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Coronavirus

The Spoon team is working hard to bring you the latest on the impact of COVID-19. Bookmark this page for our full archive on the pandemic and how the food industry is embracing innovation to fight back.

On April 6th, The Spoon had a full day virtual summit on COVID-19 strategies for food & restaurants. You can watch all the sessions from our virtual strategy summit here.

You can also check out this COVID-19 resource page for food and restaurant industry.

September 1, 2020

Holo Industries Provides Futuristic Holographic Menu Solutions

Pre-pandemic, most people didn’t think twice about checking out at a supermarket or ordering in a restaurant. Now, after entering our PIN numbers or holding a menu, the new normal involves vigorous hand scrubbing and sanitizing. Given that, dozens of companies are now rushing to create more contactless experiences in public spaces. One such is Holo Industries, a brand of Convergence Promotions that provides holographic and contactless-touch solutions that can be used in place of elevator buttons, restaurant menus, check-out kiosks, and more.

I spoke with Glenn ImObersteg, the president of Convergence Promotions, on the phone this week about recent developments within Holo Industries. The development of the brand’s contactless-touch hologram units began in March 2020, just as COVID-19 hit in the U.S. COVID-19 spiked the demand for technology like this, and the company was able to have these units ready for use by May 1, 2020.

The hologram interface is made possible through the pairing of Neonode Touch Sensor Modules, the ASKA 3D Holographic plate from Asukanet, and other components from Holo Industries. The holographic menus are touch responsive, and when your finger touches a button mid-air, it triggers an audible response from the unit.

Holographic Kiosk/Restaurant Demo - HI-DEMO-KR

Contactless solutions alone won’t be able to save struggling restaurants from going under, but they may be able to reassure customers — who demand transparency around safety nowadays — and get more foot traffic into the dining room. So far Sevenrooms, Paytronix , Payjunction also offer variations of contactless order and pay systems.

Contactless ordering and payment may be a key component to easing customers back into dine-in restaurant service. A touch-less holographic kiosk removes the risk of coming into contact with germs, bacteria, and pathogens, and does not require cleaning.  Holo’s units can be used as a menu, a method of paying for a meal, or even used to broadcast the menu from inside the restaurant to the outside. 

The contactless and holographic units from Holo Industries currently cost about $2,500. Currently, the products from Holo Industries are being used by elevator companies, and the company is also piloting a kiosk program with two undisclosed restaurant companies. Holo Industries has yet to receive outside funding but is currently looking for investors to enable its expansion. The Sacramento-based brand will become its own company separate from Convergence Promotions in October 2020.

August 31, 2020

Deliveroo and Waitrose Launch a 30-Minute Grocery Delivery Trial

Following similar recent moves from other third-party delivery services, Deliveroo is expanding its presence in the world of online grocery shopping. At the tail-end of last week, grocery chain Waitrose announced it will pilot a 12-week program with Deliveroo to get groceries to customers around the UK in as little as 30 minutes.

The news comes just as Waitrose’s longstanding deal with online grocery retailer Ocado comes to an end. From Tuesday, September 1, Ocado will instead deliver groceries from Waitrose rival Marks & Spencer. 

Deliveroo will ferry more than 500 Waitrose items to customers “in as little as 30 minutes,” according to the Waitrose press release. Customers will be able to place orders via Deliveroo from one hour after the shop opens to one hour before it closes. Waitrose says the partnership is meant to “compliment” its own two-hour grocery delivery service.

The Guardian noted over the weekend that Waitrose has seen more than 100,000 extra orders for online groceries since the UK’s pandemic-induced lockdown started. Online grocery orders across the UK have almost doubled thanks to the pandemic. It’s a similar story to what the U.S. is currently experiencing where grocery e-commerce sales hit $7.2 billion in June.

