It’s here: the next generation of Brizo FoodMetrics is waiting for you. Learn more.
It’s here: the next generation of Brizo FoodMetrics is waiting for you. Learn more.
In the restaurant industry, mergers & acquisitions are powerful force that influences trends for years to come in this space. The pandemic caused a brief lull in the occurrence of these deals, but began to come back towards the end of 2020 and throughout 2021. As we near the second quarter of 2022, a few significant deals have been announced.
Mergers and acquisitions promote growth, increase revenues, and allow companies to expand market share while eating up the competition. While it is key to stay current on restaurant industry statistics, it is more important than ever to stay competitive with up-to-date restaurant data as big players snatch up smaller chains, restaurant technology startups and competitors.
We’re not yet in Q2 of 2022, but in the past few months, have already seen several significant merger and acquisition deals in the restaurant space. Workforce shortages and higher food, transportation, and labor costs have, however, resulted in continued margin contraction. Profit margins have continued to tighten, and smaller businesses that have struggled due to external factors are getting squeezed out of the space. Distressed assets will continue to be consolidated by larger and stronger players.
According to the Restaurant Finance group at Mitsubishi UFJ Financial Group, these factors have resulted in lower M&A volume in the first quarter of 2022. Despite this, there have still been several noteworthy deals in the past few months.
Most recently, DoorDash acquired BBot, a hospitality technology startup that streamlines digital orders and payments. The details of the deal were not disclosed, but BBot’s tech will be used to strengthen DoorDash’s indoor ordering solutions, increase partner restaurant sales, and reduce diner wait times.
Olo, a digital ordering and delivery software company, acquired restaurant tech provider Omnivore Technologies at the end of February 2022.
In January 2022, FOHBOH, a digital community for restaurant operators and executives, acquired 214Eats, a digital marketing agency for restaurants.
Staying informed on restaurant industry statistics is crucial for staying competitive while keeping up with mergers and acquisitions is advantageous for predicting upcoming trends in the restaurant industry space.
According to a study conducted at Iowa State University, over the past three decades, mergers and acquisitions in the restaurant space have continued to grow steadily. However, between 1981 and 2010, the study found that M&A occurred in three different waves.
Fast forward to the past few years: between 2017-2019, M&A deals were in full swing. When the pandemic hit in 2020, there was mostly a pause in M&A activity. However, COVID-19 was constructive in helping accelerate a lot of trends that were already occurring in the restaurant space, such as contactless tech. Towards the second half of the year, deal activity did actually increase due to low-interest rates and ample investment and consolidation opportunities.
Even though the pandemic was still present in 2021, last year was still a busy one for these deals. As signs of recovery for this sector emerged, M&A’s trickled back in. According to RestaurantDive.com, many deals in 2021 were driven by restaurant holding companies looking to expand, with the intention of owning more brands rather than operating the stores themselves. Olo purchased Wisley, Fiser purchased BentoBox, and Popmenu acquired Ordernerd, signally that tech companies were going for buying over building.
What does 2022 hold for M&A trends? Despite a return to indoor dining, online ordering and delivery will maintain popularity this year, and in years to come. Technology relevant to these trends will continue to be a hot commodity.
Next year, financing terms for deals are expected to tighten if margins continue to decline. Despite this, according to global restaurant consultant Aaron Allen & Associates, M&A activity will continue to pick up over the next five years.
Travel restrictions are not fully lifted, but once this happens, M&As are expected to rush back across different geographies, categories, and cuisines. There will be a bit of a “catch up” here as deals accelerate back towards pre-pandemic levels, and distressed assets are gobbled up.
Looking forward to the next few years, concepts that are not yet trending or on the radar will have the opportunity to receive large valuations within the next few years. Groundbreaking technology that propels the industry forward will receive attention and investment. Sweetgreen was the restaurant industry’s first unicorn, and we will likely see more in the upcoming years.
In the restaurant industry, mergers and acquisitions are a driving force that can shift the trajectory of this space. These deals cause many micro and macro shifts to occur. An M&A can result in something as simple as a new menu option being brought to market as a result of two restaurant brands coming together. Or, it can be so significant that the introduction of new tech may influence restaurant technology trends for years to come.
Now, to stay relevant and competitive in this “new normal” where food delivery, online ordering, and contactless service reigns supreme, the right restaurant technology is key. Big players like McDonald’s, Starbucks, and Yum!Brands recognize this, and although they haven’t necessarily created their own tech, have acquired and integrated companies that provide this.
About 87 percent of restaurateurs and managers reported that adopting technology has been crucial for survival throughout the pandemic. Technology in the foodservice and hospitality industry moves at lightning speed, and 47 percent of full-service operators and 37 percent of QSR operators feel that new technology is critical for their business.
Restaurant tech vendors help operators, managers, and owners gain access to valuable data through tech such as point-of-sale systems and kitchen management platforms. These technologies have kept restaurants afloat and allowed businesses to maintain a competitive edge, especially against big players in the space.
Up-to-date data is not only important for restaurants, but also for vendors marketing to restaurant businesses. As large companies gather up restaurant tech competitors, it is pertinent to keep up with what your competitors are doing, and how you can fill in their gaps.
Restaurant industry statistics may be easy to access, but gaining information on competitors and potential leads is not (unless you are using Brizo FoodMetrics!). Having access to this data can ensure that your restaurant tech business is always in the know, no matter what is going with M&A’s and changing trends.
Time is money, and researching your competitors takes a lot of time. Brizo FoodMetrics allows vendors to reduce hours spent on restaurant market research by 20-40 percent, saving both time and money. Through analyzing thousands of foodservice and restaurant data points (including local menu items, review, and food technology providers), Brizo allows you to make data-driven decisions and increase sales conversion rates by up to 80 percent. Through Brizo’s restaurant data analytics and buying signals, you can easily identify the hottest sales-ready leads.
