For nearly a year, many restaurants have straddled the line between open and closed. Driven by state and local COVID-19 data, they’ve been forced to shut down at the drop of a hat and reopen just as quickly. While the green light to reopen is long-awaited good news, as various states continue to allow establishments to open dining indoors at a limited capacity, there are monumental impacts to the overall foodservice industry and subsequent impacts on the food and beverage manufacturers and distributors who are called upon to act quicky.
Keeping up with Rapid Reopenings
Restaurants that have had the chance to open back up have felt the pressure to re-open almost immediately, leaving food and beverage suppliers at a high risk of not being able to deliver as quickly as needed. Keeping up with demand, supply chain disruption, trucking availability – particularly in highly impacted areas – and quality and resource risks are real issues that food manufacturers, suppliers and distributors are facing.
To combat these challenges, restaurants may want to consider limiting their menu offerings to those that have been most popular amongst their patrons, are likely to be most profitable given pricing increases on certain ingredients due to supply shortages. A more limited menu, even if it changes time-to-time, for the short term, could make the purchasing process more manageable for a restaurant and increase their ability to fulfill the necessary, more limited products required.
It is crucial that restaurateurs maintain constant visibility into downstream product availability and shortages with continued uncertainty in the supply chain. Surprisingly, while there may be concerns around lack of inventory, restaurants also may be put in a position where they are stuck with a considerable surplus of inventory due to the uncertainty of demand, whether that be driven by uncertainty of traffic into the restaurant or uncertainty due to changes in consumer interests. While many may be looking to other channels to deplete inventory as much as possible or donating to non-profit organizations, there is a risk of excess inventory or inventory selling at a lower price than currently valued.
Understanding Consumer Demand
To manage both limited and excess inventory, restaurant owners and manufacturers need to understand the overall consumer demand as people may still be cautious about dining out and have concerns about their health and safety at restaurants. We all know by now that all restaurants should always follow the best practices of social distancing, disinfecting and other precautions that will help promote overall consumer confidence in the restaurant’s commitment to food safety, integrity and proper food handling. However, no matter how clean and safe an establishment is, there may still be hesitancy on the part of consumers if they are unclear or unsettled about whether the restaurant or those within the restaurant’s supply chain have maintained proper protocols.
It will be critical for restaurants to keep a close eye on customers trends, including capacity levels, ordering choices, in-restaurant dining vs. take-out, etc., to better determine supply requirements and purchasing frequency. This is a great time for restaurants to assess their processes and determine if enhancements could be made to track consumer demand more accurately and to increase visibility into their suppliers.
While the pandemic has created undeniable hardship for many restaurants, it has also created an opportunity for management to reflect on preparedness and assess where there may be room for improvement in policies and processes – both to be ready for future crises and to streamline day-to-day operations. Under current circumstances, restaurants and suppliers should collaborate to diligently stay up to speed with the re-openings and keep customers safe through best practices and social distancing.