Freshly Picked, September 29, 2021

Alerts & What’s Trending

Produce

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The sector continues to be challenged by a lack of consistent labor. As manufacturing nearing capacity limits for some, suppliers are still struggling to keep up with demand.

Grains

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The soybean oil market in the United States has dropped once more as the crop looks stronger than projected. The COVID rate in Malaysia and Indonesia has forced several palm plantations to close, sending the price higher.

Dairy

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With mixed demand indications, natural cheese, mozzarella, and processed cheese markets are all up week over week.

Beef

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The market was unable to sustain these prices for another week. Consumer and buyer pressure pushed the price of almost every cut of beef down. Rib meat holds it value as rounds and chucks continue to be growing in availability.

Pork

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Fresh supply levels out as seasonal demand for butts continues to wane, and the market continues to fall.

Poultry

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Wing sales were down, although demand for jumbo and medium wings remained robust. Tender prices are at all time highs.

Seafood

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Despite the hurricane’s inconveniences, the domestic shrimp harvest is continuing smoothly. Due to increased captures, several items that were shorted in the spring are now back in stock in the Portico brand.

How to Maintain Labor Efficiency in Slower Months

Now, with restaurants experiencing an unprecedented slowdown and even shutdowns in the face of a virus that has been declared a pandemic, operators are wondering not only how to keep the doors open, but also how to protect their staff and keep them employed until the public returns.

We couldn’t think of a better time to address the subject of how to maintain labor efficiency in slower months.

In addition to the unusual circumstances that surround us now, many restaurants experience offseason months. One of the biggest challenges these establishments face is how to keep their primary staff employed, retain a profitable business, and alter their budget in order to stay afloat until the busy summer or winter months descend.

In essence, there are two considerations: Controlling costs and increasing business. Let’s take a look at two factors that can ensure continued, profitable operations, even in the offseason.

Labor Controls

As with any business, putting labor controls and procedures in place is mandatory. In our current environment of labor pool shortage and minimum wage hikes, the average labor cost comes in at around 34 percent. Note the word, average. As we know, unlike multi-unit mega chains, independent owners operate restaurants that are very unique and are anything but average.

One benchmark that is a better target to aim for is your prime cost which equals your total cost of goods sold plus your total labor costs. This represents two of your biggest expenses, and controlling this number is one of the keys in maintaining restaurant health. Dividing your prime cost by your total sales reveals your prime cost as a percentage of sales, with a general target being anywhere from 55 percent for quick service restaurants to 65 percent for fine dining, full service establishments.

The benefit of this number is that you have two controls: food and beverage costs as well as labor costs. Controlling inventory, minimizing food waste, optimizing menu engineering, monitoring vendor pricing, and smart scheduling based on forecasts are all procedures available for optimizing control. Controlling food costs by working with an established GPO is one of your best solutions.

When sales are slow, the cost of labor will undoubtedly be higher. Manager’s salaries are maintained, leaving hourly employees the ones that bear the brunt of reducing labor costs. Minimum staffing levels, however, can ultimately impact customer service and lead to less brand loyal guests that will greatly affect a restaurant’s profitability in the long run.

It’s important to keep in mind that this number will change dramatically when the busy season erupts. In fact, labor can come in at close to 40 percent during the slow months and fall down to less than 20 percent during peak months. Developing a target for each month is the best approach to long-term success.

Keep these numbers in mind as we explore labor controls.

Over Managed

While good management is the key to successful operations, over-management can be a road to low profitability. How many times have you walked into a restaurant and seen management performing tasks that hourly employees are quite capable of?

Overtime

Overtime is one of the biggest contributors to high labor costs. If you find it difficult to manage labor so that this number is kept to a minimum, consider integrating an employee scheduling software system that takes into account forecasted sales. A popular brand among restaurants is 7Shifts.

Seasonal Employees

Consider maintaining your core yearly staff and hire for the peak seasons. Coolworks is a well-known site for hiring seasonal staff. You’ll want to start the process well before your season begins.

Train

A well-trained team not only ensures a high-quality product and exceptional service, it is also proven to increase your bottom line. Well-informed, incentivized servers are proven game-changers by increasing sales and enhancing customer experience. Employee recommendations can result in conversions 54 percent of the time. Unfortunately, only 5 percent of your staff is usually making these recommendations. Tipzyy, a mobile software platform, educates servers in areas such as pairings, upselling beverages, and more, and also rewards and recognizes your top performers.

