC
INSIGHTS
CONSUMER PREFERENCES With pent-up demand after pandemic lockdowns and restrictions, consumers want to taste something new, particularly when they go out to eat. Technomic reports that half of consumers are likely to “try new flavors when dining in at a restaurant, emphasizing the importance of flavor innovation during on-premise occasions.” 42% of consumers agree or completely agree they are more likely to try a new or unique flavor from a restaurant than when cooking at home**
LIKELIHOOD OF TRYING NEW FLAVORS BY ORDER FORMAT* % LIKELY OR EXTEREMELY LIKELY
50%
Dine-in
Takeout/carryout
Delivery
38%
35%
*Base: 1,500 consumers who visit foodservice. **Base: Approx. 800 consumers. Source: Technomic Ignite Consumer featuring the Technomic 2021 Flavor Consumer Trend Report.
Photo by Louis Hansel.
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CONSUMER
EXPLORATION
GLOBAL FARE APPEALS TO RESTAURANT PATRONS What new foods do consumers want to try when eating out? As it turns out, on-premises diners are attracted to “food from around the world”— according to trend-tracking firm Datassential. Global cuisine requires a higher amount of preparation skill and offers distinct flavors that pique diners’ interest. What is the lesson here? Global-fare restaurant operators hold an advantage in attracting consumers on their special night out. Americanfare restaurants are wise to diversify their menus and incorporate authentic foods from other parts of the world, and/or from farther afield within the melting pot that is the United States.
Source: Datassential “Simply Smarter Webinar”.
Photo by Louis Hansel.
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Entrees comprise the most global fare consumption 39%
Meat entree
24%
Noodle/rice dish
10%
Sandwich
6%
Appetizer/side dish
5%
Snack
4%
Soup Salad
2%
Condiment/sauce
2%
ADOPTING
TECHNOLOGY
‘RESTAURANT OF THE FUTURE’ Deloitte’s The Restaurant of the Future: “People want to feel safe eating food.”-
food to instill confidence in the dining experience,” says the Deloitte report.
—It’s that simple. But the pandemic has created a whole new paradigm surrounding consumers’ sense of safety inside businesses, particularly in restaurants.
In keeping with these trends, operators can use their safety protocols to help bring back customers and keep them. They may even be able to charge a premium for these practices. A total of 55% of respondents are willing to pay between 10% and 50% more to feel secure about the safety and cleanliness that surround the preparation and transport of their food. These practices must be transparent.
Enhanced cleaning and safety protocols are paramount: a total of 33% of consumers indicate that enhanced cleanliness and safety protocols are important to returning to on-premises dining sooner and dining out more frequently. Detailed cleanliness is predominantly an expectation of Boomers (32.3%), GenX (23%) and Millennials (25.2%); it receives less attention from Gen Z (4.9%). “Consumers must visibly see the procedures taken to protect the preparation and transport of their
“Safety is and will remain a prominent factor in the modern restaurant experience.”
Consumer demographics of those who prefer enhanced cleanliness and safety
4.9%
25.2%
23.0%
32.3%
14.5%
Generation Z
Millenials
Generation X
Baby Boomers
Silent Generation
Source: The Restaurant of the Future: A Vision Evolves.
Photo by Chipotle Mexican Grill.
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How to attract, engage Gen Z consumers By Eric Nomis
It requires multidimensional planning
Understanding the Gen Z consumer is paramount to restaurant operators’ survival in this now-digital-heavy world. In this new era, accelerated by COVID-19, consumers of all ages are embracing technology adoption; however, Gen Z consumers will be the most demanding when it comes to convenience and technology. To attract and market to the Gen Z consumer, restaurants must adapt with strategies that make convenience their first priority, and keep menu innovation as a top imperative. RESTAURANT C-SUITE | Restaurant news that’s fresh, informed, inspired (by you) 10
Gen Z: a generation accustomed to the ultimate convenience, underpinned by technology. Photo by Lucas Clarysse.
