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Daily news and analysis about the food tech revolution

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Brian Canlis on Leaving an Iconic Restaurant Behind to Start Over in Nashville With Will Guidara

Brian Canlis didn’t expect to be in the restaurant business his whole life.

But as with so many family businesses – especially hugely successful ones like Canlis, which single-handedly put Pacific Northwest cuisine on the map – life and careers happen before we know it.

And there’s no doubt that the brothers Canlis, Brian and his brother Mark, have done a masterful job since taking the reins from their parents (who themselves inherited it from Peter Canlis, who started the restaurant back in 1950). Today, Canlis is as relevant and forward-thinking as ever, a rare achievement in an industry where even the most legendary restaurants often have a shelf life.

So after nearly two decades at the helm, it would have been easy (and expected) for Brian to continue leading the restaurant, enjoying the perks of running a world-famous dining institution perched above Seattle’s Lake Union. Instead, he decided it was time to blow it all up.

“When I became a restaurateur in my 20s, I was single and I tried on the shirt called running this restaurant—and it fit,” Canlis told me on the Reimagining Restaurants podcast. “Twenty years later, I have four small kids and the shirt doesn’t fit in the same way.”

So what does a new shirt that fits his 40-something life a little better look like? As revealed in February in the New York Times, it’s a new chapter in Nashville, where he’s joining forces with his best friend from college, Will Guidara—co-founder of Eleven Madison Park and author of Unreasonable Hospitality—on an open-ended creative partnership.

The two have been close since freshman orientation and even worked together in New York during a brief sabbatical Brian took in 2013. Now, they’re reuniting, potentially for the long-term, but with a little ‘try-it-before-you-buy it’ twist: “We said, ‘Let’s date before we get married’,” Canlis said. “Let’s just work together for a year and see what happens.”

The move reflects more than just professional curiosity—it’s rooted in a desire to be more present as a father and partner, and to explore what work and life can look like when untethered from legacy.

“I started to grow an imagination for what it would look like to have a career where I could be more present to these kiddos every day,” he said. “Where I could exercise a different piece of my brain, and maybe move closer to my wife’s family.”

Leaving wasn’t an easy decision, but it was one supported wholeheartedly by his brother and business partner, Mark.

“He said, ‘You should only be working here as long as you are flourishing as a human,’” Brian said. “‘Our values are only our values if they cost us something.’”

That ethos – prioritizing people over plates – is the red thread throughline of Brian’s journey. Whether it was converting Canlis into a burger drive-thru during the pandemic or hosting wild, pink-painted Barbie-themed fundraisers, the Canlis brothers infused hospitality with heart and a willingness to take creative risks.

Their guiding principle? That a restaurant should be a place where people are inspired to turn toward each other.

“We’re not in the food business,” Brian told me. “We’re in the people business.”

As for what comes next, Brian is embracing the uncertainty. He and Will haven’t put anyting in concrete just yet, just an agreement to explore new ideas and opportunities in hospitality, with Nashville as their testing ground.

It’s a leap. But then again, so was opening the first restaurant in Seattle with a liquor license in 1950. So was putting a fine-dining spot on a cliff above Lake Union. So was painting the walls pink.

Turns out, reinvention runs in the family.

You can watch my full conversation Brian below or find it on Apple Podcasts, Spotify or where you listen to podcasts.

Brian Canlis on Leaving an Iconic Restaurant Behind to Start Over in Nashville With Will Guidara

Meet The Reimagining Restaurants Podcast, and Check Out The First Episode With Wow Bao’s Geoff Alexander

Here at The Spoon, we’ve covered hundreds of restaurant operators over the past half-decade, in part because we love restaurants and restaurant tech, but mostly because restaurant operators are some of the most creative and hard-working entrepreneurs in the food business.

The truth is they have to be. There’s no business changing faster than the world of food service, with the advent of ghost kitchens, digital ordering, automation, and AI, all against a backdrop of high food costs, changing consumer tastes, employee turnover, and more.

