The future of Restaurants

Like any other industry, the Food and Restaurant Industry is rapidly changing and getting more innovative however, it’s going to be about technology and data to allow consumers response. With the current COVID19 and post-virus crisis, Restaurants will need to embrace need new ways of using data and technology to keep up.

With social distancing, off-premises dining is constituting a new growth with delivery and increasingly carryouts, mobile units and drive-through in the years to come, but this growth can only occur if technology is put into place. As demand dictates, restaurants will have to adapt putting guest services, on demand menu development and supply-chain logistics at the frontline.

On the other side, on-premises will not disappear, but are likely to change the way they are perceived having a more high-end demand for restaurants as part of community hubs delivering new and shared and enhanced social experience.

We are now at the junction of how people dine, adapting front and back house services to meet guests needs, serving them wherever, whenever and however they want to be served. The Coronavirus crisis put the restaurant and hospitality industry into a break to the current dining reality, setting the counter to 0 and giving an opportunity to adjust to the new era, overthinking business plans, new strategies and marketing.

So, what kind of development can we expect to see in the industry structure?

1. Competition for customers will intensify.
2. Convenience stores and grocery stores will expand their foodservice offerings.
3. The restaurant industry will continue to be a breeding ground for entrepreneurialism.
4. There will be more delivery options in smaller markets.
5. Virtual or “ghost” restaurants that only offer delivery will be more common.
6. Off-premises traffic will post stronger growth than on-premises traffic.
7. Consolidation in food manufacturing and distribution will intensify.
8. Restaurants will offer more healthy and customised options on their menus.
9. The use of kiosks in limited service restaurants will be commonplace.
10. Video menu boards in limited-service restaurants will be commonplace.

The era of the Storytellers

As the competition will intensify, the restaurant industry will go the hybrid model, where convenience and customer desires area huge priority. Dining away from the restaurant will grow and third party deliveries and takeouts or even other models which are still in development will grow in importance, like virtual restaurants. However, when dining in the restaurant the unique experience will be as important as the meal.

Sketch, London

Restaurant menus are likely to become storytellers as conciousness and sustainability grows. Telling the story behind the food you are serving will be essential such as coming from a sustainable source, ideally local, will direct the path: Products journey — From farm to table. This includes healthier options and plant-based proteins. But sustainability will not only be reflected in the menus, the whole restaurant concept will focus on and implement it in their marketing efforts with recycling programs, energy efficient equipment and eco-friendly designs.

Alexa, I fancy …

With a growing near universal smartphone adoption, restaurants of tomorrow will interact in real time with an evolving digital ecosystem of apps, services and personal AI assistants, such as Siri or Alexa, that understand natural-language voice commands, complete tasks for the user, and over time “learn” their owners’ preferences and heath conditions, responding to the growing demand for personalised diets (e.g., allergies, weight, religious dietary laws, ethics). The spread of the Internet of Things (IoT), physical objects embedded with electronics, software, sensors and network connectivity enables that objects to collect, send and receive data.

The pandemic is accelarating this shift in behaviour of consumers as like other industries, restaurants have moved online, virtual restaurants would likely see a relative lowering of costs (such as staff and rent) and of other barriers to entry in launching a restaurant. This rise of “placeless” restaurants will challenge and redefine the concept of what a restaurant is and substantially alter the franchising model. The expansion of centralised kitchens for meal preparation will support the ongoing growth of app-based meal delivery services expanding the role of social media in the brand marketing.

This Coronavirus pandemic made us understand that our way of life and system was not ready for a social and economic paralysis. To avoid another situation like this, the shift to cloud kitchens will rise, affecting municipal real estate markets as well as local commercial and retail areas that serve the customers of physical restaurants. Surprise pop-up versions of these online-only restaurants could bring the experience of these restaurants to the real world and build exclusivity.

