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Daily news and analysis about the food tech revolution

restaurants

Report: Foot Traffic to Major QSRs Down by 50 Percent from Start of Year

It’s probably not much of a shocker to learn that far fewer people are venturing inside quick service restaurants (QSRs) these days. There is, after all, a global pandemic that continues to rage across the U.S. But Yahoo Finance posted a story over the weekend with actual data showing just how precipitous the drop in foot traffic has been for a number of major QSR brands.

According to location intelligence service Gravy Analytics, as of December 8, foot traffic to Burger King, Popeyes, KFC, Pizza Hut, Taco Bell, Domino’s, Papa Johns and Starbucks fell 50 percent compared to February 2020. Furthermore, Gravy Analytics reports that foot traffic to Chick-Fil-A, McDonald’s, Wendy’s, Dunkin and Chipotle dropped more than 40 percent compared with pre-pandemic levels.

Obviously the key word here is “pandemic,” which forced big changes to restaurants of all sizes here in the U.S. Early on in the pandemic, restaurants in various parts of the country were forced to close dine-in operations entirely. Though many have reopened, most dining rooms still operate under reduced seating capacity and other restrictions as states continue fighting the virus. [I REWROTE THIS GRAF FOR CLARITY]

Given that fewer people could physically stand and sit inside a restaurant, it makes sense to see the kind of drop in foot traffic that Gravy Analytics reported. And as we learn more about COVID, especially how it travels farther and faster inside restaurants than previously thought, these types of limitations are likely to stay in place until the vaccines are widely available. The question now is, even when the vaccine arrives, will people still want to dine in, or equally as important, will QSRs want them to?

In response to the pandemic, QSRs have been aggressively pivoting away from dine in and more towards drive-thrus and delivery. In the back half of this year, McDonald’s, KFC and Burger King have all announced various plans for future store designs to emphasize pickup and drive-thru operations rather than dine in options. At the same time, the rise of delivery services like DoorDash and Uber Eats means that hungry consumers don’t even need to leave their couch if they want a Big Mac or a Whopper.

With 2020 almost in the rearview mirror (thankfully), and the aforementioned vaccine on its way, hopefully the numbers we see from QSRs and all restaurants will be a lot better.

Restaurants Are Critical to Cultured Meat’s Evolution

This is the Spoon’s weekly restaurant tech wrapup. Sign up today to get the Spoon delivered to your inbox.

This being a newsletter about restaurant tech, I normally spend more time on software and systems than actual food items. Last week, however, the big restaurant tech was the food. 

Eat Just dropped news at the beginning of the week that it had made the world’s first sale of cultured meat (following regulatory approval earlier this month). The buyer? A venue in Singapore called 1880 that’s something of a mix between a restaurant, club, and social enterprise. Eat Just’s GOOD Meat Cultured Chicken made its debut at 1880 this past Saturday, Dec. 19, at a launch party.

The news is historic for both Eat Just and cultured meat. But it’s also a major milestone for the restaurant biz, which will play an important role in helping both consumers and regulators understand why we need (underscore that word) to shift to forms of protein that don’t require things like animal slaughter and deforestation to bring into being.

We’ve long known that dropping animal proteins from our food system is one of the most impactful things humans can do when it comes to preserving the planet. More recently, the United Nations pinpointed increased demand for animal protein as a major driver for zoonotic diseases, including COVID-19. It’s hard to summarize the urgency here in a few sentences, but the call to action very clear at this point: change our diets or barrel straight into a future of mass food insecurity, extinct species, regions (including Singapore) completely under water, and the whole collapse of living systems.

The way to express those points is, quite frankly, not through newsletters like this but through culinary experiences that illustrate frightening stuff while simultaneously providing solutions for what could be.

Speaking to me on the phone this week, Eat Just said it chose 1880 as a launch partner because of the venue’s “focus on the future of food” and mission “to build a better planet.” Working together, the two created a menu for the launch of GOOD that essentially brings to life the urgency around finding more sustainable sources of protein.

