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The Spoon

Daily news and analysis about the food tech revolution

outdoor dining

Toast Launches a Winter Recovery Fund for Restaurants

Restaurant tech company Toast today announced a $35 million relief plan for restaurants as winter begins and the pandemic continues to disrupt normal operations. 

The Boston, Massachusetts-based company said today this “relief package” is in response to the status of the RESTAURANTS act, which is part of a larger stimulus plan and therefore currently stalled in Congress. Were it to pass, a $120 billion grant program would be available for those in the restaurant industry impacted by the pandemic. The point, however, is that it hasn’t passed yet, winter is here, and many restaurants are on the brink of permanent closure if they don’t receive assistance.

Toast’s Winter Restaurant Recovery Fund is not near the size of the $120 billion figure of the aforementioned legislation, but it could provide a temporary boost to restaurants in some areas. 

The fund is available to Toast’s current customers. Through it, restaurants can access funding they can put towards winterization (aka, making outdoor dining feasible in cold weather) and working capital needs. They will also receive a one-month software credit for their current Toast tech stack and complementary access to the company’s online ordering, payroll, and marketing products. Finally, restaurant customers will also be allowed to pass their one-month software credit on to another restaurant (that doesn’t have to be a Toast customer) facing greater hardships. 

According to the Toast website, restaurants do not have to take any extra steps in order to activate their one-month credit. For the funding portion of this relief package, restaurants will need to apply.

Toast has been quick to respond to restaurant industry needs brought on by the pandemic. In March, just as COVID numbers were rising and businesses closing, the company launched an initial relief plan and, like others, eliminated software fees for restaurant customers. Over the last several months, it has also released a slew of new products and features geared towards native delivery and contactless order/payments. 

The restaurant industry in all likelihood stills need major assistance from Congress. (Honestly, it probably just needs a bailout.) In the meantime, assistance packages like those from Toast and other restaurant tech companies are able to provide some breathing room and help businesses keep the lights on one more week.

Grubhub Launches a New Grant to Get Restaurants Ready for Winter

Grubhub today announced the Restaurant Winterization Grant, a new program that will provide financial support to restaurants as we move into winter and outdoor dining becomes a challenge in many areas of the country.

Done in partnership with The Greg Hill Foundation’s Restaurant Strong Fund, the program will grant $10,000 to “eligible independent restaurants,” according to a press release sent to The Spoon. The funds are intended to provide restaurants with “additional infrastructure and equipment to extend outdoor dining” along with more personal protective equipment for employees.

Wintertime’s arrival coincides with record highs of coronavirus cases in the U.S. As far as restaurants are concerned, the combination of the two makes indoor dining risky in many cases, nonexistent in others. Up to now, restaurants have been able to offset some of that loss with new developments for outdoor dining plans. Now, businesses will need to innovate on those innovations in order to continue to serve customers without expecting them to eat in the midst of 30-degree temperatures or wintery mixes.

Grubhub’s new program is supported by a $2 million grant recommendation from its Grubhub Community Relief Fund, started back in March as a way to support charitable organizations helping restaurants. 

The new program joins other efforts around the country to winterize outdoor dining. Recently, the city of Chicago held a contest asking residents to redesign the outdoor dining experience for winter. Elsewhere, Washington D.C.’s Office of Nightlife and Culture announced a $4 million grant program to help restaurants cover the cost of tents, domes, heaters, furnishings and other outdoor-dining-related equipment. Grubhub is the first third-party delivery service to dedicate a fund towards outdoor dining.

Those interested in applying for funds can do so starting today through the aforementioned Restaurant Strong Fund. Restaurants located in Chicago, New York City, Boston, and Philadelphia, and which have “five or fewer” locations are eligible to apply. The application period ends Nov. 21, and Grubhub has said funds will be distributed by the end of the month. 

Some NYC Restaurants May Close Again Due to COVID-19

Nine New York City neighborhoods are at risk of having to shut down both indoor and outdoor dining due to rising COVID-19 cases, according to a Sunday press briefing from Mayor Bill de Blasio. Pending approval from New York Gov. Andrew Cuomo, NYC will close schools and nonessential businesses in those nine zip codes, which are in Brooklyn and Queens, starting Wednesday.

The affected neighborhoods are those neighborhoods where the test positivity rate for COVID-19 has been “above 3% for the last seven consecutive days,” Mayor de Blasio told CNN.

The proposal comes just one week after NYC allowed restaurants to reopen dining rooms at 25 percent capacity. If it goes through, restaurants in those nine zip codes would have to return to offering delivery and takeout meals only.

The news is just the latest blow to NYC restaurants, which have taken some of the hardest hits of the industry-wide meltdown brought on by the pandemic. Recently, the New York City Hospitality Alliance said that 87 percent of the 457 restaurants, bars, and nightclubs it surveyed could not pay their rent for the month of August. And at the end of last week, the Alliance released a new report jam-packed with some unsettling stats. As of Aug., employment in the restaurant industry was only 55 percent of its pre-pandemic level from Feb. 2020. Meanwhile, nearly half, or 44 percent, of NYC restaurants have used outdoor seating. It need hardly be said that shutting down that outdoor dining will be another serious blow to business across those nine zip codes.

Offering delivery and takeout bring in some revenue, but as we’ve discussed before, those formats are not yet enough of a lifeline to save a business. In some cases, delivery — an area plagued by controversy and sky-high commission fees for restaurants — can do more harm than good to a business’s margins.

