By now, it seems undeniably apparent that the COVID-19 pandemic has changed Canadian foodservice forever.
According to Restaurants Canada’s Foodservice Facts 2021 report, that view is shared by 76 per cent of operators across the country.
On the positive side, foodservice sales are rebounding. In July 2021, there was only a five per cent difference shortfall in sales nationwide when compared with pre-COVID-19 sales. That varies wildly from province to province; in Ontario, where restrictions were heavier and longer-lasting, the shortfall is nine per cent vs. pre-pandemic, whereas Saskatchewan is actually up nine per cent from 2019 levels.
But a major impact has been Canadian foodservice operators having to learn how to operate on far thinner margins, often at a loss. Full-service restaurants and drinking establishments were hit way harder than quick-service restaurants: 42 per cent of QSRs said they were currently making a profit vs. 44 per cent making a loss, whereas only 20 per cent of FSRs said they were profitable with 58 per cent operating at a loss.
A major and well-documented change that is predicted to stay the course is the dramatic acceleration in the rise of delivery. Off-premises consumption was already popular with some demographics, but it has become the norm like never before.
Indeed, 78 per cent of Canadians have ordered delivery from a restaurant in the past six months, according to Restaurant Canada’s cited data. While 18- to 34-year-old predictably lead that trend with 89 per cent of 18- to 34-year-olds having ordered delivery in the past six months, even older consumers have leant far more heavily on takeout, with 67 per cent of consumers aged 55 years and older taking the step.
When it comes to why Canadians chose delivery, 45 per cent said it is more convenient and/or saves time, 44 per cent said they didn’t feel like going out, 37 per cent said on-premise dining was not currently available in their region, and 21 per cent said they felt it was safer to have food delivered.
As for determining where to order delivery from, in an increasingly saturated field of convenient and accessible options, 73 per cent ranked consistently good quality of food as the most important factor. In addition, 59 per cent selected a restaurant that offered menu items that satisfied their cravings.
Younger consumers, those aged 18- to 34, are the most value-conscious, with 56 per cent choosing delivery from restaurants that offer great value for money. Meanwhile, two-third (65 per cent) of respondents aged 55 and older wanted familiarity and order from a restaurant they had visited before in-person.
Surging costs and necessary responses
While the pandemic has prompted innovation in takeout, a major roadblock has been surging food costs. Many items, such as fresh vegetables (up 72 per cent), cooking oil (up 71 per cent), beef (up 71 per cent), poultry (up 66 per cent), dairy (up 54 per cent) and seafood and fresh fruit (up 43 per cent each) have skyrocketed in price.
A key question has been how to offset these soaring costs.
Most operators are either absorbing some or all of the increased food costs (63 perc ent) or raising menu prices (62 per cent). Of those looking to raise menu prices, nearly 50 per cent say they will raise menu prices by four per cent or more, a significant bump.
Meanwhile, 35 per cent are removing items from their menu, 33 per cent are looking to source cheaper ingredients elsewhere, and 31 per cent are reducing other expenses to offset food costs.
The labour question has been on many people’s minds, and for good reason.
Job vacancies soared during the third wave and over the summer reopening period to record unprecedented numbers: there were nearly 133,000 foodservice job vacancies in Canada in July, triple the number that was seen in February 2021 and double that of May 2021.
With this shortfall in labour affecting both front- and back-of-house positions as well as managerial jobs, how are foodservice employers attracting labour? Financial perks such as health and dental benefits, higher pay, and and referral bonuses are being mixed with other value-adds such as free meals, flexible work schedules, and better communication of company culture/values.
Changes to survive
Ultimately, a whopping 97 per cent of Canadian foodservice operators made significant changes to their business to survive in 2021.
The most common tweaks were changes to hours of operation (70 per cent), streamlining menus (54 per cent), and increased use of social media (51 per cent). Other pivots have included 37 per cent of operators adding new technology such as QR codes, 18 per cent beginning to sell meal kits, and 13 per cent starting to offer groceries.
Knowing what the consumer wants
Key to many restaurants’ success from this point on will be recognizing and catering to what the post-pandemic consumer wants.
The most common request seen by the data cited in the report was for food that is sourced from local/Canadian farmers and producers. But consumers want to balance satisfying that desire for local food and community support with satisfying their cravings in a healthy way. 78 per cent of consumers want comfort foods or comfort foods with a twist, but 73 per cent want foods that promote health and wellness.
In addition, 70 per cent want natural and/or unprocessed foods and nearly as many (68 per cent) want to see food that is raised and produced without the use of antibiotics.
Other, less in-demand traits include culinary cocktails, meatless and plant-based options, meal subscription services, and gluten-free options.
Canadian foodservice has been forever changed, and getting with the times and catering to today’s new customer will be vital for operations to survive and thrive in the long term.