It has been a year that professionals in the restaurant industry won’t soon forget.
After a devastating 2020, during which restaurants across the country were closed for several months due to continent-wide lockdowns, the North American restaurant industry is set to make an impressive recovery by the end of 2021. And we couldn’t be happier to hear it.
However, although the restaurant industry has overcome a lot, there are still challenges happening, and on the horizon that the industry faces today.
In this article we will cover the top 6 takeaways to consider and reflect upon, after the unique and challenging year that was 2021.
Top 6 key takeaways in the restaurant industry.
In an effort to keep up with the numerous challenges brought about by the pandemic, the restaurant industry has undergone tremendous change over the past year, with innovations like ghost kitchens and kitchen automation taking center stage. Additionally, customer preferences and habits have been altered by the pandemic experience, creating the need for new approaches to foodservice.
1 - The rise of ghost kitchens
The past two years have seen dramatic changes in consumer dining habits, and this has forced businesses across the industry to adapt in order to avoid unnecessary losses. One of these adaptations has been the rise of ghost kitchens.
Ghost kitchens – also known as virtual brands or dark kitchens – are basically commercial kitchens without storefronts or dine-in areas, offering their services solely through delivery and/or takeout orders. The numbers of ghost kitchens in both the U.S. and Canada have skyrocketed over the past year.
Ghost kitchens provide restaurateurs with a low cost, low risk alternative to brick-and-mortar restaurants while maximizing profits and give them the option of setting up multiple locations with minimal upfront investment. With the numbers of ghost kitchens increasing across the continent and the world, this trend does not seem to be slowing any time soon.
2 - More health food options.
Food trends in 2021 point toward an overall goal of better physical and mental health, as well as environmental consciousness. There has been a general shift in the restaurant industry toward menus that are more heavily inclusive of health food options, with a focus on plant-based food and beverages, immunity boosters like lacto-fermented foods, as well as sugar reduction.
Consumers have increasingly shown an interest in vegetarianism and veganism but, for most people, “flexitarian” diets – where meat becomes a once-in-a-while option rather than a part of the regular meal rotation – provide an easier route to health-conscious eating.
There has also been renewed interest in local seasonal produce, with consumers having increased awareness of nutritional profiles and the quality of produce used by restaurants to craft their menus.
3 - Restaurant digitization is here to stay.
The pandemic has accelerated the transition of the restaurant industry into the digital era. Now, to favorably compete on the market, restaurants need to prioritize online ordering, delivery, and curbside pickup.
Restaurants are setting up direct ordering options on their websites in addition to the already existing online ordering apps. Digital menus that contain comprehensive information on nutritional value and food quality are becoming more common.
Contactless ordering and technology such as touchless payments and scannable QR-code menus, which initially became a priority because of COVID-19 precautions, will become more mainstream in the years to come, even with in-house dining making a comeback.
4 - Labor shortages are still a challenge.
During the pandemic crisis, the restaurant industry saw record high levels of unemployment, with several eateries laying off staff to cut costs in the wake of mass restaurant closures across the continent.
By the end of the first half of 2021, the NRA’s 2021 State of the Industry Report reported a net increase of 1.3 million jobs in the U.S. restaurant industry. However, the industry is still nearly 1 million jobs short, or 8% less than pre-pandemic numbers. Unfortunately, many workers have been hesitant to return to work, creating staffing issues.
Restaurant owners are also facing unprecedented increases in training costs to replace skilled workers who did not return to work. The requirement that existing and new staff receive pandemic-specific training is another additional cost. To learn more about the restaurant labor shortage and stats - read our article here.
5 - Restaurants are retaining protocols of the pandemic era.
Despite mass vaccination drives across both the U.S. and Canada, and significant drops in the number of deaths due to COVID-19, many restaurants are choosing to retain the precautionary protocols of the pandemic era for the continued safety of both staff and customers.
With more restaurants reopening and patrons making the slow return to inhouse dining, businesses are keen to ensure that customers feel safe during their dining experience. Restaurants are emphasizing:
- Wearing of masks and gloves by staff
- Social distancing, with tables at least six feet apart
- Intensive cleaning
- Routine temperature checks for both staff and patrons
- Sanitizer stations in the restaurant
6 - Changes in dining habits.
Off-premise dining is becoming increasingly popular in the wake of the pandemic. According to a report on COVID Dining by Acosta, an integrated sales and marketing services provider in the consumer-packaged goods (CPG) industry, 31% of families in the U.S. have eaten dinner at home every day this year, compared to only 18% pre-pandemic.
Restaurateurs have to take these changes into account and make the necessary adjustments to their business plans. In this Forbes article, Alex Canter, CEO of Nextbite and Ordermark, predicts that, in response to changes in consumer dining habits, restaurants may see fundamental changes in the traditional restaurant layout.
“I predict that what used to be a 70/30 split, with more front-of-the-house dining space and a limited back-of-the-house kitchen area, will flip to 30/70, with more back-of-the-house space, by 2025. This flip will accommodate the changing restaurant business,” he says.
This year was full of ups and downs in the industry - but the industry has proven again and again that it’s resilience is second to none, and that of course, it is and always will be here to stay. Some of the challenges that that industry faced also acted as catalysts for exciting and innovative change in the hospitality industry. And have shaped the future of hospitality as we know it.
All and all, it is an industry that we are excited to follow and see thrive.
Are you looking to learn more about the restaurant industry? Be sure to download our industry report and follow along!