Attracting Gen Zers through creative, relevant menu offerings
Future of Plant-based Snapshot: The Evolution of Plant-based Continues”.
Menus will need to show diversity and creativity. According to researchers, Gen Z consumers (typically, those born in the midto late-90s through 2010) are adventurous in their dining habits, but also tend to skew toward flexitarian, vegetarian, and generally healthy foods. This puts culinary creativity in the forefront, as restaurants incorporate international influence in their kitchens.
Consumer demand for plant-based foods has remained consistent even through the pandemic, due mainly to Gen Z and Millennial consumption. According to NPD’s report, one in five adults indicate they want more plant-based foods in their diets—a trend that continued throughout 2020. The International Food Industry Council notes that 52% of consumers aged 18 to 34 are more likely to have tried a diet of some kind. Plant-based diets are the 7th most popular regimens overall, following the Ketogenic or high-fat diet and flexitarian diets.
Gen Z and Millennials are almost singlehandedly driving the trend toward meat and milk analogues, reports NPD, a food research firm based in Chicago. These younger generations are making choices that are sustainable for the planet, healthy for themselves, and socially conscious for causes such as animal welfare, NPD reveals. “As consumers continue to prepare more meals in the home and younger generations cook more, plant-based foods and ingredients will be a part of their repertoire,” says Darren Seifer, NPD food industry analyst and co-author of “The
Gen Z has become a key target audience of WOWorks, the parent of Saladworks, Frutta Bowls, Garbanzo Fresh Mediterranean, and The Simple Greek. As Gen Z consumers and Millennials comprise 60% of the US population, these consumers are an appealing customer base. The company says this demographic seeks food that is healthy, nutritious and satisfying. Gen Z consumers tend to be more adventurous eaters, while at the same time valuing simplicity and clean-label foods. Many RESTAURANT C-SUITE 11
Saladworks and WOWorks are focused on appealing to Millennials and Gen Z consumers. Photo by Saladworks.
of these young adults and teenagers have been exposed to fusion foods and more multicultural dishes than previous generations.
Enhancing industry players’ understanding of the need for convenience Another demographic trait is the desire for convenience, WOWorks notes. Its brands have been addressing this through growth in dine-in, carryout, online ordering, curbside pick-up, delivery, ghost kitchens, food trucks, virtual brands and non-traditional stores. The company struck a deal for Saladworks and Saladworks-Frutta Bowls co-branded stores to open inside Walmart stores. ShopRite and The Fresh Grocer are other retailers that will host WOWorks’ brands. “We are at the dawn of shifting consumer demand for more personalized, customized and convenience-focused dining occasions,” says Kelly Roddy, chief executive of WOWorks. “Guests today demand what they want, how RESTAURANT C-SUITE | Restaurant news that’s fresh, informed, inspired (by you) 12
they want it and where they want it. We are perfectly positioned with our ability to let our guests customize their meals with build-yourown options.” A total of 46% of Gen Z and 58% of Millennials eat out at least once per week, according to Nielsen. Research found in the National Restaurant Association’s 2021 State of the Industry report, however, reveals some interesting nuances in dining behavior. After the pandemic, only 83% of Gen Z consumers wanted to return to restaurants compared to 88% of all adults. And only 76% of Gen Zers, compared to 85% of all adults, feel that going out with family & friends gives them a way to socialize with others. This suggests that Gen Z “foodies” enjoy engaging with dining in alternative ways than onpremises at restaurants, including food delivery, non-traditional foodservice (convenience and grocery stores) and home meal kits. Restaurant operators will find it more difficult to attract Gen Z without offering delivery or providing easy and convenient digital ordering options.
Finessed marketing, response to digital adoption are key
choose one restaurant over another. For delivery, that number climbs to 40%.
Marketing to Gen Z should include more personalized advertising, says Data Axle, in its report, Generational Shifts in Marketing Preferences. Personalization is most important to Millennials and Gen Zers. While email has been a go-to communication tool for reaching most consumers, social media is the top communication choice for Gen Z.
