December 21st, 2020

How Restaurants Succeed During a Pandemic

Posted in Restaurants, Technology

Learning How 3 Restaurants Have Grown During COVID

How Restaurants Succeed During a Pandemic

There’s no doubt we’ll all take many lessons from 2020, one of which needs to be how restaurants succeed during a pandemic.

This week, we’re highlighting three restaurants that have found ways to not only survive, but even grow during COVID. Let’s see what lessons we can learn from their successes.

Wingstop

Restaurant successes during a pandemic

Image courtesy of wingstop.com

With an over 25% increase in sales in quarter 3 and consistent gains over the year, Dallas, TX based Wingstop has shirked pandemic expectations. Not only are sales up, but they also launched 43 new stores over the year.

One thing that has helped Wingstop stay profitable is their willingness to adapt and innovate. When expected shortages and price increases threatened chicken wing supplies, the company began experimenting with bone-in chicken thighs to much success.

They’ve also tested the idea of launching ghost kitchens if necessary and have continually invested in technology. This has led to the digital share of Wingstop’s sales to rise 62% this year. The company’s executive leadership credits a combination of culture, technology, and old-fashioned product quality for their current stability.

Domino’s Pizza

Restaurants winning the pandemic

Image courtesy of Dominos.com

Domino’s Pizza reported a 17.5% increase in U.S. same-store sales in the third quarter, which was is strongest sales performance in decades. New product launches and innovation played a strong role in Domino’s success. Specifically, the popularity of the Cheeseburger and Chicken Taco pizzas, plus the redesigned chicken wings.

Additionally, their previous investment in ordering technology has paid off dividends during the pandemic. Where many companies had to pivot in order to launch non-traditional methods of ordering, Domino’s already had these pieces in place. Specifically, the “car-side” delivery option has proven extremely popular.

All of this, however, has to be balanced against the higher costs incurred during the pandemic. While sales are up, so are costs, including safety and sanitation, food costs due to supply chain issues, and employee related costs due to increased sick days. Not to mention, mandated early closing times in high infection rate areas. But none of this overshadows the successes of the model put in place.

Fazoli’s

Pandemic restaurant trends

Image courtesy of Fazolis.com

Fazoli’s has shown an incredible trajectory of growth all year, closing quarter 3 with a 14 percent sales increase, 10 percent increase in traffic, and 217 percent increase in online ordering year-over-year. Against the background of the pandemic, these numbers are nearly unbelievable.

CEO Charles Howard credits this success to serving “craveable Italian dishes at an incredible value” with focuses on service and convenience. With that, some credit does go to the introduction of their virtual wing concept, Wingville.

Since the full company launch in October, Wingville has raked in $350,000 at 56 company locations, and franchisees who are offering Wingville experienced nearly $100,000 in sales in November alone.

Common Threads

common-thread

There are a few common threads one can observe from the success of these companies during such trying times.

Portability is Key

With off-premise dining becoming the primary function of restaurants, and the likelihood that it will remain popular, having a product that can maintain quality during delivery is important. Foods like wings, pizza, and pastas are excellently suited to this.

If your food isn’t inherently suited to take-out, it would be worth looking into how the process can be improved or offering a limited menu for off-premise dining.

Familiarity

Pizza, Italian foods, and chicken wings are all popular, ubiquitous items. For a diner, this means there’s low risk for disappointment.

Value

These companies are all providing good quantities of food for a relatively low cost. When this can be done while maintaining food quality and flavor, it’s a win for all sides.

Technology

Finally, all three companies have put a heavy focus on developing technology or partnering with digital leaders to get their foods in the hands of customers. The ability to access and order food easily through multiple platforms ensures customers don’t have moments of hesitation or frustration.

Congrats to Those Making it Happen

We salute you. And we hope that more of our friends and partners can leverage these assets to ensure the stability of their own businesses. We’re all in this together, after all.

Any tips on how to increase sales during a pandemic? Leave a comment below, we’d love to hear from you.

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August 17th, 2020

Takeout Dining: The Next Generation

Posted in Restaurants, Technology

Digital/Physical Hybrid Takeout Dining Restaurants Drive the Future

Takeout dining is set to become the new primary way we experience restaurants. Not only have brick and mortar establishments been upping their takeout game, they’ve also been quietly developing their own unique take out only brands.

