Food Service and Hospitality
2012 Restaurant Industry Preview
It's coming, of that we can be sure.
Resist it; disagree with it; get on board with it; watch it pass you by; but just know that change is always coming. I always find myself meditating on change this time of year when industry reports and forecasts are plentiful. And they all seem to focus around change, in one form or another.
What are the industry trends for 2012? What are the sales forecasted to be? How are consumers feeling about the industry, the economy, or their pocketbooks? The questions take many forms, but we're all interested in what's going to change this year.
Technology seems to be poised to change the world every year. Trust me, as president of a paper company I'm keenly aware of iPads in restaurants, payment kiosks at tables and receipt emails. That change is coming and technology demands respect, along with capital investment.
But this year seems like the real change is taking shape in the form optimism. The National Restaurant Association forecasts real sales growth in 2012 and the Bureau of Economic Analysis reported recently that disposable personal income grew 0.4% in December 2011, positive growth for the fourth straight month.
At NCCO we have also put together an industry forecast which takes a look at numerous industry benchmarks and how the industry is changing. Amidst all the change we're facing in this new economy, it's interesting to note that the factors influencing where consumers spend their money at restaurants-along with how they choose new restaurants-isn't really changing.
Take a look at the report to see more about that along with other trend and sales analysis.
How are you planning on changing or adapting to change in 2012?
Thanks,
Ben
Tablet Technology
I've heard stories about restaurants using tablets for wine lists and for menu selection. Then there are also those restaurants where they are used for payment processing. And I've even read stories where some restaurants have installed tablets table side to handle the entire ordering process so customers only interact with people who seat them and who bring the food.
An article from PC World in September 2011, projects tablet sales to be over 72 million units in 2012, up from over 63 million units in 2011. That makes over 135 million units expected to be sold in two years. And of course the things one can do with a tablet keep expanding as well. I'm both intrigued and troubled by what this means for the restaurant industry.
A tablet can be very helpful in narrowing down the characteristics or type of wine one would prefer, but a sommelier can still help with the final selection. And the server plays a critical role in the meal - suggesting an appetizer or describing the ingredients in an item can't be easily replaced with a menu on the tablet. If I have questions about something who do I ask?
Every one of us has probably complained about bad service at a restaurant before and how it really caused a negative impression on the overall experience. But what about no service? What does that do to the dining experience? With so many restaurant choices these days, owners need to think about how every decision they make affects the customer's experience and their likeliness to return and to recommend.
If you are considering a tablet or two (or more) for your restaurant, you also need to think about how many items you need to sell to make up the cost of the tablet(s). And if you are going to use this as an ordering tool how many sales of high-profit items are you going to miss out on because no one is suggesting them? Another thing to consider is how likely they are to disappear. No one wants to think their employees would steal from them, but it could happen and then, not only are you out the money you also no longer have the tablet.
Now let me be clear - I'm not anti-tablet. In fact they can be very useful in a restaurant for tracking and managing inventory, storing recipes and or even scheduling and any necessary reporting. I just don't think they should be a replacement for people and good service. Paul Motenko, co-founder of Stacked Restaurants LLC is quoted in the January 23rd issue of Nation's Restaurant News about this very subject. He says, "If you're using this technology it has to be for the benefit of the guest." I couldn't agree more.
Where do you stand on the great tablet debate - for or against and why?
New Year's Resolutions
For whatever reason, I am a bit behind on developing my New Year's resolutions. It is always with some trepidation that I start thinking about this. Perhaps it is because I have not completed some of last year's. (I am finally taking off the one about learning to play the guitar!) Beyond that, I think it also has to do with the fact that I don't have any earth-shattering things to add. After all, I am turning 50 this year, and I'm not interested in bungee jumping, running marathons or sky diving, so I need to get comfortable with the more mundane ("Take a walk outside every day"). Here are some of my resolutions:
- Read 10 books this year. Anybody got any suggestions?
- Create quiet space. I heard someone say that "...passionate, purposeful clarity can only be found in silence", and who could not use some passionate, purposeful clarity every so often!
- Have meaningful conversations with each of my children once a week. They are in their late teens or early twenties, so their favorite means of communication is through texting. Somehow, I need more than the 160 characters my plan allows.
- Work out 4 times a week. Walking outside doesn't count...unless I am carrying a bag over my shoulders and it lasts 18 holes.
- Date night with my wife once a month - whether she wants to be with me or not. I need to work on my list of dining experiences for 2012!
What are you resolved to do this year?
