5 1/2 Restaurant Industry Trends to Watch in 2023
Joseph Szala, GSD, DCMJ, DNSME
VP of Digital Experience, Author of The Bullhearted Brand, Mass Behaving & Stop Blasting My Mama / Board Advisor to Restaurant Tech Companies & Startups
Oh hey look, another "2023 Trends" article. I'm sure your feeds are full of them, but let me tell you why this one matters. It's not focused on a service that I happen to provide like so many other trend reports do. Instead, these trends are 100% derivative of patterns I've been seeing pop up over the last 1-4 months of the year. Their frequency and timing allow me to draw some conclusions. Sprinkle in some outside factors like economics and people movement, and I think there is a strong indication of where things are headed in 2023.
Let's dive in!
1. Partnerships That Mutally Fuel Brand Pillars
While many brands continue to persevere or prevail in the post-Pandemic world by tackling challenges on their own, numerous brands have found that strategic partnerships are a smarter way forward. Financial benefits aren't the only motivating factors here. Instead of, or in addition to, that, it's about adding believability to both brands.
One such case is the partnership struck between Omsom and Chopt Creative Salad Company . Rather than phoning the go-to meat alternative, vegan brands, Chopt saw an opportunity to uplift a niche brand that added clout to specific dishes. Omson has been building an Asian vegan brand for years which has positioned them as a market leader in that category. Chopt, known for fantastic salads, was looking to expand the menu with vegan options that had bang-on flavor. You can see where this is going. The result is a powerful partnership that mutually uplifts each brand and the Patrons win big.
Another case is the collaboration between Delta Air Lines and Starbucks here in the United States. Earlier last year they announced a partnership where Starbucks purchases would add Delta Skymiles to account holders of both loyalty programs. Because both brands share a core Patron, the jet-setting, on-the-go, movers and shakers of the world, this partnership is so obviously fantastic, one wonders what took so long!
2. Value, Value, Value
Anyone who hasn't seen the economic challenges we're all facing, or the wave of heightened challenges coming is simply whistling past the graveyard. Americans, and other nations, have been fighting with intense inflationary pressures mixed with threats, and for a couple of months, realities of a recession. Combine this with the fact that credit card balances are at an all-time high and savings accounts at notable lows, and it only stands to reason that we're all tightening up our budgets and becoming more budget conscious.
We're all now seeking value. That doesn't mean cheapening out and going full-on dollar menu mentality. It does mean finding ways to cut costs while offering more than expected for customers. One brand that's been making waves with this is Papa John's with its newly released value offering, Papa Pairings. With Papa Pairings, patrons get two or more items for just $6.99.
The value trend is already playing out in real-time, which is probably why we're seeing so many restaurant customers shift their spending to C-stores. Restaurant Dive reports that the "amount of money customers spent on food service items at convenience stores rose 8% in the three months ending in November." Food at C-stores is famously cheaper than found at most restaurants. Combine that with the speed of service and you can start to connect the dots that people want value more and more.
3. Second Wave of Tacos
Is it happening?! I think it is! Tacos are looking like they're going to be the subject of the next wave of food. In 2022, two large acquisitions were announced: Rusty Taco was acquired by Gala Capital Partners, and Del Taco by Jack in the Box . These could be coincidental, but it does have all the markings of two financial powerhouses looking to build a taco wave in 2023 and beyond.
Tacos are arguably ubiquitous across the States, but many brands have focused on elevated tacos. Del Taco has been a hopeful contender to Taco Bell throughout its history. Whereas Rusty Taco is a full-service casual contender. With newly injected capital and energy, both concepts are poised to elevate the category at all levels creating a new "war" to supplant the renowned Chicken Sandwich Wars.
4. Tech Convergence
The rapid pivot to technological innovation and adoption in the restaurant industry is well documented and well underway. While some may speculate as to whether or not some brands are going too far with replacing the human touch, the movement has not lost momentum. However, with the rapid adoption comes an equally rapid wake-up call for leadership: so many systems create so many problems.
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Big brands have the leverage necessary to own integration fully, but SMBs are left having to "get creative" to find ways to make multiple systems talk to one another. The result is a burning need for more simplicity and ease of integration and activation. Cue the convergence cries.
We're in a place in the restaurant industry where technology companies must merge features in order to continue their growth. This is the fuel for a loud challenger brand like Lunchbox to offer a 360° tech suite to rapidly hit the scene and make waves.
On another path is Olo which is gobbling up notable companies like Omnivore, which allows integration in a large swath of POS systems, and Wisely, a customer intelligence platform. Olo is pooling data-first, critical software platforms to create an unstoppable one-stop powerhouse for restaurant leaders.
5. People-Forward Pivots
I don't need to remind anyone of the human resource challenges the industry faces. Heck, all industries are struggling to find engaged talent with strong work ethics. To date, not many brands have cracked a perceived code as to how to attract and grow that talent, relying simply on remuneration as a driver.
However, compensation isn't the only factor in accepting a career in the industry. It's about the holistic employee experience from onboarding into the company values to grow opportunities and career pathing. These are features and benefits that only macro brands can afford. They're readily available to launch at nearly any size, yet many leaders tend to be focused more on the daily grind of operational efficiencies than the longer-term positive effects of a successful employee experience.
&pizza continues to be a leader in the category, loudly fighting for "a living wage" while offering more benefits that mold into today's individual realities. Another leader is Happy Endings Hospitality which invests notable amounts of capital in building the skills, engagement, collaboration, and health of its team members from management to new hires.
Positive employee experiences can also be uplifted with deeper adoption of technology within the industry. Rather than being an automaton that presses buttons for orders, restaurants have the opportunity to deliver a tech-forward experience where the team accentuates it with a human touch while creating a career path for tech-first skills. The opportunities are limitless and largely unexplored.
5 1/2 AI-Generated Ideation
It wouldn't be a trends article by yours truly if I didn't throw in a weird moment. In 2019 at the FED Summit held by Zoomba Group , my weird one was 3D-printed food. This year, I see a very tangible place for artificial intelligence-fueled ideation.
From architecture to advertising and beyond, AI engines are rapidly causing a ruckus. While I'm not a proponent of supplanting expertise in the creative fields with AI, I do think AI can serve as a muse for new thinking in its ability to break the rules. By simply running a well-crafted query in an engine like Midjourney or DALL-E2, one is presented with fantastic, extraordinary results. Sometimes goofy and funny, but many times intriguing and inspiring.
AI can now even compose music from pop to classical. The app Ricercar is an interactive AI-based music composition system that's outputting remarkable sounds.
So, there you have it. 5 and 1/2 trends to watch in 2023. We may not see all of them manifest fully, but I'm willing to bet a large majority define this year and beyond. Our industry is in such an amazing time where opportunities for progress across every facet are present. The only question remains, which leaders will be bold enough to charge ahead?
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