The way consumers have interacted with restaurants and how restaurants operate has radically changed over the past two years. The pandemic set the restaurant industry back in many ways, but also propelled it forward in terms of gaining technological advancements. Restaurants will continue to face uncontrollable external factors this year, but will find themselves more prepared to adapt as necessary. Analyzing current restaurant industry demographics, here are 10 predictions for the restaurant industry in 2022:
Regaining Financial Recovery
The COVID-19 pandemic put restaurants through extreme financial turmoil all throughout 2020 and 2021. In 2020 alone, it is estimated that over 110,000 food and drink establishments permanently closed. The title of a Time.com article said it best, “Most Restaurants Fail. COVID-19 Made the Odds Even Worse”.
As we enter the third year of the pandemic, restaurant businesses have had the time and opportunity to incorporate contactless tech and streamlined delivery to create a safer dining experience. A recent survey found that 63 percent of Americans now feel comfortable eating at a restaurant. Now that restaurants have adapted to meet diner demands for off-premise orders and safety measures for dining-in, revenues should increase this year.
Although the road to financial recovery will be slow for many establishments, especially independently owned restaurants, those that have been able to adapt to the “new normal” should start to experience less financial strain in 2022.
Ghost Kitchen Space Will Continue to Expand While Addressing Past Mistakes
Although established brick-and-mortar restaurants struggled due to the pandemic, virtual kitchens have had an explosive past few years. In 2019, the ghost kitchen industry was valued at $40 billion USD, and in 2030, the value is expected to hit $1 trillion USD. Even as consumers return to indoor dining, ordering food online from delivery-only concepts has become a habit, especially amongst millennials. Adopting ghost kitchen brands is an opportunity for existing local and independently owned restaurants to maximize their operational capacity and take advantage of slow hours (as well as times periods such as early morning and late-night where they might not be open).
Despite the success of ghost kitchens, there are still lessons to be learned in this still nascent industry. Reef Technologies frequently found itself in legal trouble due to violations and operating without permits; the company announced recently that it would be shutting down 95 units.
With ghost kitchens comes a lack of transparency. Although this is not necessarily purposeful, consumers can have a difficult time connecting with and trusting restaurant concepts they have never been to in-person before.
In 2022, ghost kitchens will need to learn from these previous mistakes to continue to expand and increase revenues.
Contact-Free is Here to Stay
QR codes grace the tables of most restaurants nowadays, and diners can sometimes complete payment transactions on their own phone. Pick-up lockers and shelves allow customers to snag their to-go orders without talking to anyone. These technologies helped restaurants survive during the pandemic, but consumers will maintain these expectations post-pandemic. Does anyone actually miss sticky, damp menus, or waiting in line to pick up a to-go order you can visibly see?
Big players in the quick-service restaurant space are hip to the continuation of the contactless experience. Taco Bell is unveiling its new concept (called Taco Bell Defy) in Summer 2022 that prioritizes contact-free ordering with drive-thru lanes that will be dedicated to mobile or delivery order pickups and digital check-in screens where QR codes can be scanned for mobile orders. Panera Bread’s new café design incorporates a double drive-thru, contactless dine-in, and delivery made possible via phone ordering. Independently owned restaurants have also followed suit, but some may find that they need to catch up with the big QSR players.
Simplified Menus Due to Supply Chain Issues
Long gone are the 10-page menus you might happen upon at establishments like Chili’s and Denny’s. After grappling with the woes of the pandemic, restaurants are now facing a new set of challenges from global supply chain issues and inflation. In the U.S., we have already seen shortages of ingredients like chicken wings, ketchup, and cream cheese, and who knows what the following week will hold. On top of this, food prices are expected to rise by an estimated 5 percent in the U.S. For restaurants, the most logical course of action will be to simplify menus and offer menu items that use similar ingredients.
Restaurants with large dining rooms were essentially paying for phantom space over the past few years. With rent cited as one of the highest costs in running a restaurant business, it doesn’t make sense to waste money on space not used. In 2022, we will see new concepts operating out of smaller spaces and different formats than what has been the standard. Food halls and public markets that house multiple restaurant concepts under one roof will continue to increase in popularity.
Labor Shortages Will Encourage Restaurants to Adopt AI and Automation
Staffing shortages is one of the main issues now plaguing restaurants in 2022. This has led to reduced operating hours for many establishments, further hindering the process of regaining financial stability. In response to this, restaurants can begin to incorporate automation, robots, and artificial intelligence (AI) into their kitchen and business model. Kitchen robots don’t need time off, weekends, sick days, or a paycheck and can help fill in staffing gaps where needed.
Off-Premise To Maintain Popularity
Even before the pandemic began, the delivery sector was experiencing exponential growth. In the past five years, restaurant delivery has grown by 20 percent. The U.S. food delivery market’s projected revenue for 2023 is a whopping $33 billion. When consumers were holed up at home throughout 2020 and 2021, they turned to delivery when home cooking became a burden. Consumers are accustomed to receiving a culinary experience delivered to their doorstep while they wear comfy clothes and watch Netflix- why would they opt for going out to eat at the frequency they did pre-pandemic? Although 2022 will likely not see the spikes in food delivery demand that 2020 and 2021 saw, it should still experience steady growth.
Higher Salaries for Restaurant Employees
Some staff positions cannot be fulfilled by robots, and some restaurants may not choose to employ AI and automation. With the current staffing shortages in the restaurant industry, establishments will need to raise wages and offer hiring bonuses to draw in new employees. In 2022, this will be especially true for lower-wage, entry-level positions.
Digitalization Across the Board
As restaurants enter the third year of the pandemic and face staffing shortages, supply chain issues, and inflation, they need all the help they can get. Digitalization and technology is how restaurants will continue to survive, and ideally, over time, thrive. As stated previously, contactless tech is here to stay, and restaurants will also rely on online ordering and kitchen management systems to streamline day-to-day operations. After making the transition to digital, restaurateurs, owners, and managers will have access to invaluable restaurant analytics. The most successful restaurants will incorporate digitalization and technology throughout their business, and make data-driven decisions to increase efficiency.
Using Data for Guest Personalization
With reduced operating hours, contactless check-out, smaller restaurant footprints, and simpler menus, how will restaurants connect with their customers and keep them coming back? The answer: personalization and loyalty programs. Guest data is one of the key components of restaurant analytics. Data can be gathered from online ordering and kitchen management systems, and restaurants will then have access to customer data like frequency of dining, favorite dishes, allergies, birthdays, and more. This information can be used for customized marketing and to create a curated experience for the guest.
Don’t underestimate loyalty programs. A recent survey found that 69 percent of the respondents, which consisted of over 1,500 Americans, felt compelled to return to a restaurant if they were a part of its loyalty program.
Scope out restaurants that need your tech using Brizo FoodMetrics
In 2022, restaurants will need all the help they can get to push through the third year of the pandemic and regain financial stability. Your company’s technology might be the determining factor for an independently owned restaurant’s ability to succeed. Brizo FoodMetrics, a leader in restaurant analytics and intelligence, offers contacts for over 750,000 restaurants and data that can assist in driving lead generation. Using this valuable restaurant industry demographics, data and insight, your company can determine what restaurants need your tech solutions, discover new distribution markets, analyze your competitor’s market share, and identify what menu items local restaurants are missing. Find your ideal leads by starting your free trial of Brizo FoodMetrics today.