Incidentally, most consumers—64% per the report—want to order delivery directly from restaurants. For Gen Z, that number drops to 58%, indicating a lower sense of affinity for restaurant versus third-party delivery.
Says Robert Kapfhammer, president of Ad Cucina, an agency specializing the restaurant and foodservice industries, “Gen Z is online ‘almost constantly’ spending more time on mobile devices (an average of 11 hours per week) and streams more content (an average of 23 hours of video content a week) than any other generation.” He notes that multi-unit operators should pay attention to channels, like Tik Tok, YouTube and Instagram, as they are important channels to reach Gen Z customers. WOWorks says it is finding opportunity in 1) Demographics, 2) Psychographics, 3) SelfExpression and 4) Connection. These traits keep the brand relevant and appealing to Gen Z consumers. Roddy adds, “Our goal at WOWorks is for each of our brands to engage their guests holistically on a deeper, more emotional level that is timely, relevant, motivating and compelling to who they are and who they want to become. We use social media, and talk to them where they are and with their language. We have also utilized social influencers to market to Gen Z consumers.” As the generation that was born after smartphones, Gen Z consumers are some of the most sophisticated when it comes to technology. They and Millennials have helped fuel an appetite for digital ordering. App and mobile ordering has become their expectation. According to the State of the Industry report, 57% of Gen Z and 64% of Millennial respondents say that ordering carryout/ delivery is “essential to the way they live.” For both on-premises and off-premises dining, smartphone-app ordering is important to Gen Z diners. Thirty-seven percent of these young adults and teenagers say that the ability to order and pay with smartphones will make them
Deloitte’s 2021 The Restaurant of the Future: A Vision Evolves report indicates that 61% of consumers overall have ordered some form of takeout, whether carryout or delivery, at least once per week. With that consistent frequency of ordering, it’s plain to see how the modern, young consumer is ramping up the demand for restaurants to implement solid off-premises dining strategies.
Coming Soon TRENDS
Top 2022 menu trends An industry of consolidation Top 2022 restaurant trends Omnichannel foodservice
SPRING Beverage innovation Hot salads Plant-based chains Robotic advances RESTAURANT C-SUITE 13
‘The Restaurant of the Future’— convenient, digital, clean By Eric Nomis
Deloitte report reveals medium- to long-term changes in consumer behavior in wake of pandemic
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Marketplace restaurant formats can carry grab-and-go meals, designed for convenience and perfect for carryout. Photo by Ella Olsson.
A new report from Deloitte suggests restaurants need to respond to consumers’ digital adoption and desire for off-premises dining due to their experiences with the COVID pandemic. As a matter of fact, the ongoing pandemic has permeated consumer perceptions of dining at restaurants and ordering their food. The Restaurant of the Future: A Vision Evolves notes that although dining out is on the table, frictionless ordering tops the menu with respect to consumer needs. Restaurants that implement cleanliness and safety protocols in transparent ways will best engage customers looking to return to on-premises dining.
Adapting to consumer desire for convenience, safety According to Deloitte, 64% of consumers do not plan to return to pre-pandemic levels of on-premises dining within the next six months. This means that restaurants will need to embrace and deploy convenient, off-premises dining options. Consider the latest statistics:
• 61% of consumers now order carryout or delivery at least once per week, up 29% from one year ago and 18% prior to the pandemic. • 67% or about two thirds of on-premises diners prefer to order food through digital channels. • 33% of consumers consider enhanced cleanliness and safety protocols important in returning to dining more frequently and sooner. COVID has driven many of these changes, notes The Restaurant of the Future. The report uses data from a survey of 1,000 Americans conducted in September 2021. Respondents had ordered food from restaurants within the last three months. Jean Chick, principal, Deloitte Consulting LLP, and US restaurant and food service leader, commented, “It’s been said that the only constant is change, which holds true for the restaurant industry today. The pandemic has RESTAURANT C-SUITE 15
accelerated the progress of the restaurant of the future, calling for fundamental shifts in business models to meet new demands. Now, amid continued pressures in areas like supply chain, safety-related costs, and labor availability costs, restaurants should work strategically to build loyalty among onpremises and off-premises diners. Those that can quickly adapt and meet diners’ evolving demands for convenience, frictionless digital experiences and safety can be poised to not only survive, but thrive.”
