The big winners in the restaurant business in 2021

The year is almost over and it’s time to take stock and determine who in the restaurant industry ends 2021 in the winning column.

The pandemic tailwinds played a big part in determining this year’s winners. The same is true of changes in the regulatory and political landscape. Here are six groups that have reaped the benefits.

Steak chains

More expensive places that serve food next to a experience were among the hardest hit when dining rooms were forced to close in March 2020. But those same restaurants bounced back the strongest when things started to open again as locked-in patrons walked out and celebrated a good meal for the first time in a long time.

Capital Grille and LongHorn Steakhouse were the last stallions in the Darden restaurant stable, while Texas Roadhouse and Ruth’s Chris also performed well. Heck, Fogo de Chao’s sales are so spectacular that he just filed his case to be made public (again).

Soaring beef prices in the latter part of the year tempered that victory somewhat by squeezing steakhouse margins and forcing price increases. But most of the above chains have expressed confidence that inflation will not affect their customers too much.

University athletes

The NCAA’s decision to allow student-athletes to earn money from their image has been found to have an impact on restaurant marketing departments.

Just weeks after the rule was changed in June, as many as four chains had unveiled sponsorship deals with various athletes, and the list has grown since.

Many southern-based chains like Raising Cane’s, Bojangles and Zaxby’s have teamed up with college football stars from their home markets, where people are fond of the sport. But Louisiana-based Walk-On’s has perhaps taken the more creative approach: Through its Walk-On of the Week program, the sports bar chain has signed deals with dozens of athletes who have trained their respective teams without scholarship – aka “walk on” – including a 63-year-old golfer from Reinhardt University.

Technology companies

Technology in restaurants started out as a ripple several years ago, which suddenly turned into a ripple in 2020, mostly out of necessity. This wave roared through 2021 and looks set to continue to grow as restaurants lean more into technology for all kinds of reasons: to reach more customers, to learn more about their customers and, more. recently, to help fight a devastating crisis. staff crisis.

Investors saw all of this happening and started pumping money into technology providers. By Thanksgiving, more than $ 5 billion had entered the restaurant technology industry through investments, IPOs or acquisitions, including some from big names outside the industry, like IBM, Oracle, Squarespace. and even the Jonas Brothers.

In another sign of the dominance of technology, two big vendors, Olo and Toast, went public this year, citing the ongoing transformation of restaurants into a primarily digital industry. A third, Presto, had planned to do so.

Unions

2021 could be a banner year for unions at large, and particularly in the restaurant industry, which has been notoriously resistant to organized labor.

By the end of the year, the unions had snagged a handful of small but notable victories in restaurants. The most significant came in December, when employees at a Starbucks unit in Buffalo, NY, voted to be union represented. (As of this writing, staff at six other Starbucks are awaiting permission from the National Labor Relations Board to hold a union vote, and a seventh are awaiting the board’s decision on a contested vote.)

Elsewhere, workers at 21 Colectivo units and four Darwin’s units voted to unionize, while regional chain Burgerville struck its first contract with workers after 3.5 years of negotiations.

This new wave of organizing has a more social justice focus than in the past and is being spurred on by the Biden administration, which has explicitly praised the activity.

Chipotle shareholders

“Favorite Wall Street Restaurant” saw stock prices continue to surge in 2021, posting breathtaking results quarter after quarter.

Chipotle was by far the most expensive restaurant stock, with shares peaking at $ 1,958 in September. Its price has risen more than 3,900% since its debut in 2006 to $ 42 per share, and up to 40% in the past year.

The burrito chain did this with a strong focus on digital sales through its mobile app, loyalty program and drive-thru “Chipotlane”. He’s also actively developing new limited-time menu items, including the hugely popular smoked brisket, a feature of the chain under the leadership of CEO Brian Niccol. The challenge for Chipotle going forward will be to surpass its record results this year.

Chicken wing lovers

More choice is generally seen as a good thing for consumers. But how many more chicken wing concepts can Americans actually accept?

The popular part of poultry is no longer just for the usual suspects like Wingstop and Buffalo Wild Wings. You can now get them at Fazoli, for example.

The growth of the article was fueled in part by the explosion of virtual delivery-only brands. Fenders travel well and are ideal for delivery occasions like sporting events and parties, so they have become a popular vehicle for these concepts. Here is a list of some of the virtual wing brands launched this year: Cosmic Wings (Applebee’s), Wings of New York (Nathan’s Famous), Jailbird (Dog Haus), Toss’ Em Wing Factory (Bubbakoo’s Burritos), Another Wing (DJ Khaled), UD Wings (Udonis Haslem), etc.

Chicken wing chains have also been popular acquisition targets. WingZone, Native Grill & Wings, and Anthony’s Coal Fired Pizza & Wings were all purchased in 2021.

(All this happened, incidentally, as wing prices were rising to levels of around 50% higher than last year.)

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Cecil N. Messick