About 40 people were invited to a four-course meal designed to be a history of our food system, from foraging to farming to melting icecaps. According to materials sent by Eat Just, “Each of course represent[s] an element of the story told through the life of the red junglefowl, the wild ancestor of domesticated chickens, which is found throughout Southeast Asia and is on the ‘endangered’ list in the Red Data Book, an anthology of Singapore natural heritage.” Providing a culinary representation of what the future could be if we stopped relying on animal protein, the meal culminated with three cultured chicken dishes, each one influenced by a top chicken-producing country: Brazil, China, and the U.S.

Importantly, Eat Just’s cultured chicken will also be available for purchase on 1880’s menu moving forward. (Attendees paid for the fourth course cultured chicken dish at the launch, too.) Even more important, the cost of a cultured chicken dish at 1880 will be around $23 USD, which is on par with regular chicken dishes at that venue and at most other upscale restaurants The feasible price point is huge, since reaching price parity with traditional meat is a major requirement for the evolution of cell-based meat from prototype to dietary staple.

Restaurants are essential when it comes to providing (relatively affordable) experiences with cultured meat because they have historically always played a role in the evolution of the what we eat. Consider the hamburger. As a food item, it’s older than the United States by centuries. But it wasn’t until White Castle opened in 1921 and introduced the world to “the slider” that the burger started down the path to ubiquity and eventually became a standard of diets around the world.

That evolution took the better part of a century, which is to say that cultured meat will not come to White Caste or any other QSR tomorrow. It might not even hit those mainstream outlets next year. But as more cultured meat companies like Eat Just gain regulatory approval and provide culinary experiences and education, more consumers, governments, and food producers will start to better understand why we need it, along with other forms of alt protein, in the years to come. The hope of many is that cultured meat will eventually reach every grocery store shelf and dining table from Singapore to Dickson, Tennessee. To get there we need restaurants first. 

Craving a Better Ghost Kitchen Experience

Speaking of upscale dining, this week Crave Hospitality Group announced it had raised $7.3 million in seed funding for its Crave Collective facility in Boise, Idaho. 

Funding for ghost kitchens is definitely not exceptional in 2020. But as we learned recently when Crave took us on a virtual tour of its Boise facility, this company approaches the model a little differently. Food coming out of Crave’s kitchens is not your average burger-in-a-to-go-box fare. Rather, the company has teamed up with James Beard Nominees and Food Network Champions alike to bring a more upscale flair to the virtual restaurant/ghost kitchen experience. The idea is not to replace fine-dining restaurants where culinary creativity is valued above speed and efficiency. Rather, it’s to give these chefs and their restaurants a chance to reinvent their menus and in doing so hopefully survive the apocalyptic collapse of the an entire industry. 

Crave’s funding news this week is a good sign for full-service restaurants, which have struggled more than any other restaurant type during the pandemic. If investors are willing to bank on one upscale concept for ghost kitchens and virtual restaurants, chances are, they’ll fund more of them in the coming months and in doing so save some jobs and culinary experiences in the process.

Restaurant Tech ‘Round the Web 

In a first for the restaurant industry, the National Restaurant Association teamed up with third-party delivery services to release its Public Policy Principles for Third Party Delivery. The framework acts as a guide for lawmakers, offering best practices when it comes to third-party delivery services.

Burger King teamed up with Google this week to let customers search out, order, and pay for Burger King fare via Google Search, Maps, and Pay. More than 5,000 BK restaurants in the U.S. will provide this service.

For the first time ever this week, Shake Shack made delivery available directly via its own digital properties. Customers with the iOS app can order delivery meals directly from the brand, rather than going through a third-party platform. That said, Uber Eats is onboard as the exclusive handler of the last mile for this program.

Re-Blog: David Chang Talks Moneyballing Restaurants and Melted Cheese

At the risk of tooting our own horn here, I kinda feel like David Chang should read The Spoon.

The famed chef/restauranteur/TV personality was back on The Bill Simmons Podcast this week. The last time Chang was on there (if I recall correctly), it was at the very start of the pandemic, and the more pressing concern at that time was how third-party delivery services would decimate the restaurant industry (a topic we cover quite a bit!).