Controlling Food & Beverage Costs

 While there are multiple procedures designed to control this all-important cost, working with a GPO year-round can help you weather the inconsistencies associated with offseason. Many can also help with offseason menu planning that minimizes food and beverage costs during the slow season while still maintaining the quality your customers have come to expect.

The Importance of Restaurants Assessing Master Distribution Agreements (MDAs) in Order to Reduce Costs and Improve Quality

Master Distribution Agreements are the cornerstone for most successful operations in the hospitality industry, at least in terms of optimum pricing and maintaining a solid and reliable supply chain. For restaurants, they provide a strategic and steady cost-saving agreement with their main broadline distributor. Or, at least, that’s what they are designed to do.

Once established, many restaurants maintain the same MDA for years, relying on what has developed into a comfortable relationship with their distributor. Yet this day in, day out, consistent steadiness can, like any relationship that has become somewhat stagnant, end up paralyzing a company’s forward movement and cost operators a percentage of their profits. Experts in procurement, and supply chain analysts, all agree that regular audits and assessments are key to long-term financial health and increased margins.

Here are a few key elements in MDAs that operators should pay attention to:

Contract Timeline

Many MDAs will contain an automatic renewal clause that allows distributors to renew a contract for a year, if they are not notified by the operator within 180 days of the contract termination. Know when your contract ends and take advantage of this opportunity to renegotiate. In addition, contracts that automatically renew often have a clause that allows for cost-of-living increases resulting in increased fees that many operators are unaware of.

When negotiating an MDA, ensure that there is a “no cause exit clause” which allows operators to terminate the agreement with a 60 or 90-day notice.

Auditing

Some contracts will limit the timeframe that a MDA can be audited. It’s important that you maintain the right to audit cost and obtain the actual manufacturer’s paid invoice. Allowances and product discounts should be included in your price. Keep in mind that auditing line-by-line can be extremely time-consuming. A third-party firm, such as Consolidated Concepts, has the software capabilities that make this act effortless, processing and organizing the needed data to accomplish an expert audit readily in real-time.

Drop Incentives

The bigger a load, the better pricing a distributor can normally provide. Make sure that your MDA contains this type of agreement. In essence, it states that as drop sizes increase, your product mark-up decreases. To take advantage of this, consider increasing your size while decreasing your frequency of deliveries with certain types of products.

GPOs

When assessing your MDA, check that it allows you to release data to a third party or Group Purchasing Organization. GPOs give restaurants the combined purchasing power of all of their members and can reduce restaurant costs by up to 30 percent. Dining Alliance is the largest GPO in the industry with a purchasing power of over $10 billion. They also offer a broadline program that includes fixed mark-ups, electronic weekly auditing, and over 350 manufacturer deviations and rebates

MDA Negotiation White Papers

Comparing MDAs

According to Barry Friends, a food industry consultant who spent over 20 years as an executive at three of the top five U.S. foodservice distributors, one of the biggest challenges facing restaurants in relation to MDAs is the lack of supply chain personnel as well as the disruption that can occur when sourcing food and operating supplies from just one broadline distributor. As he describes it, “No matter how much you (the operator) know, the distributors know more; they have all the power, and they are excellent at making their customers feel like they have a great deal.” This “great deal” may be far less than what they can actually offer. While costs are driven by the market, there are options that can be included in a MDA that can help reduce price volatility. What is the distributor’s base price, margin, and backend markup and service costs?

Leveraging an organization that works with hundreds of distributors across the nation, including specialized and smaller organizations, allows experts in the field to compare distribution agreements—an ability that makes a tremendous difference when optimizing a MDA.

As is evident, it takes years of experience in the procurement field to be able to address these types of issues with confidence. Consolidated Concepts helps restaurants by leveraging their expertise in supply chain management, operations, distribution, product management, and spend management, ultimately reducing costs while improving quality. As your business grows so too does the ability to negotiate better pricing. Remaining vigilant when it comes to the agreement with your broadline distributor can dramatically affect product costs.

For more information on this important topic, take a look at Consolidated Concept’s,  A Complete Guide to Your Master Distribution Agreement.

How To Select Talent From a (Rapidly) Growing Talent Pool

About Kickfin: Restaurants use Kickfin to instantly deposit tips into employees’ bank accounts the second their shift ends, 24/7/365. We eliminate the hassle, hidden costs, and health hazards of cash tips outs, so your people stay safe while still receiving their tips in real time. 

