During the pandemic, restaurants and other foodservice operators were forced into new ways of doing business, especially with ordering and delivery or pickup.
Additionally, many chains reconfigured dining rooms and added drive-thru windows.
According to a February 2022 survey by the National Restaurant Association, 54 percent of U.S. adult respondents say purchasing takeout or delivery food is essential to the way they live.
For millennial and Gen Z consumers, these percentages are even higher at 72 percent and 66 percent, respectively.
Separately, NPD Group found 42 percent of all U.S. restaurant traffic in November 2021 was in the drive-thru versus 26 percent in February 2020.
Delivery numbers ticked up as well, with third-party service providers ringing up substantial sales.
“Pickup and delivery became a more sophisticated portion of a restaurant’s ability to generate sales,” says Craig Fields, director of account management for the Northwest at RPE, LLC BB #:105471 in Bancroft, WI. “Restaurants have realized that takeout and delivery, done well, can become a profit center.”
The rise of ghost kitchens, which prepare food for off-premises consumption, have put restaurants in a good position to continue to serve this need.
Focus Brands, LLC, parent of Jamba, Cinnabon, Moe’s, and other food banners, has opened nine outlets in the United States under its new Ghost Kitchen Brands umbrella.
More retail continues
On the vendor side, many foodservice suppliers built up their retail distribution to help them survive the pandemic, and this continues.
“We’re focusing more on the retail side,” says Dan Robertson, president of Robertson Produce BB #:101876 in Monroe, LA. “We always have a summer slowdown in restaurants, schools, and other foodservice outlets, and retail goes up during the summer.
“So, we’ll be beefed up at retail and ready to emphasize that side,” he adds.
Produce Alliance, LLC BB #:159218 in Chicago, IL, diversified its portfolio, adding retail distribution to what was, before Covid, a business almost exclusively focused on foodservice.
“We saw gaps in the retail supply chain during Covid,” says David Kraus, senior vice president of custom distribution. “Most foodservice produce specialists turned to LTL [less than truckload] outbound deliveries to get a pallet or even a case direct to a restaurant.
“We were able to pivot substantially,” he says. “Even now, fulfillment centers are at capacity, so we’re bypassing the traditional food supply chain and consolidation services and shipping direct to store.”
Jin Ju Wilder, director of marketing and business development at Vesta Foodservice BB #:125924, based in Santa Fe Springs, CA, concurs: “Many of our vendors are focusing on retail—they’re killing certain foodservice SKUs and putting their available resources on the bestsellers.”
Another model that accelerated during Covid and seems to be here to stay is grab-and-go, including at the institutional level where buffets and mass-seating cafeterias were previously the norm.
“The grab-and-go category in produce is seeing pretty significant growth,” agrees Kraus.
“We’re in the hospitality sector and seeing hotels close their restaurants on the property and bring in ready-to-eat fruit cups, pre-made salads, and fresh entrées. Large-format commissaries are doing this, too,” he adds.
This is an excerpt from the cover story in the July/August 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.
