Restaurant industry calls upon Congress to replenish the Restaurant Revitalization Fund. Is the time right for robotics in restaurants? A vertical approach to quick-service restaurant design. These stories and more This Week in Foodservice.

On Aug. 23 the FDA granted full approval to Pfizer’s COVID-19 vaccine. While this was seen as good news by many and a key milestone in eradicating this nefarious virus, the fact remains the industry still faces some very near-term challenges.

As a result of Pfizer gaining full approval, some restaurant workers may be one step closer to facing mandatory vaccine requirements. That’s because many people feel this step will provide business owners, including those in the restaurant industry, the legal standing to make COVID-19 vaccinations a requirement for employment. It will be interesting to see how this all plays out in the coming months.

McDonald’s, for example, has required employees at its corporate offices to be fully vaccinated by Sept. 27. Yet, the burger chain did not make the same requirement for employees at the store level, which is a similar path that other large companies like Amazon and Walmart have chosen to follow – at least for now.

This news comes shortly after a New York Times article revealed that those plexiglass or plastic shields that have become so ubiquitous in restaurants may not be quite as helpful as originally thought. Apparently these barriers can change the airflow in a room and create “dead zones” where viral particles can build up and become highly concentrated.

While this latest surge in positive COVID-19 cases continues to cause uncertainty to swirl around the foodservice and other businesses, one thing’s certain: The restaurant industry is in no position to go back to lockdowns and other mitigations that crippled sales a year ago. To that end, the National Restaurant Association and its state restaurant associations sent a letter to U.S. Congressional leadership sharing concerning consumer confidence survey findings and urging swift replenishment of the Restaurant Revitalization Fund.

Some key points outlined in the survey include: 6 in 10 adults changed their restaurant use due to the rise in the delta variant; 19% of adults have stopped going out to restaurants; 9% have cancelled existing plans to go out to a restaurant in recent weeks; 37% have ordered takeout or delivery instead of going out to a restaurant; and 19% have chosen to sit outside instead of inside when going out to a restaurant.

“For an industry that requires a ‘full house’ every evening to make a profit, this is a dangerous trend,” says Sean Kennedy, executive vice president of Public Affairs for the National Restaurant Association in a statement. “These changes indicate declining consumer confidence that will make it more difficult for most restaurant owners to maintain their delicate financial stability.”

The letter urges Congress to complete the mission of the Restaurant Revitalization Fund (RRF) and provide adequate funds to replenish the program and offer relief for the applications still pending. “The rise of coronavirus variants like delta threaten to push these restaurants closer to permanently closing their doors,” added Kennedy. The RRF has proven its effectiveness in every state, saving restaurants, workers, and the suppliers who depend on their business. The small gains that our industry has made toward financial security are in danger of being wiped out, dashing the hopes of communities, entrepreneurs, and consumers nationwide.”

Per the NRA, 177,000 RRF applications that totaled $43.6 billion in grants are still pending.

Economic News This Week

• Initial-unemployment claims totaled 348,000 for the week ending Aug. 14, 2021, per the S. Department of Labor. This represents a decrease of 29,000 from the previous week. The 4-week moving average was 377,750, a decrease of 19,000 from the previous week. This is the lowest level for this average since March 14, 2020, when it was 225,500.
• Existing-home sales rose 2% on a seasonally adjusted annual rate from June to July, with no sales declines showing in any regions, per the National Association of Realtors. This represents the second consecutive month where sales increased. The inventory of unsold homes increased 7.3% to a level of 1.32 million from June to July, equivalent to 2.6 months of the monthly sales pace. The median existing-home sales price rose at a year-over-year pace of 17.8%. "Although we shouldn't expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve," says Lawrence Yun, NAR's chief economist.
• July housing starts dropped 7.0% to a seasonally adjusted annual rate of 1.534 million units, per data from the S. Department of Housing and Urban Development. Housing starts were projected to be in the 1.6 million range, per a Reuters poll. Permits for multifamily housing projects jumped 11.2% to a rate of 587,000 units. This increase may reflect a rebound in demand for rental accommodation as the economy fully reopens. Surging construction costs and home prices are expected to continue to constrain the housing market early in the third quarter.
• The University of Michigan’s Consumer Sentiment Index tumbled to 70.2 in its preliminary August reading. That was the lowest reading since 2011. The decline comes as the delta variant of COVID-19 has spread rapidly across the United States, leading some states and cities to reinstate mask mandates and other health restrictions.

Foodservice News This Week

• Is the time finally right for robotics in restaurants? Maybe. The concept of robotics and automation coming to the restaurant industry is nothing new. It’s something the industry has wondered about for years. So what’s different this time around? Well, scarce labor paired with higher demand for takeout food may be the winning recipe per a Wall Street Journal article. And at the recently concluded Pizza Expo, another company unveiled the industry’s latest look at pizza-making robots. Of course, foodservice automation applies to much more than robotic arms flipping burgers and making fries. Noncommercial operators, for example, have used robots to deliver patient meal trays in healthcare foodservice operations for years. And some colleges are tinkering with something similar for campus food deliveries. There’s always been an interest among operators to automate and, in some instances, even use robotics. The biggest barrier has always been a reasonable return on investment. And it may be getting easier to calculate a more reasonable ROI, as this FE&S article on foodservice automation
• QR codes have likely found a more permanent home in restaurants. At the dawn of the pandemic, many restaurants and foodservice operators quickly turned to QR codes as a way to provide touchless service to customers. Instead of handing guests a menu and later having to wipe it down, operators could direct customers to a QR code that would lead them to the menu and more. More than a year into this trend, restaurant operators now see greater potential for the use of QR code-related technology. For example, it can bring online ordering on-premises, instead of it being solely tied to delivery or pickup sales. This could introduce other efficiencies within the operations. In addition, given how often food costs continue to fluctuate, operators can use this technology to more easily and consistently update menu pricing. Indeed, it seems there are many opportunities for operators to leverage this technology.
• Taco Bell’s latest prototype takes a vertical approach enhancing the speed of service. The 3,000 square-foot Defy prototype will place the kitchen on the second floor of the restaurant. The unit will feature four drive-thru lanes, including three that will serve only mobile or delivery order pickups. The fourth lane will handle traditional drive-thru traffic. Digital check-in screens will allow mobile order customers to scan in their order via a unique QR code, then pull forward to pick up their meals. Staff will deliver food via a proprietary lift system. The unit will also feature a two-way audio and video technology that lets customers interact directly with the team members above in real time. Taco Bell will build this unit with one of its franchisees, who will build the first location in Minnesota. The quick-serve Mexican-themed restaurant chain expects to open the first location by the middle of summer in 2022.
• Dutch Brothers Coffee hopes to raise $100 million through an initial public offering. The Oregon-based chain has more than 480 locations spanning 11 states. The company was founded back in 1992 by two brothers who began with a double-headed espresso machine and a pushcart.