Normally, we wouldn’t write about someone’s appearance on another podcast, but since we started the pandemic with Chef Chang, I thought it was worth checking back in as we close out the year to hear what he had to say about the restaurant biz with the pandemic still in effect nine months later.

As we’ve been saying for awhile, winter is coming here, and Chang’s biggest fear for restaurants is their ability to survive until Spring. In addition to a lack of dine-in options, restaurants are also being hurt by the disappearance of downtown office workers/restaurant customers that are no longer coming in to work on a daily basis and buying sandwiches. All of this, Chang continued, is compounded by an administration that isn’t doing anything to help the industry or the people who work in it.

In order to survive, Chang said on the podcast restaurant owners need to adapt, whether that’s by selling packaged goods (homemade sauces, spices, etc.), or Moneyballing their menus. As Chang suggests (and we’ve covered before), restaurants may need to embrace analytics and pare down their offerings to just the dishes that are good for delivery and that generate the most revenue.

As the two talked about how restaurants will change, how owners won’t put a lot of effort/energy in the dining rooms and will focus more on setting themselves up for delivery. What struck me as I listened to Chang was that he didn’t once mention ghost or dark kitchens. He obviously knows what they are (I mean, he sold his delivery-only concept, Ando, to Uber).

Maybe the Bill Simmons podcast isn’t the place to discuss such matters, and maybe Chang talks about it on his own podcast. I get that. But it was still odd that the topic didn’t even come up, especially since they are in Los Angeles, which is home to ghost kitchen outfits Kitchen United and CloudKitchens (for more, check out The Spoon Plus Guide to Ghost Kitchens).

The conversation between Chang and Simmons drifted to restaurant delivery. Instead of talking about the economics of delivery this time around, the two soft-balled it and spoke more about the types of food that deliver well again (pizza, sushi, Chinese, fried chicken). One funny sidenote was dispelling the notion that cheese was good for delivery. Outside of pizza, Chang commented, melted cheese dishes do not travel well in delivery, which, I hadn’t thought about but is totally true. I mean, Soggy Food Sucks.

Ultimately, what struck me about the interview was that nobody, not even a famous high-end chef who won Who Wants to Be a Millionaire (and donated the money to restaurant workers), really has the answers as to what’s going to happen next with restaurants, especially independent ones. Everyone is just doing their best to just make it through, and we at The Spoon doing our best to inform you about developments and innovations that can help. Even if it’s as simple as getting dropping melted cheese items off the menu.

Phood Raises $2M in Seed Funding to Fight Food Waste

Phood, the New York City-based startup that uses a combination of weight scales, computer vision and AI to help foodservice operators reduce food waste, announced today that it has raised a $2 million Seed round of financing. The round was led by New Stack Ventures and Story Ventures. This brings the total amount raised by Phood to $2.1 million.

Phood’s technology helps foodservice companies better understand and optimize how their food is being used. As we wrote earlier this year about the company:

There are three parts to the Phood system: a scale, a camera and a software backend. Food is placed on the scale either before going into a dish (to see how much is being used to make meals) or afterwards (to see how much waste is being generated). There’s a camera mounted above the scale that uses AI to automatically identify what each food item is.

The company’s system also connects with a restaurant’s POS and inventory management software to track what particular items are being used and who supplied them. So, if a cafeteria ends up with a lot of extra brussel sprouts, Phood tells the manager to adjust the business’s purchasing.

On its face, food waste is a huge problem because it means food has been, well, wasted instead of consumed, especially during a time when there are so many in need. Food waste is also an acute problem for restaurants, which already operated under thin margins coming into the pandemic. Now with dining rooms going through a second round of closures, restaurants need to get the most out of every dollar spent and literally can’t afford to let food go to waste.