This disruption in an old and traditional industry will not only affect the way restaurants are understood, as well the way hybrid companies will rise. Lifestyles of “digital natives,” those who have grown up in the digital age, demand convenience and immediate service, expecting non-food companies to add food and prepared meals to their offerings as an added service. For example, a media-streaming service could buy or pair with existing meal delivery services to create an all-in-one dinner and entertainment experience. Or an online retailer could leverage one-click ordering, logistics and delivery expertise to add meals to their subscriptions. Restaurants could move beyond current loyalty or rewards programs and offer flat-rate monthly subscription plans to customers. These non-traditional operators will bring new ideas and approaches to the restaurant industry.

But, how will sit-in restaurant spaces look like?

With the decline of shopping malls and “bricks-and mortar” retail through e-commerce, restaurant experiences will become even more important for public outings, community engagement and socialising.

We can imagine expanded and versatile seating options, gastropubs and full-bar fast-casual restaurants evolving into versions of German Biergartens, with less emphasis on table turnover and more emphasis on facilitating repeat socialising by customers.

Café seating and local independent restaurants could help transform food courts in the direction of food halls and bustling Asian street-food markets. We can already see these trend in places like Boxpark in London or Mercado San Miguel in Madrid:

Boxpark Wembley, London

As e-commerce rises, malls will become more and more obsolete taking into account new formats of space. These spaces can surround all different needs without leaving the area. Remote working with an office group system, food with a small kitchen space and socialising area will challenge traditional malls that don't fit into the new customers convenience and immediate demands.

Fast Food will no be synonymous with low quality

As technology advances are accelerating in all industries, automation and robotics will begin to play a greater role in food preparation and the kitchen line. We can see it already being tested in several kitchens around the world, like this one in Tokyo, Japan:

Automation technologies such as touchscreen ordering kiosks are already spreading in front-of-house restaurant operations. Back-of-house operations will become more fully automated as costs fall and flexible, reprogrammable robot systems grow more sophisticated. This will allow automation of more of the repetitive elements of food preparation and even permit motion-capture replication of the movements of chefs. On the other hand, Chefs will work in collaboration with these systems, using their physical senses and expert judgment giving them an added value in the kitchen. Robot chefs will make a place for themselves in the mainstream food and beverage industry, with fast foods taking the lead over gourmet restaurants for obvious reasons relating to creativity. Inviting automation technologies for food preparation in the kitchen will certainly reduce labor costs, lower customer wait time, and allow chefs to experiment with new flavours. If you count then in Artificial intelligences with knowledge of cooking techniques, food chemistry, recipes, and alcohol it will produce unexpected new culinary and beverage experiences incororating the “quality” of medium to high end eatries today leading to a new kinds of restaurants.

Because AI programs “live” in software, AI chefs are placeless and could be run at many locations simultaneously and provided with medicinal and health information, AI chefs driven by algorithms could be programmed to maximise the health benefits of recipes and foods. With an ageing population in the occidental countries, advanced genetic knowledge, and the rising incidence of lifestyle diseases such as heart disease, IBS, obesity and Diabetes mellitus Type II, society will create growing demand for meals that provide specific health benefits to diners, on an increasingly personalised level. This leaves an opened door for prescription meals supported by the national healthcare systems in order to prevent further worsen of the health condition. People like to eat good food, even if they have medical restrictions. The growing recognition of chronic conditions that are helped or hindered by eating appropriate foods could make prescription meals an important new category of prepared foods and open new ways for the restaurant industry. For restaurants this means that they will need to provide clearer, more thorough information about ingredients in dishes so that customers can make better-informed decisions about choosing a meal based on health enhanced with a nutritionalist knowledge.

Altogether we can see a shift in customers behaviours already before coronavirus, but through this sanitary and economical crisis, cultural and social behaviour attitudes are shifting in an accelerating pace. Furthermore businesses in every industry will need to change their mindset in order to adjust to the new digital era. The restaurant industry is one of the most disrupted ones by this crisis and very vulnerable to an economic paralysis, so they will need to be the first ones to find solutions in order to prevent disappearance.