Calculus for the Foodservice Industry in 2022

Heavy Is the Crown for Foodservice Executives These Days

Take a multi-trillion-dollar global industry, sling it into a crisis that has not been seen in more than a century — while at the same time asking CEOs?to find their place in the fourth and fifth industrial revolutions?— and it is little wonder we see so many more “retirements” occurring during this period.

Boards , rightfully so, are asking questions that require new agility and muscle flex that the organization has not had to use in its history. Fortunately, skilled captains are not commanding entirely at the mercy of challenging circumstances and limited capacities.

Much like a sailor harnesses the wind and a surfer slides so smoothly above and below the turbulent waters, executive teams can turn chaos into a ladder for their organizations.?

As the old saying goes: that which doesn’t kill you only makes you stronger.

Our systems and sensibilities are being challenged from nearly every point of view: health, wellness, financial prosperity, corporate solidarity, the limits of emotional and physical endurance. And this?could still be going on ?for years to come.

To find your own best way through, remember: “The better the question, the better the answer.” Here are some of the questions the best C-suite executives we know are asking of themselves and their organizations.

1. What should we do about CAPEX?

How much?CAPEX ?should we plan on comparative to “normal” years prior basis? Should we expect the same or different MOIC / IRR? Why? How do we help the board and shareholders see the wisdom in our choices??

2. How is OPEX changing?

How will our?OPEX ?change if we carry on the way we are (in the face of anticipated cost inflation for food and labor)??

3. Where should we be making tech investments?

What should we really be?investing in?technology ?and how do we prioritize where to focus those investments? How much of this is going to be outdated before we install it and how much will actually create long-term strategic and financial advantage? What factors should weigh the heaviest for us in the decision matrix??

4. What can we do about COVID wear and tear?

How much longer?can we run on skeleton crews and with pullbacks in R&M, marketing, training, incentive compensation, and addressing just the normal wear and tear we’ve been putting off?since COVID kicked in ?

5. Where is growth going to come from now?

Where is the real and?sustainable growth ? Cloud/virtual/dark kitchens? Smaller footprint locations with improved ability to service off-premise? New locations in smaller markets with less competitive saturation??

6. How can we optimize our performance?

What’s right for us, and?how do we build a compelling and?brand-centric case ?for the future?of the industry and the role of our company in it??This can cover everything, including?product, people, process, facilities, financing, and franchising. What is the right mix between?growth and expansion versus performance optimization???Remodels versus scrape and builds? An asset-light model versus investments in automation??

7. How can we get — and stay — a step ahead?

Is there really?any new way to?outsmart the competition ?with data science, advanced analytics, industrial engineering, experience design, and long-term investments? Should we endeavor to do that ourselves or hire in help? Who actually does that sort of work and also understands how to apply it in a practical way in a multi-national foodservice operating environment??

8. Should we consider M&A?

With so much?talk of inorganic?growth?via M&A , what’s really reasonable for our business (and what can/should we try to get the board on board with)??

9. Are we leading as well as we could be?

Are our competitors asking themselves the same?questions ?and solving for the answers, or are we over-thinking it? If we’re this uncertain and challenged at the C-Suite level, what must that mean for the rest of our company and crews? How can we best demonstrate the leadership we want or organization to be known for through a challenging period?

10. Where do we want to be in 5 years?

And how can we possibly build a?3–5-year plan ?when we can barely see 3–5 months into the future??This is the perfect time to throw out planning and budgeting strategies of years past and ask tougher questions about where your company can be five years from now — and how to get there.

Ready for Answers?

Though many of the challenges restaurant leadership?face today relate to the incredible pace of change and unprecedented circumstances, they can really all be linked back to the key question that sits at the heart of the hospitality business: are we doing everything we can to make our guests feel welcome, cared for, and heard?

Our firm is honored to have helped some of the most successful foodservice businesses globally answer the tough questions, and would be delighted to put that experience to work for you.?

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Aaron Allen & Associates ?works with global foodservice leaders to?find, size, and seize opportunities ?to drive growth, optimize performance, and maximize enterprise value.?Our approach ?to strategic restaurant planning enables our clients to understand and capitalize on the future of foodservice, as well as anticipate and act against the rapid evolution of disruptive technologies, evolving consumer dining behaviors, and increased competitive dynamics. You can?learn more about our services ?or?get in touch here .?