Thankfully, there are a host of companies fighting the good fight against food waste all along the supply chain. Both Winnow and LeanPath offer similar services like Phood’s to help restaurants manage their food usage and inventory. Restaurant supplier Choco recently held a pop-up event in L.A. challenging chefs to come up with foods based on by-products. And earlier this month the nonprofit ReFed launched a $10 million fundraising campaign to help fund projects that reduce waste in the supply chain.

If you want to learn more about the problem of food waste, and what companies are doing to combat it, check The Consumer Food Waste Innovation Report over at our Spoon Plus membership service.

Outsource the Turkey, Help a Restaurant

The whole “Thanksgiving-to-go” concept used to be the territory of just a handful of restaurant chains — the Bob Evans and Cracker Barrels of the world, for example. That, of course, was pre-pandemic, and now that the CDC has told Americans not to travel on Thanksgiving and the whole “home for the holidays” phrase has new meaning (like, you’re literally stuck at home), restaurants of all types and sizes are offering up their own take on the Turkey dinner.

At one point in the not-so-distant past, I might have thought Thanksgiving in a box was a bit bleak. But let’s be real: it’s been a stressful, scary year. People are alone and lonely, many are struggling financially, and the ever-present threat of the pandemic hangs over everything. Rather than spend hours in the kitchen cooking too much food for too few people, check out some of these restaurants, which are ready to do the hard work for you.

The Classic Thanksgiving Meal. You’ll find the old standards in this category: Cracker Barrel’s famous Heat&Serve Thanksgiving, Denny’s Turkey & Dressing Dinner Pack, and Boston Market’s takeout Thanksgiving (which, for the record, I’ve actually had and it was delicious). Thrillist has a big ol’ list of other restaurants here. There’s nothing fancy or unique about most of these options, but if you’re dead set on a turkey dinner but don’t want to deal with cooking it, these options are your best bet.

The Plant-Based Thanksgiving. Demand for plant-based foods has skyrocketed this year. It follows, then, that many restaurants around the country are offering 100 percent vegan takes on the Turkey Day dinner. VegNews has rounded up some notable ones here that include California’s Cafe Gratitude, the Veggie Grill chain, and many other restaurants, both local and national. 

Higher-End Thanksgiving to Go. If the industry-wide shift to off-premises has taught us one thing this year, it’s that even high-end food can be put in a box and delivered to your door. In keeping with that, a number of higher-end restaurants are offering Thanksgiving feasts to go. Some notable ones include Chart House, Fleming’s, and McCormick & Schmick’s.

Not-Thanksgiving Thanksgiving. Or you could just be totally over it all and have no inclination whatsoever to celebrate this year. Can’t say I blame you. For the usual QSRs and fast-casual joins, from IHOP to Sonic and every McDonald’s in between, Thursday will be business as usual.

Go Local. One quick glance on Twitter shows the sheer number of small, independent restaurants offering some kind of service on Thanksgiving. Encouragingly, there’s also an unbelievable high volume of tweets from folks that are ordering from these establishments in order to show their support.

An added bonus of ordering in for Thanksgiving instead of doing it yourself: most of these restaurants need the revenue. With no end in sight to either the pandemic or the struggles eating establishments face as they struggle to keep the lights on, the more support they can get on Thanksgiving, the better.

Upcoming Event: Food Waste Strategies for the Supply Chain

Restaurants are one stop along the food supply chain where a whole lot of food gets wasted. For restaurants, there are financial consequences to so much waste; for the entire world, there are environmental and human ones.

On Monday, November 30, The Spoon will be holding a virtual fireside chat with Apeel founder and CEO James Rogers to discuss how this waste happens and what we can do to stop it. That goes for restaurants as well as grocery stores, farms, distribution centers, and your own fridge.

Join James and myself on the Hopin platform at 2 p.m. PST that day to be a part of the discussion. You can register here.

And oh yeah, it’s free!

Restaurant Tech ‘Round the Web

Chick-fil-A officially made ordering via its website available after tests in the Baltimore, Maryland, and Washington, D.C. this past summer. Those that can’t or don’t feel inclined to download the chain’s app can now order digitally through the brand’s website.

