In-Home Meal Replacement for Restaurants is the new Normal

I wrote this article months before the COVID Pandemic came along and put the trajectory of changes slowly developing into high gear in the restaurant business. N.Y. In one of his articles, Chef David Chang said that the changes we were projecting within the industry over the next decade were taking place within a year or less. Specifically, in the realm of home-meal replacements and delivery services, take-out foods have now become the norm as the second wave of the disease has again discontinued indoor dining and, in some areas, even outdoor seating.

As we move onward into 2021, many of the concepts within this writing are taking place out of necessity, while others, like having a hot food buffet station, are totally out of the question.

Until the beginning of Spring 2020, entrepreneurs and chefs were opening new restaurants with visions of serving creative food and reaping social accolades from a community that loves what they offer. They looked for a great location with good foot traffic, plenty of parking, and decent rent. But few vision changes in food service were being explored.

Concepts many are using are from another era in food-service. Restaurateurs hold onto ideals of the pseudo-Victorian model of food-service we have been accustom to for decades. In the past decade, concepts mixing casual fast food like Panera Bread and Chipotle’s have shown better ways to sell and deliver food to large groups of customers.

The reality of statistics show that six of ten restaurants fail within year one, and another two by the fifth year. Many reasons indicate poor execution of plans, but one overwhelming sense is that the basic concept of food-service has dramatically changed in the past two decades, and most are not keeping up with trends.

Today, successful restaurants lead with sustainable food sourcing, using local produce, impeccable staffing, personal décor, entertainment, and convenient services we didn’t even conceive in the past. However, we need to get past the idea that a restaurant is a kitchen and a dining room collaborating in a live performance. The kitchen produces food, and the dining room is a retail space. When, in the traditional sense, they work in concert, they epitomize the concept of ‘fine-dining.’ Yet, they can work as separate revenue centers, as well.

Struggling with outdated Concepts

Unless you are in a ‘major metro-area’ drawing from a large population, having tables full of diners is a constant challenge. Few restaurateurs are sure how to capture their niche in the local community. Everyone struggles with various cuisines and concepts; meanwhile, ‘standards of service’ are nearly extinct. I live in a small twin-city area in the Sierra Foothills, where the combined population is around 18,000, including some outlying areas off two State Highways.

There are well over 225 non-franchised independent restaurants in a 15-mile radius. Besides a few neighborhood breakfast cafés, I can count only a handful of operations where one generally needs a reservation on the weekend. These few operate at a level of service and quality; most others lack the knowledge or incentive even to attempt. Many don’t even understand the basic principles of hospitality. They fill no niche and struggle to fill tables. This phenomenon is not unique to my community.

The concept of dining out is changing radically. The numbers illustrate it. Going out for dinner is on the decline. Derek Thompson, of the ATLANTIC, who has written extensively on trends in food-service, writes, “a decline in traffic, along with rising labor costs, has forced restaurateurs to raise their prices to pay the rent. As a result, dining out is getting more expensive.”

Thompson continues on these trends in food, “In 2015, for the first time on record, Americans spent more money at restaurants than at grocery stores. In 2020, more than half of restaurant spending is projected to be “off-premise” — not inside a restaurant. In other words, spending on deliveries, drive-throughs, and takeaway meals will soon overtake dining inside restaurants, for the first time on record.” (*1)

The Changing Landscape of Food Marketing

Many others who follow restaurant trends have written about the changes in food-service, particularly highlighting the 2017 merger of retail giants- Amazon and Whole Foods. (I wrote about it too, in another article. (*2)) Since their alliance, the landscape of food marketing and delivery has transformed how we think about the future of restaurant concepts and food-service in general. The titanic shift they are influencing is how food gets to the consumer’s table and the alternatives possible — mostly involving new technology. These changes impact how one orders or pre-orders for a sit-down meal or window pick-up. These practices will not just be seen at fast or casual operations and go beyond home delivery’s singular idea. These shifts will affect everyone in retail food sales within a decade; restaurants, grocers, caterers, and any food-related retail. Technology, backed by design changes in a restaurant, can help a busy parent pick up packaged salads and sandwiches or even pre-cooked meals to enjoy in-home a few moments later. Also, Door-Dash and other delivery services are just beginning to impact off-site restaurant sales.

