2024 Outlook: Restaurant Trends and Challenges, Part One

Modern Restaurant Management (MRM) magazine asked restaurant industry experts for their views on what trends and challenges owners and operators can expect to see in 2024. 

As we look to 2024, we can expect….

• Further investments in data, loyalty, and AI will transform how quick service brands build authentic customer engagement 
• Virtual brands unlocking growth potential and emerge as a game-changer for table service and fast-casual operators
• Bold fintech moves, as the role of payment processors takes center stage in the digital payment arena
• Future-forward dining experiences with AI, machine learning (ML), and NLP transforming both back- and front-end processes
• New consumer standards causing the food and service industry to implement more easy-to-use enterprise capabilities

– Tim Brown, GVP of Global Solutions Engineering for Oracle Food and Beverage

The restaurant experience remains deeply personal and profoundly human. And while automation and robotics can help streamline some elements of operations, in the wake of the COVID-19 pandemic, there's a newfound appreciation for human connection and dining experiences. We've reached a point where we're recognizing the value and limits of these technologies. There's an acknowledgment that not everything can be resolved through the use of robots, AI, and automation alone. The artistry of chefs and the creativity of restaurateurs will continue to be at the forefront, while these tools become operational enhancers.

The cultivated meat industry is entering its next chapter. With products now cleared for consumer sale in both the United States and Singapore, the cultivated meat industry is moving from proof of concept and early-stage R&D to a focus on demonstrating scalability, sustainable unit economics, and consumer and customer demand. Scaling will require deep capabilities and infrastructure, and we expect more industry collaborations and consolidations, particularly given the current funding environment. 

People will increasingly choose innovative products not only because they align with their values, but because they taste and perform better or otherwise meet personal preferences or needs.

In the context of 2024, we anticipate the cultivated meat industry expanding its horizons by forging more meaningful partnerships with a diverse array of stakeholders, such as governments, large industrial and agricultural players, NGOs, academia, and investors. This could take the form of creative blended financing structures, open innovation platforms, infrastructure partnerships, and commercial collaborations as the industry enters its next phase of maturity. This shift will position cultivated meat as a long-term venture with the potential for far-reaching positive impacts on future generations. Just as the transition to renewables and electric vehicles has thrived on collaborative efforts, we foresee more collaboration for the cultivated meat industry in 2024. 

As we look forward to 2024 and beyond, we'll witness a growing consumer demand and acceptance of “alternatives”. People will increasingly choose innovative products not only because they align with their values, but because they taste and perform better or otherwise meet personal preferences or needs. This transformation is evident in the realm of milk alternatives, where oat milk, once a niche product, has become the default choice at upscale coffee chain Blue Bottle. While the decision was originally driven by environmental concerns, it stuck because it makes a better coffee. What a great double bottom line. Looking ahead, we predict a day when cultivated meat will find its place as a default choice -on menus, because it delivers on taste, nutrition, and food safety, in addition to environmental sustainability and animal welfare. Beyond the realm of food, a similar shift has occurred with electric cars. Initially seen as symbols of sustainability, they are now appreciated primarily for their performance and features.

In 2024, we anticipate food's role in the global solutions conversation will continue to rise in importance, fueled by a growing awareness of its significant impact on both our health and the planet. As consumers become more aware of the intricate connections between their food choices and the well-being of the planet, they are demanding a more sustainable, equitable, and resilient food system. Governments, too, are recognizing the urgency of addressing food-related challenges, from hunger and malnutrition to climate change and resource scarcity. In this evolving landscape with more conversations around creating resilient and sustainable food systems, these discussions can help translate into tangible solutions.

As we head into 2024, we are seeing food safety become more top of mind for consumers and more mainstream media talk about its risk. Once a niche concern primarily discussed within scientific circles and regulatory agencies, food safety has now taken a more prominent place in consumers' consciousness. This heightened awareness will drive consumers to actively seek information and make informed decisions to ensure their well-being. In the long run, this will drive consumer interest in choices like cultivated meat and other alternative proteins – which are created in clean, controlled conditions versus conventional slaughterhouses.