Kickfin can help mitigate the spread of the coronavirus and ensure the financial security of your employees with contactless tip outs. Because of this, we feel we have an ethical responsibility to make Kickfin available to new and existing customers free of charge through the months of April and May. Contact us to learn more.

Unemployment is one of the most painful byproducts of this unstable, uncertain market. It’s impacting every industry, of course, but hospitality has taken one of the biggest hits.

Hundreds of thousands of jobs have been cut — in fact, restaurants and bars account for 60% of the losses. While some are (hopefully) temporary, other jobs have been permanently lost, as many restaurants have little hope of weathering this storm.

It’s a cruel twist of fate: for years, hospitality employers have battled against one another in a highly competitive labor market. Now, though, there’s willing, able and experienced talent everywhere you look. 

Who’s hiring at a time like this? 

You’d be surprised. With off-premise sales spiking, delivery restaurants and chains are in need of extra hands. Pizza Hut, for example, indicated they’re hiring for 30,000 permanent positions. Other restaurants who have pivoted in this market are hiring in anticipation of the virus striking their team and taking out part of their workforce. 

If you’re in the hiring boat, you might be wondering: How should my recruiting practices change in light of this burgeoning labor market? (And how should they stay the same?) 

We’ve got 3 tips for restaurateurs who are hiring during this crazy time.

  1. Don’t lower your standards.

If you’re in a bind and in need of help ASAP, you may be tempted to make a hasty decision, setting aside your typical hiring process

That’s understandable: in the current environment, survival depends on your ability to be nimble and move fast. But when it comes to bringing new people on board, moving too fast could backfire.

Right now, restaurant patrons are anxious. People need to eat, of course, and many genuinely wish to support the restaurants they love — but they’re worried about their safety, and rightfully so. Plus: federal, state and local guidelines for essential businesses are constantly evolving, and in general, health hazards are high.

Taking all of that into account: seek out employees who are reliable, experienced, and have a can-do attitude. Before you make new hires, ask yourself: will they be considerate of and accommodating toward anxious patrons? Will they follow new, extensive sanitation and safety guidelines? And can they adapt to a role that may include changing responsibilities, as your business shifts to respond to the market?

Pro tip: Don’t skip references. Now more than ever, it’s important to require references for candidates — and don’t neglect to actually reach out to those references. Aside from confirming previous employment, questions you may want to ask include:

  • What were the candidate’s key responsibilities?
  • Where did the candidate excel? What were his/her key strengths?
  • Did you ever experience any performance issues with the candidate?
  • Is there anything else I should know?
  1. Broaden your horizons.

If you’ve just pivoted to curbside or delivery service, you may need to look for a different kind of background than you’re used to hiring for. Seek out people with skills or experience that are directly applicable to the roles you need to fill.

That may seem obvious — but many restaurateurs are used to only hiring either front-of-house and back-of-house staff. Now, they’re suddenly looking for drivers. While you shouldn’t lower your standards (see above), you may need to shift required qualifications and experience.

A few key considerations if you’re hiring drivers:

  • Do they have solid driving credentials?
  • Will they be using a company car? If not, do they own or reliably have access to a vehicle?
  • How will they be compensated? Will they make tips? Will they receive a stipend for gas and wear and tear on their car?
  • Will they be an employee or an independent contractor? If it’s the latter, are you in compliance with state and federal labor laws?

Pro tip: If you’re hiring for a different kind of role than you’re used to, talk to other restaurateurs who have experience with this model to get an understanding of what kinds of qualities and qualifications you should focus on. 

  1. Think long-term

We can all agree that this is a strange and difficult time. But good news: it’s not forever.

It may not be weeks or even months, but at some point, we’ll return to some semblance of normalcy. And while everyone in hospitality is trying to be nimble and pivot fast, savvy restaurateurs are making strategic shifts — not band-aid solutions. 

So wherever possible, think ahead: are the changes you’re making going to benefit your business now and in the long term? 

This is especially important when it comes to your people. Every employee you onboard right now is still going to require some level of ramp time, which means you should hire the right person for the role and the team, so you can ultimately minimize turnover

Pro tip: Don’t neglect your restaurant’s culture. Think about what new hires are going to bring to your team: how will they fit in? And will they want to stick around, even after things go back to a (new) normal?

