You can't eat online & why it takes Phoenixes instead of Unicorns

Michael: Stephan, I am pretty sure a lot of things happened since our last session in February. What are we talking about today?

Stephan: Indeed, there were some interesting highlights during the recent weeks, like for example the EuroShop – The World′s No. 1 Retail Trade Fair , the biggest global retail and shopfitter exhibition which is happening in Düsseldorf, Germany only every 3 years, where we presented some interesting food concepts and which brought my attention to the question, why is it beneficial for retailers to include prepared, preferably hot food offer into their stores. I will show you some interesting concepts later.

Secondly, I had the pleasure to attend the first international Ghost Kitchen conference in Amsterdam, which was organized by our fellow TrendTalk speaker Peter Cook . During the various panels and presentations, we received a lot of insights from thought leaders like Omar Rifai , Dec Penfold , Gary Moore , Eccie Newton , Alex Canter , Massimo Noja De Marco and off course many more first hand.?

Michael: some real highlights indeed, please tell us more, which insights did you get during the conference?

Stephan: There were some interesting findings:

1)????Telling a potential investor that you are going to develop your own technology platform generates less and less interest. The technologies necessary to efficiently manage everything related to delivery already exist and trying to start from scratch is now considered an unnecessary risk.

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2)????Trying to get Ratings above 4.5 in the Apps of the aggregators is often counterproductive.

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3)????Despite the fact that it was considered a great advantage for customers, to order from different brand/restaurants at the same time (I mean the typical “family – everyone wants something different” – examples) ?there does not seem to be much demand for multi-brand orders at the same time from the same kitchen as 85% of people ordering are only single persons which normally order one brand or even one product only anyway. This was, though logic, a little surprising to me.

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4)????Dynamic Pricing was a topic: If a restaurant appears with a delivery time of 15 minutes when the others in the same area offer the same products in 45 minutes, should that allow the first one to charge more? Wouldn’t that be logic?

…But what if the one that serves in 45 minutes only has a much higher quality and ratings that justify the waiting time? This created controversial discussion about speed vs. quality. If we look at Michelin start cuisine, waiting is also a quality indicator as it implies total fresh cooking and a certain exclusivity for those waiting to have the time ..

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5)????Having a strong brand and profile allows you to stand out within the aggregator Apps. That was not new, but once again was underlined. We just saw the recent “cut” of brands, when Uber eats cleaned up the entries and deleted the (presumably) doubles and triples of brand copies just under different names. Customers appreciate clear focused menus, to prevent getting lost in the “endless sea of indifferent brands”

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6)????Before a restaurant was limited by the capacity of its room, now it is limited by the production capacity of its kitchen. This is once again where clever technology comes into play to increase the productivity per square meter. Needless to say, that both of our solutions, the RATIONAL iCombi and iVario, are exactly suiting to that challenge as their multifunctionality allows way higher production capacity on smallest space than any traditional cooking equipment.

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Michael: These are really a lot of interesting new and insights. Do you believe there will be similar events coming soon so those who could not participate can get another chance?

Stephan: I know that similar ghost kitchen conferences will be held in the near future in the US, and Pete Cook hinted that there might be another one in Europe as well maybe next year. Stay tuned for that.. I would be definitely in. ?But the good news is that even if you cannot attend such events yourselves, you can always join our TrendTalk by RATIONAL and get the latest news first hand as well. ?

Michael: Indeed Stephan, there is anyway nothing better than joining our TrendTalk

Stephan: But seriously, if anyone of you wants to be here on stage to present your vision and ideas live to the TrendTalk community, please do not hesitate to reach out to me. There are plenty events to come, and we are looking forward to new speakers and your contribution.

Michael: Great, just to come back to the other major event, the Euroshop exhibition. You mentioned about hot food concepts for retailers. What is that about?

Stephan: Well Michael, that was really a great event and we received great feedback on our concepts shown, but first let’s understand about the situation we have right now in the retail world.

Supermarkets and other grocery stores have three main challenges typically:

1) Space is the most important issue. Retail space is precious and therefore it is always a tough decision to use the space for other than displaying goods for sale.

2) The comparable low margins when selling raw food or groceries. Though big retailers are very profitable sometimes this can only be achieved by the high volumes of goods they sell. Margins on food are normally only lower single digit %. Something you do not expect, especially if you come from the restaurant business.

3) with the changing habits of buying more and more online, retailers need to find a way bring customers into their stores, allowing them to sell more than initially planned once the customers are in… I think we all had these “..i just want to buy some tea candles at IKEA and end up with a full cart moments..”, right? - ?But joke aside, this is really an issue and affects retailers and petrol stations same way.

