In the leadership keynotes and workshops I conduct globally at foodservice and franchisee conferences, I often begin with the following anecdote: “If you asked a farmer 125 years ago what he’d need to be more productive in the future, he’d probably tell you he’d like a horse twice as strong that ate half as many oats. He would not say he needed a tractor.”
Conversely, if you asked a restaurant owner 20 years ago what she would need to be more productive in the future, she’d probably say, “I need more effective newspaper ads and a separate smoking area for customers.” She wouldn’t say, “Ordering kiosks, mobile-friendly payment apps, third-party delivery partners and a better social media strategy.”
The point is, technology changes things so rapidly that business owners are never quite sure what the best solutions to their current problems might be, which makes predicting and solving our future challenges tougher than a two-dollar steak.
So if I asked you, dear reader, what you need to be more productive and profitable in your foodservice operation today, you might say, “an undersupply of restaurants and an oversupply of talent.” But that’s wishful thinking, not an action plan.
Maybe a better answer is threefold:
1. Artificial intelligence and robot cooks that pay taxes;
2. Elevating the industry employee turnover rate to the same importance as food safety; and
3. Being the sole owner of your diner’s data and demographics.
Allow me to explain via a few cold, hard facts:
• The current annual turnover rate for hourly employees in the U.S. foodservice industry is now north of 120 percent. That means we’re turning over approximately 250,000 employees every seven days, according to statistics compiled by the National Restaurant Association and the Bureau of Labor Statistics.
• The number of restaurants in 2018 misaligns with the number of people available to work in them. There used to be 10 people for every job in this industry; now there are 10 jobs for every person.
• Today, foodservice customers and their expectations are changing quicker than Elton John at a Liberace tribute, and foodservice companies big and small are struggling to understand and provide what the new guest wants from their restaurant. It used to be fairly straightforward: they wanted hot food hot, cold food cold, quality, speed, accuracy and cleanliness combined with friendliness. Those were the days…just 10 years ago. We now have a new generation of customers who won’t be happy until a tap on an app and a upturned palm out their apartment window results in a personal pan pizza being lowered by drone into their hands in 10 minutes or less (“Or its on us!”).
• The People Problem is at epidemic status—and getting worse. Most foodservice HR departments now pin their hopes on “Career Pathing” as employee retention strategy. The problem is that until people aspire to be in an industry that truly brings them increased value at every step of their career, we are merely addressing symptoms, not causes.
To wit: a recent industry study cited the following Foodservice Career Stages among current employees: 18 percent Careerist, 23 percent passing through, 35 percent undecided, 24 percent misplaced. Holy smokes, that means less than 20 percent of our crew sees our industry as a career, and 82 percent of our current employees are drifting along. How do we sustain an industry based on these figures? The short answer is: we don’t.
• One of the biggest sea changes going on in, around, under and through the restaurant industry today is who owns our customers when you contract with a third-party delivery company to take your food and beverage to the diner’s home, apartment or workplace. And there are battles a-brewin’. Third-party delivery companies develop an ordering and payment app, contract the drivers, and deliver your food and beverage to customers in exchange for a 30-percent surcharge to operators. But here’s the thing: since customers order and pay through the third-party app, the delivery company owns the customer info, including what they order, when they order, who they are and where they live.
And don’t think otherwise: that diner data is where the real value of these companies resides. It’s driving hundreds of millions of speculative VC investment dollars into the deliverers. One recent tech conference panel estimated that data’s value to be worth somewhere between $600 million and $1 billion dollars by 2030. Nice, right? Except that most of these companies see those diners as their customers, not yours, and they don’t share that data with the restaurant that contracts with them—not for free, anyway. This brings up another question: who spent the initial money to market, acquire, maintain and merchandise their menus to the customer in the first place?
Until our industry asserts itself relative to customer data sharing and ownership, only three things are certain:
1. The guaranteed winners are credit card companies who make the ordering app functional.
2. The second-place gainers are the third-party delivery companies who contend they own and can exclusively sell and market the diner data.
3. Last place will be the restaurant industry itself, which created the market and the demand, but will become its supplier and servant instead. I think this is a battle worth fighting for foodservice chains, owners and operators. Who owns the data owns the future.
Those are two issues to focus on as the future unfolds: make hiring, development and retention the Most Important Decision; and partner up on the data. Third-party food delivery cannot exist without restaurants. Restaurants have existed for nearly 300 years without third-party delivery. If you share access, share data revenue. Consumers have no stomach for higher prices, so economies of scale must be sought elsewhere.