Given all that, it’s no surprise that third-party restaurant delivery services like Deliveroo are diversifying their sales channels to include grocery. Deliveroo, in particular, has struggled to keep business strong during the pandemic as restaurants shutter permanently. For example, the Competition and Markets Authority (CMA), the UK’s antitrust watchdog, finally approved Deliveroo’s long-scrutinized deal with Amazon on the grounds that Deliveroo would have had to exit the UK food delivery market without the Seattle giant’s investment.

Adding more grocery services is one way to make up for some of the lost restaurant sales. New sales channels may also give third-party delivery services a fighting chance a profitability, something that keeps getting eroded by fee caps, battles over worker classification, and other regulatory issues.

It’s a narrative we’re familiar with in the U.S., too. Uber Eats now delivers groceries, and DoorDash just announced its own grocery delivery service in addition to its partnerships with convenience stores.

The initial Deliveroo-Waitrose trial, which also starts September 1, will serve about half a million households and, if successful, will extend to more locations in the future.

August 27, 2020

Front-of-House Igloo? Chicago Asks Residents to Redesign the Outdoor Dining Experience for Winter

We’ve said it multiple times in the last couple of weeks: winter is coming for outdoor dining. And when it arrives, restaurants may be even more limited as to how they can serve dine-in customers in the midst of a pandemic and reduced capacity mandates for the dining room.

Chicago, a city that’s no stranger to harsh winters, is preemptively dealing with this situation by challenging residents to redesign the outdoor restaurant experience. Dubbed the Winter Design Challenge and done in partnership with IDEO, BMO Harris Bank, and the Illinois Restaurant Association, the contest is looking for outdoor dining ideas that can adhere to safety restrictions around COVID-19 while still allowing restaurant customers to eat outdoors.

Participants can submit ideas through September 7. Chicago Mayor Lori Lightfoot’s office told NBC Chicago that winners will receive $5,000 each and “opportunities to start their idea at restaurants and bars around the city.”

Sam Toia, president and CEO of the Illinois Restaurant Association, added that, “We need out-of-the-box thinking to address the hardship facing our industry.”

We’ve seen some of that outside-the-box thinking already in the restaurant industry, from outdoor self-service kiosks to greenhouse-like buildings that enclose individual tables. But winter weather provides a whole new set of challenges that a few heat lamps may not be enough to solve. 

A panel of local judges will pick one winner from the following categories: outdoor structures; indoor-adjacent spaces; and cultural change/other ideas.

Ideas are already pouring in, including heated tent rentals, blankets, solar-powered pergolas, and actual igloos. There are also several suggestions to simply not open, which underscores how divided the general public remains about eating in restaurants in the time of a pandemic.

Submissions will be accepted through September 7 at 11:30 PST. All suggestions should address on-premises dining, not delivery or takeout.

Whatever winning solutions emerge from this could provide a blueprint for other cities around the country when it comes to addressing the upcoming winter. Chicago may have a reputation for harsh weather, but it’s hardly the only city in the U.S. to endure snow, ice, and sub-zero temperature. It wouldn’t be surprising if more cities launch their own challenges in the coming weeks in a collective effort to pull the restaurant industry through the changes and prevent even more from having to permanently close their doors.

August 27, 2020

Survey: Restaurants Should Expect to Serve 4 Types of Customers in the Coming Months

Roughly one in three Americans look forward to dining in restaurants again over the next three months, but different customers have different standards for what the new era of eating out should look like. So says restaurant tech company Sevenrooms, which today released a new survey entitled “Restaurant Reckoning: Dynamic Diner.”