Therefore what is the scenario?

We want to attract more customers in store e.g., by offering prepared food or ready to eat meals to take out or even eat on site which create an added value compared to the raw food and a better price therefore, but still need to consider simple preparation and low labor requirements to increase the margins and this without loosing too much space in store.

Michael: This looks like a dilemma to me, Stephan?

Stephan: It really is, however, we tried to find the best possible compromise by creating a small “Grab & Go” concept which had to fulfill the following requirements:

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-????????A concept to offer hot food on 4m2 only

-????????Must be operational with one employee of any skill-level per shift

-????????Guaranteed hygienic and easy to keep clean

-????????optimized for take away-food

-????????outstanding and consistent food quality

Michael: Sound like a very compact concept, but also a lot of requirements. What is your idea how to solve these?

Stephan: Given the requirements, we came up with a concept which is centered around our smallest appliance, the RATIONAL AG iCombi XS. In this concept we were able to produce hot boxed food in only a few minutes, more than 60 portions per hour and kept hot afterwards in a modern display holding cabinet which allow instant pickup.

Preparing the food is a child’s play and is basically loading and unloading the boxes. The cooking, the cleaning later, all is done automatically, and any operators only needs a few minutes. The rest of the time they can focus on other tasks in store, like replenishing goods, working at the cashier, or serving the customers.

All in all, a very easy concept to implement as well into stores which do not have any food preparation yet, but also a very good supplement to any existing hot counter.

Michael: Very nice concepts, and very versatile. I can already see them being in a food court, coffee shop or petrol station etc.

Stephan: Yes, I also believe that this could be a great opportunity to leverage sales, and improve the margins… Retailers can always be very competitive compared to Restaurant or QSR, given that they can sell their existing beverages at “retail price” making a lunch or snack very attractive for the customer, but still earn a buck more by preparing the food. Simple as it is: A bread roll and a sausage 1.50 – a Hot Dog however can sell at 3.50…

Though this might be a very simple reference, in central Europe for example, bakeries and butcheries already got that and offer fresh salads, sandwiches or even entire plated meals for lunch going into direct competitions to restaurants and canteens. ?

It is just a question of time until retailers like 特易购公司 , Kroger or 沃尔玛 start “their own version” of a “ Pret A Manger style” outlet on premise, if they not already did in some cases...

Michael: Makes sense, they already have the customers on site, so why not sending them home with a lunch box in addition..?

Stephan: Absolutely correct, Michael. And if we look back some years ago, people tend to eat where they were shopping. The rise of food courts in malls I would say. Convenience a s main driver.

In future, it might be the opposite. People will go shopping where they get a good food, because their main reason to leave home is maybe eating and drinking, meeting people, socializing -- , rather than shopping only. Shopping they can do much easier online nowadays.. But remember, you cannot eat online.

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Michael: well, you never know what’s coming next..?J Just some more questions, to you Stephan. Coming back to further updates from the industry, what are the headlines?

Stephan: There are some news off course as well as some classic challenges which keep operators busy now.

A typical problem is still labor shortage. Brita Rosenheim from magazine The Spoon summarized it quite nicely in one of her recent articles:

“The labor shortage in the restaurant industry has been a major challenge for operators in recent years, and labor optimization is still at the top of every operator’s mind. The pandemic caused many workers to permanently leave the hospitality industry, leaving restaurants short-staffed.?According to the National Restaurant Association, almost two-thirds of US restaurant operators say they do not have enough employees to support existing demand. Instead of replacing this lost workforce, many operators are turning to tech to automate more functions and reduce the need for human labor.”

Tech will replace human labor ... where possible.

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Listening to the news, company REEF probably understood that as well. as the company is changing course right now. The Ghost Kitchen pioneer has decided to focus on licensing other businesses and his highlighting their technology, rather than promoting their typical 250-square-foot trailers anymore.

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But adopting to new circumstances seems to be a wise choice, especially after some turbulent year with high hopes and disappointment following the ambitious plans they had, for example in cooperation with The Wendy's Company

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We briefly discussed that during the recent TrendTalk as well, and I believe the time for experiments is over now.

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Operators and investors are looking for a “safe harbor” amid the rising storm of potential recession and increasing costs. Many companies will focus back on their core competence now, respectively they should.

Let’s see which player will survive this “cleansing storm”?.. before we had “Unicorns”.. now we need “Phoenixes” to stay with the metaphoric picture..

Michael: Great closing words, Stephan. Let’s see who will rise form the ashes then..