All of which is why we’ve decided to start a new podcast focused on entrepreneurs who are finding new ways to run a restaurant in today’s modern world. We wanted to hear their journey into restaurants, hear how they are rethinking how to do business in today’s world, and where they see the restaurant business going in the future.

For our first episode, we knew no one better to discuss approaching the restaurant business in new and innovative ways than Geoff Alexander. The CEO of Wow Bao got his start in hospitality with a college job as a bartender, where he discovered his talent for connecting with people, and he hasn’t looked back.

He joined Lettuce Entertain You shortly after graduation and rose through the ranks over the next three decades, gaining operational expertise and eventually overseeing his own division. In 2009, he took the reins at Wow Bao, where he embraced technology as a way to turn the business around and innovate on new business models. He introduced self-ordering kiosks, mobile ordering, and partnered with third-party delivery platforms early on, which laid the foundation for Wow Bao’s unique model that spans over 500 locations with a mix of virtual kitchens and centralized food production.

Alexander shares insights on Wow Bao’s approach and how a lack of capital fostered a culture of creativity and efficiency. This approach led to successful innovations like centralized production and distribution, which he says has kept cost low while ensuring quality. Alexander also discusses scaling with hot-food vending machines and dipping the company’s toe into the metaverse.

It was a fun episode, and I think you’ll enjoy it. Listen and subscribe on Apple Podcasts or wherever you get your podcasts!

A Tale of Two Ghost Kitchens: Why Wow Bao Wowed and MrBeast Bombed

This week, James Donaldson, known online as MrBeast, sued Virtual Dining Concepts, the company behind his virtual restaurant brand.

In the lawsuit, MrBeast and his legal team claim that “Virtual Dining Concepts was more focused on rapidly expanding the business as a way to pitch the virtual restaurant model to other celebrities for its own benefit, it was not focused on controlling the quality of the MrBeast Burger customer experience and products.”

The complaint goes on to say that low quality products have resulted in thousands of negative reviews and viral social media posts, including this Reddit article which showed photos of undercooked ground beef.

Above: Picture from Reddit post complaining about BeastBurger

Through its lawyers, VDC has dismissed Donaldson’s claims as “riddled with false statements and inaccuracies” and says that he is attempting to use “bullying tactics” to force VDC “to give up more of the company to him” and is using the lawsuit to “undermine the MrBeast Burger brand and terminate his existing contractual obligations without cause.”

While it’s too soon to tell how all this will shake out, there’s little doubt that the Beast Burger brand will suffer from its namesake celebrity creator publicly complaining about the quality of the food. While VDC has shown no intent to relent and shut down the BeastBurger brand, the current trajectory for the world’s most famous virtual restaurant brand doesn’t appear sustainable.

Ever since I first wrote about MrBeast’s growing disenchantment with the BeastBurger project, I started to think back to a conversation I had this spring with Wow Bao CEO Geoff Alexander. Like BeastBurger, Alexander’s company ventured into the virtual restaurant business a few years ago. However, unlike BeastBurger, there is no celebrity discord to deal with, and from the looks of it, Wow Bao’s ghost kitchen business appears to be thriving. In fact, according to Alexander, the company had just expanded its virtual restaurant footprint by over 106 restaurants in about four months, which brings the total number of virtual WowBao locations to over 700 at the time of our conversation.

So why is Wow Bao succeeding while BeastBurger struggles? From what I can tell, the two brands have three significant differences: Quality control, partner monetization, and product niche.

From a quality control perspective, Wow Bao and BeastBurger are very different. Unlike BeastBurger and lots of other virtual brands which rely heavily on its various restaurant partners to source and make the food, Wow Bao simplifies the process by delivering ready-to-steam products to the restaurants.

“We ship frozen products around the country,” Alexander told me. “If you can steam the product, you can make the product.”

That’s right; no cooking burgers, fries, or other foods, no assembling different ingredients with varying results. Hearing Alexander explain it, the Wow Bao model is the restaurant kitchen equivalent of me bringing home a bag of frozen dumplings from Costco and throwing them in my Instant Pot.