Papa John’s is the latest restaurant brand to employ an AI-powered voice assistant to answer the phone. The chain will use AI company Kea’s platform, which can learn a restaurant’s menu as well as take orders, answer questions, and even upsell items. 

Washington, D.C. is allocating $35 million in COVID-19 recovery grants to restaurants as part of the city’s $100 million “Bridge Fund” for the hospitality industry. D.C. restaurants are still open, though Mayor Muriel Bowser suggested new restrictions could go into effect soon in response to the pandemic. 

UPDATED: McDonald’s to Create its Own “McPlant” Burger, with an Assist from Beyond Meat

UPDATE: After publishing this post, McDonald’s sent us the following:

  • In the same way McDonald’s does not run its own farms, we are not manufacturing our own plant-based meat for the McPlant platform; we will rely on our suppliers, the third leg of McDonald’s three-legged stool (which includes the company, franchisees and suppliers)
  • Beyond Meat was our testing partner for the P.L.T. plant-based burger in Canada
  • We have not announced which suppliers we will work with on McPlant

In its corporate blog post announcing the McPlant, McDonald’s wrote:

Last year, with those customers in mind, we tested our first plant-based burger in select restaurants in Canada. Based on what we learned and an encouraging response, we’re excited to give you a sneak preview of the McPlant – a delicious plant-based burger crafted for McDonald’s, by McDonald’s, and with the kind of craveable McDonald’s flavor our customers love.

In fact, we think our culinary team nailed it. There are other plant-based burgers out there, but the McPlant delivers our iconic taste in a sink-your-teeth-in (and wipe-your-mouth) kind of sandwich. It’s made with a juicy, plant-based patty and served on a warm, sesame seed bun with all the classic toppings.

Does this mean, Beyond could be a supplier for the McPlant? We’ve reached out to McDonald’s for further clarification.

UPDATE 2: Well this tale of two tweets certainly clarifies the situation. Beyond will be helping McDonald’s with its McPlant:

Original post follows:

McDonald’s announced today that it is creating its own line of plant-based meats dubbed, appropriately enough, “McPlant.” The McPlant will begin testing in markets next year and will be applied to both beef and chicken substitutes.

There’s been a big question mark around what McDonald’s plant-based strategy would be. Sales of plant-based meats have surged over the past couple of years, making the potential flexitarian market undeniable. While QSRs like White Castle and Burger King have rolled out versions of their burgers with Impossible Foods,McDonald’s has been relatively quiet about any forays it might make, at least here in the U.S.

After some tests with Beyond Meat in Canada, and the fact that a former McDonald’s CEO sits on Beyond’s board, there was speculation that Beyond would become Mickey D’s plant-base burger provider of choice. But that turned out to not be the case and McDonald’s decided to develop its own product internally. (See update above for clarification provided after this post went live.)

Having a heavyweight jump into the faux meat space could be a rising tide that lifts all plant-based boats. One Marketplace estimate from a few years back suggested that McDonald’s potentially sells more than 2 billion burgers a year. If the company can even convert a small percentage of its customer base to a plant-based alternative, that could spur those same people to seek out and buy more plant-based meats from their grocers and elsewhere. Getting millions of people to reduce their meat intake would also have benefits to the environment and our planet.

We are in a golden age of meat alternatives, with the likes of Impossible, Beyond and more developing products that are closer and closer to the real thing. Now the question is, can the golden arches push the whole plant-based sector forward?

Uber Eats Adds Contactless Order and Payment Methods for Dine-In and Takeout

Uber Eats has turned on some new contactless ordering and payment methods according to a story out today in USA Today. The new “Uber Eats Contactless Order Feature” aims to reduce the amount of human-to-human contact for people dining in restaurants or picking up their food.

Customers can either scan a special QR code at participating restaurants or find the restaurant in the Uber Eats app to order and pay for meals. For those eating at the restaurant, the food will be brought out to your table. Those choosing takeout can schedule a time to pick up their food.

The food pickup option is available nationally starting today, and the food delivery to your table for dine-in customers is available at now in Indianapolis, Boston, Chicago, Philadelphia, Vermont, Atlanta, New York City and Washington, D.C.

