The foodservice equipment industry has done a good job of adding technology to specific pieces of equipment. But the industry has not done as good a job of using technology to improve business operations.
As the industry continues to consolidate — and it will — effective use of technology will play a significant role in determining the winners and losers.
A primary reason the foodservice equipment industry struggles with business technologies is that the ecosystem is many to many to many — too many! It’s a system of hundreds of equipment manufacturers selling through hundreds of reps to hundreds of dealers to thousands of chains and other operators, which run millions of commercial kitchens. This whole system evolved based on two assumptions: any dealer can sell any piece of equipment, and any service company can fix any equipment item. This is nuts, but it’s what we have right now.
New car dealerships, which are 100% brand specific, represent the mirror opposite of the foodservice approach. A dealer can own several dealerships spanning a variety of brands, but they operate separately. In that industry, dealers aligned with factories can share information seamlessly. That’s why every Honda dealer can see regional car inventory, parts inventory, recall notices, service advisories and organizational info by tapping into one system. To gain some of the same efficiencies, the foodservice equipment industry will either become more aligned and exclusive, or it will continue to create shared systems.
Eventually, the way operators own equipment will change as it has in other business segments. Take, for example, business equipment. Nobody buys a copier these days. They lease it. And these leases include service-level agreements and all the necessary maintenance and repairs. In the foodservice industry, this occurs in the warewasher segment, often driven by the chemical side of the business. And this approach continues to creep into ice machines because of the need for uptime and fast repairs. We’ll soon see a similar approach in high-speed ovens and combi ovens.
The foodservice industry needs some new standards when it comes to technology, and the big chains will likely drive this. For example, we need a standard for Internet of Things that allows operators to look at one dashboard on their screens to see what is happening with all their equipment across all the brands they use.
Unfortunately, the pandemic is only slowing the advancement of technologies to help foodservice companies run their businesses better. Companies continue to slam the brakes on expenses and shrink their bandwidth through layoffs. The irony is that even though revenues may be down significantly, companies still have to figure out how to thrive in an ever-shifting marketplace.
The good news here is that we don’t need to invent new technologies or develop our own solutions. We just need to adopt things that have been well proven and refined in other industries.