Another difference is the monetization model. According to Alexander, Wow Bao’s restaurant partners only pay Wow Bao for the cost of the food, a vastly different approach from many virtual brand management companies that take a cut of the overall revenue (while also leaving the cost of food and labor to the restaurants). After deducting labor and food, the third-party delivery fee, and a cut of the revenue to the virtual brand partner, there’s often not enough of a financial incentive for the restaurant operator (which usually has its own branded business to worry about) to give the love and attention a brand like BeastBurger needs.

The third big difference is product niche. Asian food’s popularity has skyrocketed in recent years but is still somewhat underrepresented in quick service chains compared to more standard American fare. A typical midsize suburb town in the US might have five to ten burger joints and a similar number of pizza places but may only have a couple of Asian restaurants (and often very few fast-casual or fast food variations). Wow Bao’s dumplings and buns are more likely to face less competition on third-party delivery apps than other categories.

Finally, one other difference is worth mentioning: Wow Bao is an actual restaurant chain complete with its own restaurants, while BeastBurger was born in the virtual world as a business concept, built around an online celebrity made famous not by food, but by playing video games and tracking his life via almost daily videos uploaded to YouTube. There’s something to be said for food born from an actual restaurant with an actual menu to one born out of a business plan to create a non-core business brand extension.

Beast Burger’s problems are not unique. Over the past year, it became clear that many ghost kitchen and virtual restaurant brands that rolled out in recent years would likely not survive. After Uber Eats and DoorDash began to more closely regulate and cut back on the virtual brands on their platform and chains like Wendy’s started to pare back their plans for virtual locations, it became clear the end of the wild west era in ghost kitchens was near. Now, with MrBeast’s efforts to shut down BeastBurger, we have what looks to be a definitive end to the first chapter of the ghost kitchen industry story.

The good news is some companies like Wow Bao and Hungry House are showing that there are other ways to operate ghost kitchen models and make it a win-win for both the ghost kitchens/virtual brands and their restaurant partners.

As for Wow Bao, it appears they will soon expand beyond their restaurant business and take a page out of MrBeast’s book by bringing their starting their own packaged goods business. This week, Alexander teased the release of Wow Bao retail products with a post on Linkedin.

Front Of House Takes an NFT Program to Smaller Restaurants

If you’ve ever taken home a souvenir menu or ashtray from your favorite restaurant, you will understand the role NFTs play in the hospitality industry. The same goes for attending a restaurant theme night or local pop-up of a new dining establishment. As Front of House (FOH) co-founder Phil Toronto eloquently puts it, a restaurant establishing a successful NFT strategy is “a beautiful merging of the digital and physical experience.”

Launching on May 18, Front of House (FOH) is a marketplace for NFTs of digital collectibles and experiences for independent restaurants. Co-founders Phil Toronto (VaynerFund), Colin Camac (former restaurateur), and Alex Ostroff (Saint Urbain) represent a mix of people with backgrounds in digital technology, advertising, and the hospitality industries. Initial clients include Wildair and Dame, with upcoming partners such as Rosella, Niche Niche, and Tokyo Record Bar.

The company’s business model is for the restaurant to keep 80% of the sale of digital collectibles. If an establishment uses a collectible as an invite to a unique dining experience, the restaurant will keep all the money from the food event.

Toronto stresses that FOH’s digital collectibles will be the digital analog to buying swag (such as a sweatshirt or tote bag) from your go-to dining establishment. Over time, he adds, the digital representations can grow to become interactive experiences that can be shared and/or enjoyed as a personal keepsake. “It’s a passport of sorts from your favorite restaurant,” the FOH co-founder told The Spoon in a recent interview.

The early adopters of using NFT as a marketing and sales tool are “scrappy entrepreneurs,” Toronto added, who had to get creative to stay afloat during the pandemic. “The commonality is that every restaurant owner interested in our program is entrepreneurial and looking to go outside the box,” he said.

