RESTAURANT INDUSTRY INSIGHTS

Tips, trends, and marketing advice to help you grow your business.

The concept of evolution doesn’t only apply to Darwinian theory. The restaurant industry has continued to transform and adapt since the first known dining establishment opened its doors in 18th century France. We’re not going to delve that deep into the history of dining out, but we’ll explore 5 ways the U.S. restaurant industry has changed in the last ten years.

1. Fluctuation in the U.S. Economy Affects Restaurant Business

economy affects restaurants

Time-travel back to 2008 for a moment. For some of us, it was a time we’re still trying to forget (fur-lined Crocs and Uggs, anyone?) It was also a time of economic plight, not only for America, but the entire world.  Between 2007 and 2008, the global financial crisis hit hard and was compared by multiple economists to the Great Depression of the 1930s. The catalyst for the financial downturn? The United States mortgage bubble that quickly turned into a full-on banking crisis. From there, the Great Recession sent shockwaves through the entire globe.

Unsurprisingly, this state of economic unrest severely affected the restaurant industry. A CNN Money report from mid 2008 noted that casual dining chains were taking a major hit as people turned to cheaper food alternatives. A number of restaurant businesses filed for bankruptcy and closed their doors.  At the same time, the job market was just as bleak, with unemployment rates reaching up to 10% in the years following the Great Recession.

Like anything else, the economy has since bounced back. Things took a positive turn around mid-2009 and have been steadily looking up ever since. Unemployment rates are currently at an impressive low, with a rate of about 4% holding steady throughout 2018. Total US food sales also increased year after year, with 2017 total retail and food services sales reaching 5.75 trillion.  In 2009, food sales were only at about 4.06 trillion, a true reflection of the economy’s downward spiral.

According to the National Restaurant Association, as of 2017 there are over 1 million restaurant locations in the United States employing 14.7 million people in the field. Predictions for the next ten years in the food-service industry continue to look up, and we hope that to be true.

2. The Rise in Popularity of Organic Food Creates a New Standard

In today’s world, the term organic in reference to food is as ordinary as the common cold. When you go to the grocery store you have the option choose between organic and non-organic fruits and vegetables, a decision that can have an influence on both your health and your wallet.

According to the Organic Trade Association, the consumer demand for organic products has grown by double-digits every year since the 1990s. In 2008, total U.S. organic sales and growth was sitting at about $20 billion. By 2015, that number had nearly doubled to almost $40 billion.

Although organic food items tend to be pricier, people are buying them. Today, America is spending nearly $50 billion on organic products each year, with over 82% of households buying it. Top reasons? A 2016 Treehugger survey reveals people buy organic for health reasons, concerns for the environment, and better taste.

farm to table organic .jpeg

The organic craze doesn’t just apply to household preferences and the grocery industry. Restaurants have followed suit in order to cater to the ever-growing demand for organic products. We’ve seen a rise in locally-sourced, farm-to-table concepts that center around healthy ingredients and environmental sustainability.

Today’s savvy restaurateurs are giving the people what they want - delicious food with ingredients that have a clear, local origin. And this trend isn’t just prevalent in single location restaurants. Fast-casual chains like sweetgreen and Dig Inn pride themselves on mindful farm-sourced menu items that include rotating seasonal selections.

Over the years, our population has taken a stand, demanding the right to know where food is coming from before it enters our bodies. In response, the restaurant industry has made strides to become more transparent, more inclusive of local agriculture, and more vocal about their use of high-quality ingredients. An inclusion of organic products isn’t just a foodie trend, but a standard of quality with a permanent seat at America’s dining room table.


3. Social Media Impacts Where and What We Eat

Social media is tremendously influential, a notion that isn’t the slightest bit groundbreaking. But, think back to 2008 again for a moment. Most of us were awkwardly navigating our newfangled Facebook pages and kissing Myspace goodbye. Instagram was probably not yet even a figment of Kevin Systrom and Mike Krieger’s imaginations. Twitter wasn’t as flooded with politically and humorously charged tweets, retweets, and favorites. It’s a bit nostalgic to think back to those days of infancy of social media, when everything was new and exciting. Today, social media is a fabric of society, often too hard to escape even for an hour.

Pew Research shows that in 2018, 68% of Americans use Facebook, 35% are on Instagram, and 24% have a Twitter account. The average person uses three social accounts and most people access their social channels at least once per day.

The authority of social media has had a significant effect on the restaurant industry as well. If I could sum it up in one hashtag, it would be #FoodPorn (which by the way currently has 171 million posts attributed to it on Instagram alone). You probably follow at least a few accounts, whether it be restaurants themselves, food magazines, or the bloggers and influencers who have made a living out of snapping irresistible photos of what they’re eating. And this foodie phenomenon has altered the way that we look at food, where we go to get it, and what we choose to eat.  

