The restaurant industry is hard enough without occasional cries of panic that some new trend or issue is going to slash margins and kill profits. Like most pain points, the latest crop of challenges are really opportunities in disguise. Here are the top 3 we’ve been thinking about lately at BlueCart:
1. Home cooking startups are actually good for restaurants. Look. No one is going to stop going out to dinner because it’s gotten slightly easier to cook at home. What they are going to do is stop eating crap on nights they were going to stay home anyway. Instead of frozen pizza, they’ll cook flank steak and a salad. That’s actually good for everyone. The more people appreciate food and cooking, the more they appreciate the service you offer as a restaurant. (For more thoughts on this, see: “Could Blue Apron Kill the Restaurant Industry?”)
2. Higher food prices will drive innovation, not sink the industry. The drought in California is not going to bring prices down, and it’s certainly not going to be the last environmental disaster we face in the near term. The good news is: there are two kinds of innovation that will go into solving this problem, and both will be good for business.
The first is on the producers’ side, and you can be sure they are doing everything they can to make it happen (just look at CropX hitting the news this week). Big agriculture has too much to lose, and smaller-scale farmers have too much pent up demand headed their way to let our pesky, fickle environment get in the way. Innovation on the supply side of our food system has led to some incredible gains in productivity and kept prices low for a long time. That hasn’t always meant great things for the food itself, but with a growing demand for high quality (see point number 3), there’s no reason to think another “green revolution” can’t actually be green.
The second is on the restaurant side. This is not innovation in the sense of finding the best way to brow-beat a supplier into slashing prices. This is the kind of exciting innovation that means what’s on the plate will get better, without costing much more. Some say this could mean a return (or moving forward?) to simplicity itself, with fewer ingredients and a focus on “cooking to perfection”–think a whole-grilled fish with no sauce or spices, maybe just a lemon slice on the side. Don’t ask us how this is going to work for the rest of the menu. That’s up to the innovators. We’re not chefs in any sense, but we are big fans, and we’re very excited to see what they come up with next.
3. Pickier consumers will force restaurants to pivot, and restaurants should thank them for the excuse. There will always be a place for sizzling platters of meat dipped in overflowing vats of yellow “cheese” and drizzled with ranch sauce. There will always be someone on the lookout for a 99 cent 2lb burger tossed through a sliding window just off the highway. But—and thank god for this “but”—there is now also a strong demand for kale. Now, you may not be a fan of kale, but the current craze for local, organic, humane, raised-on-hugs food is something to be embraced, not avoided.
Why? Because if you were ever looking for an excuse to add a little extra to your margins while being able to feel even better about the quality you are passing on to your customers, this is your time. OK, the add a little to the margins thing is easier said than done. But, it’s doable. Food hasn’t changed this much since we started freezing it en masse and zapping it back to life with microwaves. The restaurant industry stands to benefit handsomely from the return to “real” food, especially since a whole lot of that food will be served on real plates in their real restaurants, making them very real money.