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March 27, 2020

Here’s How Restaurants Say They Are Reacting To COVID-19

Tony Treadway

Our intelligence meter is running to assess the damage from the coronavirus to foodservice operators nationwide. What we are finding is a rush to pivot to new models for serving customers that will forever change the face of this wonderful industry.

36% of foodservice operators have already laid off employees.

Our ongoing survey is polling operators ranging from fast food and casual restaurant operators, to college and K-12 foodservice directors, theme parks, and convenience stores. Overall, 36% of operators have already laid off workers and 56% are shifting operations away from dine-in to drive-through, take-out, and delivery. An amazing 25% have shut down their operations completely for now, while 29% say that they are staying the course. Among full-service restaurants, 60% have had to lay off employees and 30% have closed their doors completely—at least for now. This dovetails with a report from Datassential that only 8% of meals are currently being eaten inside a restaurant right now.

As for predictions on when things might return to profitability, an optimistic 34% say by June, 37% say by September, and 21% figure it could be a year from now. At 45%, C-level leaders say September is a good bet.

Operators are in search of new ways to attract and serve more customers. For example, nearly 10% are in search of portion control packaging like dipping cups, packets, and pouches as consumers are more squeamish about points of potential contamination in the to-go and delivery boxes. More than 13% are rushing ahead with menu innovations or limited time offers that can better meet a grab-and-go menu or create some excitement and purchases by consumers.

This pandemic will be a game changer for foodservice operations of the future. Based on our network of operators, researchers, and journalists, here are some of our predictions:

  • Get Used To Kitchen Staff In Masks – For a decade the trend was to allow consumers to see what’s going on in the kitchen in upscale casual restaurants. Now, consumers want to imagine that their meal magically appears on their plate or to-go box. We predict that when you do return to an eat-in meal, your chef could be wearing a mask.
  • Crews A, B, and C – It has already happened within K-12 kitchens. One worker testing positive for COVID-19 means the entire team most go home with the kitchen potentially closed. Look for operators to shift to crews that work for a few days or weeks together, then go home while another crew takes the helm. This separation of a work team means that when one crew becomes contaminated, a new crew can arrive to the rescue.
  • Fewer Restaurants, But Bigger Volume – We will see thousands of restaurants shuttered forever. The survivors will offer more options for how consumers can access their menu and post higher annual sales.
  • MoreEmphasis On Clean Label – Consumers will be indelibly affected by the virus and think twice about what goes inside their bodies when they look at a menu. Clean label products will play an even more important role in future success.

We will continue to monitor the foodservice environment and provide insights to operators and food manufacturers on the changing landscape. For certain, the environment based on COVID-19 will significantly change the way we access food away from home forever.

If you would like to learn more about our process for building brands based on insights. Just let us know.

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