Adding these types of contactless features is the latest in a series of moves Uber has made to adapt to the new normal caused by the COVID-19 pandemic. In addition to implementing contactless delivery, Uber also launched a pilot program that lets its restaurants accept pickup and delivery orders directly through their own websites with no added commission fee for the rest of the year, created a voucher program so companies can buy remote workers lunch during meetings, and developed a mask verification feature for its delivery drivers.

Uber is far from alone in adapting its product to support and accelerate a more contactless meal journey. In fact, any business that has any sort of relationship with a restaurant is getting into the contactless game. Holo Lens makes holographic interactive menus. Order for Me, BBot and even Apple are just three of the many companies with mobile payment solutions, while Keenon Robotics and Bear Robotics are creating robot servers to bring you your food.

As the pandemic continues, contactless payments and delivery will just become table stakes for any restaurant, and we are bound to see even more announcements like this from Uber and others in this space to accommodate.

Pudu Robotics Raises $15M in Series B+ Round

Chinese delivery robot company Pudu Robotics (aka Pudu Tech) announced this week that it has completed a Series B+ round of nearly $15 million in funding. The round was led by Sequoia Capital China with participation from existing investors Meituan, Everwin Investment, QC Capital, and Chengbohan Fund.

Pudu makes self-driving restaurant server robots equipped with racks of trays that can shuttle plates of food and empty dishes to and from the kitchen.

This B+ funding comes on the heels of Pudu Robotics’ Series B fundraise of $15 million, which the company announced on July 1 of this year. The B+ round brings the total amount of announced funding raised by Pudu to roughly $30 million. (Crunchbase lists prior Series A, Seed and Angel rounds of undisclosed amounts.)

According to today’s press announcement, Pudu’s robots have been sold to more than 20 countries and regions around the world. Earlier this month, Pudu announced that the Muhguri restaurant is Sokcho, South Korea now had 11 Pudu robots serving food to customers.

Pudu is certainly not alone in creating a new robotic labor force for restaurants. Other players in the space include fellow Chinese company Keenon Robotics, California-based Bear Robotics, and South Korea’s Woowa Bros., which has partnered with LG for server bots.

Pudu said this latest funding would be used to expand its market. The money is coming just as the global pandemic has restaurants reassessing their dine-in businesses. Server robots like Pudu’s remove one possible vector of human-to-human viral transmission, and come with the added benefit of not getting sick themselves.

While that may be good news in terms of not spreading the coronavirus, the increased use of robots means fewer jobs for humans. A recent survey from Aaron Allen & Associates found that more than 80 percent of restaurant jobs could be automated, with the majority of them being server positions.

That stat, of course, brings up a host of other societal issues, but right now, most people are pre-occupied with the more immediate pandemic-related problems.

Yelp: 60 Percent of Closed Restaurants Have Shuttered Permanently

Today, Yelp released its Q2 2020 Economic Average Report, which tracks business closures (temporary and permanent) to analyze how industries like retail foodservice are being impacted by the ongoing pandemic. Sadly, the latest findings around the restaurant industry are nothing to celebrate.

According to the report, which The Spoon was sent a copy of, the restaurant industry surpassed retail in having the highest total business closures. Of those closed restaurants, 60 percent are shuttered permanently.

From the report:

“As of July 10, there have been 26,160 total restaurant closures, an increase of 2,179 since June 15. Of the all closed restaurants in July, 15,770 have permanently closed (60%), accounting for 2,956 more permanent closures, a 23% increase since June 15.”

The report also notes that “Overall, permanent closures have steadily increased since the peak of the pandemic with minor spikes in March, followed by May and June.”

At the same time, however, consumer interest in restaurants, bars, wineries, and other food-related businesses is returning to pre-pandemic levels, according to the report. That makes sense, as we’ve all been cooped up at home for months now and more people are eager to resume their normal activities outside the house.