Ghost kitchens are not a new topic to us here, however, what we’re going to show you today is how restaurants are using their space to host individually branded digital and physical restaurants in the same space. Let’s see who’s leading the way.

The New Leaders in Takeout Dining

The h.wood Group

Takeout Dining

The h.wood Group, the Los Angeles based proprietors of restaurants like Mason and 40 Love, are launching ghost kitchens out of their restaurants across the state. These digital restaurants include Ela Ela (Mediterranean inspired), Mama’s Guy (homemade Italian), Lilah’s (American classic diner fare), and Beautiful Foods (vegan concept). With a focus on quality and portability, these concepts are aimed to excel.

Brinker, International

Takeout Dining

Photo courtesy of FSRmagazine.com

Brinker, the folks who gave us restaurants like Chili’s and Maggiano’s Little Italy, are trying their hand at the ghost kitchen game with It’s Just Wings. Prepared out of the aforementioned restaurants’ kitchens (with over 1,000 locations), It’s Just Wings will be serving bone-in or boneless chicken wings along with curly fries and decadent fried Oreos. With 11 flavors of wing sauces plus dipping sauces, there’s a fit for every customer.

Smokey Bones

Carryout dining trends

Photo courtest of smokeybones.com

Florida’s Smokey Bones is launching their own ghost kitchen operation called The Wing Experience. TWE caters to those who crave wings and includes 14 different wing flavors on the menu including three flavors not currently available at Smokey Bones locations. But which three I wonder…?

The Madera Group

Takeout dining

Photo courtesy of ladowntownnews.com

The Madera Group is leveraging their kitchens at Tocaya Organica and Toca Madera to launch Burritos Locos. Described as an “indulgent burrito concept,” Burritos Locos offers a range of burritos from classic, to Nashville-fried chicken, to Beyond Meat. Customers have the option to add fries or beer to delivery orders as well. Now that’s a winning idea!

I Wonder Who’s Next?

Certainly, many more restaurants will follow suit in making their physical kitchen shared spaced for ghost kitchen concepts. It’s a great way to supplement the drop in in-person dining without having to add new ingredients and builds. Plus, it’s a great way to expand brand loyalty and innovate at small scale. Can’t wait to see what’s next.

Cheers!

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July 20th, 2020

Ghost Kitchens Are Here to Stay

Posted in Restaurants, Technology

The Next Wave of Restaurant Concepts Opt for Off-Premise

Ghost Kitchens

As global pandemic continues to affect the food and beverage industry, more and more restaurants are looking to ghost kitchens to support their brand.

What is a ghost kitchen? It’s a restaurant kitchen with no dining room that exists solely for the purpose of fulfilling off-premise orders.

This may seem counter-intuitive to most food businesses, who would traditionally want guests to stay longer, ordering multiple courses and conversing over drinks. But that’s all changing now, with safety, convenience, and portability becoming the most important parts of the dining experience.

Restaurants Turn to Ghost Kitchens

Who’s in the Game?

Many national food businesses have been eyeing the ghost concept for years now, considering it’s potential and possibilities of success. In the wake of the global pandemic, rather than scaling back, many are going full steam ahead into development of these concepts.

Famous Dave’s launched a 200 square foot ghost kitchen in Chicago’s West Loop and its success has exceeded the expectations of the owners. Fresh Borders California Pizza executes their menu out of a shared kitchen space with nearly 20 other concepts, all capitalizing on the benefits of the ghost kitchen.

Dallas-based fan favorite Wing Stop launched a ghost kitchen in Garland, TX which requires only about 400 square feet to operate, whereas their traditional operation have a roughly 1,750 square foot footprint. Even brands like Wendy’s and Smokey Bones have joined in.

Other Benefits

Ghost Kitchen Delivery

The model of the ghost kitchen also offers many potential benefits for restaurants. Smaller footprints equal less cost in real estate and insurance. Ordering apps and lack of dining rooms minimize staff needed to execute operations. And scaled down menus, focusing on quality delivery items, means less cost in ingredients and equipment.

And the F&B industry as a whole is finding other ways to benefit. Companies like Kitchen United are building out large kitchen spaces that can house multiple operations in one location. This can mean one central ghost kitchen actually contains a multitude of individual kitchens, customized and tailored to the type of cuisine being made, all under one roof.

Consulting firms are also getting in the mix, helping new concepts develop online storefronts, navigate technology, and creatively minimize expenses. They become especially valuable when maximizing cross-utilization and developing innovative menu design.