Marketing and being on the cutting edge are only part of it. The impetus for jumping on board the growing NFT trend is about money. In addition to their regular dining business, an owner can collect revenue from digital collectibles, but the aspect with the most upside is creating memorable dining experiences. A key to all the possibilities is to make it simple for the customer to engage. A key to FOH’s success will be what the co-founder calls creating a frictionless experience, making it a little more than a typical eCommerce check-out experience.

“One of the avenues we’d like to explore is ticketed experiences where Front of House will work with a restaurant to buy it out for the night and have a special ticketed experience,” Toronto said. “That experience is sold through a digital collectible that lives on as a memory and a digital ticket stub you can take.”

Toronto said he is surprised that 65% of the customers he approaches get the idea and understand its value but might have a wait-and-see attitude. Once the pioneers prove NFTs successful and more than a “get rich quick” concept, he believes any reluctance will disappear. Also, Toronto commented that the NFT opportunity for restaurants isn’t limited to New York, Los Angeles, and other coastal towns. Given the hospitality business’s everyday issues, the concept will work just as well for Des Moines or any eatery wanting to explore a new business opportunity.

OneRare and Honeybee Burger Partner to Bring Plant-Based Food to the Metaverse

OneRare, the first dedicated food metaverse platform just announced a collaboration with LA-based Honeybee Burger to make plant-based food “more desirable, accessible and available everywhere.”

The vegan burger, founded by former Wall Street execs, is considered a mini-chain in Southern California but has grown in popularity alongside the plant-based movement and is planning to open locations in NYC and Chicago. Honeybee plans to leverage OneRare to enter the metaverse and create a virtual location accessible to anyone around the world.

It’s a good move and one that smaller restaurant groups should watch carefully; as giants like McDonald’s, Wendy’s and Chipotle unveil their proprietary “metaverse” environments that will act like virtual storefronts and communities (Wendyverse, anyone?), taking advantage of already established platforms like OneRare will be important to compete in the fast-casual dining space in the future.

Adam Weiss, CEO of Honeybee commented, “we like to think of Honeybee as an innovator, redefining the potential of vegan food in order to increase the appeal of plant-based dining globally. On the food side, that means bringing new and exciting plant-based products to our customers, including things like Nowadays chick’n nuggets…and also Akua kelp patties, which we were the first QSR to serve. This innovation extends to our business and marketing, where we were one of the first to use Regulation CF to raise funds, and now we want to be one of the first to market in the metaverse.”

For now, Honeybee will use the OneRare “foodverse” to promote plant-based food and sustainable dining and feature an NFT menu created by the vegan chain. OneRare has been busy since raising its first funding round in November 2021, announcing dozens of partnerships with food and restaurant brands along with partnerships with NFT and cryptocurrency platforms.

New Croatian Restaurant Uses Five GammaChef Robots to Make Meals

Typically when we write about food making robots, they fall into either one of two categories: Smaller countertop devices meant for the home, or larger, more industrial robots meant for restaurant kitchens. But a restaurant called Bots&Pots in Zagreb, Croatia, is combining those two ideas and using a number of GammaChef cooking robots to make meals for its customers.

GammaChef, also based in Croatia (and also a former Smart Kitchen Summit Startup Showcase finalist), makes the eponymous robot capable of creating one-pot dishes such as stews, risottos and pastas. The device stores ingredients, dispenses them into the pot, and stirs the food as it cooks. According to Total Croatia News, customers at Bots&Pots choose their meal via touchscreen at one of five GammaChefs inside the restaurant and they’ll be able to see their meal prepared. According to the story, with five robots running, the restaurant can make up to 60 meals per hour. Human chefs at Bots&Pots are also creating new recipes for the robot to “learn.”

We don’t have a ton of other details about Bots&Pots right now. Based on the restaurant’s Facebook page, it appears as though it is in more of a showroom mode, and not quite open to the public yet. A translation of a Bots&Pots Facebook post on August 14 reads “Soon….Zagreb, then the world 🤟😇.” The restaurant also mentions franchising in earlier Facebook posts, so it appears that Bots&Pots is looking to take the concept to more stores in more locations.