I’m a proponent of ‘fine-dining.’ My career involved several high-end dining rooms, including one of the Big-Four, as San Francisco’s Nob Hill Hotels have often been referred. Therefore, using and teaching techniques of this style of service is always in my wheelhouse. So, I don’t dismiss any of that in today’s food-service. ‘Fine dining’ techniques must be understood and incorporated, as in the maxim, ‘know the rules, then you can break them.’

That said, I realize time has changed how social interactions and the costs of running a restaurant require a paradigm shift in our thinking. As I view them in this article, prepared foods are an extension of the ‘finer food idea’ that was the core of classic dinner houses. So now it’s time to get quality foods to the diner in a whole new fashion.

While guests are demanding healthier and better quality products, they also expect a host of conveniences to get food on the table. Seated dining service demands are less formal, convenience-driven. Yet, even in casual dining, we still embrace the notion: a) order, b) make the order, c) serve the order. The new reality is a universe where food is created and consumed today entirely different than even a decade ago. Not all food is immediately eaten, nor needs to be made only when it’s ordered. Beyond the fact that not everyone wants a hot meal, and dozens of ideas for to-go items can fill the bill, the hot meal concept, as one alternative, is about holding, packaging, and making the ease of reheating for possible short distance travel and convenience. One cannot open the doors of a restaurant, pub, or delicatessen without dealing with a new approach to food-service.

Offering Alternatives for Dinner

We still think of Victorian sentiments when it comes to how the dining service should look. We don’t sit down as a family at Sunday dinner, as we did a few decades ago. Why do we keep opening restaurants based on past ideals without offering the market some alternates that it wants? Every casual or ‘fine-dining’ restaurant needs to consider adding value to the guest experience by anticipating possible needs. The couple dining tonight has a brother home babysitting that could be an added meal sale when offering the dessert selection. It would be best if you had a simple way to build this marketing into your server’s dessert presentation. Better yet, offer a selection in a merchandising case for pre-made salads or microwavable entrees visible on the way out the door! Pre-orders, take-out, and delivery are just the beginning of what guests are expecting.

“Diners are increasingly buying prepared food at places that aren’t restaurants. They’re going to convenience stores with made-to-order food, or grocers with prepared food, like Whole Foods, college stores, corporate cafes, community centers, and food trucks. In fact, one-third of prepared meals this year won’t come from a typical restaurant or fast-food joint.” (*1)

Adding one more movement to the picture is the Home Meal Kit, which in 2017 was a 2.5 billion dollar business with growth rates projected at 30–40 percent in the next decade. These are boxes of ingredients delivered to your door with recipes for making gourmet dinners at home. At least twelve players in this field are doing everything from supplying grocers, like Kroger, to home delivery. *3

Some Historical Perspective

From the ’50s, McDonald’s fast meal delivery at a walk-up order window began a new food era. Then Casual and Family restaurants like Applebee’s or Cheesecake Factory filled a niche. In the ’90s, Fast-casual’s like Chipotle introduced high quality and offered custom made quick service. Today’s newest trend, in large cities, is fast-casual, where pricing and service are reduced, and food quality takes priority.

A selected menu item is chosen in all these examples, and nearly everything is made to order. This time-consuming method isn’t necessary to serve quality food! Today’s guests want good food, convenience, and options for when and where they consume it. Yes, Fast-food still fills a particular niche; then, many people don’t want to sacrifice quality and nutrition for convenience.

We need to start thinking more about how the deli counter functions, where some prepared items are ready to package and consumed off-site. Look, for instance, at how a bakery is laid out. The baker displays his delicate goods in rows at a counter. You select items, bagged and sold, and consume them either at a counter, a small table or take them out the door for later.

Time for a shift in thinking

The progression of food-service, which came out of the traditions of ‘fine-dining,’ still resonates with many restaurant operators. The model is simple: sit down with a menu, a server takes the order, food is cooked or assembled in the kitchen, then the meal is taken to the table. However, that model doesn’t work in many people’s lives, even when they have time to enjoy a meal with family or friends. They may want to eat a quality restaurant cooked meal in their home dining room.