Location, Location, Location

 

Ghost Kitchens

Location matters. Ask any business owner. It’s important for businesses to be near their markets for access and delivery. This is another place that ghost kitchens can become a handy tool in the restaurateurs toolbox.

By strategically locating ghost kitchens in high volume areas, businesses can decrease single-store volume and delivery times/distances. So, let’s say you have a pizza delivery company. You could spend the money to set up another store front with branding, imagery, and a place for customers, or you could set up a ghost kitchen that operates to go orders only. Think of the value!

Another strategic benefit is market testing. With smaller ghost kitchen locations you can roll out regional LTOs or test new products in specific markets for a short time. This way you can simply stock a few ghost kitchens with new ingredients and digitally market the new items in specific zip codes. What a great way to gauge your demographic for new flavors and trends!

Should Your Brand Consider a Ghost Kitchen?

It might not be a bad idea. Regardless of what the future holds with the pandemic, consumers are developing new habits around dining out that will be hard to reverse. Plus, the flexibility and diminished cost of operating a ghost kitchen make it a powerful tool in a time where off-site dining is becoming the new normal. Food for thought…

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August 26th, 2019

AI Technology Driving Efficiency in Fast Food

Posted in Consumer Trends, Restaurants, Technology

AI Technology shows strength in fast food testing

AI Technology in Restaurants

Photo courtesy of nrn.com

AI technology has been a conversation starter for some time now. In most cases, it’s in the format of “someday,” or “won’t it be crazy when…?”

Well it looks like that “when” is now. With impressive advances in AI technology over the last couple of years, companies have begun testing in different markets. One of the most popular platforms to test AI technology is currently in fast food restaurants.

Let’s look at how AI is changing the way we interact with food.

AI Technology in Food Service

As of now, four major players in the fast food arena (McDonald’s, Good Times, Chipotle, and Sonic) are either testing or in the process of implementing AI technology into their restaurants. But it’s not in the format one might expect.

AI Technology Fast Food

Photo courtesy of nrn.com

Instead of using the tech for cooking, packaging, or other labor-based skills, it’s being utilized in so-called “soft-skills,” specifically order taking. This use is why this type of AI is dubbed “conversational AI.”

How is Conversational AI Being Used?

Good Times is focusing on using this technology in drive through windows. Its system, lovingly named “Holly,” has shown to be very adept at her job. In the six months of her operation, Holly has reduced customer wait time by seven seconds and her intuitive up-selling has shown a measurable increase in check averages.

AI Technology

Photo courtesy of hospitalitytech.com

Chipotle has found success with their intuitive telephone ordering technology while Sonic begins testing on their drive through system this year. McDonald’s, however, is showing an aggressive push with a slightly different tech. By the end of this year they will have increased the implementation of their AI driven interactive menu boards from 700 to 8,000 restaurants nationwide. The biggest difference in their system is that the boards are not voice operated, but intuitive based on the customers choices.

What’s the Benefit of AI Technology?

The push for AI is coming from the operators’ need to:

  1. Decrease labor turnover
  2. Increase speed of service
  3. Increase accuracy
  4. Allow employees to focus on food quality

By letting AI systems take over ordering and basic customer service functions, employees are freed up to focus on food quality and speed of service. As of now the companies claim that the tech will not replace human employees, instead, it will help them do their jobs better.

There are some additional benefits of AI. It does not get tired, or angry, or sick. Its accuracy is nearly flawless, and is always “friendly,” even when being yelled at.

Limitations

AI in Fast Food

Photo courtesy of engadget.com

At this point some kinks are still being worked out. It’s incredibly important that the technology can actually understand the customer. Therefore, the speech detection portion of the software is absolutely crucial. Regional dialects and accents can add other variables. The adaptive learning portion of the program is essential in overcoming these limitations.

Fail safes have been implemented to help in some of these categories. For example, at any point during a conversation a customer can ask Holly to speak with a “human” or “employee.” However, in the time of its activity only ~1% of customers have chosen to do so. This shows not only Holly’s effectiveness, but also the adaptability of Good Time’s customers to changing technology.

Hello Future World!

It’s official, the future is here. Conversational AI now holds real estate in our pockets, homes, and restaurants. It’s safe to say that the only direction is forward when it comes to AI tech., so we’d better be ready for the changes. What an exciting time to be alive!

Cheers!

 

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