The survey, conducted with third-party research firm YouGov PLC, polled 1,327 U.S. restaurant customers at the end of July. As its title suggests, the pandemic has created new types of diners with different sets of priorities. Sevenrooms has divvied these up into four categories:

  • “The Pick-Up Patron:” More than one in four survey respondents, or 27 percent, said they will not feel comfortable eating in a restaurant dining room until a vaccine for COVID-19 is found. Nearly one in four, 23 percent, will stick to takeout orders for the rest of 2020. 
  • “The Safety-Savvy Consumer:” More than one in five, or 22 percent, of those surveyed want a detailed outline of a restaurant’s safety protocols, including physical barriers between tables, at-table hand sanitizer, and having their food covered when brought to the table.
  • “The Tech-Conscious Contactless Diner:” A smaller percentage, 13 percent, said they would only dine in a restaurant that uses contactless dining solutions like virtual waitlists, QR code-enabled order and payments, and contact tracing technology.
  • “The Carefree Guest:” Despite nationwide restrictions around indoor dining, a healthy number of respondents, 29 percent, said they are comfortable with the format. Another 42 percent said they are comfortable with outdoor dining.

The outdoor dining stat, though, is an important reminder of a situation most restaurants around the U.S. will soon face: winter is on its way, and once it arrives, outdoor dining will be uncomfortable in some locations, impossible in many more. It may very well be that colder weather will mean the Pick-Up Patron category gets a lot larger and the number of “carefree” guests lowers alongside the temperature.

The survey also recommends that restaurants double-down on collecting customer data that can better tell them which of the above customer types they serve most. That directive makes sense, given that Sevenrooms is a guest management platform that emphasizes the value of restaurant customer data. But it brings up a good point: with the restaurant experience going more and more digital, it’s time for restaurants to rethink their relationship to customer data.

Speaking in today’s press release, Sevenrooms CEO Joel Montaniel also suggested that agility is crucial for restaurant operators right now: “Our research has made one thing clear: operators need to be flexible,” he said. “Whether it’s in regard to outdoor dining, virtual waitlists or contactless order and pay – every guest has different needs.”

With colder temperatures and a lot of uncertainty around both the pandemic and the future of the restaurant industry, that flexibility will remain a must-have for restaurants for the foreseeable future. The good news is, since restaurants were allowed to slowly reopen their dining rooms, we’ve seen no end of creativity when it comes to serving guests while keeping them socially distanced. No doubt we’ll see even more of that as the restaurant industry transitions into a new season.

August 23, 2020

Can Ghost Kitchens Save the Vanishing Restaurant Biz?

“Perhaps we should stop using the term ghost kitchen. Ghosts are rarely seen, but ghost kitchens? Well, they are popping up everywhere.”

Spoon Editor Chris Albrecht was half-kidding when he wrote that line earlier this week, but he might have been onto something. Ghost kitchens, a concept that only really started turning heads one year ago, are practically unavoidable these days in a conversation about the restaurant industry. 

In the past few weeks alone:

  • Foodservice distribution giant US Foods launched its own ghost kitchen service that will provide restaurants “guidance and resources” to open their own kitchens.
  • Gig economy engagement platform ShiftPixy unveiled a ghost kitchen incubator that connects restaurants with physical kitchen space and the tech to run a ghost kitchen.
  • Dubai-based iKcon, raised $5 million to expand its kitchen network and the proprietary tech stack that goes with it.
  • Fat Brands announced that Johnny Rockets, a brand it intends to purchase for $25 million, will expand via ghost kitchens, many of them inside the kitchens of other Fat Brands restaurants.
  • Sweetgreen said it is testing the ghost kitchen concept out by working from a Zuul kitchen in NYC.

And those are just the highlights.

What’s noteworthy here is not that a bunch more restaurants and food industry companies have hopped aboard the ghost kitchen train. It’s that there are a fast-growing number of options when it comes to where and how a restaurant can open a ghost kitchen. With a company like iKcon, for example, a restaurant’s ghost kitchen essentially becomes a franchisee. Renting space from Zuul or another third-party kitchen provider is another way. Operating one brand out of the kitchen of a sister brand is perhaps the most intriguing concept on this list, and one we’ll see a lot more of in the future.

Add to all that choices around location, technology, and figuring out if they even have enough demand to warrant a ghost kitchen, and restaurants have a lot to consider in today’s off-premises-centric world.

