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Taking stock: the 2010s in foodservice

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What were the biggest foodservice trends of the last decade? Tina Nielsen speaks to consultants about the developments that had the biggest impact

Somehow we find ourselves at the end of another decade. The conclusion of the 2010s seems to have crept up on us, yet here we are ready to welcome the next era of the 21st century.

Few would disagree that changes in the last ten years in foodservice have been momentous. Today, it is hard to imagine a restaurant menu without the towering presence of vegetable dishes, but in 2010, we were yet to embrace plant-based foods – veggie burgers were definitely not on anybody’s radar beyond the vegetarian community. Vegan was still an alien concept to the average diner.

Ten years ago, chefs had not yet been frustrated by diners suddenly afflicted by all manner of food intolerances – gluten free, for example, didn’t become a lifestyle choice until the middle of the decade. By 2015 one in five US diners had reduced or eliminated gluten in their diets.

A tough decade

Much of the world has spent the last ten years in various degrees of political and financial turmoil. The foodservice sector has not escaped the effect of this as consumers tightened purse strings and started to expect a lot more for their money when they did decide to spend with a certain operator or chef. Food as an experience came to life in the 2010s.

So what of the foodservice sector in the US? It’s been a tough decade for a lot of restaurants, both independent and chains, according to consultant Jay Bandy, president of Goliath Consulting Group and FCSI Associate. “Mediocre business results during a growing economy are an ongoing concern. Margins are tighter, sales are flat and guest counts are declining,” he says.

“For those who don’t own restaurants, the growth of convenience this decade stands out – from food halls to delivery to restaurants in grocery stores. Retail foodservice has morphed in many ways in the last decade.”

Dining goes off-premise

One major feature of the last ten years that stands out above all in a very visual way is the increasing demands of delivery on foodservice operations. “This taxes current kitchen designs, interferes with in-house a la carte meal prep, and it has spawned the growth of  so-called ghost kitchens to deal with the delivery issue,” says Arlene Spiegel FCSI, president of Arlene Spiegel and Associates.

Bandy also highlights this trajectory towards an increase in off-premise consumption. “We started the decade with a double digit increase in catering sales, then came a larger flow of takeout business and in the last five years third-party delivery,” he says.

“Restaurant design now incorporates these three elements along with implementing technology and the new guest/employee flow through the restaurant or property.”

From an operator point of view, Don Fox, CEO of national sandwich chain Firehouse Subs, says the use of e-commerce for an ever-increasing share of retail activity has had two significant points of impact. “It has changed the traffic patterns of consumers. As they offset traditional trips to brick and mortar establishments with e-commerce generated delivery of retail goods, it takes away the opportunities for restaurant occasions that are traditionally triggered by those trips,” he says.

“Second, technology has had an impact on where the customer is choosing to consume their meals. The growth of off-premise consumption of prepared food has led to a shift in how restaurants are used by the consumer – and it has not been for the better.”

The people conundrum

FCSI Associate John Reed, owner of Customized Culinary Solutions, points to a tough labor market as the number one element to impact on commercial kitchens. The proliferation of commercial foodservice means operations are fighting for the same workforce that is also changing.

“The cost of education rises, student debt grows, minimum wages rise and the need to provide opportunities such as healthcare and a living income affects the industry,” he explains. “Designers, equipment manufacturers and the ingredient supply chain have had to adjust to make the impact of a smaller less trained and higher paid labor pool less significant. Robotics, pre-programmed equipment and convenience products are all a result of the labor issues.”

This is something Bandy has noticed too. “We spend more time helping clients with recruiting, hiring and retention than ever. There are more positions open than qualified applicants to fill them,” he says.

The increased price of labor, aligned with the smaller spaces available for restaurant kitchens has presented unique challenges to foodservice operators, says Melanie Corey-Ferrini FCSI, CEO of 3.14DC Design and Consulting. “With the newer cooking methods with less equipment, smaller kitchens mean more innovative cooking methods on these pieces of equipment. Often traditional kitchen staff has a more difficult time with the smaller footprint kitchens with less traditional equipment – which makes it more difficult in the planning phase of a project,” she says.

She points to the emergence of versatile “plug n’ play” equipment that can perform multiple functions – cook, boil, grill – all in one. “From a design perspective, the other aspects are the residential nature of the design as far as far as the scale of spaces, placement of equipment and flow, a less industrial feel, and customers seeing all of the back of house equipment. More open spaces mean less walls, less cost and often less square footage for planning,” she says.