Memorable Restaurant Experiences of 2012
As this is the last entry of the year, I thought I'd share some of my favorite dining experiences of 2011. Since I have a tough time remembering what I had for lunch, these are not meant to be full blown reviews, but rather impressions of the experience.
1. Il Gatto (3001 Hennepin Ave, Minneapolis, MN 55408; 612.822.1688) - Sadly, I just learned that this Uptown Minneapolis restaurant closed last week. For years it had been Figlios, but its parent organization, Parasole, rebranded and re-opened it 18 months ago. It made the list this year, because, while eating there with some friends, one of the busboys knocked over a candle on an adjacent table and spilled wax all over my jacket. We had already paid the check, but the manager, in addition to paying the dry cleaning bill, gave us our money back and gave us substantial gift cards for a return visit. Upon our return, they remembered us again and comped our dessert. It's unfortunate they couldn't stay open, but I sure appreciated their hospitality. They will be missed.
2. Heidi's Minneapolis (2903 Lyndale Ave S., Minneapolis,MN 55408; 612.354.3512). Heidi's is another Minneapolis venue that had some issues recently. It burned down about two years ago, but Heidi and her husband, Stuart Woodman reopened it in an old coffee shop. We had been trying to get there for a long time but were finally able to secure a reservation on a Sunday night. The Shefzilla Surprise is the nightly appetizer and it is a work of art. We shared a mini baked sweet pumpkin that was stuffed with crab and shallots. It was TDF. I am so glad they are back!
3. Arguello Supermarket (782 Arguello Blvd, San Francisco, CA 94118; 415.751.5121). This supermarket/deli was the best culinary surprise on a recent trip to SF. They roast their own turkeys daily and use fresh baked bread, so the Roast Turkey Sandwiches are unbelievable. There is limited seating at tables on the street, but Golden Gate Park is two blocks away, so grab some chips and a beverage of your choice and make it a picnic. The succulent taste of that turkey will bring you back again and again.
4. Lucia's (1432 W 31st St, Minneapolis, MN 55408; 612.825.1572) Another Minneapolis staple, but like good wine, this one seems to get better with age. This is where we held my wife's 50th birthday party. And what a party it was. Even though the place was packed when we got there the servers treated us as if we were the only ones in the place. Lucia Watson was an early proponent of the "eat local" movement and always creates an interesting menu. The food was terrific, the wine kept flowing and pretty soon we were the only ones in the place!
5. Cucina Italiana Paprika (110 Saint Marks Place New York, NY 10009; 212.677.6563) Full disclosure: my son is a waiter here, so we may get some preferential treatment, but he has little to do with the ambience or the quality of the food. Those are the work of owner, Egidio Donagrandi. See if you can get a spot at the family table in the back corner and spend a few minutes looking at the table itself. It is a work of craftsmanship worthy of the menu. The Eggplant Napoleon is a great way to start. My son likes the Pizzacchari Valtellinesi with the buckwheat pasta, and while you cannot go wrong with this simple peasant dish, you owe it to yourself to try the Creamy Lobster Macaroni and Cheese. You will not look at the boxed Mac and Cheese in the grocery store ever again. And then you have to get the Panna Cotta to finish it off. This custard is so light and airy; you'll practically float out the door. But be sure you tip the waitstaff before you go!
As I look back at this list I'm struck by a couple things. The first is that while food is important, the ambiance and service are just as important. The second thing that strikes me is I can't say enough about making things right, should there be an issue - check out the number 1 restaurant on my list if you don't believe me.
I'm excited to see what 2012 has to offer and what new places I discover. I'm looking for recommendations so please tell me your most memorable restaurant experiences this year.
Thanks,
Ben
The Holidays and You
With the holiday season upon us, I am reminded of many family gatherings filled with gifts, fun, food and of course, family. With five brothers and sisters there were smiles and frowns, tears and laughs, fights, games and hugs. Now, with family in multiple states and conflicting schedules, our holiday get-togethers are far more subdued, but fun just the same.
This got me thinking about all the people who, for whatever reason do not have friends or family with whom they can gather for the holidays. What do they do for meals? I’m sure some will stay home and cook on their own, but is there anything we in the restaurant industry can do to make people feel like they’re home for the holidays?
There was a great article in the November 21, 2011 issue of Nation’s Restaurant News about this very subject. Managing Editor, Christi Ravneberg talks about her experience Thanksgiving weekend as one of the many people who decided not to go home. There is one sentence that really stood out. She states, “Even though most American’s hunker down at home on Thanksgiving, operators would be wise to remember that there are plenty of people willing to spend money for a little taste of home on Thursday – and the days surrounding it.” The same is true for Christmas, Hanukkah, Kwanzaa or any other holiday you celebrate.