Providing off-premises convenience Consumers are looking for convenient offpremises options that offer “restaurant style quality and variety,” says Deloitte. With consumers not returning to on-premises by and large for the next six months, the offpremises dining stakes are certainly high for restaurant operators that want to continue to grow their businesses, whether large chains or independent, single-unit owners. Restaurants will appeal to these consumers by providing quick and high-quality offerings. Three in five customers expect the same quality and freshness in any form of takeout as they do in the dining room. But they also expect speed: 68% of consumers want to wait no more than 30 minutes for their food. Because of the ease of customers ordering takeout in QSR, spending at QSRs (quickservice restaurants equivalent to fast food) has increased 100% over the past year. Consumers order from QSRs most often at 62.6% and next from fast casual at 52%. By comparison, ordering at casual-dining restaurants is at 40.5%. Restaurant operators are turning to technology and novel real estate formats. Consequently, 79% of respondents say they are likely to order from ghost kitchens, a trend that is 20% greater than a year ago and 32% higher than two years ago. The drivethru remains robust, with 37% of consumers ranking it as a top choice.
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Attracting and keeping customers via loyalty, enhanced cleaning Loyalty programs and enhanced cleaning can go a long way in attracting and retaining customers. The numbers bear this out. According to The Restaurant of the Future, the average consumer participates in two loyalty programs, and 79% of consumers say their participation impacts where they will dine. Enhanced cleaning and safety protocols are paramount: a total of 33% of consumers indicate that enhanced cleanliness and safety protocols are important to returning to on-premises dining sooner and dining out more frequently. Detailed cleanliness is predominantly an expectation of Boomers (32.3%), GenX (23%) and Millennials (25.2%); it receives less attention from Gen Z (4.9%). “Consumers must visibly see the procedures taken to protect the preparation and transport of their food to instill confidence in the dining experience,” says the Deloitte report. In keeping with these trends, operators can use their safety protocols to help bring back customers and keep them. They may even be able to charge a premium for these practices. A total of 55% of respondents are willing to pay between 10% and 50% more to feel secure about the safety and cleanliness that surround the preparation and transport of their food.
Convenient, digital, clean…and automated? Advances in robotics and its role in commercial kitchens is generating opportunities for operators. The resulting improvements in accuracy, efficiency and cost control are much needed as restaurants face supply chain challenges and surging prices. More than half of the survey respondents (54%), notes Deloitte, would order from a partially or fully automated kitchen. On the food payment side, 25% of customers prefer a digital or contactless payment method to a physical one now that such technologies are advancing.
Ghost kitchen explosion By Rick Zambrano
Different models offer channels to operators for easier expansion
Ghost kitchens are providing new outlets for growth, spurring a race among some of the largest hospitality and restaurant players to establish a presence in this rapidly-expanding arena both regionally and nationally. Because they can lower cost barriers to entry and expansion for smaller restaurant operators, ghost kitchens offer seemingly ideal growth opportunities, especially now, as consumers— particularly Millennial and Gen Z—adopt digital ordering, takeout and delivery in far greater numbers than previous generations. The ghost-kitchen game is divided into a few formats, with cloud kitchens and dark kitchens rising to early prominence. RESTAURANT C-SUITE 17
REEF’s NBRHD Kitchen facilities stand out and are only a sliver of what’s yet to come in the ghost-kitchen space. Photo by REEF Kitchens.
Cloud kitchen format Through advances in technology, cloud kitchens can be housed in commercial, industrial space, or even mobile trailers and trucks to handle multi-concept orders at any given time. These are often handled by a multi-concept restaurant group or ghost-kitchen service provider, preparing orders for different restaurant brands.
leverages technology to allow multi-concept ordering on a single customer check. Using the platform, it partnered with mall operator Westfield to launch a takeout & delivery platform at the Valley Fair Mall in Northern California. Koja Kitchen, Pizza My Heart and other restaurant concepts within Valley Fair use the platform to sell their food outside the mall to the neighborhood.