What’s more, those restaurants are being forced to consider their choices when it comes to ghost kitchens. The pandemic has decimated the dine-in business for both large restaurant chains and smaller independent businesses. Recovery from the fallout will be slow, and the idea of most customers returning to brick-and-mortar restaurants seems less possible each week. Given those factors, more restaurants will have to consider either supplementing their existing operations with ghost kitchens or pivoting their entire model to a virtual, delivery-only one.

I suspect this is just the beginning when it comes to types of ghost kitchens that rise out of the ashes of the on-premises restaurant experience. We’ve already seen restaurants employ countless amounts of creativity when it comes to running a restaurant during a pandemic and trying to create a concrete restaurant experience out of virtual tools. With the pandemic still very much a part of our lives, we will now see that creativity head for the ghost kitchen.

SipScience Raises Money to Reinvent the Bar

SipScience, a data analytics company specifically for the hospitality industry, is preparing to launch itself into the contactless payments realm by launching a new platform, Sip. 

According to a press release sent to The Spoon this week, there are two sides to Sip. The consumer-facing one comes in the form of an app that connects to a user’s digital wallet. The app lets said user find nearby bars and open a tab from their own mobile device, through which they can order and pay for drinks. When it launches, Sip will be available at participating bars and venues across the U.S. Bonus: those who sign up for a subscription will get half off their first 50 drinks ordered through the app.

For venues, such as bars and restaurants, the app is a new way to drive more traffic, and the accompanying SipSync analytics engine gives these places more data on in-venue customers. Brands, too, are provided with real-time purchasing data, which is not something a payments app normally provides.

The company said this week it had raised $1.3 million in SAFE notes. There is no official launch date yet for the app, which makes sense, given the state of in-person hospitality venues. Bars in many states remain closed, as to venues built to hold hundreds of people. 

Granted, no sane person would spend much time in a bar right now. But SipScience’s news suggests that folks start flocking back to their local watering holes, they’ll find a far more tech-driven experience waiting.

Restaurant Tech ‘Round the Web

Starbucks launched a digital traceability tool this week that lets customers learn more about their coffee, including where it came from and traveled, and the farmers and roasters involved in production.

Domino’s is hiring 20,000 more employees. That’s on top of the 10,000 the pizza chain said it was hiring right after the pandemic hit, and just goes to show you that the company’s delivery-centric business is alive and thriving. 

Grubhub has launched an online petition to commission fee caps and is reportedly going to run an ad campaign that calls the fee caps “food delivery taxes.” Grubhub says fee caps result in higher costs for consumers and ultimately hurt restaurants. 

This is the web version of our newsletter. Sign up today to get updates on the rapidly changing nature of the food tech industry.

August 20, 2020

Taco Bell Unveils New ‘Go Mobile’ Restaurant Concept

Two big trends are a foot in the world of quick-service restaurants: orders going off-premises and major chains redesigning their store formats to better meet that demand. Taco Bell is the latest major QSR player to respond to these trends. Today, the chain announced a new restaurant concept, “Go Mobile,” that emphasizes the role of digital in the restaurant experience.

Speaking in today’s press release, Taco Bell President and Global COO Mike Grams called the new format “a completely synchronized digital experience centered around streamlining guest access points.” 

To that end, the new store format includes two drive-thru lanes, with one dedicated to customers that order via the Taco Bell mobile app. New technology integrated into the app will detect when customers arrive to pick up their order and direct them as to where they can retrieve the food. (Sidenote: the tech sounds like geofencing a la Panera, but Taco Bell’s press release did not use the term.) Go Mobile will also feature curbside pickup and “bellhops,” who will take orders via tablet in the drive-thru lane and at curbside. 

Taco Bell also notes that this new store format will be physically smaller than its normal brick-and-mortar locations, which makes sense, given the reduced dining room capacity under which restaurant operate these days. 