– Amy Chen, COO, UPSIDE Foods 

License Plate Recognition (LPR) is already playing a vital role in business security infrastructure. In 2024, the role of LPR will expand to helping businesses with ease of operations, especially for drive-thrus. 

Currently, License Plate Recognition is used to improve safety at drive-thrus by monitoring license plates and reporting incident disputes in case of investigations. In the next year, this role will also include helping them with order management during peak times.

Currently, LPR is used to improve safety at drive-thrus by monitoring license plates and reporting incident disputes in case of investigations. In the next year, this role will also include helping them with order management during peak times. Using LPR, restaurant staff can link an order to a customer's car and use it as an identification to deliver their order once ready. 

Further, it has the potential to help customers place their orders where the menu can display past preferences and also upsell based on the available data.  The data collected will help create future strategies to identify customer preferences influencing a company's sales and marketing strategies.  This will be done optionally depending on the customer's preference to opt in or opt-out of data collection.”

– Dean Drako, CEO of Eagle Eye Networks

2023 served up a year of resilience and innovation for restaurants, as they adapted to shifting landscapes and embraced new dining paradigms. We’re seeing strong and growing interest in IoT connectivity and automation in the back-of-house – especially for multi-site operators.  In 2024, we anticipate a continued evolution, where technology and sustainability will play pivotal roles in reshaping the culinary experience. As the industry navigates challenges, the spirit of creativity and adaptability will remain the secret ingredients for success in the ever-changing world of dining.

– Jay Fiske, President, Powerhouse Dynamics 

The Future is here – Robots will become a larger part of society

• In 2024, I anticipate an increase in the number of robots deployed in the hospitality industry, especially in terms of cleaning, cooking and security robots.
• The hospitality industry suffers the most from labor shortages. The problem is not a lack of qualified workers, but a lack of desire to return to a hospitality workforce still on the mend. As the pandemic raged, hordes of hospitality workers shifted to in-office or at-home jobs, leaving a large labor gap to be filled, especially as tourism returns to pre-pandemic levels. Robots fill this gap with automation and productivity, alleviating the workload from the workers who are committed to the hospitality industry.
• With the restaurant industry needing to fill the labor gap, robotics are primed to penetrate the market.
• Development of robots is accelerating exponentially, in quantity and quality. At the most recent Robot World Conference in China, more than 150 humanoid robots were introduced. These robots are still in their ‘project’ phase, but many will become commercially available products in the near future.

As the demand for robotics increases, solutions like franchising and bringing robots closer to home will augment market growth and penetration.

• Conversational AI and large language models (like ChatGPT) will continue to steal the show in 2024, as it continues to compact piles of data into coherent sentences, thus boosting productivity in ways we’ve never seen before. RobotLAB uses it by default!
• I anticipate that as more jobs are being created as a result of robotics and automation, people will begin to understand that, like every technological advancement (like the printing press and computers), there are more benefits to innovation than cons.
• As the demand for robotics increases, solutions like franchising and bringing robots closer to home will augment market growth and penetration.

– Elad Inbar, founder and CEO of RobotLAB

For 2024, the big question will be the macroeconomic climate. Will the feared recession finally hit? As we navigate changing externalities, we're staying committed to things in our control: providing the best guest experience with value for money, staff happiness and retention, and controlling costs.

– Téa Ivanovic, COO and Co-Founder of gastro-advocacy focused restaurant group,Immigrant Food
 

On Consumer Preferences

2024 is the year of unconventional pizza. Restaurants are taking the dish to the next level, serving everything from breakfast to Indian-inspired pizza. While Pizza Fridays have been a long tradition at work and home, we anticipate seeing a growing demand for pizza orders for all parts of the day as the fan-favorite dish becomes more diverse than ever.   

