It may be difficult to predict what will happen tomorrow, but there are most certainly indicators that give us a clue. There is always a tendency to be hopeful that things will somehow be better along with a reluctance to change how we measure “better”. One thing is absolute – things will change.
The restaurant industry is positioned for radical change. Some might even view this change as a “burst of the bubble”1 – demanding immediate action, while others simply shrug and feel that it is best to take things as they come. Those who prepare for the future are not surprised by what occurs. All we need to do is look to businesses that failed to accept and embrace the future to find examples of Future Perfect gone badly. Kodak, at one point, one of America’s great companies failed to totally embrace the digital revolution leading to their demise; as a result, photo chemists are no longer in demand. Amazon recently opened the first “check out free” grocery store model that will virtually eliminate the need for cashiers and lines in food markets and possibly even other retail stores. Their interest in “AirAmazon” – delivery of product by drone – could minimize the eventual need for as many delivery trucks, and driverless cars could be the next alternative to Uber – the company that shook up the taxi industry.
Restaurants are faced with a real dilemma that may only have one end game for far too many. The problem evolves around labor – in particular, kitchen labor. Here are the challenges:
- Quality menus that reflect the desire for fresh preparations require talented cooks with a definitive skill set.
- These quality cooks seem to be in real short supply today as has been pointed out in many articles of late.
- The restaurant business is labor intensive requiring many hands to accomplish the operations goals.
- A great level of need and a limited supply drive restaurants to either pay much more substantial salaries to quality cooks or change their business model to accommodate less qualified individuals.
- Higher pay rates and “many hands” equates to a financial burden that most restaurants are not able to handle.
So – here we are – an industry positioned at a fork in the road. Which way do we go: aggressively plan for future change or shrug and take it as it comes?
“The best way to predict the future is to create it.”
If we put on a Future Perfect Thinking Cap we might envision one or more of the following in our not to distant future:
- Restaurants will continue to fail creating a “leveling off” of operations and need for the current number of employees (demand meets supply).
- Restaurants will take a hard look at labor-intensive menus and trim them down to fit the availability and affordability of staff.
- Restaurants will return to menus that utilize labor reducing convenience items – thus eliminating the need for well-trained and more expensive cooks and chefs.
- Restaurants will turn to technology to find ways of reducing labor and increasing profit margins (cooks replaced by automation or handlers vs. craftspeople).
- Restaurants will continue to raise prices to offset the cost of labor.
- A combination of all of the above.
The real question for career cooks and chefs is “Where do I fit?” What will tomorrow’s kitchen look like and what skill sets will be required of those who seek to make cooking their calling?
When an industry changes – leaving people without the ability to adapt behind, the first inclination is to blame the industry and fight for the right to keep things the way they were. History has demonstrated that this does not work. Once an industry takes the leap there is no turning back. Individuals who saw it coming and prepared accordingly by changing or enhancing their skill set were able to ride the storm and even thrive, while those who resisted change wound up on the bench without a promise of earning any play time.
“Failure is not fatal, but failure to change might be.”
Some of you might be thinking “Enough of the doom and gloom – what should we do?” Well, I don’t view this as doom and gloom, but rather a reality with opportunity. The first step in recovery is always to admit that there is a problem, and then discover what the solution might be. So – there is a problem!
In a recent article for thrillist.com, Kevin Alexander wrote: “There’s a Massive Restaurant Industry Bubble and it’s About to Burst.” Based on his hands on research he clearly points to the problem(s), part of which focus on labor. One quote spells it all out:
“I wasn’t worried the lights were properly dim, or the regulars were in the right booths,” he says. Instead, Semmelhack was just looking at his staff — people he hangs out with on weekends, people whose livelihoods he supplies, some of his closest friends — and all he could see was the money each one of them was costing him, flashing in front of him like a video-game score. “I knew right then,” he says, “we had to shut it all down.”
Yes, there is a problem and it’s not going away. There – check off the first step – admitting that there is a problem. Now what?
We (cooks, chefs, restaurateurs, the restaurant industry) need to accept the fact that change is inevitable. The opportunity is to figure out ways to be in charge of the change rather than become a victim.
When Napster changed the way that the recording industry needed to conduct business, many tried to resist through the courts and by pointing fingers while imbedding their feet in concrete. Steve Jobs saw things differently and created a business model that helped the recording industry change (some say forced), built a new model that fit the needs and desires of the customer, and added significantly to the positive changes at Apple. Right now, retail industries are reeling from the impact of amazon.com. As sales in physical retail stores fall, amazon continues to break sales records. Why? The reason is simple – amazon understood that the market was changing, that convenience was king, and that the opportunity to service this need was huge. Far too many retail stores are currently hanging on to the old model hoping that things will go back to the way they were. The reality is – they won’t. So, the retail companies that accept this and determine how to adapt and create the next Future Perfect will thrive, while others will continue to struggle and close.
There will be restaurants that get it and figure out how to lead the pack with a model that works. The Napster of the restaurant business is out there somewhere – why can’t it be you. When this happens – cooks and chefs will need to be ready to adapt; they will need a new skill set that allows for an easy transition to a new level of success.
What might some of those skills be? This is a difficult question, but it might include some or all of the following:
- Understanding new technologies in food preparation such as sous vide and the resurgence of “cook/chill” methods.
- Cross training to increase your value to a restaurant.
- The ability to work with food producers to devise high quality convenience foods that allow chefs to maintain high standards while saving on the bite of labor costs.
- Building a repertoire of chef/entrepreneurial skills and preparing to open/operate smaller – focused restaurants that require less labor.
- Many other “yet to be determined” skills.
The answers are out there – we need to be observant and watch what happens in other industries. Patterns emerge that provide clues to the next paradigm shift – be ready and stay flexible. Resistance to inevitable change is rarely a good idea.
PLAN BETTER – TRAIN HARDER
Harvest America Ventures, LLC
Restaurant Consulting and Training
1 = Kevin Alexander: thrillist.com article:
“There’s a Massive Restaurant Industry Bubble and it’s About to Burst.”