REEF Kitchens and United Kitchens are two most notable ghost-kitchen providers currently. Both operate ghost kitchens to help restaurant operators grow in the off-premises channel. United Kitchen has a MIX platform, which
REEF Kitchens has signed multiple deals with restaurant chains to set up mobile ghost kitchens in markets across the country. Saladworks, Wendy’s and Legendary Restaurant Brands are just some of the groups that have
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joined this type of partnership. Kelly Roddy, CEO of WOWorks, parent of Saladworks, says, “Adding these locations has been a great way to enter a new market. It helps to determine demand and opportunity for us to evaluate continued growth in that area. It also helps to grow our brand awareness and expand.” ClusterTruck is a proprietary, multi-concept operation that now operates in several markets in Indiana, including downtown and Indianapolis, Kansas City, Mo. and Columbus, Ohio, and is growing. Through a deal with Kroger, ClusterTruck will serve an expansive menu inside its grocery stores and to the food retailer’s neighboring trade areas. Chief operating officer, Brian Howenstein, says ClusterTruck is the only profitable delivery model. He also notes that the model doesn’t charge customer fees and has a rapid delivery system that can get food to customers within 10 minutes of preparation.
Dark kitchen formats Dark kitchens use underutilized restaurant space in hospitality venues, including hotels and restaurants. Butler Hospitality, which raised $32M in October, operates ghost kitchens out of hotels, creating a central hub for delivery to other nearby hotels. Donatos Pizza operates outlets out of Red Robin Gourmet and Burgers. This partnership will have grown to over 200 locations by the end of 2021. Bao Wow has partnered with independent restaurant operators. These restaurant or kitchen operators are not franchisees, but rather vendor recipients (“vendees”) who sign up through a resale program. The dumpling chain says the initial cost for restaurants who join the program is typically less than $1,000. A partnership with Combo Kitchens allows Saladworks to enlist franchisees that have existing kitchen space to sell its menu items. Combo Kitchen said it makes the process quite seamless, taking care of training and helping with implementation. “We have seen tremendous success partnering with some great operators in Combo Kitchens as well as Ghost Kitchen brands in Wal-Mart, as well as without,”
says WOWorks’ Roddy. “Both have been great partners to ensure we find and select the right locations.” Even C3, which has multiple sales channels, but is primarily a virtual food-hall ghost kitchen operator, has expanded its capabilities to power dark-kitchen service. An agreement with TGI Fridays, announced in October, will enable C3 to sell menu items from some of its virtual restaurant brands, which now number 40, out of 170 of the casual-dining operator’s locations. The ability of independent restaurant operators, whether independents or chains, to sell food products from other concepts in an easilyimplemented franchise or resale program is definitely a game changer. It also maximizes benefits of the acceleration of off-premises dining by consumers.
Advantages for smaller operators While the ghost-kitchen model provides several advantages to large restaurant chains, emerging restaurant brands will also most certainly benefit from this accelerated, affordable growth opportunity. In a cloud kitchen format, franchisees can outsource much of the work to a ghost kitchen provider after investing in the initial cost. The lower price tag and the ability to outsource operations are developments that could attract franchise partners to smaller, emerging brands, while creating asset-light channels for these upand-coming franchisors. “Emerging brands can put their concept in front of a large number of people quickly and at a much lower cost. In addition, the inherent risks associated with opening new locations are removed almost entirely,” says Brett M. Buterick, Counsel at A.Y. Strauss, in the Franchise and Hospitality and Litigation practice groups. Company-owned locations can also get off the ground more easily. New market penetration can be executed faster. Buterick adds, “The new vertical can be very attractive for prospective franchisees as it does not require the same RESTAURANT C-SUITE 19
initial capital outlays as the traditional verticals. The same is true if those operators traditionally outside of franchising choose to expand by launching new corporate locations, internally. The reduced cost and time savings for expansion through ghost kitchens can fast-track corporate growth.”
