As 2020 progresses, restaurants and noncommercial foodservice operators increasingly place on their proverbial front burners those initiatives that have proven successful in maintaining revenue.
They do this while moving new ideas and processes that may not be quite as necessary to the backburner. Given that indoor seating will likely remain severely limited for the foreseeable future, there will continue to be a greater dependence on the purchase of meals via takeout, delivery and prepared meal kits to drive revenue. The good news is that Americans continue to incorporate food prepared at restaurants into their meal planning, even though now they primarily eat most meals at home.
What do the continuing restrictions on in-house dining and the emphasis on off-premises meals mean for back-of-house operations? Operators must take into account multiple considerations before evaluating potential back-of-house changes.
The first consideration is simple yet important: How will the daypart mix change at a location? Given that a sizable percentage of individuals who used to travel to an office every weekday will now work from home, the demand for breakfast and lunch will decline in urban centers and central city locations. Depending on the source, forecasts of office staff working at home full-time or part-time on an ongoing basis, instead of returning to the office five days per week, range from 20% to 40% of a company’s total office-based employees. Employers have seen that productivity has not really diminished for many as they work at home, so why require them to be in the office five days a week? This can help employers reduce costs because they will no longer need as much office space, etc.
While not every U.S. worker works in an office, a sizable percentage has traditionally done so. Urban areas and suburban office parks tend to have concentrations of offices. That type of population density, along with a predictable pattern of customer traffic, made these locations attractive to restaurants and a variety of noncommercial foodservice operators. Operators could base decisions about menu development, inventory management and staffing on reliable, current and regularly updated data. Breakfast and lunch were the more active dayparts as most people typically opted to eat dinner closer to home.
For several years prior to the coronavirus pandemic, breakfast was the highest-growing daypart in foodservice as food and beverage options expanded and operators learned how to minimize wait times. Growth in breakfast visits was concentrated in fast-food and fast-casual outlets, not full-service establishments.
Going forward, if a sizable percentage of people will now work from home, restaurant demand for the morning and lunch dayparts will continue at diminished levels. As a result, operators need to quickly reevaluate the size of their ongoing breakfast and lunch businesses and identify necessary changes to hours of operation, menus and staffing. Operators should consider simplifying the existing menu to limit inventory, streamline the supply chain and maintain speed of service.
Until such time that full on-premises dining can be offered to customers, operators need to decide what to do about on-premises dining. Namely, if the local jurisdiction allows for on-premises dining at reduced capacity, does it make sense for the operator to move forward with it? Or does it make more sense for the operator to keep the dining room closed until it can reopen at full capacity and focus on takeout and delivery in the interim? Consider the following: If operators decide on the latter approach, can they reallocate staff to back-of-house roles to ensure the business continues to provide fast service? Slow service generally results in fewer customers as people tend to be in a hurry during periods of peak traffic, especially in the morning. This is the bigger issue full-service restaurants face.
For operators in the suburbs or exurbs, similar deliberations should occur, but they should come from a different perspective. These operators have the opportunity to increase their breakfast and lunch business as their potential customer base grows due to more people working from home. How do these operators build awareness and promote their morning meal and lunch capabilities to customers who have previously rarely used these outlets for breakfast and lunch meals? What sorts of operational changes must these operators make to better accommodate a larger group of time-constrained customers?
A final consideration: To enable breakfast or lunch service to become a larger component of an operation’s total revenue, the business requires the appropriate equipment and trained staff to make breakfast sandwiches, espresso-based (hot and cold) drinks, and items like smoothies, fresh juice combinations and multiple varieties of healthy bowls. Each of these offerings was growing in appeal prior to the pandemic, and consumer demand for these products will likely not change going forward, regardless of employee location. Due to health concerns, make-your-own salad bars may be phased out as an offering. As an alternative, operators will have to determine how many premade salad options they can profitably offer customers.
Simply said, in order to build their business, suburban operators must be able to offer the same types of food and beverage items that new customers had previously ordered at restaurants closer to their city-center offices.
Two BOH Sure Things
Two factors will shape changes to back-of-house operations: necessary spacing of staff and the need for increased flexibility of menu management. First and foremost, employees will need to have more space in order to better limit the potential spread of the coronavirus. Like the rules that call for social distancing in front-of-house spaces, operators will need to account for personal spacing in the kitchen and other back-of-house areas, too. If the operation can’t provide employees with more space via expansion of prep and cooking areas, management and kitchen designers will need to get creative. For example, is there a way to utilize plexiglass barriers to separate different areas of the kitchen where different functions occur? Can the operation rearrange equipment or storage to help separate the kitchen staff?
Personal safety is a high priority among staff as well as patrons. For staff to comfortably return to work, they must feel their working conditions are safe. Proper spacing will play a key role in helping employees feel safer about the chance of catching the virus from co-workers. As part of maintaining necessary back-of-house staffing levels, operators must provide required personal protection equipment and enforce that all team members wear gloves and masks at all times.
