Foodservice's Road to Recovery

“People who are saying restaurants are dead and everyone is going to cook at home are giving consumers way too much credit.” I second that quote from a member of our SFA Trendspotter Panel, Jonathan Deutsch of Drexel University, speaking at our recent webinar, Trends from Specialty Food LIVE!, our digital marketplace event held in January.

Pre-COVID, aka the Before Time, dining out socially was a way of life for many—from grabbing quick fast-casual lunches to dinners out a few times a week. And after a year of hunkering down at home, many are eager to emerge from their bubbles, ready to enjoy.

As vaccine rollouts increase and indoor dining restrictions become more lenient, recovery predictions are rolling in. A recent story in Bloomberg, Bars and Restaurants Are About to Go on an Epic Post-COVID Hiring Spree, quoted foodservice operators across the U.S. heartened by a noticeable uptick in business as weather warmed up, and the pandemic showed signs of receding. According to Labor Department data, bars and restaurants added almost 300,000 jobs across the country in February, the first substantial increase in four months.

High hopes aside, the pace of foodservice’s return is still dependent on a number of variables influencing consumers’ comfort levels. In our spring issue of Specialty Food magazine, we look at Foodservice in Crisis: How the Channel Can Recover. There is no question that foodservice has been devastated. More than 110,000 restaurants—about 17 percent of all locations—are gone, according to National Restaurant Association data. Some segments, especially small immigrant-owned mom-and-pop restaurants, were severely hit, as you can read about in the issue. Hope to prevent more closings has come in the form of the recently passed Restaurant Revitalization Fund, part of President Biden’s American Rescue Plan. But clearly, recovery is going to take years for the channel to return to pre-COVID sales.

While in survival mode this past year, some of the new avenues of business operators turned to are expected to continue as key to recovery, including:

•  Ghost kitchens.  Consumers have gotten used to and comfortable with restaurant quality food at home and it will remain part of their dining habits even as they begin to branch outside more. With ghost or dark kitchens,  restaurants  can  operate  for  delivery without incurring high overhead costs.

•  Off-premise dining. Delivery was rising even before the pandemic and is certainly part of the norm now. Many operators plan to make this a priority and ongoing investment.

•  Specialty retail products.  Several restaurants and food trucks began packaging their proprietary sauces and condiments, making them available for sale via e-commerce or in brick-and-mortar retail.

You can read more about the trends and changes that are going to help pave foodservice’s way back in the spring issue. Like many things post-COVID, all signs point to a comeback shaped by a new normal.