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TransformationJul 21, 2020

Innovation in the Wild: How Restaurants Are Managing the COVID-19 Crisis

Kelsey Kah

The stay-at-home orders in the U.S. have forced restaurants to close their doors to diners but allowed them to remain open for takeout and delivery. While this has been a small change for many fast food establishments with a drive-through window, traditional sit-down, and fine dining restaurants have been left scrambling for how to stay afloat.

As we have watched the industry adapt to the needs of the U.S. consumer over the past couple of months, we’ve seen some innovative practices emerge—the top three listed here are poised to last long after the impacts of COVID-19 fade.

1. The Meal Kit Explosion

Though meal kits have been popular for some time with companies such as Hello Fresh and Blue Apron holding the majority market share, now local restaurants are compiling their own meal kits for their regulars to make favorite dishes at home. Midwest fast-casual chain Crisp & Green began offering a meal kit delivery and pick up service at all seven of their Minnesota locations. Dubbed the ‘Crisp @ Home’ program, customers select 20 meals worth of a la carte ingredients, such as Crisp & Green’s salad mixes, grains, cold and hot ingredients, beverages, snacks, whole fruits, prepared proteins, and dressings to assemble at home.

Mimosa, a farm-to-table hot spot voted the number one brunch spot in the state of Wisconsin by the New York Daily News, has also created meal kits for patrons to enjoy at home. The ‘Cooking with Mimosa’ meal kit includes the farm fresh foods delivered to consumer doors with favorite recipes from Mimosa.

2. All Restaurants Offer Takeout/Delivery

The market for takeout and delivery is simply too large to be ignored anymore. While a majority of restaurants historically offered takeout and many partnered with food delivery companies such as Uber Eats, Doordash, Grubhub, etc., dining room closures have forced traditionally dine-in only restaurants to innovate their process to support these services. Even Michelin-starred restaurants are offering takeout and/or delivery during this crisis.

One of the keys to maintaining revenue during a takeout-only time period has been effective menu bundling (e.g., family packages, dinner for two specials, special combos, etc.) and reducing total offerings. Consolidating menus forces restaurants to focus on what their customer actually demands, opening up new potential revenue streams as they break from a traditional multi-page menu.

3. The One-Stop Shop Transition

As their menus shrink and foot traffic decreases, restaurants are looking for alternative ways to serve customers and generate revenue. Many have started selling fresh produce, breads, and other ingredients to reduce excess inventory and become a one-stop shop for consumers.

Panera Bread has added a grocery section to their online ordering. Boston has authorized any restaurant that completes the proper application to sell groceries. Orange County restaurants are turning into artisan bodegas. Some establishments are expanding selections to include essential household products such as toilet paper and paper towels.

The FDA has made this change during the COVID-19 crisis to increase access to food and to help bolster the struggling restaurant market, but this change may stand the test of time as convenience wins the day.

it’s all about change

An inspirational example of innovation can be found at Chili’s as they are working to recover from lost dine-in revenue during this time. As Credera colleagues Justin Wilson and Aaron Wolin share, Chili’s has an established curbside and delivery takeout option but needed to accelerate marketing and increase awareness of these options. In order to distinguish themselves, Chili’s developed a stronger loyalty program, offered coupons and discounts on delivery, excluded low-margin items from free delivery options, and more. We are excited to watch this industry continue to innovate and find new ways to serve a hungry customer base.

moving forward

As we carry forward as a nation during this unusual time, we anticipate continued evolution and innovation in this sector. As the food service industry represents roughly 7% of all U.S. jobs, we want to continue to support these establishments and reward their efforts in trying to better serve the U.S. customer. If you are trying to innovate during this time, feel free to reach out to us at findoutmore@credera.com—we’d love to partner with you.

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