What’s intriguing about Bots&Pots is its robot deployment strategy. The restaurant is foregoing one big, self-contained autonomous kiosk (like the DaVinci Kitchen) in favor smaller consumer appliances. This approach could help save money up front, because there is no big installation or training that needs to happen around a large robot. Not needing to build around a big bulky robot also means that as Bots&Pots franchises out, the concept can adapt to just about any real estate because you just plunk the GammaChefs down on some countertops.

Will this be a strategy other restaurants adopt? Could we see other home cooking robots like the Oliver or Nymble’s Julia be used in bulk at eateries? We’ll have to see how the nuts and bolts of Bots&Pots works out.

U.S. Restaurant Foot Traffic Is Up Nearly 50 Percent From January

Foot traffic and in-store visits to food and beverage establishments in the U.S. has increased 48 percent since the start of 2021, according to new research from marketing tech company Zenreach emailed to The Spoon. 

The uptick in restaurant foot traffic seems the natural result of more Americans getting vaccinated and cities and states loosening restrictions around when, where, and with how many customers dining rooms can reopen. (It should also put to final rest earlier speculation that the pandemic killed the concept of the eat-in restaurant.)

Certain cities have seen enormous increases. San Diego, California has seen a 198 percent increase since January 2021, followed by Los Angeles (141 percent), San Jose (141 percent), and Denver, Colorado (129 percent). California had the most increases overall, with The Golden State cities taking five of the top seven spots on Zenreach’s list of increases. At the same time, California is fully reopening its economy today, which could bump its overall number of foot traffic increases even higher in the future. 

Zenreach expects foot traffic to continue increasing for the entire country. “It would not surprise me if nationwide foot traffic reaches a more than 55% lift (since January 1st, 2021) within the next three months.” Megan Wintersteen, VP of Marketing for Zenreach, said in a statement.

Of course, the foot traffic increases come at a time when the restaurant industry is dealing with a major labor shortage that’s making it difficult for businesses to offer the level of customer service they normally would. The restaurant industry is still 1.5 million jobs below pre-pandemic levels, according to the National Restaurant Association. An increase in foot traffic could further increase difficulties in delivering the kind of service customers previously expected when dining out. Unemployment benefits are frequently blamed for the shortage, and many states are now asking for proof of a job search for those seeking unemployment. Larger chains are also responding to demands for safer jobs and higher wages for restaurant workers.

NPD: Shipments of Plant-Based Proteins to Restaurants Up 60 Percent Year Over Year

Shipments of plant-based proteins from foodservice distributors to commercial restaurants were up 60 percent year-over-year in April of 2021, according to new data released by NPD Group today. The stat is another data point illustrating the staying power and appeal of plant-based proteins.

NPD writes that plant-based beef nabbed the largest share of those protein shipments, with the number of pounds shipped increasing by 45 percent year-over-year in April. Plant-based chicken grew by 82 percent year-over-year in April, and plant-based fish is up 72 percent year-over-year. Plant-based chicken and fish are more nascent categories compared with plant-based beef, which would explain their relative dramatic jumps.      

“There has been a lot of public discussion about plant-based beef and meat substitutes, and whether or not plant-based is a fad or a trend,” says Tim Fires, president of NPD’s SupplyTrack said in a press announcement. “But the fact of the matter is, chefs and operators see the plant-based protein category as a flexible option for developing recipes and menu offerings that taste good, and their guests enjoy. Plant-based is now a staple in their repertoire.

Though NPD didn’t specify reasons for the increase in shipments, the two big drivers for this growth in plant-based protein are availability and price. Both Impossible Foods and Beyond Meat, the two biggest players in the beef analog space, have dramatically ramped up production in the past couple of years, which has helped bring prices down and closer to parity with animal meat.