Based on what we’re already seeing from our partners, consumers want to be educated about  their food to make informed buying choices: where is it from? How was the food sourced or produced? Next year, I believe consumers will make food sustainability a top purchasing priority. This trend will manifest itself at many levels, whether in retail labeling or how restaurants describe their menu items to customers.

On Menu Ingredients

We predict the rise of “bougie” ingredients like caviar, lobster and truffle popping up at restaurants at more affordable prices and in more casual settings like fast casuals and QSRs. Restaurants will lean into serving ingredients that create a craveable, memorable and unique experience for their customers at a more accessible price, making it a more accessible treat that’s not only for special occasions. 

We predict the rise of 'bougie' ingredients like caviar, lobster and truffle popping up at restaurants at more affordable prices and in more casual settings like fast casuals and QSRs.

As the return to office continues, we anticipate employers will jump on the latest food trends when deciding what to serve to create “office FOMO.” From serving food from hard-to-book restaurants and menu items like the latest chicken sandwich or charcuterie board taking TikTok by storm, photo-opp-worthy foods will be used as a draw to increase in-person attendance.

On General Restaurant Trends 

Workplace catering will remain a critical channel for restaurants to boost their revenue, and we expect to see restaurants focus on providing a greater variety of catering options, like offering more single-serve or handheld items that give people the flexibility to eat their lunch with their teams or grab and go as needed. 

– Giliah Librach, Director of Merchandising Operations, ezCater 

As we look ahead to 2024, these technological advancements are poised to become even more ingrained in the restaurant ecosystem. Mobile payments and contactless transactions are expected to remain at the forefront, reflecting the sustained demand for swift and secure payment methods. While artificial intelligence (AI) has been a growing component of this technological landscape, its role is expected to evolve into a more supportive capacity, focusing on predictive analytics for improved inventory management and the personalization of customer experiences.

The impact of these technological shifts is multifaceted. For customers, the advantages are clear – quicker, more streamlined transactions and increased convenience, aligning with modern expectations for seamless dining experiences. On the operational side, restaurant workers stand to benefit from the streamlining of order processing and reduction of manual tasks, although adapting to these new technologies may require additional training.

While there is an upfront investment associated with the adoption of these advanced payment technologies, the long-term benefits often outweigh the initial costs. Increased operational efficiency and improved customer satisfaction can contribute significantly to the return on investment. Looking specifically at 2024, AI's influence on restaurant payments is expected to grow, with applications such as predictive ordering and personalized promotions taking center stage. The ongoing integration of technology into the restaurant industry is not merely a trend but a strategic response to evolving consumer expectations. By prioritizing both enhanced customer experiences and operational efficiency, restaurants are positioning themselves for sustained success in an ever-changing market. The journey into 2024 signifies a continued commitment to technological innovation and its seamless integration into the fabric of the dining experience.

– Justin Price, Vice President, Business Development, ScanSource POS & Payments

Only when weather events subside will finding insurance carriers to write property insurance be easy. General liability claims are not likely to fade any time soon, either. Add to that the minimum wage increases, which flow to worker’s compensation rates.  Restaurant companies need to think differently about risk. The cost of premiums today is a meaningful hit to the bottom line –more so than ever.

I am concerned that rising insurance costs may force some chains to exit the market. But many of IMA’s clients are responding to the crisis by reexamining how they’ve always done business.

I am concerned that rising insurance costs may force some chains to exit the market. But many of IMA’s clients are responding to the crisis by reexamining how they’ve always done business.  Many large operators have found opportunities with leveraged buying pools, even across brands, in the case of large multi-brand owners. 

Franchise operators are also stepping in for their franchisees. Golden Corral is one. The family dining chain is negotiating insurance programs for franchised restaurant groups to leverage a buying force in the marketplace.

Rates are likely to continue an upward trend, but restaurateurs who think differently and plan appropriately can manage their insurance costs with thoughtful packages and sound operations even before a claim is made. 

– Tim Smith, IMA Financial Group National Hospitality Practice Director