Other QSRs have made similar moves in the last few months. Starbucks is reformatting many of its traditional cafes to act as to-go-focused locations. Chipotle, a brand not historically known for drive-thru service, is all-in on its Chipotlanes. Shake Shack is also revamping its focus to include more drive-thrus and digital-forward experiences. Even Domino’s, which has always been an off-premises business, is revamping its format to include more curbside pickup.

Taco Bell’s first Go Mobile store is set to open in the first quarter of 2021.

Takeout, delivery, and curbside pickup are still the main formats through which these big brands can reach customers at the moment. With dining rooms still operating at reduced capacity and the future of full-service restaurants still very much uncertain, we will see more QSRs rethinking their brick-and-mortar locations to fit the off-premises style that’s become, for better or worse, the new restaurant experience. 

August 16, 2020

Uber Eats Is Not Bailing On California

California imposed an order this week that, for a minute there, led us all to believe Uber’s food delivery business in that state was on the rocks.

Spoiler alert: it’s totally not.

Recap: On Monday, a California judge issued a preliminary injunction ordering that Uber (along with Lyft) reclassify its drivers as employees in keeping with the state’s AB5, which was signed into law in January. Uber CEO Dara Khosrowshahi then took to the airwaves to tell us all the company will likely have to temporarily shut down service in California if the court does not overturn the ruling.

As is usually the case when we talk about third-party delivery services, there’s fine print, which Eater SF promptly dug up. An Uber spokesperson confirmed to the publication that the shutdown would only apply to the company’s rideshare business, and that Uber Eats — now Uber’s biggest business — would continue “as is.”

I can’t really think of a better way of putting it than in Eater writer Eve Batey’s own words: “Uber’s threat to take their ball and go home if forced to comply with California law really only applies to a ball that, right now, isn’t the one that the other kids want to play with all that much.”

Eats currently generates more revenue than Rides, according to Uber’s second-quarter earnings report. That makes sense, seeing as the world has been in a pandemic-induced lockdown of late, and even with restrictions lifting in places, average consumers are just not going out as much. They are, however, ordering a ton of delivery meals from restaurants. Gross bookings for Eats were $6.96 billion in Q2, which was up 113 percent year-over-year and up 54 percent over Q1 2020.

Uber also recently struck a $2.65 billion deal to acquire fellow third-party delivery company Postmates — a service that just happens to be number one in Los Angeles, a city that just happens to be the second most populated one in the U.S. Yanking the plug on California, even temporarily, would make the deal pointless. Uber might have ethical flaws in its business model, but its leaders aren’t dumb.

Besides, they’ll get a chance to continue the fight to keep its delivery drivers and couriers as contract workers come November, when Californians vote on Proposition 22, which would exempt rideshare and delivery drivers from being considered employees. Needless to say, tech companies are all-in on this one.

But if regulators continue to scrutinize third-party delivery practices, and consumers continue to rely on off-premises meals while restrictions around in-house restaurant dining room remain in place, it seems only a matter of time before Uber et al. go from the frying pan to the fire with food delivery. 

Maybe then we can take eloquently worded threats to shut down seriously. 

Accelerating the Drive Thru

Of late, there’s been much ado about the drive-thru, with major restaurant chains like Shake Shack and Chipotle all announcing an increased focus on the format.

So it wasn’t too surprising this week to get new data showing the drive-thru is far and away the most popular restaurant “experience” among consumers. A new survey from Bluedot and research firm SeeLevel HX found that 74 percent of respondents said they have visited the drive-thru “the same amount or more often than usual” compared to 43 percent in April. Those consumers surveyed also named drive-thru “the safest” of the to-go formats polled in the report.

It’s all a bit of a no-brainer if you ask me. If you’ve hung around inside a restaurant lately waiting for your pickup order, you’ll know the experience is often tense and confusing. Meanwhile, curbside pickup is still so new for most restaurants that operational kinks have yet to be worked out. That makes drive-thru, a decades-old format, seemingly the safest and fastest way to collect your grub at a time when dining at a restaurant is a no-go for many consumers.