Power of data

Fox says technology has made things easier for operators – specifically he points to the availability of data, and the means to interpret it and apply it to the business. “It is the biggest difference from ten years ago,” he says. “People are still people, and the art of leading, coaching, and inspiring them has not fundamentally changed. But the increase in business intelligence is tremendous. It is a great asset, and as CEO, makes the decision-making process much better than it was a decade ago.”

He adds that the last ten years have served to reaffirm the inherent strength of large brands, “but also shows that not even the largest is immune from seismic shifts in their trajectory,” he says.

“The disruptive nature of technology-enabled social media is a driving force behind this.” Mainly, he says, the decade has validated once again that even though the industry is saturated with too many restaurants, the sector is unique compared to many others. “Why? Because there is always room for another great restaurant – though more than ever, it will come at the expense of other operators.”

Taking stock, looking forward

Looking at the decade of the teens as a whole, Spiegel thinks what we’ll remember is the endless options for dining public. “There’s an almost unimaginable amount of options in the choices of cuisines available,” she says. “Levels of service from delivery, pick-up, through mobile devices; and the pressure on operators to develop intimate relationships with guests in spite of  the ‘wall of technology’ keeping them apart.”

The big change, says Reed, has been how we as consumers and professionals approach the sector. “The foundational methods of providing food and service have not changed, it is our approach on how we interact with them,” he says.

“Cooking methods are the same; they are better managed and replicated through technology to reduce the need for higher level employee skill sets. Hospitality is the same we just rely on data on how to provide it and whom to target. However, the customer still expects high-quality food as a given and served on their terms whether as a delivery or sitting down at a restaurant table.”

For him the one development of the decade that towers over all else if the rise of the digital foodservice environment. “The online culinary experience was born in the 2010s,” he says.

Of course most of these trends from the past decade will not go away just because we enter the 2020s – indeed some will grow even stronger. Consider the rise of healthier eating trends and the emergence of more plant-based meat alternatives. “We see more healthy, sustainable and plant based dining – that tastes appetizing to a wider demographic than ever before,” says Corey-Ferrini.

“With fast food chains having more healthy dining options than ever before, these trends seems to be lasting and will continue either as they are or morph into more healthy and possibly adventurous menus.”

Tina Nielsen

Commercial kitchens are being allocated smaller spaces. Howard Riell discovers how consultants, operators and manufacturers are finding innovative ways to make it work

A smallish kitchen is one of the oldest challenges in foodservice.

“Kitchen space has always been the first square footage to get hit when foodservice is secondary to prime business requirements,” says Howard Stanford FCSI, senior vice president of SSA Foodservice Design & Consulting in Tampa, Florida. “Increasing rental cost per square foot forces potential entrepreneurs to rethink how to be successful within a smaller footprint.”

Rudy Miick FCSI, founder and president of The Miick Companies in Boulder, Colorado, says this is a dialogue that has been going on since at least 1992, if not earlier. “It’s not a new idea; there is simply more need now. Every project we’ve done since the 1990s has built the smallest kitchen possible,” he says.

Contributing factors in driving down kitchen size have been the percentage cost of rent or mortgage versus income – the front is where the money is made – and the basic cost of construction. “The bigger the kitchen, the more expensive the build-out and overall budget due to equipment and utilities,” says Miick.

This is a globally recognised situation, as Ian Grubb FCSI of Ian Grubb Consulting in Germany notes. “The kitchen areas in new project buildings in European cities are becoming smaller and smaller,” he says. “The main reasons are the rising prices of real estate as well as growing building costs, but high personnel costs are also a driving factor in this urge to concentrate on developing compact working spaces.”

Changing dining trends inevitably have an impact on the make-up and set-up of a kitchen, as Paul Bartlett FCSI, principal of Kitchen Solutions Consulting in Baltimore, Maryland suggests. “I think commercial kitchens began shrinking with the advent of food ‘anytime, anywhere’,” he says. “We all realised if there was a need to be filled, we could do it. For example, when I was the chef at the University of Maryland in the late 1990s, we realised the need for late-night food.”

Nowadays, Bartlett continues, more and more operators realise that, “overhead is killing them and controllables are just barely controllable. Rents for prime space are high. Wages for prime employees are high. Everyone, and their brother and sister, wants to be a rock-star chef, so there are more restaurants and more competition than ever. What’s an aspiring culinarian with the need to make a dollar to do?” he asks.

It has to be noted that not all operations are plagued by the challenge of a shrinking footprint in the kitchen. In the high-end projects where Alex Hofer FCSI of H44.Team works in South Tyrol, Italy, he says he rarely has to fight for more space in the kitchen. “Of course, the room designer and the architect want to give more space to the guest and for attractions,” he says. “But a good kitchen designer has to stay strong to make sure he has enough space for the kitchen.”