Nor do many independent restaurants have the money to invest in some of the recent developments around off-premises ordering, like GPS-enabled pickup systems, sophisticated digital-ordering technology, and native delivery platforms. Meanwhile, Paycheck Protection Loans are running out, which means so is any hope of governmental assistance. Last week, the U.S. House of Representatives passed the updated $2.2 trillion HEROES Act, which would include $120 billion in relief for independent restaurants. However, it is not expected to be taken up by the Senate.  

Al Fresco Vs. To Go

Outdoor dining: an opportunity to innovate or a yet-another huge expense for restaurants? The whole restaurant industry is pondering this question as we head into fall and start prepping for winter.

I wonder if restaurants might not be better off forgoing the whole debate and instead keeping their focus fixed on their off-premises strategies.

In many cities, restaurants have relied heavily on outdoor seating at a time when dining rooms remain shuttered or can legally only accommodate a fraction of their normal capacity. Some businesses have gotten very creative in their efforts. And that creativity will need to carry them through the next several months of cold, snow, and wintery mixes, when normally no customer would even consider dining al fresco. There’s no telling when dining rooms will be able to operate in full capacity again, and with reports of rising COVID-19 cases, there’s also no way to predict if we’ll have to shut them down completely again.

In response to the uncertainty, some cities are getting proactive about winterizing the outdoor dining experience. The idea is to reinvent the outdoor seating format to make it more comfortable for restaurants-goers to eat outside, despite the weather. This week, Washington D.C.’s Office of Nightlife and Culture announced a $4 million grant program to help restaurants cover the cost of tents, domes, heaters, furnishings and other operational expenses that specifically relate to outdoor dining. Applicants must submit a budget of their planned expenses before they can receive funds. All locally owned businesses may apply, with a few caveats. (Read the full requirements here.)

The grant program follows recent news of Chicago’s Winter Design Challenge, which was accepting ideas for outdoor dining formats and will announce the winners in a few days. Submissions so far have included tents, solar-powered pergolas, heat-reflecting walls, heated tables, and igloos, among other gems.

All of those ideas sound compelling (including the igloo). None are likely to be cheap, which gets to the real issue of winterizing outdoor dining. It’s less a question of whether these solutions would work as it is of how much more money a restaurant would have to pay in order to implement them? That’s to say nothing of the fact that restaurants must first obtain sidewalk cafe permits to even be allowed to serve outside, which is yet-another expense piled on the heaters, furniture, and other creations meant to protect diners from the weather.

I need hardly say that restaurants can ill afford these options at a time when many are struggling to simply keep the lights on. Off-premises formats are not ideal, but they are going to be a better long-term bet for most businesses. For one thing, the numbers around digital ordering, which powers off-premises orders, say as much: 50 percent of consumers are using restaurant mobile apps “more often or much more often” than they were before the pandemic, according to one recent survey. Another found that its restaurant customers “have seen a 782.7% increase in Online Order sales volume growth.”

At the same time, 60 percent of restaurant operators say that their operational costs are higher now than pre-pandemic, according to the National Restaurant Association, and that’s without heated tents or igloos.

As much as I hate to say it, forgoing the question of outdoor dining altogether and using any remaining funds and resources for improving to-go formats seems like the wiser decision. At least for now. Someone may come along with a truly disruptive idea that could reinvent outdoor dining without breaking the bank, but that’s a wish more than a reality right now.

A Fine-Dining Drive-Thru Extravaganza

Speaking of creative concepts. Reservations platform Resy this week unveiled plans for “The Resy Drive-Thru,” a fine-dining drive-thru event that takes place October 15 and 16 at the Hollywood Palladium in Los Angeles. Resy is doing the event in partnership with Amex, which acquired the platform last year.

Ten noted Los Angeles restaurants will host pop-ups outside the Palladium. Guests will be able to drive through this “whimsical labyrinth,” which effectively amounts to a 10-course tasting dinner on wheels. Chefs include Nancy Silverton, Curtis Stone, Nyesha Arrington, Konbi, Night + Market, and Jon & Vinny’s, among others.

From a Resy press release: 

“Each of the chefs will create a never-before-seen dish from their individual kitchens, to be served in sequence to the guests, who will remain in cars for the duration of the experience.”  

I thought the whole thing faintly ridiculous (and pretentious) at first, until I remembered how badly the pandemic has hit the full-service and fine-dining sectors. No, a fine-dining drive-thru won’t solve all the restaurant industry’s current woes. Yes, the event is partially a way for Resy to promote its business. But it’s also another example of the industry being forced to think of new and unusual ways to connect with customers. And right now, we need as many of those as we can get.

Following the event, Resy and American Express will make a donation to chef Jose Andres’ nonprofit World Central Kitchen.

Restaurant Tech ‘Round the Web

Virtual restaurant company Triver Eats and Urge Gastropub & Common House San Marcos opened their first Taco Box virtual franchise this week in San Diego. The concept offers family-style taco bars available takeout or delivery.

Donatos vs. Dominos: Pizza chain Donatos told NRN this week that it operates “a secret innovation hub” near its Ohio HQ, where it tests new foodservice innovations it hopes will eventually benefit the entire food industry. So Domino’s is clearly not the only pizza company-turned tech innovator in town.

Read this: an extensive breakdown of the many ways in which third-party delivery services are decimating the restaurant industry.