But drive thrus could be faster. A lot faster. In this week’s survey, 81 percent said waiting more than 10 minutes in the drive-thru is too long.

As mobile ordering increases in restaurants and more chains reformat their brick-and-mortar locations to accommodate drive-thru, speed of service will need to be at the top of the priority list.

Restaurant Tech ‘Round the Web

  • A new survey by Oracle Food and Beverage found that 59 percent of U.S. consumers and 47 percent in the U.K. “plan to dine-out as soon as they are able.” Forty percent in the U.S. and 39 percent in the U.K. would feel “safer” using a digital menu from their own device. Another 35 percent in the U.S. and 31 percent in the U.K. had similar feelings about digital payments. 
  • Mobile platform Mad Mobile has acquired restaurant tech company CAKE, best known for its POS system. Mad Mobile hopes to use the acquisition to create a next-gen POS designed for mobile-first restaurant experiences. 
  • For more on the future of ridesharing, which is usually an indicator of what’s to come for food delivery, check out this podcast from Axios Re:Cap. 

This is the web version of our newsletter. Sign up today to get updates on the rapidly changing nature of the food tech industry.

August 14, 2020

Are Food Delivery Services ‘Violating’ Mandatory Fee Caps in NYC?

NYC regulators are demanding stricter oversight of the recently mandated caps on delivery commission fees, according to the NY Post. NYC Councilman and head of the small business committee Mark Gjonaj this week urged Mayor De Blasio’s Office of Special Enforcement to fine the offending parties (i.e., the delivery services) found to be violating the fee caps.

Which is apparently happening. At a hearing this week, OSE’s executive director Christian Klossner said his office had received two complaints from restaurants that were charged more than fee caps allowed by the delivery companies. Klossner said the companies (unnamed) had refunded the money, but Gjonaj demanded the OSE “consider fining the offending company.” 

Two restaurants isn’t a lot, but Gjonaj, seems to suggest the actual number of businesses being overcharged could be bigger. Speaking at the hearing this week, he said, “If these companies have done it to one restaurant, it must be widespread.”

While not proven, that point wouldn’t exactly surprise, since third-party delivery services have disregarded legislation before, most notably around worker classification. Fee caps are so new on the third-party delivery regulatory front that there hasn’t been much time for companies to flout the rules, or for restaurants to make known that they’re being overcharged. Part of Gjonaj’s call over more enforcement of the caps seems aimed at bringing any violations into the light. “How are you getting the word out to the thousands of businesses that they need to bring this to your attention?” he asked attendees at this week’s hearing.

Like a growing number of U.S. cities, the Big Apple imposed mandatory fee caps on commission fees at the peak of shelter-in-place mandates brought on by the pandemic. The aim of those fee caps is to help restaurants, who normally fork over as much as 30 percent per transaction to third-party delivery companies in commission fees. Needless to say, those commission fees were gutting the already decimated restaurant industry, hence caps imposed by NYC, San Francisco, Los Angeles, Baltimore, and many others. 

Those fee caps are for the most part meant to endure only as long as cities remain in emergency states around the pandemic. Soon enough, though, these cities will have to weigh the ups and downs of mandating — and enforcing — the caps over the long term, along with other measures that can better protect restaurants in a delivery-crazed world. 

August 13, 2020

Survey: Drive-Thru Orders and Mobile App Usage at Restaurants Are Up

Consumers are using a mobile app more often than just a few months ago to order restaurant food, according to new survey data from Bluedot and research firm SeeLevel HX.

The survey, based on responses from 1,501 U.S. adults between June 23 and July 2, 2020, found that 50 percent of consumers are using restaurant mobile apps “more often or much more often” than they were before the pandemic, up from 42 percent in April. Meanwhile, 64 percent of respondents said they have downloaded at least one or more new apps to purchase restaurant food, up from 51 percent in April.