He points to higher-end restaurants where operators are often looking to add more production in-house. Many products that operators bought outside in the past are now made in-house, including pasta, bread and charcuterie.

These operations also have good reason to consider staff when allocating space. “Good employees will say, ‘OK, you have a nice restaurant, nice design, but I have to go and work in this hole? I won’t do that’,” Hofer explains. “Some designers might say, ‘I don’t care, I get cheap labour’, but I would say the world is changing and countries, such as China or Romania, where employees might come from, are developing.”

John Thomas FCSI, of Sangster Design Group in Australia, suggests the focus on optimising space can be a good thing. “Many commercial kitchens to this day remain grossly over-sized,” he says. “The biggest challenge in kitchen design is when insufficient consideration is given to minimising staff movements outside their key workstations.”

“Working the space hard and considering every part and its interactions have always been key to commercial design,” explains Roz Burgess FCSI, principal of Intelligent Catering in the UK. “Focusing the client and the entire team’s minds on what the actual capital expenditure [capex] and operating expense [opex] costs are to the design means not just looking at the areas separately, but at each element separately and then as a part of a whole.”

 More retail space

The complications for consultants, operators and manufacturers caused by lack of square footage alike are, unfortunately, many.

It was more than a decade ago that operators began trying to maximise retail space, according to Ian Maitland FCSI, lead consultant for RPP Solutions in the UK. One way it has been achieved has been by, “matching menu requirements to the equipment capacity, not deploying equipment that is ‘nice to have’.”

As a result, he says, kitchens and product quality have been compromised. Operators must understand that, “when the equipment matches the menu requirements, the footprint can be more effective.” At the same time, manufacturers should ensure that the evolution of the equipment is in line with menu trends. The limiting of space, Maitland believes, means consultants are, “required to update with equipment evolution, and have the ability to use deterministic data in justifying the equipment and space required.”

According to FCSI associate Jay Bandy of Goliath Consulting Group in Atlanta, Georgia, for consultants smaller spaces mean more time spent on layout and finding solutions. For manufacturers it means updating design to be more efficient in smaller footprints.

Miick says manufacturers are being called on to come up with more flexible equipment that requires a smaller footprint to do similar tasks, as well as to develop faster cook/chill/prep technologies. Operators themselves, he adds, are faced with a complex set of challenges. “A smaller kitchen keeps the budget low. Less storage equals less waste, less theft, better cash flow and, potentially, higher profit. Less prep space needs better management of production and time. And there is more income space if the operator is smart,” he explains.

Adapting to new demands

The smaller the kitchen, says Miick, the more difficult it is to come up with a design that maximises production. “This takes real talent for a designer.”

The reductions are being accomplished, he notes, through units such as combi-ovens and hoodless equipment. “Storage is reduced, which is good because it demands just-in-time ordering and tighter turns with less waste.”

According to Grubb this requires the kitchen consultant to, “adapt to new demands and free himself from the routine planning of standard footprints for outdated work processes with conservative kitchen equipment.”

The need to adjust the number of menu offerings and develop ways to create them with less equipment is an inevitable complication. Stanford says his firm’s approach is not to focus on what to eliminate but to specify equipment capable of multi-tasking while not increasing production time. For consultants, it means, “being more creative with solutions to make the space workable, creating new widgets,” he says. “Some manufacturers have more solutions than we give them credit for. The majority of the manufacturers we deal with love the challenge to do something different, to twist a product or combine a few items they have to fill a special request.”

For operators the task is to be willing to try something new. “A different approach in order to utilise the space and equipment available to produce the product they require without compromising the outcome they need to be successful,” he says.

All the options

Given the reality of shrinking kitchen space, the challenge to consultants – now and in the future – is obvious.

“Consultants need to think like operators,” says Arlene Spiegel FCSI, president of Arlene Spiegel & Associates in New York City. “They need to have a broad knowledge of the challenges the operators face as it relates to the cost of space, the cost of labour and the capital expense of build out. They also need to develop a strategy for optimising output by putting forth all the options and thinking outside the box.”

From a design perspective, a competent consultant should always be the key driver to shrinking commercial space by eliminating spaces and workflows, says Thomas. “Additionally, the client has increasing costs of delivery, be it cost of ingredients, labour cost, or utilities expenses. They are searching for effective ways to do more with less.”

