Three Trends That Will Keep Restaurateurs on Their Toes in 2020

Expect a collision of trends to mark the restaurant industry in 2020 as ambitious operators in today’s increasingly marijuana friendly environment test both legal limits and consumer appetites by looking to launch cannabis cafes that serve farm-to-table … everything. 

That’s on one front, at least, as restaurateurs across the country scramble to get a piece of the action as the fledgling cannabis tourism industry starts to take off. But the influence of legal marijuana is being felt on more than just menus. It’s going to be another pressure point for an industry facing ongoing challenges on the staffing front, forcing restaurateurs to re-examine their drug policies, benefits packages and incentives in order to stand out sufficiently to attract needed workers.

As the first year of a new decade unfolds, so do the opportunities and exposures that restaurant owners need to consider in positioning themselves for optimal success. Here are three of the most important developments that we think the industry needs to be mindful of in 2020. 

1.   Cannabis Cafes Put a New Spin on “Farm-to-Table” 

The farm-to-table food sustainability movement isn’t new, but it’s gaining a different sort of momentum when locally grown organic marijuana is added to menus. The nation’s first cannabis cafe, Lowell Cafe, opened in October in Hollywood, the first of eight planned for West Hollywood by Lowell Farms, a well-known Santa Barbara grower. There’s no cannabis-infused food on the menu, but food that is on it is chosen to pair with the extensive varieties of cannabis – like the wine and craft beer pairings that have been the norm.

Cannabis cafes are getting a tremendous amount of buzz as recreational marijuana legalization sweeps through various states: Both Colorado and Massachusetts, for example, have considered allowing them, and there’s been talk in Illinois, where recreational pot becomes legal Jan. 1. But existing laws are a big roadblock – including those for clean air and anti-smoking regulations, and, in Colorado, one that prevents a business from selling marijuana and allowing it to be consumed on its premises. 

And then there’s still the fact that, at the national level, marijuana is still regarded as a Class 1 drug and, thus, is illegal. Even if restaurateurs can get around local laws, and their landlords are willing to relax probable prohibitions against on-site toking with dinner, most major insurers aren’t going to provide liability coverage at this stage of the game.

2. Good People are Still Hard to Find

Restaurateurs are hard pressed to find and keep qualified staff, especially those on the frontlines whose skills at customer service can make or break a brand. The environment is posing any number of challenges to employers and forcing them to improve and stand behind their policies and procedures and their benefits packages, and explore payment models that respond to the times – especially important for millennial workers.

For example, the #MeToo movement may not be grabbing the same headlines, but it’s still a big concern in the restaurant business. Not only are states like California and New York putting specific laws in place on sexual harassment training, but current and prospective employees want to see that you have a policy with teeth to it that expresses your organization’s behavior standards in place. On another front, though, restaurant employers, especially where recreational marijuana is legal, may be forced to moderate their drug policies.

Restaurateurs also are starting to see that it takes better benefits to attract and retain staff. To that end, we are seeing growing interest in wellness programs that have a holistic focus on the “whole” person, or the individual’s physical and emotional health, making them an important draw for millennial and generation Z workers. And “paycards,” or debit cards to which an employee’s wages are transferred, represent the new payment models that are increasingly attractive to younger workers who may be unbanked or underbanked. 

3. A Harder Insurance Market Puts a Premium on Smart Risk Management

Hospitality in general can expect to feel the pain of the big claims that are making insurers pull back sharply. Natural disasters – from record-breaking storms and floods to rampant wildfires in California and Colorado – are taking their toll. Count yourself lucky if you can get your catastrophic coverage renewed with only a 25% premium boost. And the $800 million settlement for 2017 mass shooting at the music festival in Las Vegas made commercial umbrella coverage even harder to come by than catastrophic coverage. Expect high deductibles and higher rates when insurance is available and lower liability limits, as well.

Restaurateurs can expect to confront some interesting situations in the months ahead – some of which may be easier to handle than others. It will take both agility and flexibility to continue to stay ahead of the curve.