Those “normal” activities, though, seem like an increasingly bad idea, as Yelp noted a statistically significant correlation between an increase of consumer interest in restaurants, bars and nightlife, and gyms in May and an increase in COVID-19 cases in June.” Once the data for July comes in, I doubt much changes. 

In the restaurant biz, that could mean more permanent closures, and it’s not hard to see why. Restaurants have historically operated off extremely thin margins. And even before the pandemic hit, the move to off-premises orders was steadily gaining momentum with delivery, drive-thru, and other to-go-centric formats. Restaurants that have historically never had to focus too heavily on the off-premises side of things now find themselves in a position where they must offer these formats or risk going out of business. Even when they do, the logistics, not to mention the cost, of doing off-premises can be so burdensome it can in some cases cause more harm than good.

How many states have to follow California’s lead and re-close parts of their economies will further impact the number of permanent restaurant closures over the next few months, and probably for the rest of the year. The hope is that by the time Yelp releases its Economic Average Report for Q3, the numbers for restaurants won’t be so dire. At this point, though, that hope is far from certain.

Good Eggs CEO Thinks with COVID the Line Between Grocer and Restaurant Will Continue to Blur

There has been pretty much nothing but bad news for the restaurant industry since the COVID pandemic went global. In-store dining widely shut down (then re-shut down), third-party delivery services have continued their parasitic practices, and an alarming number of restaurants have permanently closed.

But in this crisis, Bentley Hall sees an opportunity for restaurants — in the grocery aisle. Hall is the CEO of Good Eggs, an online grocer serving the Bay Area. I spoke with him by phone last week, and during our chat he explained why he thinks we’ll see more restaurant food pop up at grocery stores.

“There’s no reason that the top ten restaurants in a category can’t have SKUs on Good Eggs,” Hall told me by phone last week. “Send us a pallet of your best meals!”

Hall said he has a number of friends who own restaurants and added that they all have kitchens and staff that want to work. Food delivery is a lifeline, but with the high commission fees, it’s also a bit of a double-edged sword for restaurants.

A grocery store like Good Eggs can place bulk orders for either prepared meals or meal kit components. So, for instance, Taqueria X could bundle up its tortillas, sauces and slow-cooked pork as a taco kit and sell it via Good Eggs. That may not have the same satisfaction as getting one fully prepared and brought to you, but you’re still helping out the restaurant (without the commission fees), and not all food delivers well, or as Hall put it making that taco at home is “better than taking a taco that was cooked an hour ago.”

These types of kits can also extend to bars, which are going through as bad if not worse times than restaurants. After all, being at the bar is more important than what is being imbibed at a bar. Hall said that through Good Eggs, bars can put together cocktail kits for sale, providing at least some revenue while they are shut down.

Another reason Hall likes restaurants as food suppliers is their ability to ramp up production. Restaurants are used to adapting to rushes of demand, so if Good Eggs has a run on a particular item or meal kit, it’s easy to pick up the phone and ask them to crank out more that same day.

This blurring between grocery and supermarket has already been accelerated by COVID. Restaurants have been turning themselves into grocery stores, H-E-B started selling food from local restaurants in April, and Cheetah added prepped local restaurant meals to it grocery pickup service last month.

For its part, Hall said that Good Eggs has doubled its revenue and added 400 new people to its headcount in the past 90 days. The long-term ramifications of the pandemic have yet to be seen, but between the surge in online grocery shopping and the decimation of the traditional restaurant biz, it’s a good bet that we’ll be seeing more restaurant items for sale at your grocer of choice.

Some States Halt Re-Opening, Bars Ordered to Shut Down

Twelve states have stopped their former plans to re-open businesses amid continued growth and record setting numbers for coronavirus infections. Florida and Texas have shut down bars, and Texas also reduced capacity at restaurants from 75 percent to 50 percent. California ordered bars to shut down in seven of its counties, including Los Angeles county.

As CNN reported over the weekend, states halting their re-opening plans include Arizona, Arkansas, Delaware, Idaho, Louisiana, Maine, Nevada, New Mexico and North Carolina. Washington state also announced over the weekend that it is not moving into phase four of its re-opening.