When in-house dining expands in the future, another important consideration for management will be the allocation of back-of-house staff between on-premises and off-premises meal preparation. Today, most kitchen staff focus on the preparation of off-premises meals due to the significant limitations placed upon on-premises dining. As on-premises dining is permitted to operate at a higher capacity and consumers begin to feel more comfortable eating on-site, operators will again have to pivot to have some portion of the back-of-house staff work on a different food prep process. Off-the-shelf third-party scheduling tools assist operators in optimizing the hours and allocation of staff by function to maximize manpower.
In addition to staffing, operators should consider the use of technology and new equipment to optimize back-of-house operations. For example, this means combining all incoming third-party delivery orders into the existing POS system and on kitchen display screens. Utilizing multiple third-party delivery screens unique to each delivery service is a waste of space and results in poor staff productivity. Displaying all orders on a single screen can help set priorities and ensure food prepared for delivery is ready at the specified time for each service provider. Since all orders will be input and displayed in a similar manner, this makes it more likely that staff will take a uniform approach to food preparation. This limits incomplete orders and food preparation errors. In the long run, such a system also helps with inventory control because it consistently classifies all components of a meal, allowing for better tracking of individual items.
Many operators continue to modify and streamline their existing menus. This helps reduce the number of SKUs held in inventory. Is management willing to modify the meal preparation process to include prefabricated or semi-cooked items that require less labor? This could result in using less shelf space, too. This modification of food components can reduce prep times, which leads to shorter customer wait times and higher guest satisfaction. The use of prepared foods also minimizes the number of kitchen staff necessary to create throughput in a timely manner, potentially providing some cost savings due to increased productivity. Fewer items in inventory also means lower carrying costs and potentially a more simplified supply chain, leading to lower expenses — an objective of every operator.
Greater Needs, Expanded Options
Changes to ingredients, including not only what an operator sources but how much and in what form the individual items arrive, could result in a greater need for more refrigerator/freezer space to account for the increase of items requiring cold storage. This is where a multifunctional device — in this case, a unit that can serve as a refrigerator or a freezer based on need — could help. As necessary, the temperature can be lowered to serve as a freezer or raised to serve as a refrigerator.
In general, any equipment that can perform multiple tasks will be beneficial to operators, particularly in this environment. Take, for example, induction cooktops or combi ovens. These types of equipment can quickly change temperatures for varied cooking functionality.
The bottom line is this: Successful operators will reevaluate their back-of-house layouts based on changes to menu and daypart demand to determine the degree to which they can modify space, staffing and equipment. What operators felt was safe and efficient prior to the pandemic will require some adjustments. Not completing this exercise endangers any operator’s ability to profitably serve its customers going forward. This applies to commercial and noncommercial operators alike.
While evaluating equipment needs, consider doing the same with respect to servicing these appliances. Many newer pieces of equipment have the ability to connect to external monitors, which helps operators know if their refrigerators and freezers continue to maintain the right temperatures throughout the day and evenly within each unit. For ovens and cooktops, the monitors can determine if pilot lights are on or have gone out.
Other monitors enable operators to begin preheating an oven before opening, allowing early morning food prep to begin earlier in the day. Monitors can also ensure the equipment reaches the appropriate temperatures as the appliance transitions from one application to another. Monitoring equipment can help reduce expensive service calls by providing early identification of potential problems and paving the way for service before the item is out of commission. Of course, enhanced features like these may come with a higher cost, but if service calls become less frequent or this approach extends the service life of the equipment, the higher price may be justified.
New technology provides the potential to reduce labor costs if it can replace staff that complete repetitive tasks. There has been lots of discussion about chains possibly implementing robots for tasks like managing a frying station or flipping burgers. So long as the assigned task is simple, repetitive and rarely changes, this technology might help reduce labor costs over the long run. Implementing technology to take customer orders online instead of over the phone enables operators to use existing staff for more productive tasks, too. Online automation reduces order error, speeds food preparation and helps to increase customer satisfaction. Use of technology to remotely monitor equipment enables operators to potentially limit major expenses related to emergency calls or new kitchen equipment. New systems have been developed to help improve staff planning and budgeting as well as improve inventory control.
Note that all of the technology examples provided above may enhance efficiencies at foodservice operations. The implementation of technology, though, is not specifically intended to run a restaurant with fewer employees. Though labor represents a significant percentage of operating costs, an operator’s goal should not be to arbitrarily reduce headcount just to save on labor-related costs.
In the year ahead, the factors that will distinguish one restaurant from another will include speed of service and food quality. It is difficult to provide either of these with a smaller staff, even when an operator focuses on carryout and drive-thru. Consider technology a tool that can enhance operational efficiency, which ultimately translates into customers coming back to purchase food more often.
Though many restaurants will unfortunately close for good in the coming year, plenty of competition for customers’ discretionary income will remain. A poorly run back-of-house operation, regardless of how food is ordered or prepared, puts any operator at a competitive disadvantage. Improving back-of-house operations strengthens an operator’s ability to increase profits and keep the doors open into the future.