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In the summer of 2019, the average cost of a nationwide flight in the United States was about $345. In the summer of 2020, the average cost of a domestic ticket dropped to $245. By the summer of 2022, it had shot all the way back up to $ 330.
These price fluctuations reveal the rapid fire changes that the coronavirus pandemic ushered in.
Now, thankfully, the country is opening back up. But opening up doesn’t mean going back to “normal” — normal being the pre-COVID state of affairs. In fact, quite the opposite.
When it comes to the food industry, some of the trends popularized during the pandemic are here to stay. At the same time, new challenges accompanying reopening are providing businesses with new opportunities to improvise, adapt, and overcome.
New Habits Die Hard
Humans are creatures of habit. So much of our lives, where we travel, what we do for entertainment, even what we eat, is ruled by routine. Many with longstanding habits pre-pandemic were forced to adapt and change to meet changing health guidelines. Those shifts slowly metamorphosed into new habits. And, as the saying goes, old — and new — habits die hard. That means many of the norms that consumers acquired during the pandemic are here to stay.
Sean Connolly, the President and CEO of Conagra Brand, explained in an April 2021 earnings call that, “Psychology experts assert that it takes, on average, 66 days for a new behavior to become habitual. As you all know, we are nearly 400 days into the COVID-19 pandemic. Consumers have adapted to at-home eating and formed new habits that we expect to sustain well beyond the current conditions.”
This isn’t necessarily bad news for the food industry. After all, during the height of the pandemic, food manufacturers who were able to adapt to changing customer needs, continued to turn profits. The psychology of habit-formation just means that restaurant owners will need to continue adapting to changes and riding the wave of flexibility for another few years.
Which Habits are Here to Stay?
The pandemic ushered in a number of changes to businesses. Some, like masks in the dining room and socially-distanced seating, are unlikely to stick around once the health crisis has been eliminated. Still, the following trends are forecast to stick around for a while.
Younger People Prefer Delivery
If this trend sticks around, as experts forecast it will, it poses a challenge for restaurants who partner with third-party delivery services, where high commission fees eat away at slim profit margins. Third-party delivery services are also re-evaluating their own business models in the post-Covid world. Even though pandemic era delivery sales tripled, DoorDash and Uber Eats still lost money.
During the pandemic, people found themselves at home, with time on their hands, lots of it. There was nowhere to go and entertainment opportunities were limited. How did people respond? Many turned to takeout to fill the void. According to a 2021 survey by the National Restaurant Association, 60% of people in the United States, including 71% of millennials, admitted to splurging on delivery more often during the pandemic.
UberEats is responding by introducing pricing tiers for restaurants. Basic service, for example, now costs 15 percent commission and requires establishments to hire their own drivers. By contrast, business owners who can pay 30 percent commission rates can get drivers, and more visibility on the app. But some restaurant owners hope to bypass these rates altogether by building their own user-friendly apps and websites.
Technology at the Forefront
Apps and websites, in fact, have been a feature of the pandemic era. And they are a trend that is definitely here to stay. Technology has been transforming our society since the dawn of humankind, but the pandemic accelerated its impact on foodservice.
In addition to virtual tip jars and mobile ordering, technology is playing more innovative roles in the foodservice industry. A relic from the germophobic coronavirus era, touch-free Coca Cola dispensers are beginning to roll out in restaurants across the country; these dispensers are activated by a smartphone scan. Contactless payment is expected to triple from 2 trillion dollars worth of transactions to 6 trillion by 2024. Online bookings and table reservation systems are also rapidly increasing in popularity. Additionally, restaurants are adapting to changes in supply chains by turning to AI to manage inventory and reduce food waste.
Serving the Customer However They Want to be Served
Pop-up restaurants, ghost kitchens and takeout-only were popular options that helped restaurants adapt when dining-in opportunities were limited. It turns out that customers like the convenience of takeout places and the novelty of pop-up establishments. Restaurants that switched to these models during the pandemic may want to consider sticking with them, or at least offering a hybrid provision of services, as these trends are expected to stick around for a lot longer than originally anticipated.
Americans adapting to changes in routine during the pandemic found new hobbies and interests. Home grocery deliveries, extra time, and closed foodservice establishments encouraged many to invest in home-cooking. 54% of Americans say they cook more now than they did before 2020, and 35% of those enjoy it more as well.
Kroger CEO, Rodney McMullen agrees with this trend, adding that it has been a boon for supermarket delivery. “A lot of people learned how to cook that didn’t know how to cook. We are getting all kinds of feedback from our customers that they have enjoyed cooking more than expected. If they have kids, they especially enjoy doing it with their kids as something fun.”
Corresponding with this newfound love of cooking, meal kits and niche restaurants are growing in popularity, McMullen explains, “We are going to serve the customer however they want to be served.”
New Challenges on the Horizon
In addition to needing to accommodate habits that consumers acquired amid coronavirus, those in the food industry have additional opportunities “on their plates” to adapt and innovate, alongside the reopening of the country.
Sustainability and Supply Chains
Consumers are reporting that the pandemic made them think more about what they put in their bodies. Certainly it is no secret that healthier and more sustainable meals are trending. Restaurants are finding that customers are more likely to patronize sustainable dining opportunities. And reusing food, decreasing waste, and using locally produced ingredients can even save restaurants money.
Sustainably produced ingredients and buying local can also help restaurants adapt to supply chain issues that are plaguing the nation. George Frangos is a burger restaurant owner in Decatur, Georgia. He explained that when it came to supply chain issues “We didn’t have those issues because we work directly with farmers. Our prices held tight, and we didn’t have any problem with supply.”
Economic Restrictions
Another new challenge to the food industry is rising inflation and economic instability. But, even when consumers have less to spend, businesses can still adapt. Some dining establishments are responding by moving away from more expensive luxury food offerings, or diversifying to become more affordable.
Noma, a Michelin star restaurant in Denmark, is an example of this trend. During the pandemic they had to close their fine dining operation. Instead they opened a burger pop-up shop. To their surprise, the idea took off and soon they were contending with 1,200 customers per day! Now that Noma has reopened, its owners have also brought back the pop-up burgers bar as a full restaurant.
Other restaurants are adapting to changes by drawing customers in with, not only gourmet food, but also unique experiences. Sensory experiences, trivia nights, board games, and patio seating are all draws that can convince customers to open their hearts, and wallets, to foodservice establishments.
Staffing
According to a recent National Restaurant Association Survey, half of all foodservice providers claimed their biggest issue was finding and retaining employees. Not an uncommon phenomenon in the foodservice industry, the pandemic took this issue and turned it into somewhat of a crisis. Aaron Kanatzar, general manager at Waldo Pizza decided to shut the pizzeria’s doors temporarily due to staffing issues. “It’s just a continuing battle, “Kanatzar bemoaned. “We’ll go through about 100 applications and maybe get about four people to work here, and we’re lucky if all four of them stay a month.”
Business owners are adapting to changes and finding creative solutions to solve staffing issues. In some places, foodservice managers have had to take a turn washing dishes and doing food prep. Other places are using robotic servers, and prioritizing technology over extended customer interactions. Others have cut down hours, or even temporarily shuttered, like Waldo Pizza did.
The last few years have required more flexibility than average. But entrepreneurship is all about being flexible and ready to move with the winds of change. And even in this era of instability and rapid fire shifts, there are opportunities for investing in innovation, technology and novelty, and responding creatively to whatever life throws at you.