Yet, a model that needs further testing The economics and operational feasibility of the ghost kitchen model are still in question. The model represents different cash flow opportunities, depending on the vantage point. Many ghost kitchens utilize third-party restaurant delivery services; those costs can be excessive, reportedly more than 30% as a starting point. For larger operators, who can negotiate lower fees and have stronger restaurant unit economics, the fees aren’t as great a concern. While younger generations may have grown accustomed to fees as part of the convenience of delivery, many consumers may still hesitate to pay such a steep price to have a meal delivered. Ironically, this sentiment could hold the off-premises model to a slower growth rate than that generally touted in industry and media circles. ClusterTruck provides a model that doesn’t add fees to the check and has no middleman in the process. This particular ghost-kitchen model also boasts an incredibly fast delivery experience of hot food within minutes of ordering, along with the diverse food selections of its multiple-menu format.
Saladworks is bringing its healthy meals to new markets via nontraditional units, including ghost kitchens. Photo by Saladworks.
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If there’s a lesson to be learned about the challenges of the ghost-kitchen model, operators may want to review the latest analyses of REEF Kitchen’s operations. According to reports from The Wall Street Journal and Restaurant Dive, the operator has amassed multiple health and safety violations in more than one market. In addition, its economics are somewhat upside down, suggests reporting from Restaurant Dive. Daily costs can exceed daily revenues by about $600, although it’s not clear if clients are footing that particular bill.
Text message marketing the right fit? By Rick Zambrano
New report shows effectiveness of text message marketing programs for restaurants
Text message marketing subscribers visit 44% more frequently than nonsubscribers, according to a report from Mobivity. Based on data from millions of transactions from 2018 to 2021, Mobivity saw spend increase 23% once consumers joined. In addition, over a six-month period, text subscribers were valued at an additional $12.15 on average in incremental revenue, although some brands saw an amount as high as $16.59, based on the findings of the Mobivity 2021 Restaurant Text Marketing Benchmarks Report. RESTAURANT C-SUITE 21
Text messages are getting a significantly higher open rate than email marketing. Photo by Omid Armin.
The retention of text subscribers is also much higher than that of email subscribers, notes Mobivity. Surprisingly, 96% of text subscribers remain in the program after 90 days, and after two years, 90% remain in the program. This is twice the retention rate of apps and three times compared to email subscribers. The average six-month spend rises within a range of $5.37 to $16.59. Restaurant operators can apply the 23% increase in spend to their average check to determine the incremental benefit of a text marketing program. Given the high retention rate of text subscribers, the incremental revenue opportunity per customer is tremendously high.
messaging open rates 5X-20X better—and often with higher adoption rates—than other owned media channels, this lifeline helps restaurants connect with guests and offer them valuable offers that drive traffic and spend.” Data from Mobivity show that 60% of redemptions occur within the first 24 hours, and 39% of redemptions happen on the same day that the subscriber receives them. There is a greater immediacy in text messages as more than 30% of redemptions occur within the first three hours after receipt; and nearly half of those within the first hour.
Mobivity found that the open rate of text messages is 98%, which is much higher than both the email open rate of 20% and the app open rate of 5%. Given the high open rates of text message marketing programs, they are ideal for restaurant operators who want to rise to the forefront of consumers’ attention.
During the pandemic, the Papa Gino’s and D’Angelo Grilled Sandwiches brands, a client set of Mobivity, saw their mobile messaging program deliver an average return of marketing spend of 440%. The two brands have also seen much higher opt-in offer redemptions than the average, with Papa Gino’s having a 50% redemption rate and D’Angelo averaging a 47% redemption rate.
“Restaurants of every kind were particularly hit hard at the onset of the pandemic and continue to experience staffing, supply chain and traffic issues. The No. 1 takeaway they’ve learned is that building an efficient, direct to consumer owned media channel is critical — and text messaging enables that,” said Dennis Becker, Mobivity Chairman and CEO. “With text
Becker noted that traditional mass marketing techniques are becoming less effective because consumers expect messaging to be more personalized and authentic. Based on their online habits, consumers will engage more with first-party-data and brands will have more control of their successes as they generate oneon-one messaging with consumers.
