Following a two-year hiatus, the 2022 National Restaurant Association Show recommenced this past week from May 21-24, with more than 1,800 exhibitors and numerous professionals coming together in Chicago. The event was highly anticipated by attendees, all excited to learn about the new products, strategies, technologies, and trends in the restaurant industry. In addition to the many established vendors and attendees, there was a significant increase in new exhibitors, many of whom started their business in the past few years and whose market presence and capabilities expanded during the pandemic.
While the four-day event showcased a variety of exhibitions and presentations, there were six main takeaways embedded throughout the presentations and exhibits, each one likely to affect the resutaurant industry for years to come.
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1. Customers are Hungry for Plant-based and Alternative Protein Products
Plant-based food has evolved from a niche market position to a widely adopted trend in restaurants producing a variety of products. Exhibitors in every pavilion showcased plant-based offerings ranging from meat and fish to dairy categories such as ice cream, cream cheese, and milk.
While offering alternative protein options for customers with dietary restrictions was still a large benefit of plant-based food, the new messaging presented at the event was around the products’ sustainability and how they could potentially mitigate inflation and supply chain challenges. In addition, plant-based proteins were also positioned as being a premium product in terms of quality and taste, one that has a customer base that spreads well beyond just vegetarians and vegans.
2. Restaurants Need to Shift to Sustainable Products to Reduce Carbon Footprint
Sustainability was also a core focus of the event, with an emphasis on reducing the industry’s carbon footprint. One of the more widespread solutions for this endeavor focused on responsible packaging for carry-out and delivery. As consumers shifted to a delivery and carry-out approach to dining in response to the COVID-19 pandemic, restaurants have had to increase their use of takeaway containers, many of which are neither bio-degradable nor recyclable.
With 71% of consumers planning to order food delivery as much or more than they did during the pandemic, the choice of take-out packaging is increasingly becoming a sustainability issue. In addition to reducing carbon footprints, sustainable packaging is also becoming a heightened expectation of consumers who expect operators to be more socially responsible and to see their personal values reflected in the brands they choose.
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3. Brands are Investing in Technology to Optimize Operations and Customer Experience
There was a sizable increase in technology exhibitors at this year’s show, with a variety of new and improved technology offerings. Much of the featured tech was designed to address key pain points for foodservice operators. Technology solutions ranged from front-of-house support such as touchless menus, ordering efficiencies, payment systems, as well as mobile apps, along with back-of-house systems for labor, inventory, automation and payroll management.
These expansive tech offerings are coming at an opportune time. During the “Restaurants in the Hot Seat” session, Joe Pawlak, managing principal from Technomic, cited a recent survey his company did, which found that 60% of foodservice operators plan to increase their technology budget in the next two years. On planning where to spend that increased budget, the highest priority was inventory management (51%), followed by scheduling software and loyalty programs at 46% and 42%, respectively.
4. Restaurants are Creating New Strategies to Offset Inflation Costs
With the rise of food costs up from 4.5% to 5.5% (and dining out costs expected to increase between 5.5% to 6.5%) from last year, inflation and the resulting challenges were a major theme at this year’s show. Not only are restaurants struggling with food purchases, but inflation has also affected customers’ discretionary spending, leading to decreased restaurant visits per month.
To limit the impact of inflation—without passing all of the cost directly to consumers—restaurants have had to get creative. Some of the solutions offered focused on menu substitutions, streamlining for decreased operating costs, exploring new ways to bring value, and providing an enhanced consumer experience to justify the price increase.
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5. Brands have Developed New Tactics to Address Employee Welfare and Labor Shortage
With a decreased labor force and wide competition for employees, addressing labor challenges was a dominant theme. Strategies for addressing the declining labor force were two-fold: employee welfare and technology.
Regarding employee welfare, solutions focused on creating a beneficial and healthy working environment for employees, including through skill training, developing clear paths for job advancement, transparency, and flexible work schedules.
In addition to improved employee welfare, many restaurants are leveraging technology to not only mitigate their labor shortage challenges but also to alleviate inefficiencies by eliminating tasks. This would be accomplished with technology like digital ordering, which allows, either customers or wait staff to immediately send orders directly to the kitchen thus reducing the time servers spend going back and forth to the kitchen, thus allowing them to redirect that time to other customers.
6. Operators Have Implemented New Strategies for Alleviating Supply Chain Struggles
The final restaurant trend highlighted in the event was the lessons learned and strategies developed from supply chain struggles. The three dominant lessons were:
- Diversification: Operators need to partner with a diverse group of suppliers to protect their access to necessary supplies.
- Supplier collaboration: Restaurants need to build stronger relationships and work more closely with suppliers to regularly review orders and needs and to check in on supply status.
- Streamline offerings: By streamlining menus, restaurants will require fewer SKU’s. Potential ingredient/food substitutions on menus were also touched on.
- Technology adoption: Operators have incorporated technology to address supply chain issues through inventory and supply chain management software systems.
The restaurant industry has seen a lot of change over the past few years, but as this weekend has shown, there is more (and better) change on the horizon.