In order to keep up with the demands of a social-centric society, your restaurant needs to be present on social media. And you’ve got to do it right. You should not only be posting quality content to your own handles, but reaching out to foodies and influencers to cast a wider net.

Restaurant marketing has experienced a paradigm shift over the years and traditional advertising tactics just don’t cut it anymore. What was new and exciting on social media in 2008 is now an essential piece of the marketing pie for restaurants, so it’s important to attract new customers by being social.

4. Food is Easily Available Whether You’re Dining Out or Staying In

Along with being present on social media and more tech-savvy than ever before, Americans are growing increasingly impatient. Technology lends itself to a “I want it right now” culture. You can get an Amazon Prime delivery in two days and even get grocery stores to do the shopping for you. This concept translates to restaurants as well. A vast  landscape of restaurants lie between fast food and fine dining. The fast casual dining concept has experienced a boom in recent years with its ability to juxtapose a slightly elevated in-house dining experience with quickness and convenience.

Brands like Shake Shack, Panera Bread, and Moe’s Southwest Grill (to name a few) have made a business out of being the middle ground between fancy and fast. Of course, fast casual existed in 2008, and was a crutch during the recession, but picked up speed in years following.

The fast casual scene as a whole has had its ups and downs, with brands like Chipotle and Starbucks making national news for everything from foodborne illnesses to social injustices. However, according to Restaurant Business, fast casual chains grew sales by 8.9% in 2017. People like having the option to dine out without having to dress up and enjoy being able to place an order with a staff member but not rely on a waiter each step of the way. Convenience is key when it comes to fast casual.

Eating in has also become wildly simpler in recent years. Delivery services like Grubhub, Postmates, and Slice are dedicated to getting food to people in the comfort of their own homes. What used to be a landline call to your local chinese restaurant is now a few taps on a smartphone app. As a comparison, in 2008 only 22% of people owned smartphones. Today, that number has risen to 77%.

takeout delivery.jpeg

Online delivery currently represents 43% of all delivery orders. The market has increased steadily since 2011 alone and there are no signs of this trend slowing down. According to CNBC, the investment firm Cowen is forecasting a 79% surge in total U.S. food home delivery over the next 5 years, an increase from $43 billion in 2017 to $76 billion by 2022.

The cuisines people are ordering are more diverse as well. Typically, Chinese food and pizza were go-to order-in items. Now, especially in large metro areas, people have access to anything from Mediterranean kebabs to bagels and lox, delivered quickly to their door. People are expanding their cultural palates within the comfort of their own living rooms.

If your restaurant isn’t making it efficient for hungry couch potatoes to order food online, you’re missing out on opportunity for more profit.

5. The #MeToo Movement Breaks Silence About Workplace Culture

 #MeToo march via  Vox

#MeToo march via Vox

It’s no secret that brave individuals of all industries have been more vocal about their rights than ever before. What started out as a shocking scandal involving Hollywood’s elite quickly reverberated through a number of other sectors. And the restaurant world wasn’t omitted from the conversation. Celebrity chef Mario Batali and other restaurateurs, like John Besh and Ken Friedman, have been accused of inappropriate acts in the workplace. Case by case accusations quickly turned into a larger stand against sexual harassment and inequality everywhere. The #MeToo movement continues to send a clear message that injustice will no longer be tolerated.

The restaurant kitchen has long been known to be male-dominated, and was referred to by the New Yorker as “bro” culture. But, because these horrible truths within the workplace finally surfaced, positivity started to come as a result.

For the first time, women have a prominent voice that echoes loudly through the discussion. Empowerment has been a result of the destruction. In the aftermath, we’re seeing more female powerhouses in the restaurant and hospitality industries band together to create a statement and a difference.

Earlier this year, OpenTable CEO Christa Quarles started an Open Conversation dinner series dedicated to women in food. Just this month, Saveur magazine released an issue completely created by and about women. Women are taking on more prominent roles in the industry, proving that they can make light of a negative situation, turning it into a mission for good.

The truth about workplace culture has been brought to light and the dynamic is continuing to evolve; what was once swept under the kitchen rug is now the topic of dinner conversation. There’s still work to do to make the workplace a safe place to be, but we’ve made larger strides than ever before. And for that, we should be proud.

In Closing

Change is inevitable in any industry and has been especially prominent in the restaurant sector over the past ten years. From shifts in technology and trends to developments in acceptable work behavior, we have seen an evolution that will continue to advance in years to come.

As part of a larger entity of food, hospitality, and restaurants, we’ll be along for the ride and looking forward to seeing where it’ll take us next.

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