Weekly Update: Coronavirus & The Foodservice Industry, Week 32

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Stats Of The Week

The State Of The Industry

With social distancing guidelines limiting the number of customers a business can serve, 55% of small businesses said they have concerns about staying open in the long term, according to Verizon Business' latest Small Business Recovery Survey. Half of the restaurants and bars surveyed said they began offering new products and services, including groceries and family meals, to adapt to the needs of their customers at the beginning of the pandemic. 49% reported changing the way they packaged delivery orders, such as family meals, to be easily reheated and stored. Even with the majority of states allowing restaurants to open their dining rooms, most restaurants are operating under limited capacity. The Independent Restaurant Coalition reported in August that most restaurants believe they need to be open with at least 60% capacity to remain open permanently.

Fast Food Just Got Faster

Major fast-food chains, McDonald’s, KFC, and Taco Bell, improved their drive-thru speeds in 2020 compared to 2019, according to the 2020 SeeLevel HX Drive-Thru Study. The study measured 10 quick-service restaurant drive-thru performances based on their speed, accuracy, customer service, and taste. As customers continue to be wary of going to restaurant dining rooms in fear of contracting the virus, it has been shown that customers feel more comfortable going to drive-thrus. Drive-thru visits increased by 26% in April, May, and June, according to The NPD Group. With the influx in customer traffic, fast-food restaurants trimmed down their menus and installed new technologies to streamline the ordering process. The study found that McDonald’s improved their service times by 30 seconds, Taco Bell improved by 9 seconds, and KFC improved by nearly 2 seconds.

What’s Trending

NYC Mayor Proposes Shutting Down Restaurants As Virus Spikes

Just a week after NYC restaurants were able to open indoor dining, some restaurants are facing the possibility of reclosing. NYC Mayor Bill de Blasio said in a press briefing that he will ask the state of NY to shut down restaurants, schools, and nonessential businesses in nine ZIP codes throughout Brooklyn and Queens. If the state approves this initiative, restaurants will be forced to shut down indoor and outdoor dining starting as soon as Wednesday. Restaurants would be allowed to only offer food for delivery or pickup. De Blasio cites the reason for these closures to the infection rate of COVID-19 increasing to 3% in those areas for seven consecutive days.

Operators Get Creative To Increase Capacities

Even with restaurants being able to utilize their indoor and outdoor dining space, they are limited by the number of customers they can serve while adhering to social distancing mandates. Also, operators are scrambling to come up with solutions to boost traffic before winter comes and removes the possibility of outdoor dining. Some restaurants are installing physical plexiglass barriers between tables as a way to work around the six-foot distancing requirement in jurisdictions that allow it. Operators are also taking tents to another level with tents that have built-in roofs and walls that enclose a dining table and chairs. In preparation for winter, some restaurants are installing heaters in each tent and offering guests blankets upon request.

California Creates Stricter Laws For Delivery Companies

As restaurants have turned to third-party food delivery services to help generate business during the pandemic, many issues have arisen from some of these unofficial partnerships. Food delivery companies have been adding non-partnered restaurants to their platforms to attract more customers while damaging the reputation of some restaurants. This practice has been criticized because restaurants have reported that they have found incorrect menus for their restaurant online, received orders for delivery when they didn’t offer delivery as an option, and complaints from customers regarding orders they were unaware of.

California is working to rectify these issues with California Governor Gavin Newsom signing two pieces of legislation into law that would regulate the food delivery industry. The first piece of legislation requires aggregators to sign formal, written agreements with restaurants before adding them to their platform for delivery. The second initiative requires third-party food delivery services to guarantee cleanliness and temperature controls during deliveries and restaurants will be required to add a seal on each take out bag before handing it over to a courier.

The Pandemic Accelerates Ghost Kitchen Popularity

The COVID-19 pandemic has obliterated any sense of normalcy in everyone’s life and that includes dining at a restaurant. Traditional dine-in business either isn’t a possibility or is at limited capacity for restaurants. However, the pandemic has created various opportunities in the digital sector to increase growth and profit. With food delivery and pickup growing at an all-time high, the ghost kitchen segment could create a $1 trillion global opportunity by 2030, according to a recent report from Euromonitor. Ghost kitchen concepts are all about the convenience of making meals that are streamlined for food delivery.

"As we look at increasing food delivery, these kitchens are one model helping restaurants adapt to [delivery] without changing their existing real estate, while other brands are opening a digital-first space focused on kitchens and food optimized for delivery," Alex Frederick, senior analyst at PitchBook, said to Restaurant Dive.

Hawaii Gives Funds To Unemployed Residents To Visit Restaurants

The Hawaii Chamber of Commerce is using $75 million from its CARES Act funding to give unemployed Hawaiians a $500 gift card to use at restaurants. The state is hoping this will help boost its economy and help support local restaurants. The "Hawaii Restaurant Card" can only be used at restaurants in Hawaii to pay for meals, alcohol, and tip. An estimated 100,000 people will initially receive a card that will be valid until December 15. The President of the Chamber Sherry Menor McNamara thought this initiative would be beneficial after seeing evaluations that project this program will nearly double its economic impact for local businesses while saving approximately 1,000 jobs.

Bright Spots In A COVID-19 World

Chef Hosts Virtual Cook-Along For Make-A-Wish Fundraiser

Chef Justin Severino partnered with Make-A-Wish Greater Pennsylvania and West Virginia to host a virtual cooking event. The Quarantine Kitchen fundraiser benefits the regional chapter that grants “wishes” to critically ill children. Participants watched an online video where Severino discussed and demonstrated how to prepare the foods with the ingredients given. Severino said to the Pittsburgh Post-Gazette that his business has been struggling this year with shutdowns and found that this fundraiser was the first thing that has made him feel excited about cooking again.

Food Blogger Creates A Pop-Up To Support Asian Restaurants

Texan food blogger, Jane Ko of A Taste of Koko, is partnering with a local restaurant to drive traffic to the city’s Asian restaurants. The Koko Pop-Up is working alongside 101 by Teahaus, an Asian fusion restaurant, to create a menu that draws inspiration from night markets in Taiwan. The dishes and drinks include bubble tea, fried dumplings, bubble waffles, and fried chicken. Ko hopes to help Asian restaurants in her community by attracting customers while diminishing the discrimination Asian restaurants have received since the beginning of the pandemic.

“I hope my pop-up will not only help our local restaurant industry, but more importantly, break the stigma on Asian culture during this pandemic by having people enjoy Taiwanese food,” Ko said in a release to Eater.

Quote Of Hope

“Our reward [as chefs] is that we love what we do. We love watching people put something in their mouth, close their eyes and tell us they love it.” - Chef Justin Severino of Morcilla in Pittsburgh, PA

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