If you already are open on major holidays, some people will want to just make reservations and enjoy the meal, but others might be interested in sitting at a common table with other “orphans” and creating a shared experience. In essence they become family for the day. Or think about offering specials for the weekend that aren’t holiday related. For instance, if guests donate food for the food shelf, you may give them a free drink or appetizer. Regardless of what you decide is right for you, make it a tradition every year and get your staff involved in developing the idea and promoting it to your guests.
Nothing can replace my family’s secret grog recipe (ginger ale, cranberry and orange juice, and a touch of vodka for good measure!) but there are many restaurants I would consider going to on the holidays. I know the food will be good but it’s the extra little things that can make a big difference. I just got a picture in my mind of the movie “A Christmas Story” where the family is forced to go out for Chinese food as that was the only place open. To make it feel more like Christmas, the waitstaff sang Christmas carols. Again, it’s a small gesture but it came from the heart.
I encourage you to read Christi’s article and start thinking about what you can do during the holiday season to make people feel more at home. You can find the link here.
Also, tell me a little about your holiday traditions at the restaurant. I’m looking for places to go.
Happy Holidays!
Ben
The Excitement of the Holidays and 3rd Quarter Data
No time of year is more exciting than the holidays. As Thanksgiving gives way to Christmas preparations, Black Friday warriors line the sidewalks combating fellow shoppers and tryptophan, seeking out deals and looking to stain department stores’ balance sheets black with profits.
Though I don’t participate in the Black Friday festivities, they are a welcome reminder of the season and that, although the economy is certainly still rebuilding, savvy consumers will find deals and kick off the gift buying—and giving—season.
Not surprisingly, the increased retail consumerism leads to the 4th quarter routinely being the most successful quarter for the restaurant industry. But before we get to that, I want to call your attention to NCCO’s Quarterly Industry Analysis for the 3rd quarter. For the last few years NCCO has put together this report in an effort to explore and dig deeper into some of the “whys” regarding the health of the Restaurant and Foodservice Industry. Sometimes the data lines up and makes perfect sense; sometimes things are a little more complicated than that.
And as I go through our 3rd Quarter Industry Analysis I see the best 3rd quarter sales totals since 2003. Yet we also notice data showing significant volatility as expressed in the gyrations of the Nation’s Restaurant News’ Restaurant Stock Index showing industry decline and growth at different points in the quarter. These insights and much more can be found in the report, so take a look at our 3rd Quarter Industry Analysis for yourself. You will gain some deeper insights into the restaurant industry.
How did the 3rd quarter finish for you and what are your expectations for the last month of the year?
Welcome!
Welcome to NCCO’s new blog. I’m glad you decided to stop by and see what’s happening in the industry. Twice each month, on the 15th and 30th, I’ll be posting a new entry discussing key events and activities in the restaurant and hospitality industry that affect you personally and professionally.
You may be asking, “Why am I starting a blog?” And the answer is simple. There is a lot of information out there in a variety of places but to find it you have to go to a lot of different websites. My goal is to find that information for you, summarize and analyze it and report back to you the important parts so you only need to visit one site instead of many.
In addition to consolidating this information, I also want to begin a conversation. I see this as an opportunity to create some dialogue between NCCO as a manufacturer and all the varied stakeholders with whom we interact. This includes our employees, brokers, buyers, distributor sales reps, operators, servers and chefs. I’d like this discussion to encourage, provoke, support and inspire. Hopefully, this interaction will help bring success to those engaged in the hospitality industry.
Let’s talk about the state of the industry. The 2011 restaurant industry--with numerous successes and setbacks—has been a microcosm of the overall 2011 economy. Numerous industry benchmarks from the National Restaurant Association to the US Census Bureau show that 2011 continues to offer success for opportunistic restaurant operators even while the industry remains clouded with uncertain customer behavior.
The second half of 2011 should be looked at with reasonable optimism. For one, third and fourth quarter sales typically outperform first half sales by an average of 2.3%, according to the US Census Bureau. While that is not the kind of robust growth that most of us would like to see, it is a positive indicator upon which resourceful operators will build.
2011 is proving to be not as much about industry and economic recovery, but rather navigating an entirely new industry climate. Consumers are patronizing restaurants more, but they proceed with caution and the result will continue to be slow growth with the potential for minor setbacks based on macro industry and economic news. That means providing great food, even better service and an enjoyable experience is key to keeping customers coming back. I’m curious. How have you focused on customer loyalty this year and what results have you seen?
Ben