Optimizing Profits for Summer 201716 May 2017
As the popular summer months approach, Pacific Northwest restaurant operators are gearing up with seasonal menus, staffing programs and marketing activities. This year could be your best, and based on decades of experience in the Pacific Northwest, we urge you to take five minutes to absorb our recommendations on how to optimize profits this summer to achieve your best results; whether you have one restaurant, multiple sites or are a national chain.
The Focus: Your Menu + Your Operations + Your Customer
“Focus One: Your Menu”
Be Aware of Your New Customer
There are significant differences between the millennials and preceding generations that are seeing new trends and new ways of operating being adopted by the industry. The most significant include:
-Transparency – transparency on ingredients and where they are sourced is very important to Millennials.
-Customization/Made on Demand – Millennials want to control their own food and have their transactions occur quickly. They want to combine ingredients and flavors that they want.
-Questioning – there is now much more emphasis placed on the origin of foods and ingredients as well as know how sustainable your business is.
-Everyone’s a Critic – the rise of social media and online review sites are a norm for the millennial generation, from Facebook, Twitter, Instagram, TripAdvisor, Yelp… the list goes on.
-Socially Responsible – engaging with the local community in an appropriate and authentic manner is important to millennials.
Tastes Are Changing
A new generation of customers including both Millennials and Generation Y are looking for menu items that appeal to them. They have different needs to previous generations that need to be considered:
-Healthier options – not necessarily weight-loss but organic, natural and ‘free-from’ ingredients.
-Snacking – the all-day occasion that is rapidly replacing the traditional lunch occasion. Are you making these grab-and-go items available in your operations?
-Seasonal – dishes that reflect food without the miles and with more taste.
-Seasonal offerings – serving the right dishes at the right time of year such featuring seasonal ingredients and items that reflect the season (more pastas in the winter, frozen treats and drinks in the spring and summer)
-Locally sourced ingredients – a radius of known, local suppliers.
-Innovative dishes such as dessert alternatives e.g. sippables from the bar, grab and go offerings, etc.
“DSL Northwest Recommends….”
Based on the above, we recommend that you take the following actions now in relation to Your Menu:
1. Conduct a menu audit that addresses…
-Is my menu sustainable and can I keep ingredients as fresh as possible?
-Do I have multiple dishes that utilize similar ingredients or do I have legacy menu items that feature unique ingredients? Is this an ineffective use of ingredients and therefore creates cook-time inefficiencies?
-When was the last time I introduced a new seasonal item to the menu?
-Is my menu designed for the new eating occasions e.g. more frequent snacking through the day?
-Have I built in flexibility to allow for consumer customization?
-Does my menu include items to drive new revenues e.g. Frozen Tea or Frozen Cold Brewed Coffee, Broasted Chicken?
-Am I incorporating best practices into my menu that will appeal to a new generation of customers such as local sourcing, organic and transparency of ingredients, flavors and food preparation?
-What am I doing to create menu items for customers can be ordered on the go as take-out or delivery? Am I looking to work with third parties such as UberEATS? If not, you could be missing out on valuable business as an increasingly tech-savvy generation prefers to order online.
2. Conduct local research to determine your demographic
-Do I understand my local area’s customer profile and can I attract more customers with a revised menu? For example, children under the age of 15 influence 75% of the decision making when a family dines out; do I have a menu offerings that will appeal to this demographic? Can I make the experience memorable such as a free ice cream cone?
-A simple analysis might be looking at the local stores; any new outlets that are appearing that appeal to a changing demographic, and talk to other businesses, talk to realtors and investigate statistics online at local government websites.
3. Build in Community, Consumer and Communication
-Consumer – Create a loyalty program to tie-in customers and drive engagement.
-Communication – get busy on social media; utilize the platforms they use to share news and reach out to your customers.
-Community – be specific about your community positioning and connections back into the community from a hiring perspective to business operations that incorporate sustainability practices, recycling and waste management.
“Focus Two: Your Operations”
Avoiding Equipment Down-Time
With the increase in business comes a greater demand on the kitchen, the equipment and your teams. Regular equipment servicing is often low on the list of priorities when the season kicks in, but the impact of equipment downtime can be catastrophic; especially for smaller operators. Unplanned maintenance and equipment break-downs can cause a myriad of problems; from ruined ingredients, not being able to execute large sections of the menu and to under-utilized staff.
Save Time and Money
Are your processes as efficient as possible? Labor costs continue to rise and maximizing the efficiency of your staff and their labor hours can be a make or break issue. Have you considered a review of your equipment and processes to see if new technology, such as the Taylor Clamshell grill, can reduce ticket times, improve quality and reduce labor? Our DSL Northwest experts are uniquely qualified to discuss this opportunity with you.
Technology is Your Friend
“Digital ordering is growing by double digits in a market that’s not growing at all”….The trend that restaurants can’t afford to be without. Around 80% of the US population use mobile devices to make everyday tasks easier. This includes dining out and the statistics reveal the popularity of mobile and apps:
-63% of diners have at least one quick-service app on their phones.
-73% of diners have used mobile within quick serves.
-35% use mobile every time they visit a quick-service restaurant (or at least regularly).
While the major chains will dominate in online ordering, there is an opportunity for independent restaurants to carve out a unique positioning with a digital offering.
“DSL Northwest Recommends….”
Based on the above, DSL Northwest recommends the following actions in response to the issues raised in Your Operations:
1. Conduct An Equipment Audit
Consider an audit on your equipment to identify potential issues. When looking at your equipment, consider its condition and usefulness in relation to the labor force and energy consumption; you might be surprised to find that switching to new equipment boosts the bottom line, and initial investment costs are covered quickly. New and modern equipment is designed not only to cook products, but they are also created with space, resource and time saving solutions in mind.