Coronavirus cases continue pretty much unabated across the U.S., with a record 44,726 new cases reported last Friday.

The restaurant industry has been decimated by the pandemic As my colleague, Jenn Marston wrote last week:

As of June 15, roughly 140,000 businesses were listed on Yelp as closed. While retail got hit the hardest, restaurants came in at a close second, with 23,981 businesses closed. And here’s the kicker: more than half — 53 percent — of those restaurants currently closed won’t reopen, according to Yelp.

For most restaurants across the country, re-opening dining rooms meant fewer tables spaced further apart, as well as a host of other guidelines such as disposable menus and servers wearing face masks, all meant to help prevent the spread of the coronavirus.

And there’s some indication those measures were working in bringing people back. While restaurant sales were down year-over-year, NPD data showed that they sales were growing, even as cases of COVID spiked. From a recent NPD press release announcing the firm’s latest findings:

For the week ending June 14 total major restaurant chain transactions are down -12% versus the same week a year ago, which is -1% below the previous week but the ninth consecutive improvement year-over-year, reports NPD. Quick service restaurants still managed to improve slightly to -11% versus year ago compared to -13% the previous week. As dining rooms reopen, full service restaurant chains continue to have the strongest improvement in customer transaction declines, having a week-over-week gain of 12% in week ending June 14, moving up +6 points on a year-over-year basis to -26% versus year ago.

It’s too soon to say how high the number of COVID-19 cases will reach over the next few weeks or how many more restaurants and bars will have to close again as a response. Offering takeout, drive-thru, curbside pickup, and other off-premises channels was a small lifeline to businesses during nationwide shelter-in-place mandates. Restaurants large and small are being encouraged to continue keeping their focus on these areas, in the hopes that off-premises will help them keep the lights on if dining rooms are once more forced to close. 

Square Launches New Service So Restaurants Can Take Delivery Orders Directly

Payment processing company Square announced today the launch of its new On-Demand Delivery for its customers using the Square Online Store. The service allows restaurants and other sellers to take and fulfill delivery orders directly through their own websites, rather than going through a third-party delivery service.

Off-premises eating had been a growing portion of the restaurant industry’s revenue before the pandemic hit. Once restaurants were forced to close down dine-in operations out of COVID-19 concerns, delivery and curbside pickup became the only way restaurants could stay afloat.

But typically if restaurants want to offer delivery, they need to sign up for a third-party delivery service like DoorDash or Uber Eats. Those third-party delivery services charge high commissions and fees that basically gobble up most of the money a restaurant earns and drives up the price for consumers.

Square is letting restaurants bypass some reliance on those third-party delivery services by letting restaurants accept delivery orders directly on their own websites. From a Square blog post today announcing the new feature:

When an order is placed on the seller’s online store, a courier from the restaurant’s delivery partner is dispatched to the business location, picks up the order, and delivers it to the buyer. The buyer receives text updates with links to live maps to track delivery progress. Sellers pay a flat fee of $1.50 per order to Square, plus a fee to their delivery partner that is calculated in real-time based on distance and other factors. Sellers can pass this fee entirely to the buyer or offer custom delivery promotions. When applied across hundreds of delivery orders each month, sellers can save a significant amount on per-order costs.

There are some devils in these details. For instance, Square’s On-Demand delivery is now powered by Postmates, which itself a third-party delivery service (Square says more courier services will be added). Per Square, the restaurant is still paying Postmates a fee “based on distance and other factors.” The question then is, how much cheaper is it for a restaurant to take the delivery order directly and just use Postmates as a courier than it is to take orders via Postmates? Because part of what you pay for with a third-party delivery service is access to their large marketplace of customers looking for something to eat. Will abandoning third-party services save enough money?

Regardless, this is another example of the continuing evolution of the restaurant industry trying to navigate this pandemic and beyond. Third-party delivery services were a hero, then the villain. Restaurants that had once outsourced delivery are now looking to bring it back in-house, or create some type of hybrid solution.

Square’s On-Demand feature is more fuel for even more change.