Bottom line: if you’re hiring in hospitality right now, you’re in a fairly unique position. You have a wealth of talent at your fingertips that, just weeks ago, was next-to-impossible to find. And more importantly, you can help workers who have lost their livelihoods and are desperate for gainful employment. Remain committed to smart, strategic hiring practices, and your business, your employees and your new hires all stand to benefit.

The New and Unusual Produce Trending in 2020

Did you notice the fast pace with which food and beverage trends came and went in 2019? The rise and fall of consumer’s preferences and desires seemed to wane as quickly as a tropical afternoon rain shower that drenches an island one minute, only to bring intense sunshine the next. Blink, and you might miss it.

Avocado and kale may find some tough competition in the next decade with curious guests turning to unique and unusual produce. Let’s take a look at a few that are definitely not found at the corner grocery store.

Celtuce

Tyrant Farms describes celtuce as “the coolest veggie you’ve never heard of.” As the name implies, it’s a little like a celery-lettuce combo. The big, massive leaves, which are not it’s culinary prized possession, gives way to a thick, crunchy, juicy stem that Asians and others in the Mediterranean region have known about for over a thousand years.

The stem, after pealing the fibrous outer skin, is great raw or in stir fries, maintaining its crispy juiciness even after cooking!

According to the Forager Chef, Michel Bras, a world famous French chef, and his son, Sebastien, serve it at their 3-star Michelin restaurant, Bras. Of course, as their menu is an ongoing work of art, Celtuce may be a thing of yesteryear by the time you get to France and indulge in some of the region’s finest culinary creations. If you’re in search of this off-the-beaten path wonder, it’s best to look in your local Asian market. At least until we Americans catch on to its tasty offerings.

Komatsuna

This hardy green, also referred to as Japanese mustard spinach, is actually not a spinach but a member of the Brassica family, home to cruciferous vegetables such as cauliflower, broccoli, and cabbage as well as mustards. Asians use it for its tender leaves as well as the flowering stems. As the name implies, it is native to Japan where it is used in salads and stir-fries.

This health trend is high in vitamin C, calcium, beta carotene, and sulforaphane, a compound that has been shown to fight against cancer cells. Chef Tetsuo Takenaka, Kyoto’s leading specialist in the school of traditional Japanese kaiseki ryori, a cuisine that uses fresh ingredients distinctive to each season, recommends combining this green with fresh shitake mushrooms and dashi.

Mushrooms

I know, this edible wonder does not seem like it belongs on the up-and-coming list. But what is new for 2020 is the “superfood” aspect of mushrooms and that it fits in well with the plant-based alternative to meats. This nutrient dense, versatile meat-alternative can be found in main dishes as well as small plates in all its remarkable forms including Shitake, Maitake, and Chanterelle. The first two started out in Asia before finding their way to the U.S. They are high in several immune-boosting, anti-cancer compounds including polysaccharides and terpenoids.

Chanterelles are native to many parts of the world, including the forests of Wisconsin in the summer months. Bartolotta’s Lake Park Bistro, set in a park pavilion overlooking Lake Michigan, offers a Chanterelle Mushroom wine-pairing dinner that includes oysters in curry with chanterelles and slow-cooked American wagyu brisket with chanterelles and shallot. This mushroom, with a distinctive mild peppery flavor, is full of vitamins and minerals including a high concentration of B vitamins, a fair share of Vitamin D—a vitamin hard to find in food—and iron.

According to USA Today, searches for nutrient-packed mushrooms has increased by 46 percent on Pinterest, a social media site with more than 250 million users. But, wait, even more astonishing is that mushroom coffee has seen a 471 percent year-on-year spike in searches. Amazing. If you’re considering getting in on this dynamic trend, you’ll need to familiarize yourself with mushrooms such as chaga, lion’s mane, reishi, and cordyceps, medicinal mushrooms that have been used for thousands of years in traditional Chinese medicine.It looks like more and more health-conscious consumers will be trading in their morning latte for a mug of Lion’s Mane & Chaga.

Butterfly Pea Flower

Just when you thought edible flowers were entering the downside of their climb to fame, this beautiful, vibrant blue flower enters the scene. This, however, is not just any flower—it is the chameleon of the plant kingdom, changing colors when mixed with an acidic food. It is also rich in antioxidants, making it not only Instagram worthy, but a strong contender for those drawn to health-conscious cuisine. Butterfly pea flowers offer little in the way of taste but make up for it in their natural food and drink coloring properties. The tea has a mild woody taste, a little like green tea. Indigo tea, made from its petals, is a staple in Thailand.