Foodservice professionals are managing the challenge of smaller space in different ways. “We have case studies of staff being reduced up to 80% for previously inefficient areas,” says Thomas. “On a current large project, we have increased output by 300% in terms of capacity to deliver fine dining, yet the team has only increased by one member. The chef in charge is happy, and dealing with this dilemma very well.”

The ideal ratio

According to Bandy, “It’s about using modular equipment and focusing on efficiency. Prep areas are shrinking, dry storage is on rollers, and combi ovens are replacing conventional ovens and steamers. Speed ovens are replacing toasters and microwaves. Mobile prep carts and custom shelving require less space. Employee restrooms and lockers have been cut.”

Miick’s rule of thumb for a full-service kitchen ratio is ideally four to one, front to kitchen. “Any bigger than three to one is not acceptable,” he says. For fast-casual concepts, he adds the ideal ratio is four to one, and no bigger than three to one. For quick-service, it should be, “one to one or one to two, front to back.”

The need to maximise space is clearly not going away. “Why would it?” asks Burgess. “We need to validate all aspects of a project and ensure that what is needed is included, but not just pop everything in just in case.”

Part of being a professional consultant is to discuss, consider, provide options, debate and query requests. “The more compact the area the more of a challenge, which is certainly something we excel at,” she adds.

Howard Riell

 

Illustration: Alice Mollon

Fast food giant has acquired artificial intelligence-powered Dynamic Yield as it future-proofs its offering, reports Tina Nielsen

McDonald’s has followed recent investment in technology – including a global mobile app, mobile order and pay, self-order kiosks and digital order boards – with the acquisition of personalization specialist Dynamic Yield.

The seven-year-old tech company’s artificial intelligence (AI) powered platform delivers individualized experiences and will help the fast food giant provide customers with an even more personalized experience.

Examples of the changes they can make to their current offerings include the ability to vary the outdoor Drive Thru display to reflect the time of day a customer passes through or the weather, current restaurant traffic and trending menu items.

“Technology is a critical element of our Velocity Growth Plan, enhancing the experience for our customers by providing greater convenience on their terms,” said Steve Easterbrook, president and chief executive officer of McDonald’s Corporation.

“With this acquisition, we’re expanding both our ability to increase the role technology and data will play in our future and the speed with which we’ll be able to implement our vision of creating more personalized experiences for our customers.”

Underlining this message, shortly after announcing the acquisition of Dynamic Yield, McDonald’s said it was taking a 10% stake in New Zealand based app developer Plexure, which will help it improve functionality including customer targeting.

The Dynamic Yield acquisition is set to make McDonald’s one of the first companies to integrate decision-making tech in the point of sale at a physical restaurant site.

Competitive advantage

Jay Bandy FCSI, president of Goliath Consulting Group, believes the acquisition part of a wider trend in the foodservice sector. He says it makes a lot of sense for a company such as McDonald’s.

“First of all it gives McDonald’s competitive advantage. They are taking the technology  and bringing it in-house, which will keep potentially keep it out of their competitors’ strategy – at least in the short term,” he says.

“Obviously people will be able to replicate that software after a while, but it will get them a head start.”

William Bender FCSI, president of W.H. Bender & Associates, agrees that the move allows the fast food company to leapfrog the competition. “McDonald’s needs to keep focused on the main job – people, food, service. If they can gain from a technology that delivers personalization and then close the gap with guests it may be a big win,” he explains.

The future

Once the deal is completed, the burger chain will start rolling the technology out at Drive Thru restaurants in the US with international expansion following. There are also plans to integrate the technology into other points of sale, including self-order kiosks and the mobile app.

About 3,000 of McDonald’s 14,000 US locations have been remodeled in what the company has called its Experience of the Future design, which features new decor and self-order kiosks.

“We started Dynamic Yield seven years ago with the premise that customer-centric brands must make personalization a core activity,” says Liad Agmon, co-founder and CEO of Dynamic Yield. “We’re thrilled to be joining an iconic global brand such as McDonald’s and are excited to innovate in ways that have a real impact on people’s daily lives.”

Bender believes that acquiring rather than building makes business sense for a large company of McDonald’s stature. “The pace of technology continues to speed up – especially with AI – so buying a company with the team in place, technology products, and systems already built in is a win-win for McDonald’s,” he says. “An AI communication system that personalizes the marketing (and brand experience) with guests could be a home run.”

The ability to further develop customisation in a foodservice business is critical to connect with customers, according to Bandy. “Having that interaction with the consumer is critical to brands today, they need to be able to reach people and continue the conversation and make sure people get the content they want and talk to them where they want,” he says. “This is smart technology and people love that customization.”

Tina Nielsen