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2022 Culinary Forecast By Rick Zambrano
National Restaurant Association reveals top trends in partnership with chefs from American Culinary Federation
The 2022 What’s Hot Culinary Forecast predicts a more health-centric future: healthful and plant-based foods are trending; global and non-traditional flavors are impacting breakfast and snacks, and better packaging is becoming key. The National Restaurant Association publishes the forecast annually, using insights and survey responses from hundreds of professional chef members of the American Culinary Federation. RESTAURANT C-SUITE 23
Immunity-boosting snacks continue to be a top a menu trends. By Louis Hansel.
Top 2022 trends • Packaging has rocketed to the forefront due to the fast-rising popularity of takeout food, claiming the #1 spot (packaging: food quality) as well as #2 (packaging: retains temperature) in top trends. • At #3, sustainability and zero-waste foods are high in the 2022 trend forecast, signaling that consumers are demanding more environmentally-friendly options, and restaurants are responding. • Immunity boosting snacks appear as the #4 overall trend, a sign of the times, as the nation starts its recovery from the global pandemic. • Menu streamlining comes next at #5, as operators face stiff inflation-based hikes in costs of raw and prepared ingredients, and want to cross-utilize product while reducing complexity in operations and inventory levels.
Packaging that travels well and retains heat or cold is essential for restaurants as consumers increase demand for carryout, delivery and catering. The Association notes RESTAURANT C-SUITE | Restaurant news that’s fresh, informed, inspired (by you) 24
that as restaurants seek to translate the dining experience outside the restaurant, operators are looking at “thoughtful packaging that maintains food quality, retains temperature, and is tamper-proof.” Sustainability efforts are part of an ongoing conversation in which the industry establishes its role in earth-positive initiatives. Recyclable and reusable packaging is a topic that has received much attention. With regard to zerowaste initiatives, operators are exploring ways to more thoroughly cross-utilize 100% of product, including produce and meat. For example, all-in-one preparation is a rising trend in minimizing food waste and optimizing the profit from vegetable dishes, notes Chicago-based consultancy Technomic, Inc. At Esther’s Kitchen in Las Vegas, Pea Agnolotti—carrot vinegar and pea shoots is on the menu, maximizing the use of the carrot. Guests will begin to see items that were once served raw, now grilled and cooked, as operators remove costly steps in labor and introduce greater efficiency.
Immunity-boosting snacks are attracting attention. As consumers come out of lockdown mode into recovery, the whole category of immunity-boosting foods is increasingly popular. Nuts, berries, tomatoes, seeds, olive oil and dark chocolate are said to have properties that ward off disease and major illness. Restaurants are repositioning dishes and meals in this functional context. Menu revamping and streamlining trends are arising from necessity. “In addition to a return to health-focused menu offerings and more eco-friendly, improved off-premises packaging…we’re expecting operators to look across their menus for transformative opportunities,” said Hudson Riehle, senior vice president of Research for the Association. “Look for trends that fuse the traditional meal daypart items with other dayparts and an increasing popularity of snacking and its allied items. Also, with the popularity of cocktails-togo during the pandemic, restaurants will look to expand both alcoholic and non-alcoholic craft beverage options.”
Top trending foods by daypart • Non-traditional breakfast proteins are trending, including chorizo and vegan bacon, as well as plant-based breakfast sandwiches and eggbased breakfast bowls. • At lunch time, chefs are betting on plant-based sandwiches and globally-inspired salads and bowls to become top-trending foods next year. • Dinner will see less-expensive chicken, such as thighs, become more pervasive on menus, in addition to plant-based burgers and less expensive beef cuts—chuck versus loin, for example—become more prevalent.
To discover more trends, readers can obtain a copy of the report at the 2022 What’s Hot Culinary Forecast link.
Photo by Jenn Kosar.
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