Beans

Beans have been a staple around the world for thousands and thousands of years, an estimated 9.000 years, to be exact. So, what’s new about something so old? Knorr and World Wildlife Fund put together a report on the Future 50 Foods—foods that are healthier for both people and the planet.In addition to foods that fall into the algae and cacti categories, superfood beans made the list and include black turtle, bambara, and marama—a bean that, when roasted, is said to taste like cashews—Yum.

We definitely recommend checking out the Future 50 Foods report which offers a wealth of information about unique foods from around the world that are sure to be growing in popularity as the rise of the health conscious consumer continues to redefine the restaurant landscape.

Know Your Produce

Whether you opt for the curious and new or for the old-time favorites, it’s important to keep abreast of the market and what is happening to produce on a world scale.

Consolidated Concept’s Freshly Picked Market Report offers weekly reports that focus on updated pricing in the meat, poultry, beef, and seafood industries as well as produce, dairy, and grains. I was surprised to see in their Freshly Picked, December 19 report that pricing on chicken wings for the coming year may run below the elevated 2019 prices. Good news for those restaurants that are building their Superbowl menu!

This report is a great resource to have at your fingertips and one that will serve you well if followed on a weekly basis.

If you’re looking to redefine your menu in the coming year, Consolidated Concepts can also help you develop your menu and connect you with the local and national sources to help you succeed.

Coronavirus: How to Quickly Pivot Your Operation to make it through this time

restaurants add grocery store items to their menus

As operators close dine-in operations, successful operators are quickly pivoting their restaurant to include more take-out, delivery, curbside, and other innovative ways to continue to bring customers to their doors. Below are a few common ways we’re seeing operators make a change to their operation to stay afloat.

Update your menu and business model to incorporate take-out and delivery

Shortening your existing menu down to fewer items will increase your operating efficiency and help ensure more success in delivering great food! Here are some options to keep in mind when thinking through your menu.

  • Make sure to engage your staff; servers and chefs can have great ideas for a take-out menu.
  • Publish your to-go menu on your website and Facebook pages so that diners can view your offering and place orders for carry-out or delivery!
  • When moving to Curb Side or Take-Out look at providing a condensed or temporary Menu. This will enable you to not only execute quicker but will look after your in house inventory & product spending.
  • Cross utilize and condense ingredients
  • House-made soups are a great way to use ingredients up that may have fallen off the menu or you’re overstocked on – create them and sell in quart or larger containers
  • Consider prepared or ‘take and bake’ family meals, ie. pasta or lasagna or pot roast. Look for comfort-food entrees and round out the menu with a salad/vegetable and dessert
  • If shrinking down your menu, set aside or freeze the items that don’t travel well. Or use them to feed your staff.
  • Consider packing some ingredients separately – such as sauces, toppings, croutons and dressing Items that work very well for to-go:
  • Lasagna and other bulk pasta dishes
  • Anything braised such as stew or pot roast • Roasts – consider prepping roasts raw by cutting, seasoning, packaging then provide instructions for the customer to bake at home

To increase profitability, also consider pairing each entree with a beverage to make it simple for customers to order the combination with one click rather than having to click through to the drinks section and order a la carte. Put bundles first in your online menu lineup.

Consider adding grocery items to your operation

At Consolidated Concepts, we’ve seen several clients begin to offer selling fresh produce, shelf-stable items, and some paper products. If you’re looking to add this to your operation, consider connecting with your distributor and begin advertising on your online menus and any third-party delivery apps you are working with.

Blue Moon begins to offer fresh produce, canned goods and more.

Stay in the know of state and federal regulations

As we’ve all been witness to, the changes in the industry both on the federal and state level are happening quickly. While it’s a trying time for all, there are a lot of reputable resources sharing consistently updated information.

Coffee Shop Bar Counter Cafe Restaurant Relaxation Concept

As the Coronavirus Spreads, Restaurants Fight Scare with Super Hygiene Tactics

On December 31, 2019, China reported several cases of pneumonia caused by an unknown virus in the port city of Wuhan. One week later, the World Health Organization (WHO) announced that they had identified the causative virus as belonging to the coronavirus family.

