Labor, Tech Fuel 2018 Restaurant Industry Outlook and Trends

January 19, 2018

Convenience blurred the lines between grocery, quick-service restaurant and fast casual in 2017, with meal kits throwing another curveball into the mix. The restaurant industry outlook for 2018 rides the 2017 wave of change.

Labor shortages and minimum-wage legislation had operators scrambling to find ways to save money and streamline their operations — which often meant turning to data to work smarter rather than harder.

But which challenges are destined to stick around into 2018? And what new trends are looming on the horizon?

1. Labor Shortages and Wage Wars

Restaurants are taking seemingly random hits as state and federal governments wrangle over immigration laws, minimum-wage hikes, tipping rules and scheduling regulations.

Speaker and leadership trainer Jim Sullivan posits these restaurant industry issues will remain unchanged into 2018, according to Nation’s Restaurant News. Sullivan also asserts that restaurants are experiencing a turnover crisis — not a labor crisis. Employee turnover for a restaurant can cost up to $4,800 per person, according to the Center for American Progress.

Sullivan recommends training the staff you have and developing from within, while also removing underperformers. It doesn’t matter how good your food is if the customer experience is terrible.

2. Harassment Awareness

Let’s face it. The restaurant industry has taken several hits in recent years over the gender divide and lack of diversity in kitchens and among senior management, opening it up to further scrutiny. News of sexual harassment allegations against celebrity restaurateur John Besh, as reported by The New Orleans Times-Picayune, has empowered victims in other cities and organizations to speak up and startled restaurateurs into examining their staff and operations.

Take a hard look at your internal culture and human resources practices — and look to outside consultants if you need assistance. Remember that front-of-house staff is at risk of customer harassment too. Promote zero tolerance and a policy of safe-space communication. These issues will take time to eradicate.

“Camaraderie must exist within a restaurant. Without it, we are a broken team,” said Kristen Essig, chef and partner at Coquette in New Orleans, in a guest column.

3. Technology and Data

Cashless payment, voice ordering, facial recognition, automobile dashboard consoles, mobile ordering technology, 3-D printers and robots … technology is edging into every aspect of the restaurant industry outlook for 2018. Ninety-five percent of restaurateurs agree that technology improves business efficiency, according to the Restaurant Technology in 2017 industry report from restaurant software company Toast.

Fast Company reported how Mediterranean chain Cava Mezze used sensors throughout out its restaurants to find efficiencies in its operations and mined customer flow-through data to streamline the ordering process and improve customer experience.

Captured data also allows operators to personalize the customer experience, making it possible to target promotions and upsells to individuals. Does someone habitually order new menu offerings? Or do they stick to low-calorie items — and you have a new salad on the menu?

4. Mindful Consumption

Consumers are demanding “clean” options and transparency, especially when it comes to proteins and packaging.

The National Restaurant Association’s What’s Hot 2018 Culinary Forecast lists sustainable seafood and heritage-breed meats among its food trends, in addition to food-waste reduction and locally sourced meat and seafood concepts. Large producers are getting on board, with companies like Perdue, the fourth-largest chicken producer in the U.S., slow-growing their chickens.

Research company Mintel and Restaurant Business magazine also point to “foodceuticals” as another 2018 trend in this area, as consumers focus on the health benefits of certain ingredients, like turmeric and flaxseed.

5. Veg-Centric

The veggie trend has gained momentum over the past three years, slowly edging proteins away from the center (or even off) the plate. The industry’s growing creativity with vegetarian and vegan offerings has consumers embracing animal-free options.

Flexitarians, diners who choose to occasionally replace meat with other options, are expected to rise in 2018, according to the Waitrose Food and Drink Report 2017-18. The market even has veggie burgers that bleed from Impossible Burgers and Beyond Burgers.

6. Cultured Proteins

International food and restaurant consultants Baum + Whiteman predict there’s a “post-animal economy” just around the corner, with Hampton Creek’s lab-cultured chicken scheduled to hit shelves next year. The idea is to make meat more acceptable by growing it in a lab, without slaughtering or antibiotics. It’ll be interesting to see how this plays out with regulators and consumers.

7. Off-Premise Boom

With delivery and ordering partnerships filling the news, and chains redesigning their stores to accommodate takeout or delivery-only models, expect to see more operators adopting off-premise operations. (Read this earlier article on the process of starting an in-house restaurant delivery service.)

8. Feed the Social Beast

Two in five Gen Z-ers and one in four millennial consumers agree social media exposes them to types of food they’d previously never heard of, according to Mintel’s latest report, Foodservice Trends 2018. Eye-catching “Instagrammable” options like Starbucks’ Unicorn Frappuccino or coconut charcoal ice cream will continue to dominate social media.

Summary: Ordering!

Many trends from 2017 will continue to gain momentum in the new year.

Change and challenges lie ahead for the restaurant industry in 2018, many centered around labor, technology and manufacturing.

Savvy business owners will want to stay on top of them to stay successful in the fast-changing restaurant world.

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