Harvest America CUES BLOG

Take a deep breath, sit down, grab a couple Ibuprofen, tighten your belt and pay attention. EVERYTHING IS CHANGING AND THERE IS NO TURNING BACK. If you think that you can simply continue to do business the way you have, cook the same type of food as in the past, live with the level of service that has defined your restaurant for decades, expect the same level of commitment from your staff as had been the case as long as you can remember, and still find guests lining up to support your restaurant just like they have forever – then think again. Things are not going back to the way they were, the way that you feel comfortable with, or the way that your operation has depended on. Welcome to the new restaurant reality.

So what is changing, why is it changing, and what can you do about it?

WHAT IS CHANGING:

[]         BRICK AND MORTAR RESTAURANTS ARE A PROBLEM

There are many reasons for this statement, but one thing stands very clear – if you have to depend on customers coming to you in today’s world of anytime/anywhere – your operation is at a disadvantage. Brick and mortar isn’t going away, but mobility is always an advantage.

[]         YOUR LANDLORD MAY NOT BE AS NICE AS YOUR THINK

One of the greatest challenges facing brick and mortar restaurants today is exponential increase in lease requirements. Watch out when that lease comes up for renewal.

[]         FOOD PRICES ARE GOING UP

Prices never seem to go down, even during peak availability of raw materials. Additionally, for the small restaurant there is always the challenge of minimum requirements for delivery and tighter requirements for payment cycles.

[]         FINDING GREAT COOKS, SERVERS, AND CHEFS IS BECOMING IMPOSSIBLE

It appears that every restaurant in the country is looking for and failing to find sufficient numbers of staff to get the job done. When unemployment is below 3.8% there isn’t much hope for a solution in the near future.

[]         FORGET WHAT YOU THINK YOU KNOW ABOUT MARKETING – IT DOESN’T WORK ANYMORE

If you don’t have someone affiliated with your restaurant (preferably under the age of 25) that is truly tech savvy and able to understand and manage a flurry of social media platforms, then you simply don’t have a marketing strategy. Traditional advertising is becoming less and less effective as the days go by.

[]         CUSTOMERS AREN’T AS LOYAL AS YOU THINK

The days when a two-mile radius of loyal customers lined up to enjoy their neighborhood restaurant is fading fast. There are far too many choices, way too many interesting opportunities, and an increasing number of ways to buy.

[]         YOU REALLY CAN’T AFFORD THAT MODERN KITCHEN

Equipment has become much more sophisticated and efficient over the past ten-years or so – everything comes equipped with the bells and whistles that provide controls and analytics that can help you perform better – but profit margins have not budged. The price tag to build out and open a restaurant kitchen today is truly scary.

[]         PEOPLE ARE NOT GOING TO WANT TO DRIVE TO YOU ANYMORE

Keep an eye on what Detroit is doing. Rapid turnaround strategies are banking on fewer people owning cars in the future, more car sharing opportunities, and sophisticated urban mass transportation will potentially be quite painful for restaurants – especially those that depend on curb service and drive thru.

[]         LEGISLATION IS GOING TO CHOKE YOU

Local, regional, and national legislation will continue to focus on ways to protect the health of the consumer. Even though most of us might agree with this initiative – it will force restaurants to make uncomfortable changes. Everything from new food safety requirements, equipment mandates, nutritional data listing, increases in minimum wage, and controls on single use disposables will pinch profit margins.

[]         CASH FLOW IS MORE IMPORTANT THAN PROFIT

The top line drives the bottom line mantra will take on a more important role as narrowing restaurant margins become less important than how fast cash is coming in and going out. Cash flow management will become a primary role for managers and owners.

WHY IS THIS HAPPENING?

• THE THRILL IS GONE

The 30-year sizzle of starting a career in the kitchen has been replaced with the reality of the physical and emotional nature of the work, the meager wages paid, the lack of benefits, and the impact that a career in food can have on quality of life.

• I CAN’T AFFORD TO COOK ANYMORE

The passion to cook that many of us share is being interrupted by the reality associated with wages vs. expenses.

• GREED IS ALWAYS A FACTOR

While some owners may eventually reap the financial benefits of operating multiple outlets, that success never seems to trickle down to the people working behind and in front of the range.

• LOOK OUT FOR UBER EATS, BLUE APRON, AND AMAZON GO

It seems that overnight – people have been presented with multiple new ways of receiving the food that they prepare and eat. Every one of these options represents an additional slice of the pie that doesn’t make its way into the restaurant till.

• YEP – CLIMATE CHANGE IS REAL

Eventually, everyone will feel the pain of climate change. If prediction hold true – climate change will continue to impact farmers, transportation, shoreline communities, and prices. We will all pay the price.

• 3.8% UNEMPLOYMENT IS NOT GOOD FOR THE RESTAURANT BUSINESS

Isn’t it great – everyone who wants a job can find one? This is certainly always a goal of our representatives – but the downside is that finding employees is increasingly difficult, the employee is truly in control, and rates of pay increase will continue to make it difficult for restaurants to survive.

WHAT CAN BE DONE?

[]         FOCUS ON THE EXPERIENCE

Producing great food and service is no longer enough. The experience becomes an important way to draw and retain customers. The experience might be interaction with cooks, visual food preparation, connections with farmers and producers, education, entertainment, interesting take-aways, membership, pop-up concepts, etc. The experience must be foremost in the minds of owners and operators.

[]         BE NIMBLE, BE QUICK

Rapid change is always important, but now operators will need to strategize on becoming a change agent before there is a definitive need. You must be in a position where other operators look to you for the next shift in concept and dining habits.

[]         PUT ASIDE THOSE TRADITIONAL MENU ITEMS _ THINK DIFFERENT

Everybody loves a steak, but when the cost of that steak drives restaurants to charge prices that shock, then it is time to look at alternative ingredients and ways to make them as exciting as that 12 oz. Black Angus filet.

[]         KEEP IT SIMPLE- DO IT WELL – CROSS UTILIZE

Big menus create big challenges. With a workforce that is hard to find it will become more important to work smaller and train to execute limited menus well. With the cost of ingredients skyrocketing it will become even more important to control inventories. Small doesn’t have to mean uninteresting. The role of strategic menu planner becomes even more important.

[]         YOU CANNOT AFFORD TO BE COMPLACENT

At the blink of an eye your restaurant can become irrelevant. You must stay ahead of the game – always researching, always watching the competition, staying in touch with your guests, challenging vendors to work with you, and analyzing what is happening with sales and costs everyday.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant Consulting

www.harvestamericaventures.com

**Picture – The Hen of the Wood Team – Burlington, VT