But this increase in shipments of plant-based protein to restaurants is just part of an overall increase in interest and sales of plant-based meat. The Good Food Institute’s latest U.S. market research shows that the plant-based meat category grew by more than $430 million in sales from 2019 to 2020 and the category is now worth $1.4 billion.

Tesla May Soon Open Its Own Restaurant

Tesla has filed a trademark under restaurant services, which suggests the automaker may be finally working to realize its dream of combining its charging stations with an old-school drive-in restaurant concept. The application is currently waiting to be reviewed. 

This isn’t a new idea. As far back as 2018, CEO Elon Musk has said he wants a “retro carhop” where a menu would automatically pop up on a driver’s dash when they parked their car at the restaurant. Roller skates and rock ‘n’ roll would also be included in the package. And these restaurants would, of course, include Tesla charging stations. The company even applied for permits to build this “Supercharger station” in Santa Monica, California.

For the last few years, no work on the project has been done until building applications for said Supercharger station were submitted this year, and the trademark application filed last week. Under the latter, Tesla’s “T” logo would be trademarked for use by “restaurant services, pop-up restaurant services, self-service restaurant services, take-out restaurant services,” according to the application. 

While the name “Tesla” may not automatically conjure images of restaurants, the idea of combining a quick-service eating establishment with a charging station makes perfect sense. Consumers need something to do if they are away from home while having to charge their car. Eating a meal is an obvious activity, and many restaurant chains are already partnering with companies to host charging stations in parking lots.

Whether Tesla concocts its own restaurant concept from the ground up or partners with another brand remains to be seen. 

Eat Just Goes Further Into Foodservice With a Major Canada Expansion

Eat Just, maker of both plant-based eggs and cultured meat, announced a major expansion today that brings its popular JUST Egg product into foodservice formats across Canada. According to a press release sent to The Spoon, that includes distribution at restaurants, hotels, universities, and government and corporate cafeterias.

Foodservice businesses in Canada can now order the JUST Egg — a frozen folded “egg” made from mung bean — through their distributors and sell the product on their menus. The move into foodservice follows Eat Just’s retail debut in Canada, which happened earlier this month. The launch also includes a partnership with Copper Branch, one of the largest plant-based restaurant chains in the world.

Today’s news is also the latest in a string of moves Eat Just has made in the last few months specifically around restaurant distribution. Since January, the San Francisco-based company launched the JUST Egg product at Peet’s and Starbucks in the U.S., and struck a deal with Discos in China to outright replace traditional egg offerings with Eat Just’s plant-based items. 

These partnerships are part of a larger trend happening in the restaurant biz right now as more brands expand the number of fully plant-based meals they offer in response to an uptick in demand from consumers. The ubiquitous breakfast sandwich — sausage, egg, and cheese — is a good example. Previously, only one component (usually the sausage) of that offering was plant-based. Now, restaurants like Starbucks and Peet’s are vegan-izing the whole sandwich, which means other QSRs and fast-casual chains will follow soon. It’s a similar pattern to the original rise of plant-based protein in QSRs that happened a couple of years ago.

However, Eat Just is also developing cultured meat products through its GOOD Meat line, and so clearly has bigger ambitions for the restaurant industry than simply selling its plant-based egg products. At the end of 2020, the company became the first in the world to be granted regulatory approval to sell cultured meat. Actual sale of GOOD chicken bites followed shortly after, at a restaurant in Singapore.

Restaurants will be a major part of cultured meat’s expansion from lab prototype to mainstream staple — a point Eat Just’s CEO Josh Tetrick confirmed to me at a talk last year. So while this rapid expansion into restaurants around the world is good for the company’s plant-based wares, it’s vital for the expansion of its GOOD line. 

That expansion won’t happen immediately, of course. Like any other company making cultured meat, Eat Just will have to gain regulatory approval for every single market it plans to enter with its GOOD products, and it is unclear how long that process will take. However, once said regulatory approval is granted, existing partnerships with major foodservice businesses could give the company a big head start when it comes to cultured meat.