How the Coronavirus Began

There are several speculations as to how the virus first affected humans. Whether the Wuhan coronavirus found its way via workers at the Huanan Seafood Wholesale Market, leapt from bats to humans, or, as conspiracy theorists are prone to believe, is associated with weapons research at the Wuhan Institute of Virology, it’s clear that it has changed the face of China and possibly the world…at least for now.

And restaurants are not immune.

McDonald’s recently shut down approximately 300 restaurants in China and set up an epidemic task force in response to the virus. A Chinese restaurant in San Gabriel that specializes in dry hot pot from Wuhan has seen their orders cut in half. Diners are changing their destinations, leaning away from big city Chinatowns. When a Philadelphian took a random Facebook poll, 40 out of 100 respondents said that, for now, they would avoid Philadelphia’s Chinatown.

Dr. Allen Chan, owner of Jasmine Seafood Restaurant in San Diego, reported to 10News that, after the WHO declared an international public health emergency due to the Wuhan coronavirus, customers dwindled. As a doctor, he decided to take things into his own hands and “fight the fear with hyper hygiene.”

He installed sanitation pumps at the entrance, and reminded customers to avoid double-dipping or shared cups. Remarkably, he even played the CDCs notes on the virus on a giant projector. He’s also ordered masks for servers which, due to high demand, are on back order. While some restaurant operators may see these actions as a little over-the-top, Chan’s customers seem to appreciate his actions and concern.

Steps to Help Keep Guests and Employees Safe  

For those in the restaurant industry, there are simple steps you can take to minimize the chance of a virus, be it the now infamous Wuhan coronavirus or the common influenza, from gaining hold in your establishment and taking down staff and customers alike.

Laurie Garret, a reporter who traveled throughout China and Hong Kong during the SARS epidemic of 2003, shared in Foreign Policy the several important steps she learned to help her keep virus-free despite being in both cities and rooms with those who were infected. Here are a few or her tips as well as other important preventative strategies that restaurants can incorporate.

  • Take a close look at public areas where people commonly put their hands. This includes doorknobs, menus, and the back of chairs. Be sure to wash these areas regularly, as well as handheld devices that your staff commonly uses such as phones, keyboards, stairway banisters, and POS systems.
  • Frequently used items such as towels in the kitchen and pens in the front of the house should be given out with the names of staff members written on them. Viruses thrive in damp towels, so make sure that the staff is aware of this and that they trade in their towels for new dry ones on a regular basis.
  • If you offer family meal style food or group appetizers, nudge your guests to avoid double-dipping by supplying an abundance of utensils and small plates. Consider creating individual serving size portions.
  • Put a sign up for both guests and staff reminding them to avoid touching their face, including rubbing their eyes, and washing their hands frequently, particularly after touching surfaces that are commonly handled. Single-use gloves in the kitchen are always a good idea as well as a reminder to follow established hygiene practices by washing their hands before handling food, after using a tissue, coughing or sneezing, and after eating or drinking.
  • Retrain staff on the basics of good hand washing practices which includes scrubbing in between fingers, under nails, and washing for a minimum of 20 seconds.
  • Masks, on the other hand, may not be very helpful, and are a visual reminder of the reason that many people have opted to forego dining out for now. If one of your staff comes to work with signs or symptoms of an illness, it’s best to send them home. In this day and age of labor shortages, it can be tempting to ignore the signs that an employee is sick, but your guests and other employees will appreciate your consideration regarding their health and well-being.
  • With the current estimated incubation period (time of exposure to the development of symptoms) of the coronavirus ranging anywhere from 2 to 14 days, people may be contagious before they even know that they are sick. Because of this, those in the hotspots, such as McDonald’s, have gone so far as to measure the body temperatures of all employees when they get to work.

Keep in mind that, while some people are putting in their online orders for masks, meals, and services, and avoiding human contact as much as possible, others are wondering why mass hysteria seems to be setting in.

Just to put things into perspective, last year’s flu season resulted in approximately 34,200 deaths in the U.S alone. While this may do little to ease your fears regarding an unknown virus and its potential mortality rate, numbers like this remind us that we live in a world inundated with viruses, bacteria, mold, fungi, and tiny insects that we cannot see, but can kill us. Feel better?

While it’s important to take necessary precautions, it’s also wise to maintain calm amidst a storm of unending end-of-the-world diatribes. The unknown has always had the ability to take our minds and run with the worst-case scenarios. While we don’t know when the virus will die off or the final toll it will take, we do know that, as with any virus, by taking necessary precautions, we can minimize the risk to both our customers and employees.

