Will 2022 be the Year for Restaurants?
For the past two years when restaurants were in the news it was due to shutdowns, labor issues, and way too many closures. Now into year three of the pandemic, with most experts expecting it to end this year, there is reason to be optimistic about restaurants in 2022. While this year is likely to be a transitional year, the industry is on track to become a nearly trillion-dollar industry in 2022.
Period of Opportunity
Two years of disrupted operations has created pent-up demand for dining out that is driving the optimism in 2022. Over 51% of adults report not eating out as much as they would like. Additionally, household wealth and savings are above pre-pandemic levels, and debt is lower, giving consumers more discretionary income to do so.
For households with income over six figures, one in three adults indicate they’d like to eat out more in 2022. These upper income households account for four in 10 dollars spent at a restaurant so restaurants must find a way to turn their increased desire to eat out into traffic through the door. While there is a strong desire from adults of all ages to eat on premise more, it’s Baby Boomers followed by Gen X that are the most excited to return to restaurants. However, 70 percent of Gen Z and 75% of Millennials indicate that going out to restaurants are an essential element of their lifestyle.
This is a time of opportunity in the restaurant industry. In fact, nearly half of restaurant owners across all segments believe their 2022 sales volume will exceed 2021. Savvy operators will be able to respond to the real-world conditions and create new experiences that draw the customer hungry to dine out back into the restaurant.
Tech Forward
Challenging times often drive innovation and that was certainly the case for the restaurant industry during the pandemic. To deal with a situation that literally changed overnight, the restaurants that weathered the storm turned to technology.
The most common types of tech implemented were online or app based ordering, mobile payments and delivery management. Our brands like Rise, Brooklyn Dumpling Shop and Taffer’s Tavern that implemented consumer facing technology all thrived during the last three years. All of these new technology pieces helped ease the abrupt switch to off-premise sales that were the bulk of 2020 and 2021 sales. In 2022 restaurant operators expect off-premise to stay strong, with fast casual and QSR operators expecting sales to even increase. This could be the year for restaurants to invest in their own delivery service. Only 1 in 10 do, but six in 10 customers indicate they would prefer to order directly from the restaurant rather than a third-party delivery service.
In the hospitality business there is always a fine balance when incorporating technology because customer service is essential to a positive dining experience. However, restaurants shouldn’t fear embracing technology. Only 25% of adults believe restaurants have too much technology currently. In fact, the technology they would embrace the most would be to improve customer service. Other technology customers would like include systems to make ordering and paying easier, to provide allergy and nutrition information, to speed up the restaurant experience and to make takeout and delivery more convenient.
70% of all adults are open to ordering and payment technology, and they order 14% more when ordering digitally. While this technology is embraced by adults across all generations, it’s not surprising that younger consumers are more willing to accept more avant garde services like delivery by drone, robot or a self-driving car.
Gen Z and Millennials are also open to having the food prepared by automated systems and robots like restaurants like Brooklyn Dumpling Shop and Taffer’s Tavern are already doing.
These back-of-the-house technology implementations offer a big opportunity to restaurant owners to leverage technology to reduce labor during a time when there is a labor shortage, lower operation costs and increase efficiency. 80 percent of operators believe technology provides their restaurant a competitive advantage and about 30 percent across all restaurant segments plan to beef up back-of-the-house technology in 2022.
Two-thirds of restaurant operators believe technology and automation are strong solutions to the labor shortage and 78 percent of QSR owners plan to make greater use of both in 2022. At Rise, the employees and management decided to eliminate the cashier function and sales and revenue rose, as did employee satisfaction. Technology is not the death of restaurant jobs.
Top Restaurant Trends
As the restaurant industry rebounds in 2022 these are the hot items, according to professional chefs with the American Culinary Federation. Restaurant owners that align on these consumer trends will be on point this year.
Sustainability
Sustainability was the hottest trend predicted for 2022. And we’ll see it play out in many different ways in the industry.
The popularity of plant-based eating is in part driven by the consumer’s desire to eat in a more planet-friendly way. Restaurants across all segments are beefing up their plant-based offerings in all categories.
48 percent of Millennials and 40 percent of Gen Z indicate that they would choose a restaurant using ingredients grown or raised in an organic and/or environmentally friendly way over a restaurant that didn’t have those practices. Additionally, locally-sourced ingredients were a driver for nearly 40 percent of all adults to choose one restaurant over another.