Will We See More Conveyor Belts in Post-Pandemic Restaurants?

Consider the sushi conveyor belt. That wondrous, autonomous carrying mechanism that brought delicious bits of salmon, toro and more, right to your seat. While this used to be a kind of fun novelty (here in the U.S. anyway), with the pandemic forcing restaurants to re-think their operations, could we see more conveyor belts once we eat out again?

Restaurant automation company AUTEC thinks so. Admittedly the company, which makes sushi robots and automated conveyor belts for restaurants, has an interest in pumping up such a concept. But according to an email AUTEC sent to The Spoon, it has seen a 100 percent increase in in-bound interest from not just sushi restaurants, but from bakeries and other types of restaurants as well.

Again, we should take AUTEC tooting its own horn with a grain of salt. But if you strip away the marketing aspect, the idea of restaurant conveyor belts, or any type of rail system that brings food to your table makes sense in a post-COVID world. After all, conveyor belts provide a contactless method of food service.

Granted, there would be some kinks to work out to keep hot food hot and not have it go to waste (no one wants that burger and fries that have been around the track three times already). But we’re already starting to see different types of automated table service akin to conveyor belts emerge in restaurants. At the Country Garden robot restaurant complex in China, food is carried from the kitchen to the table via an overhead rail system and then dropped down by tether to the customer. At Alibaba’s Robot.he restaurant, also in China, automated robots on tracks deliver food directly to a table. The Robo Cafe in Dubai has a similar system of Roomba-like robot waiters for customers sitting at the counter.

We know that many restaurants right now are focused on off-premises eating by expanding drive-thrus and building out ghost kitchens for delivery (FWIW, Burger King plans to add conveyor belts for its drive -thrus). But as the vaccines continue to roll out and people return to eating indoors, we could see more dining rooms outfitted with all manner of high-tech conveyances.

If you’re interested in the future of restaurant automation, you should attend our upcoming ArticulATE food robotics virtual conference on May 18! Get your ticket today!

Report: Restaurant Spending Has Increased for Many U.S. States

Overall restaurant spending in the U.S. is only down 1 percent from from where it was in January 2020, according to new numbers from TOP Data and Zenreach that were emailed to The Spoon.

That increase varies widely, however, with some states spending more at restaurants than they were in January 2020 and some spending less. Washington, Utah, and South Dakota are the top three states spending more, with increases of 26 percent, 24 percent, and 20 percent, respectively. Others experiencing increases include Alaska (19 percent), Alabama (18 percent), and Nebraska (18 percent).

On the other hand, several states are spending significantly less at restaurants than they were at the beginning of the year. Idaho is spending 47 percent less, followed by Massachusetts (41 percent), Rhode Island (34 percent), and California (29 percent).

In many cases (but not all of them), less spending lines up with stricter regulations for restaurants throughout the year. California for example, has had to shut down indoor dining once again in several counties, including LA County and San Francisco. By contrast, South Dakota has imposed far lighter restrictions on restaurants throughout the pandemic, so the spending increase in the state doesn’t surprise.

How these numbers change over the next few months depends a lot on the trajectory of the pandemic. A vaccine may be on the near horizon, but restaurants have much work to do in terms of establishing trust with customers around the safety of eating inside their dining rooms.

“If you can create a safe dining environment, effectively target your best customers, and maintain (or even boost) your marketing spend, the more likely you are to successfully drive customers into your locations and sustain your restaurant business during this challenging time,” noted John Kelly, CEO of Zenreach, in today’s email.

At the same time, some customers now prefer off-premises formats like takeout and delivery, and so restaurants will have to continue developing those channels in order to see more customers spending as we head into 2021.

Finally, overall restaurant spending may be up, but not enough to keep tens of thousands of restaurants — many of them smaller, independent establishments — from shutting down. These are businesses that may not have extra budget to spend on marketing or intricate tech solutions to make delivery more efficient. In order to change this, restaurant spending over the next few months will need to increase at these establishments, not mainstream chains.