By David Hopkins
It’s difficult to believe it but we’re already more than a third of the way through 2022. Now, more than two years into the pandemic, Canadian foodservice businesses are continually facing challenges while also experiencing new successes and new innovations. Even as we’re only in the fifth month of the year, there are many trends in this space to analyze as a state-of-the-industry update.
Mitigating inflation and supply chain crunches
One of the biggest challenges faced by restaurant operators has been increased prices and supply chain issues throughout COVID-19.
There are a couple of ways that businesses have combated this to mitigate economic pressures. The most apparent of these has been price increases.
Menu creativity
We have found from our clients and projects that strategic menu engineering is more effective than an across-the-board increase in this regard. Menu engineering involves a strategic review of your menu that identifies popular and profitable items. Analyzing menu items on a graph based on popularity and margin helps operators understand how each item contributes to profit. Additionally, ensuring your entire menu is properly reciped and costed and converts into bottom-line profitability will work to increase restaurant profits. You’ll get the most bang for your buck while establishing a pricing system that suits the needs of your operation and guests.
Another tactic that many operators have taken on is reducing the size of their menu altogether. Restaurants have opted to streamline their offerings, especially with staffing shortages, supply chain and inventory issues, and higher food prices. This approach will also ensure that your kitchen can run more smoothly and efficiently and help you manage inventory.
Alleviating pressure with tech
Restaurants have also strived to mitigate economic pressures by adopting technologies to improve efficiency and take on some of the workload. From simple implementations such as contactless ordering to advanced, automated inventory management systems, technology can significantly support Canadian foodservice businesses with a limited labour pool. For example, operators can often spend days on end in the office with inventory management, inputting recipes and costing menu items. Implementing a streamlined system requiring less input allows businesses to earn valuable time, energy, and costs back.
QR codes have also exploded in popularity over the last two years, and that’s something we don’t expect to see slow down any time soon. This technology has benefited both businesses and consumers, allowing operators to easily update menus and online information without the cost or hassle of reprinting collateral, and affording customers a more sanitary dining experience.
Diversifying
We also expect to see restaurants continuing to diversify their revenue streams. First adopted during indoor dining closures, this strategy has allowed businesses to bolster sales and become more resilient –– now and in the case of future unforeseen circumstances. Offering retail items or small “pantries,” providing pre-made meals or meal kits to-go, or selling and delivering alcohol are all tactics that have been employed by restaurant operators in an attempt to diversify their offerings and drive business.
The labour question
Another challenge the Canadian foodservice industry continues to face, of course, is the labour shortage.
Based on the National Restaurant Association’s 2022 State of the Restaurant Industry Report, open restaurant positions are still high, and operators continue to have difficulty finding and retaining workers. Based on a survey of 3,000 restaurant operators and 1,000 customers in November and December 2021, “seven out of 10 operators reported not having enough employees to support demand at their restaurants, and the majority said they don’t anticipate the labour situation to improve in 2022.”
Make restaurant work a value-add experience
Indeed, the reduced labour pool is expected to remain a reality for the foreseeable future, and operators must adapt to that. It will be imperative to invest in staff holistically; signing bonuses are compelling draws for potential employees, but only until a more lucrative option comes along. Ultimately, operators must create ongoing, value-add opportunities for staff to remain competitive.
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Management must also foster positive work environments and be prepared to demonstrate that to potential employees. With the often toxic nature of the restaurant industry becoming increasingly exposed, workers are no longer settling for the subpar, often unsupportive, and at times dangerous work environments they previously did. Establishing open lines of communication from staff to management and having a system for implementing and enforcing protocol is critical. It may also be strategic to alter your immediate business model in the form of changing hours or days of operation to boost profitability; it may no longer make sense to be open on Mondays or slow times based on limited staff availability.
Get creative with operations
Another trend we’ve noticed across the industry is an influx of programming, specials, and events at restaurants. It appears the novelty of “just being open again” is no longer enough; consumers are looking for engagement and excitement with their meal. Selling guests on a larger experience is becoming the norm more and more, with an increasing amount of “activity” or “fusion” concepts popping up, such as arcade bars, retail/restaurant fusions, and more. More conventional restaurants are also adopting the approach of bringing more intrigue to their spaces. Live music nights, half-price wine nights, stand-up comedians and interactive artworks are among a few examples of the uptick in restaurant programming.
Following the popularity of ghost kitchens and food trucks, the trend of pop-up restaurants will also be interesting to follow going into the second half of 2022. Without the commitment of a lease or permanent real estate location, restaurant pop-ups –– either standalone or within other establishments –– have been increasingly appearing across the country, affording operators lowered overhead costs and the ability to be more mobile and seasonal.
A sustained recovery on the menu
It’s clear that the restaurant industry is still facing its fair share of challenges and will continue to throughout this year. But we are encouraged to see the enthusiasm of consumers to return to restaurant dining and the rise of new innovations and trends emerging.
As the year progresses and the Canadian foodservice industry continues to prove its resilience and make changes for the better, it is certain to make a full recovery and then some.
David Hopkins is the president of The Fifteen Group, a hospitality management and consulting agency that works with hundreds of restaurants across North America, and a regular contributor to RestoBiz.
Photo by sebastiaan stam on Unsplash