With off-premise dining becoming so prevalent, a restaurant’s packaging becomes important in the eye of a consumer focused on sustainability. According to the EPA Plastic packaging generates approximately 35.7 million tons of waste in the U.S., but just 8.5% is recycled. Worse, Styrofoam, a common restaurant to-go packaging material takes 500 years to decompose. According to Food Dive, sustainable packaging is about 25% more costly than standard packaging, but according to the NRA 45% of restaurant customers believe its important. Because consumers do care about the issue, restaurants can pass along some cost to the consumer, providing the why behind the increase is promoted. Smart restaurant owners are also working to simplify packaging. Ask your guests if they need plastic cutlery and napkins, often they won’t.
How a restaurant reduces food waste is also a way to differentiate your restaurant. Do you donate unused food to charity? Do you have a compost program? Are you working towards zero waste? If your restaurant has these green initiatives use them in your marketing. According to Harvard Business School 77% of consumers prefer to purchase from companies committed to making the world a better place.
Health Conscious
After two years of eating comfort food to soothe the pain of the pandemic, consumers are once again putting a focus back on eating healthy.
Plant-based sandwiches, burgers and breakfast sandwiches are the rage. Not only do they check the box in terms of the perception that they are healthier than meat, they also are believed to be better for the environment. For restaurant owners facing supply chain issues related to protein, the news couldn’t be better. We’re already seeing this trend playout as chains like McDonald’s and Chipolte have introduced plant-based menu items and new brands like 100% plant-based NoMoo, offering a plant-based burger one would have to be hard pressed to discern from beef.
领英推荐
Customers are also interested in dishes made with immunity-boosting foods. Ingredients like tomatoes, olive oil, berries, seeds and dark chocolate all qualify. Restaurant owners can highlight options on the menu that contain these and other wellness ingredients.
Global Eats
Americans continue to embrace new ethnic eats and foodies are always on the lookout for new flavor sensations. For restaurant owners looking to tweak menus or franchisees looking for the next big thing.
The top five global influences in 2022 are expected to be:
1. Southeast Asian (e.g., Vietnamese, Singaporean, Philippine)
2. South American (e.g., Argentinian, Brazilian, Chilean)
3. Caribbean (e.g., Puerto Rican, Cuban, Dominican)
4. North African (e.g., Moroccan, Algerian, Libyan)
5. Western African (e.g., Nigerian, Ghanan, Western Saharan)
Opportunities in 2022
While the return to on-premise dining is expected to increase in 2022, there are several opportunities available to restaurant owners to drive more sales and revenue from off-premise sales as well.
Over half of all adults say they would purchase DYI meal kits from restaurants that offered pre-measured raw ingredients and instructions on how to make at home. This isn’t a surprise considering the popularity of services like Blue Apron and others. In fact, this type of offering would appeal to 82% of Gen Z and 77% of Millennials. One of our newest brands, Duff’s Cake Mix, offers a DYI cake kit that can be delivered or picked up at its stores.
Creating a meal subscription program is another strong option for restaurants in 2022. 57% of all adults and 81% of Gen Z and 77% of Millennials would be up for having a set number of prepared meals per month, offered at some type of discount from the regular menu price.
More than half of all adults would be likely to purchase fresh, uncooked food items like meat, produce, bread, pasta or dairy from a favorite restaurant if it were offered as retail items. Not surprisingly, the idea is most popular with Gen Z and Millennial customers.
Conclusion
After beginning the decade with an unprecedented global pandemic, 2022 is finally the year the restaurant industry begins its recovery. While challenges still exist, enterprising restaurant owners have used it as a way to help drive the industry forward at a pace it likely wouldn’t have achieved otherwise in terms of innovation and technology adaptation. On track to become a nearly trillion-dollar industry in 2022, now is the time for entrepreneurs to get in on the restaurant bounce back.
Sources:
NRA State of the Restaurant Industry 2022 Report
?
Dan, thanks for sharing!
Chief Operating Officer (COO)
2 年Hi Dan, It's very interesting! I will be happy to connect.
Small Business, Restaurants & Franchising | Entrepreneurial Growth | Empowering Coach | Transformative Advisor | Visionary Strategist
3 年I couldn't agree more, Dan. And so many restaurant operators found new profits centers in off-premises dining, catering, and home delivery. Yes, riding the wave of post-pandemic growth will bring much success, and especially to those unwilling to waiver from, and unwilling to tolerate anything less than delivering positively memorable experiences!
The future belongs to those who prepare for it!
3 年Nice article Dan Rowe !