Ordering can now be an App on the phone, an actual call to your restaurant, or through a third-party delivery service. If you are in a centralized locale and have parking, you can offer ‘Grab n Go’ items from a hot-case or as pre-orders. If a guest can walk-in the store, select from a well-stocked merchandising case, or pick up an order, possibly already paid through an APP, it’s quick easy, and they will do it often.

As I am writing this article, a potential client called. They have a small hotel on a property with a pub and another retail space. The hotel does fine, meaning it pays the bills and has a positive cash flow, and they want to increase revenue. I’m thinking, “how does my approach in this article relate to this particular situation?” They have a real potential to use the food and liquor license to add to the motels marketing appeal in that they can offer meals, not just in the pub but as pre-packaged microwavable dinners for those guests who do not want to drive a few miles down the road to the nearest restaurant or grocery store. To do this, they need a plan to have staff and a separate menu of items to make up packaged lunches, which guests can buy to take to local day attractions just up the road, and microwave-ready dinner entrees from which guests can choose to take back to the room. As I come back to the budgeting plan I’ve been working on for other clients, I see the similarities. Small hotels or coffee shops can use a ‘to-go’ program as the implementation strategies are similar.

To show how a program in To-Go foods works, I offer a couple of examples. In a seaside town along the Central Coast, I was managing a gourmet foods market, which at the time was known for its imported Italian meats and cheese selections from around the world. It also made custom sandwiches, which at lunchtime had lines out the door as people waited for the best sandwich in town. To assist in sales and cut down on wait times, we put together a cold case of the most popular combinations of sandwiches, pre-made with containers of salads and available condiments. These sold out nearly every day. These pre-made sandwiches wouldn’t satisfy everyone, as you can’t put ‘sprouts’ on a sandwich that will sit for a few hours, yet in most combinations, it worked very successfully. To add to the interest, I added a display of picnic baskets. They were nice with glassware, utensils, and cloth napkins near this cooler. Ideal for a Big Sur picnic, baskets increased sales by creating a solution for those longing for a day on the Coast.

In a more populated location, friend Chef Mitch, in a Mid-Town Sacramento Italian dinner house, told me of their success in an aggressive To-Go Program. They have a small retail coffee, salad, sandwich kiosk just a few feet from the main dining room, also accessible from the lobby of an office building where the restaurant is located. They roast their own turkeys for sandwiches and salads, use quality bread, and everything except espresso and coffee is prepared ahead of opening. Selling items at competitive pricing to other retailers in the area, they do well over $2000 a week in pre-made items. The Kiosk concept is quick and easy for hundreds of workers heading to work or on lunch break.

The two biggest expenses in setting up a take-out program, after any investment in new equipment, will be the extra labor and packaging costs, besides, of course, the cost of raw food ingredients. Food costs and their packaging should be designed into the menu pricing directly, as you are building a brand with your packaging. It may cost upwards of $2.00 per serving if using composable, compartmental clam-shells, or oven-ready containers.

Here are just a few logistic details you need to consider while implementing a new To-Go Foods program.

The goal of increased sales

Overview foods that fit your current menus

New Food Costs

Analysis of Packaging needs

Food Safety consideration for travel

Display- where and how

POS considerations- how to ring up sales

Production Scheduling

Time-frame to roll out a new program

Points- You need to think about the end consumer- How and Where is this meal consumed? It’s not unlike when I take on a food photography shoot. From the beginning, I think how food will be cooked, plated, and the styling of everything that goes into the photo. You need to do this about who your customer is, and how do they consume your food?

Get over the made-to-order concept entirely while approaching this program. Think, instead, how can you package and make your signature items look presentable in a box. Moreover, consider asking your current guests what they want and how you can feed them in a different way than having them sit down in your dining room.

*1 Derek Thompson the ATLANTIC Jun 20, 2017 “The Paradox of American Restaurants.”

*2 David B Townsend Ambrosia-Blog- Aug 2017 “Amazon-Whole Foods, this changes everything in food-service”

*3 https://www.foodpolitics.com/2019/08/weekend-reading-foodnavigator-usas-special-edition-on-meal-kits/

Restaurant Consultant, Food Stylist/Photographer/Writer www.dbtownsend.com/about

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