The spike makes sense, given the rise in off-premises restaurant formats, the push for so-called “contactless” ordering and payments platforms, and widespread consumer concerns around safety and social distancing. 

The report also examines the popularity of off-premises formats among consumers. The drive-thru is far and away the most popular. Seventy-four percent of respondents said they have visited the drive-thru “the same amount or more often than usual” compared to 43 percent in April. Respondents also named drive-thru the “safest” of the to-go formats, which also include curbside pickup and in-store pickup. 

Responses around both mobile app usage and drive-thru visits are in line with developments by restaurants over the last few months. Chains like Chipotle and Shake Shack are reformatting many of their stores to include drive-thru lanes. In many cases, those lanes are dedicated to customers ordering via the restaurants’ mobile apps. 

In many cases, these drive-thrus are one of the main reasons QSRs have fared much better in terms of sales so far during the pandemic.

All that said, the Bluedot and SeeLevel HX report also suggests that drive-thru lines are still frustratingly slow. Of the consumers surveyed, 81 percent said waiting more than 10 minutes in the drive-thru is too long. If you’ve been to a drive-thru recently, you don’t need data to tell you wait times are stretching far beyond that number oftentimes. 

Cutting down wait time in the drive-thru is an old story that pre-dates the pandemic. Making that particular restaurant format more efficient will continue to be a priority for QSRs going forward. 

August 13, 2020

Report: The Restaurant Industry Could Lose $300B by the End of 2020

Technomic has revised its forecasts for the rest of 2020 and into 2021, according to a news release the firm sent out this week. The reason for these new numbers? You guessed it: the pandemic. Speaking in this week’s announcement, Joe Pawlak, a managing principle at Technomic, said to expect “continued decline” in restaurant sales for the rest of the year but “aggressive growth” in 2021.

“Few industries have felt the repercussions of the COVID-19 pandemic quite like foodservice,” he wrote, adding that restrictions (e.g., reduced capacity, no bar seating) “are wreaking havoc, especially on the segments that depend upon on-premises consumption.”

In light of that, the firm has made revised forecasts based on Best, Middle, and Worst Case scenarios. While the bulk of those numbers are behind Technomic’s paywall, the firm did release some telling facts based on the new forecasts:

  • Based on the Middle Case scenario, the restaurant industry will grow by 21 percent in 2021, but sales will still be down 11 percent compared to 2019 sales.
  • The restaurant industry is expected to lose between $250 billion to nearly $300 billion in sales for 2020, depending on the scenario.
  • QSRs are faring the best of any restaurant type at the moment; full-service restaurants and bars are struggling the most.

The firm also notes that the state of the industry’s prospects are “directly tied to medical advances related to COVID-19” such as a vaccine. 

It’s no secret that spikes in COVID-19 cases are in part tied to the reopening of states’ economies, of which restaurants are a major part. Just this week, the New York Times noted that “Data from states and cities show that many community outbreaks of the coronavirus this summer have centered on restaurants and bars, often the largest settings to infect Americans.” In a separate article, it also noted that indoors, the six-feet-apart rule for social distancing is misleading because “people think they are protected indoors and they’re really not.” Little wonder, then, that the CDC lists indoor dining as the highest-risk setting of all restaurant formats for spreading of the virus. the virus becomes easier to spread at a restaurant that offers on-site dining, even with reduced table capacity, according to the CDC.

None of that makes for an exactly encouraging scenario restaurants face in the coming months. Even in a Best Case scenario, full recovery will be slow at best. As we putter towards that prospect, businesses are best advised to keep their foot on the gas when it comes to offering off-premises formats.   

August 12, 2020

Updated: Whataburger’s Food Truck Set to Tour the U.S. in 2021

Iconic Texas-based QSR chain Whataburger announced this week it has upped its off-premises game with a 36-foot-long food truck that will take a multi-state tour in 2021. 

