3 priorities for a post-pandemic restaurant industry

The following is a guest post from Manik Suri, Founder and CEO of Therma, a tech startup that creates safety and sustainability tools to eliminate food waste, energy inefficiency, and refrigerant emissions.

Just over a year ago, restaurants were closing, laying off staff, and waiting for the pandemic to pass. This unprecedented crisis has catalyzed the worst economic crisis the restaurant industry has ever experienced.

In March, Datassential report that more than 10% of American restaurants have closed permanently since the start of the pandemic, or 79,438 restaurants out of the 778,807 in operation since the start of the crisis. Jhe average income of an establishment fell by around 36% between March and December 2020, according to Bloomberg.

At the same time, industry costs have skyrocketed. Food cost increased by 38% during the pandemic, Business Insider reported in Juneeven as much restaurants have spent large sums renovate buildings for more security occupation. Unfortunately, even as pandemic restrictions ease, many people remain reluctant to eat out, meaning the industry is likely looking at a slow recovery once operations return to normal. In other words, the restaurant industry shouldn’t wait for a return to normal. Instead, this unique moment is an opportunity to rethink their operations, developing new sustainable business models that allow them to remain agile while responding to the changing conditions of the world around us.

For restaurant businesses looking to thrive in the year ahead, here are three ways to rethink their operations today.

1. Reduce costs by reducing food waste

Food costs can be about a third of the cost of running a catering business, and protecting this valuable asset is an easily accessible way to improve profits. As the restaurant industry tries to do more with less, companies can optimize their resources while reducing waste and promoting sustainability.

Every year the food industry waste 1.6 billion tons of food, accounting for a third of the world’s food supply each year. This widespread problem occurs at every point in the supply chain with incredible costs and environmental implications. JThe Food and Agriculture Organization of the United Nations and the World Resources Institute estimate that food waste accounts for 8% of global greenhouse gas emissions and represents a $1.2 trillion opportunity to increase profitability.

Catering businesses can significantly reduce waste by targeting on-site food storage solutions. Power outages, equipment malfunctions, refrigeration failures, old equipment, and human error all contribute to food waste.

Rather than accepting these issues as an inherent cost of doing business, restaurants and other industry members can use these causes of loss as sources of margin improvement. By investing in better processes and technologies, companies can reclaim money that stays on the table.

Notably, the advancement and proliferation of Internet of Things (IoT) connected devices creates the potential to monitor all kinds of physical assets, including food products and their storage containers.

For example, using IoT technology to monitor refrigeration appliances throughout a supply chain can ensure food is stored optimally while optimizing metrics to make storage more efficient and effective. Likewise, IoT inventory tracking makes traceability more accurate, creating new security measures that can reduce the amount of food lost due to inventory recalls or security issues.

Additionally, IoT devices in smart kitchens monitor water flow, temperature, and pressure to reduce overall resource waste. In total, some estimates expect IoT technology could reduce food waste by 20% over the next four years and 50% by 2030.

It’s good for restaurant businesses and the environment, as it’s a more sustainable way to operate in a post-pandemic environment. By doing so, restaurants and other industry members can save money while promoting public and environmental health.

2. Improve energy optimization

While food waste represents a significant cost for restaurateurs, energy expenditure also offers an opportunity to improve margins. Restaurants spend up to 5% of their operating budget on electricity. Even incremental progress can have a significant impact on the bottom line.

For example, a report found that a 20% reduction in energy consumption results in the same net profit as a 5% increase in sales.

In some ways, reducing energy consumption is an inexpensive proposition, as simple measures like turning off lights, fans, and other appliances when not in use can reduce electricity costs. However, with over 40% of the restaurant’s energy expenditure from the coldimproving metrics in this category can have an outsized impact on profitability.

While investments in new technology-equipped refrigeration units will reduce energy consumption, restaurateurs can equip existing appliances with IoT sensors to ensure refrigeration levels are optimized, doors and gates remain closed. and that the units remain operational. When Coupled with dashboard technology, restaurant managers can incorporate energy cost reductions into their existing workflows, reducing consumption and costs without making significant investments or integrating onerous workplace policies. .

3. Explore other service arrangements

The pandemic has forced the restaurant industry to innovate or die. Many restaurants have risen to this challenge, finding new ways to deliver delicious food to their eager customers.

A notable example of these efforts is the accelerated adoption of shadow kitchens. Ghost kitchens reduce the cost of entry and enable greater innovation within the restaurant industry. It is believed that ghost kitchens could be a A $1 trillion global market by 2030, and their increase is closely correlated with the rapid growth of delivery and takeout trends that provide new revenue streams for restaurants ready to adapt.

Meanwhile, other companies are look to digital-first brands to reach customers. Chilli’s, by Mariano and Applebee’s have launched virtual brands selling specialty items online. These virtual restaurants are inspired by the pandemic, but they represent a reprioritization of the customer-first philosophy that made restaurants so appealing in the first place.

That’s why, whatever the expression, comfort and customer experience are now a top priority. Like Jonathan Nunn, a food writer for The Guardian, Remarks: “The most adaptable restaurants will find their own solutions focused on community and simplicity.”

With full-service restaurants not planned to fully recover until 2025, exploring alternative service arrangements allows foodservice providers to harness this moment and drive innovation that can provide an immediate increase in revenue while fostering long-term sustainability.


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Cecil N. Messick