Combat the Flu This Season With Tips From Georgia-Pacific & Consolidate Concepts

Consolidated Concepts & Georgia-Pacific have teamed up to help stop the flu this year. We’ve put together a special lineup of products for this winter season to ensure your operation survives this flu season completely germ free. Check out the video below to learn how to fight the flu this season.

Products Featured:

Georgia-Pacific SmartStock

Georgia-Pacific enMotion®

The Benefits of Dispatch Delivery versus Third-Party Delivery

At the recent Restaurant Leadership Conference (RLC), leading industry experts discussed how they’ve increased their bottom line by adopting several cost-cutting techniques. One of these, in particular, stood out—dispatch delivery services.

Jason Morgan, CEO of two emerging fast casual concepts—Original Chop Shop and Bellagreen—shared what he saw as one of the greatest challenges facing restaurants—third-party delivery costs. In just the last two years, he’s seen third party delivery fees go up from 100 to 300 basis points.

It’s a service that is a growing in demand. In fact, digital ordering and delivery have grown 300 percent faster than dine-in traffic since 2014, with over 85 percent of restaurant customers using off-site delivery services on a monthly basis. By the end of 2020, it’s expected that the sales provided through third-party delivery providers will grow to about 9.7 percent of total restaurant sales.

Unfortunately, the restaurants using third-party delivery services often pay a hefty fee—up to 30 percent. In a survey conducted by Hospitality Tech, 82 percent of restaurant operators thought the fees for these services were too high and over 30 percent went so far as to say they weren’t worth it.

In order to combat these rising costs that were proving disadvantageous to the restaurant’s bottom line, Morgan began using dispatch programs, shifting their customers from the third-party delivery sites to the restaurant’s website or mobile app. Every order they get that comes through the restaurant instead of a delivery service such as GrubHub or DoorDash, saves the restaurant between 20 to 25 percent. In addition, they, instead of the service provider, now have the customers’ data.

What is a Dispatch Program?

Using a dispatch program may well be the answer to increasing customer delivery demands, particularly for those restaurants that do not want to develop an in-house program that requires the use of their own drivers. Going this route is especially challenging due to the continuing labor crunch. A delivery program allows customers to place a delivery order on a restaurant’s website or app. The order is sent to the restaurant and dispatched for delivery. In essence, orders are processed just like all other online orders, except a delivery courier makes the pickup instead of the customer. Customers, instead of restaurants, pay the delivery fee. Currently, Morgan is using Olo as their dispatch provider.

Olo

Olo, a digital ordering provider for restaurant brands, announced the addition of Dispatch in the fall of 2015. It offers a service that is fully integrated into a restaurant’s point-of-sale (POS) system. The service allows guests to track their delivery from the minute it’s ordered, to the pick-up by the courier, and the course the driver takes as they travel to the customer’s home—all from the restaurant’s digital ordering site or mobile app.

In order to accomplish this, Olo relies on a network of delivery service providers to obtain the best delivery fee. According to SmartBrief, they have also developed an index called the Delivery Search Score. This index counts the number of times an online search for a restaurant’s name plus the term “delivery” leads directly to a restaurant’s website. According to the data obtained, the top 300 restaurant brands are performing at less than 30 percent of their potential. In other words, 70 percent of the time these types of searches will take the customer to third-party sites instead of directly to a restaurant’s website.  

Noah Glass, CEO and founder of Olo, compared this to the rise of the third-party marketplace in the hospitality industry when sites such as Hotwire and Travelocity became the primary choices for customers looking to make reservations.

Olo is currently being used by brands such as Wingstop, Chipotle, and Five Guys.

Of course, not every restaurant is in a dispatch delivery zone. There are, however, some restauranteurs that are coming up with other creative solutions to this current pain point.

Food Trucks as Delivery Providers

Wayback Burgers is a growing fast-casual franchise concept that specializes in burgers and shakes. They currently have about 155 locations in the U.S. and several others around the world including Canada, Saudi Arabia, Kuwait, and Morocco. The company plans to open another 275 restaurants in the U.S. within the next five years.