The forthcoming Whataburger food truck will be a totally mobile kitchen the chain says has “the same kind of burger-making power as a brick-and-mortar restaurant.” Whataburger developed it in partnership with Cruising Kitchens, a well-known food truck manufacturer that has made mobile kitchens for everyone from Hard Rock Cafe to the LA Dodgers. 

Whataburger also says the truck can be used for disaster relief, and honestly in this day and age it isn’t hard to imagine the company reformatting the truck at some point to serve frontline healthcare workers or communities impacted by, say, a hurricane. 

The truck will “tour” U.S. cities where Whataburger already has a presence, as well as those the chain is planning to expand too. That’s in keeping with the general aim of ghost kitchens, which a growing number of QSRs are using to reach customers in new markets or serve more off-premises orders in existing ones. 

While there’s undeniably something fun about a bright orange touring burger truck, it’s also a fairly practical move on the part of Whataburger. Like other chains, it’s had to pivot more of its business to off-premises over the last several months as well as increase its capabilities around mobile ordering. It’s currently operating dining rooms with limited seating, but with the trajectory of the coronavirus still uncertain (and still rising), it’s not unreasonable to think dining rooms might have to shut down in full again before this is all over.

While it’s not technically a ghost kitchen, the forthcoming food truck more or less serves the same purpose, which is to help the chain reach a wider audience and keep operations going even in the face of unprecedented global crises. According to this week’s announcement, Cruising Kitchens founder Cameron Davies has wanted to build a food truck for more than a decade. With the restaurant industry sitting squarely at the crossings of off-premises, ghost kitchens, and more mobility, now seems the perfect time for a test drive.

Note: The original version of this post incorrectly stated that Cameron Davies was CEO of Whataburger.

August 11, 2020

ShiftPixy Launches Ghost Kitchen Incubator

Gig economy engagement platform ShiftPixy announced today the launch of its Ghost Kitchen Incubator Project, which will provide advice and infrastructure to restaurants wanting to launch and/or improve their off-premises strategies. 

The incubator is part of ShiftPixy’s new Labs offering, which is a suite of marketing and support services designed specifically for QSRs. ShiftPixy says that through it, restaurants can get insights and advice on what exactly they need to operate an off-premises business. Via the Incubator Project, that means access to physical kitchen space as well as ShiftPixy’s technology, which connects restaurants to delivery drivers and couriers.

ShiftPixy differentiates itself from third-party delivery services like DoorDash or Uber Eats by hiring these gig workers (“Shifters”) as W-2 employees and facilitating the connection between them and the restaurant. Meanwhile, ShiftPixy’s tech platform doesn’t act as a consumer-facing marketplace for food delivery. Rather, it powers the back end of restaurants’ native mobile apps.

For those restaurants, the benefits of a system like ShiftPixy’s is avoiding the high commission fees associated with other third-party services and retaining customer data because orders are coming through their own digital properties. 

The benefits of this alternative delivery model are attractive at a time when most restaurants have been forced into doing delivery and other off-premises formats as a means of survival. Ghost kitchens, too, are growing more popular thanks to the pandemic, which has shuttered many restaurants and is now making many rethink how important the dining room is to their overall livelihoods. 

In the QSR realm, ghost kitchens are becoming especially prevalent, with Starbucks, Fat Brands, The Halal Guys, Chick-fil-A, Wendy’s, and an ever-growing list of others either turning their own stores into ghost kitchens or renting space from third-party kitchen providers.

But, as we discussed at length in The Spoon’s recent report on ghost kitchens, not every QSR needs one. And of those that do, the specific requirements for equipment, location, menu items, and other factors will vary from one chain to the next. 

ShiftPixy will undoubtedly address these and other issues through its new Incubator. Company CEO Scott Absher said in today’s press release that “if operators want to survive, they need to re-think their business processes, customer engagement and their approach to real estate.”

ShiftPixy hasn’t yet given full details on the new facility or said if any specific QSRs have yet signed onto the Incubator program. The company says it will “continue to issue updates” in the coming days, so stay tuned. 

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