Arrange for a planned program of maintenance and servicing with a reputable group such as DSL Northwest. Call us for a free consultation and advice on 877-865-1125.
3. Identify Workflow Lags & Errors
A simple analysis through fresh eyes can help to improve processes and existing cooking and delivery systems. In addition, introducing technology can improve the time it takes to process orders in the kitchen; from ipad apps to the latest in kitchen display equipment.
4. Create an App/Online Presence
Creating an app that offers your menu online and the ability to order across both Apple and Android is a strong marketing and publicity tool as well as a functional benefit to the business. Online interaction with the customer is more than just ordering. It’s about brand engagement, building loyalty and reward, and some restaurant chains are already linking their online ordering with other social media channels to drive further engagement. Where mobile ordering isn’t available, restaurants are partnering with groups such as Uber Eats or Yelp to fill that gap.
“Focus Three: Your Teams”
The Minimum Wage
The rising minimum wage is fast becoming the #1 concern of operators. Not only does it impact costs, but a shortage of skilled labor and continued turnover leads to rising training and implementation costs. It looks increasingly likely that the $15 per hour minimum wage will soon become the national norm. While this can be a headache for operators, we believe this also creates opportunities for efficiencies and for driving profitability in new ways. The key objective for any operator is to remain profitable while maintaining menu prices that will attract and keep customers. However, this can be a conundrum when costs are rising. Our Foodservice experts are uniquely qualified and trained to discuss these solutions with you
Debating The Tipping Model
This is a much-debated issue and something high on the agenda of the Pacific Northwest restaurant sector with some restaurants switching from tipping to auto-gratuity models or higher menu costs with no gratuity expected. Others are moving toward service charges instead of tips. How are you prepared to address this challenge/opportunity?
Supporting Your Employees
Today’s foodservice equipment utilizes start of the art technology to help operators address many of the issues mentioned in this blog. Automated cooking systems, significant reductions in labor hours to execute complex menus, energy efficient systems to reduce waste and expense are just a few of the many features now available. For example, the MagnaBlend Revolutionary Blender features an integrated ice dispenser, blender & built-in rinse station for quick service; no more separate washing required. Signature recipes can be uploaded straight from a laptop, and portion control reduces product waste. The result is the delivery of consistently blended drinks every time, and more efficient use of staff time. The new Lainox combi ovens feature wireless connectivity and cloud based applications that allow for recipe changes to all of your restaurants at the stroke of a key.
Based on the above, DSL Northwest recommends the following actions in response to the issues raised in Your Teams:
1. Labor Saving Audit
To discover how much time is wasted doing inefficient tasks that could be performed more efficiently by introducing new technologies, call the DSL NorthWest Inc team for a free consultation. You might be surprised how much time will be freed up to work on the more important tasks such as marketing and customer initiatives.
2. Consider an Automatic Gratuity Model
Re-think the way gratuity is handled. With the end of tip pooling, and disparities between front-of-house and kitchen salaries, consider incorporating gratuity into your menu as many restaurants are now doing such as Le Pigeon in Portland and several locations in New York City. This ensures fairer wages for the front-of-house and kitchen staff while the customer pays a slightly higher menu price but no final service tip. The Washington Hospitality Association provides some excellent advice and help on their site regarding tipping and the minimum wage: https://goo.gl/6agRfX
3. Interrogate Profits on Dishes
In line with the overall menu audit, interrogate the menu for the most profitable items and those items that can be executed efficiently. Clean up the menu by removing items with minimal sales volume, items which have a high labor factor to execute or items that use ingredients that are unique. Explore where you can build incremental revenue on existing items, and how to create differentiation by adding in new items that are operationally easier to execute.
4. Change-Out Equipment
There are all sorts of tools and equipment that are designed specifically to improve efficiencies while improving food quality and time to table. Importantly, the pay-back period on new technology can be fast if implemented correctly. For example, 2-sided cooking systems such as The Taylor Grill line incorporates microprocessor controls that can be programmed for simplified cookline operation, reduced cooking times and improved quality end products. Broaster Pressure Fryers that use less oil, reduce ticket times and lower product waste while sealing in the natural juices to deliver tastier foods. Combination cooking systems that use convection and steam such as the LAINOX Combi Ovens that can utilize tablet like interfaces, pre-programmed cooking modes and HACCP controls. However, navigating the sheer amount of technologies available can be daunting. This can be a big investment, and you should think about independent help in finding the technology solution that is right for you.
5. External Service Providers
Do an audit on labor-intensive tasks currently performed by employees. Are there areas that could be contracted out to improve efficiencies such as cleaning the kitchens?
6. Drive Profits vs Reduce Costs
Instead of focusing on the costs, are there other revenue opportunities that can be identified? You know your fixed costs, but can you leverage the bar, front-of-house services, on line ordering for takeaway or add-on products that will help to generate further revenue while maintaining the same level of costs?
Recruit Fresh Eyes – sometimes the most obvious solutions can be hard to detect if you are in the thick of it. Bring in an independent consultant who can provide an objective appraisal and identify short, medium and longer-term solutions. DSL NorthWest provides an initial free consultation to help to optimize your menu and provide guidance on areas to drive profit and efficiencies.
Call DSL Northwest on 877-865-1125 for your free consultation with an expert. We will also be at May’s NRA Show in Chicago May 20-23. Come visit us at Taylor Company Booth #3412, Lainox Booth #5021, Flavorburst Booth#3412, Broaster #3801 … we are happy to help.