They are testing the use of mini food trucks, that run on electric and propane, as vehicles for delivering to-go orders placed via a proprietary app. The customer’s food is not cooked until the truck arrives at their home or business—say goodbye to soggy fries. They are hoping to license this idea to other brands as well—such as those that are having trouble with the high third-party delivery fees or the customer experience that is sometimes lacking in quality or timing. The branded truck also acts as a moving marketing billboard. While this mode of delivery is currently available to franchisees, it is not mandated.

With the demand for delivery expected to grow by over 50 percent by 2021, it’s clear that restaurants can no longer ignore this growing aspect of their business. According to Warren Solocheck, NPD Group’s senior vice president, “Delivery has become a need to have and no longer a nice to have in the restaurant industry…It has become a consumer expectation.” It’s also clear that restaurants are starting to look for alternatives to what was once considered an easy approach for integrating delivery services, third-party delivery companies. A dispatch program may very well hold some promise for those looking to develop or reorganize their existing delivery services.

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How You Can Cut Costs on Your Restaurant’s Utility Bill

Restaurants are known for their razor-thin profit margins. That notion holds particularly true among affordable fast-casual and quick-service concepts. Add on pressures like rising real estate costs, unpredictable food prices, and minimum-wage hikes across the country, and operators are left with even less of a financial safety net.

In this climate, every penny counts. One often overlooked factor into your monthly costs comes from your utility bill. While something like a utility bill may seem like a fixed, somewhat inelastic cost, there are changes and improvements to your restaurant that can save you money and increase your bottom line. To help, we’ve asked an expert at SIB Fixed Cost Reduction to identify ways restaurants can lower their utility bill and save themselves money in the long run.

Make sure you’re using the right bulbs

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If you are still using incandescent bulbs in one or more of your restaurants, it’s time to make the switch to LED. This is the fastest way to lower the electricity bill. Switching to LED bulbs can lower your costs by 50-75% per fixture.

The transition will require some upfront costs that take time to show results, but in the long run the ROI for a switch to LED will pay off. For example, let’s say you have lights in your parking lot, and you replace one of the heads on those lights from incandescent to LED. The initial cost may be around $300, but you save 10% per head per month, so in 3 years the project will pay for itself. In addition, a cleaner and more well-lit parking lot attracts more customers to your business, which will help to accelarate the the break-even cost of switching the heads in the first place.

Upgrade your old HVAC system

This can be a drastic change, and a farily large financial undertaking in the short term, but upgrading old and inefficient HVAC systems can do wonders towards energy efficiency, and ultimately, your savings on monthly utility costs. These are savings you will begin to notice immediately following the upgrade. To ensure that your HVAC system is running at it’s most optimal, consult with a trusted contractor about what’s the best fit for your location. Protect your investment by establishing a sound maintenance program. This includes regular cleaning and inspection of your HVAC equipment by a qualified professional.

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Add Tints to Exterior Windows

Adding tints to exterior windows is an effective way to save on heating and cooling your business, especially in the summer season. The window tint acts as a barrier between the sun and your business, blocking out ultraviolet light and keeping the interior of your business cooler. This will allow you to save on running the air conditioning, cutting down on the electric bill. In the winter month’s the window tint can help to keep heat in. In addition to lowering your energy costs, this addition will also save wear and tear on your HVAC system, keeping your business at a more steady temperature.

Know your Electricity Market

In the U.S, there are 2 types of electricity markets: regulated and deregulated. In a regulated market, the utility company owns all of the infrastructure around electricity. These companies then sell directly to the consumers at fixed rates. The rates are set by a state’s public utility comissions. In regulated market there are different tiers, so it is important to ensure that your restaurant is being charged the correct rate. There are different industries rate structures. For example, a restaurant’s rate structure may be different than that of a hotel or shopfront. On the bill there is a code that says whatever rate structure you’re on. You will have to call the regulated utility provider and tell them you’re doing an audit or confirm online that you are on the correct rate. 68% (34 states) are in a regulated electricity market.

In a deregulated market, private competitors buy and sell electricity by investing in power plants and transmission lines. Generators sell the wholesale electricity to retail suppliers, who then sell to consumers. In a deregulated market, the retail suppliers set the prices for consumers. Areas with deregulated markets are: California, Connecticut, the District of Columbia, Delaware, Illinois, Massachusetts, Maryland, Maine, Michigan, Montana, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Texas. If you operate in one of these areas, comparing bids from multiple brokers to ensure that you are getting the best price is an effective strategy to cut down your utility bill and save your business money.



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