In part 2 of our Future of Restaurants series, our founder Kiana Estevez sat down with Kealoha Pomerantz, Derek Domino, Parker Doyle, and Frank Schuetzendorf to discuss the rollercoaster restaurants survived in 2020 and ways the industry can get back on track from 2021 and beyond.
Kealoha Pomerantz: Derek, I know you have strong feelings about how technology affects the future of restaurants.
Derek: Finally, my topic!
Kealoha: [laughs] He’s ready!
Derek: I think technology is a thread in all of these conversations. It touches every piece of it, whether it’s labor or guest experience. It’s the infrastructure that allows these experiences to happen.
What brand are you going to have, and how are you going to use technology to give your guests the experience they want? The Steve Verdet, founder of Toast, used to say that 10 years from now there will be food factories or food art. Completely automated experiences where I just hit a button and food has arrived at my door. That’s inevitable, that’s where consumer trends are heading. If I want that convenience, that is going to be available. If I want a high touch experience, that is also going to be available. I’m just going to have to pay a premium for it. Restaurants are going to have fo figure out where they’ll live on that spectrum. What kind of experience do they want to offer their guest? That’s going to become synonymous with their brand.
What are the implications of creating restaurants that are equitable, that pay well, and are sustainable? What are the positive and negative implications of creating good businesses?
Parker: That’s the future, we can’t run away from it. We have to realize that’s the future. We’re not just in a labor crisis, I hate that word. We’re in a wage and benefit crisis. We’re in a major reset period that requires us to be so much smarter and more purposeful with our decision making. There’s no reason why creating restaurants that pay well and are sustainable needs to remain as single unit operators or have fewer restaurants. They just need to ensure that they’re smart and tactical with their brand strategy, menu, operations, store designs, and their technology stack. All of those things need to work together in one direction.
What’s really interesting during the pandemic is, operators found much success with smaller menus that really celebrated hero items and cross utilized ingredients at a very high percentage. Consumers are really understanding of that. Like Derek said, you need to develop an operating system that’s able to efficiently flex up and flex down during peak days that can be run by one employee or five. Instead of adding 15 steps to dropping off a delivery order, it needs to be a pivot in the kitchen. A pivot for dining, a pivot for delivery, a pivot for drive through that all works together and doesn’t make employees mad when they see a delivery order.
Kealoha Pomerantz: I agree, this is the future. How do we create that? What might the good and bad implications be?
Kiana: I think we need to be real for a moment. What are the implications of not doing this? There are one and a half million job openings in an industry that doesn’t look so attractive from the outside or the inside. What’s most interesting for me is the first part of the equation- let’s just raise our prices. Let’s raise our prices and that’s our answer. But you have to understand, there’s the gentrification component. We’re pricing out the community. From the guest’s standpoint, we have to approach our pricing with more gratitude to our guests.
How do we award those who create sustainability and equitable practices in your restaurant? We see a Michelin restaurant and see them as worthy of our money as a guest, but how do we provide the same credibility to businesses who pay their employees an equitable wage?
Kealoha: Lastly, what’s happening? What are you most excited for in the future of restaurants?
Kiana: It starts off with understanding that the last year gave us a privilege to understand our food differently. From individual, to restaurant experience, to as a collective. We had to be at home preparing dishes, truly savoring and understanding the ingredients. We are now able to understand that we’re willing to pay a premium for restaurant experiences, we are willing to try new things.
I’m also excited to see how we define what a restaurant is and what the role of a chef truly is. I am nothing short of excited and hungry for the next step of creativity that is about to be brought into this space.
Parker: I think as an industry, we’re getting smarter and stronger. And we’re still here! We’re happy, we’re back and we’re ready for guests. Everyone, including guests, has realized the importance of restaurants. It’s a community meeting space, it’s where you meet with family and friends to celebrate, it’s such an integral part of our daily lives. That’s where memories are made.
I’m looking forward to sharing more food and drink with friends. I also recognize that younger customers are expecting a heightened experience of convenience and not willing to settle for less. That’s really exciting. I think we’re going to see a growth of plant based cuisines like Mediterranean. I think of Kava or Luna Grill based in San Diego. Those are the next concepts that are poised for growth not just in coastal cities, but in the midwest as well. It’s going to be great to see not just burgers, fried chicken, and tacos anymore.
Kealoha: Frank, where’s your excitement?
Frank: I think we don’t really have a choice because it’s such a such a mature industry. We have to eat to produce energy to be productive. We don’t have an option, it’s just a matter of who’s going to be the first to come up with the next brilliant idea.
I think quality is going to be improving. We have more accessible, high quality food products. We see it in low cost food markets that is really democratizing access to food. In general, quality should be well improved.
As I mentioned, we’re experiencing the conversion of food and tech. I think there’s going to be a lot of creativity with new millennial chefs.
Kealoha: Derek, close us out with your excitement.
Derek: I’m the tech guy and you’re probably thinking I’m going to say something tech related but one of the things I’m really excited about is remote work. By definition, restaurants cannot be remote work. Somebody has to be there in the restaurant. I think that’s what’s creating this ‘labor crisis’. Everyone went home and now everyone’s railing on this universal basic income, everybody wants these checks and no one wants to go back to work.
I think it’s actually also that the labor pool has fundamentally changed. It used to be that everyone in a town is a part of the labor pool. Now, everyone has moved back home. They’re getting jobs all over the place. Now you as a restaurant owner are actually competing with the whole world for that person’s time. I think that’s a fundamental change in the restaurant industry that has really disrupted it. If I have a choice of getting a salary and working from my couch or getting paid $2, it’s not that hard of a choice. I think this is going to force restaurants to pay a competitive wage and actually offer benefits. That also is a constraint that forces restaurants to innovate.
This is a factor that forces them to pay staff a minimum wage, change your business model, figure out ways to bring in new revenue streams, bring in new technology just to be more efficient. Pre-covid, the business model wasn’t exactly great. Covid blew it all up, and now we’re trying to build it from the ground up. We have a clean slate, and I’m seeing a ton of innovation. Also, I think restaurant workers will be paid a living wage. I think that’s going to be a net good. There may be less restaurant workers, but the workers in restaurants will be happier. As we come back and restaurants are part of our communities, if I choose to take that job, I’ll be able to afford rent. Before covid, that was a trade off. I would be living with 5 roommates and taking a bike to work. That’s the life of so many restaurant workers.