Foodservice by Design

Team members from Profitality-Labor Guru discuss how industrial engineering can be applied to the foodservice industry.


The Operational Impact of 2017 Foodservice Trends

Juan Martinez explores the operational impact of such foodservice-related trends as sustainability, technology and more.

Earlier this month, Havi, a global supply chain management company, released a list of five foodservice supply trends for 2017. While they often provide good food for thought and cocktail party fodder, many foodservice professionals don't understand how trends can impact back-of-the-house operations. With that in mind I thought it might be worthwhile to connect these trends to their operational impact.

Consumer preferences are increasingly diversified.

Let me start with consumer preferences, needs and desires. Due to the myriad options they have, which expand quickly, consumers regularly change their preferences and like to try different things. What looks like a wavering consumer is actually an adventurous one, eager to try new experiences. Foodservice operators must offer options to stay competitive, but the more options available the more challenging the business becomes to run. This eventually impacts operating profit and loss, too. Options can drive inventory management and rotation issues, resulting in bad food quality as well as inventory spoilage — all of which drives an operation's food cost line higher. Basically more items can mean waste.

Personalization represents one common aspect of giving customers options. Of course, this is nothing new. Back in the '70s, Burger King, where I spent a large portion of time in the front end of my career, operated under the slogan "Have It Your Way." The chain understood the importance of personalization and revolutionized the industry when they proclaimed "special orders don't upset us." No, personalization is not new but the way it manifests itself today is.

From a production perspective, it's important for restaurants to have the right operating parameters and systems, where the operating parameters work in synergy with each other.

From an inventory perspective, operators need to implement a sharp inventory management system that enables their businesses to function in a "just in time" manner when it comes to buying, setting up the stations, using the product components (in multiple offerings, instead of a few items) and managing and discarding — especially when the dynamics of trying new things shows no signs of slowing down.

Technology will continue to drive modernization of supply chains.

Customer-facing technology will continue to play a larger role in shaping the guest experience. And the rate that operators use apps or online ordering will only grow in the coming months and years. In other words, it's time to embrace how technology can positively impact your business. Recently, I was one of the panelists in an FE&S webcast on customer-facing technology such as smart phones and off-line ordering on foodservice operations. This technology may be the equivalent of having an infinite number of registers in a given restaurant, which could make some operators hesitant to embrace it. But it's important to understand that adopting technology such as apps, online ordering and even partnering with third-party delivery companies such as Grub Hub, represents another way restaurants can offer guests options. The difference between these options and others is that the proper use of technology can actually save labor and provide the guests better service. It's time for operators to jump on to the technology bandwagon. Those that fail to jump on board will get caught in the wake of those that do.

When it comes to embracing technology to access and manage information, the foodservice industry is likely years behind many other industries. It is not that the information is not there, but rather that it is not used to help in objective decision making. Another way of looking at it is to say the foodservice industry is data rich and information poor.

There are so many techniques available to help with decision making and design. One of the ones that we use as industrial engineering consultants is simulation, mentioned in the article.

Helping homemade happen.

Everybody wants the equivalent of a homemade meal when they eat out. Perhaps this is all about the comfort levels with which we grew up. Everyone loves grandma's cooking, right? Maybe it's because we trusted her. Or maybe it had to do with the quality and quantity of the food she prepared. Regardless, consumers' appetite for homemade food has never been greater. This has forced a blurring of the lines between the segments as operators' pursue a greater share of the customers' stomachs. Today all operators – be they quick serve, fast-casual, casual or even fine dining operations – strive to offer food that rivals homemade. The latest example of this is the growing acceptance of meal kit companies and consumer willingness to purchase prepared foods at the grocery store. As a result, the competition for foodservice operators has never been greater. To succeed in today's complex market place, operational excellence is no longer enough. Efficiency is an essential ingredient, too.

Traceability begets confidence.

Food safety is not negotiable! Traceability is a key good safety component. It will go a long way toward helping customers establish confidence in a specific foodservice operation. In addition to partnering up with the right suppliers, the application of the right technology is critical. Operators need to monitor and track storage and handling of food from the moment it hits their back door until it lands on the customer's fork. The operational systems, including equipment, processes and procedures, and food safety practices at the unit level are the last point of protection. I don't need to tell you what one bad food safety issue can do for a brand, since there has been plenty front and center happening in this area recently. It is mandatory to ask yourselves the impact of food safety on everything and anything you are doing at the unit level. The same questions should be asked of the suppliers.

Sustainability and the circular economy.

The last topic that is mentioned in the article is sustainability. I was recently at a conference where Roger McClendon, chief sustainability officer at Yum! Brands, discussed this subject. Later on that day, I was moderating a panel on unit economics. We included in our discussion the importance of making sure sustainability was a key part of the unit economics equation that drives the success of a given concept. Sustainability and social responsibility is important and getting more so as consumers get more and more sensitive and concerned about environmental impact and becoming more socially responsible for their part on the world we will leave our children.

So, are you ready for the impact these trends could have on your business in 2017? Keep in mind as you answer this question, there are many more factors this blog post does not address but will most definitely impact your business. So, keep your eyes open for these, and be ready to address how they can impact the operations side of your business.