February 27, 2020

20 restaurant industry opportunities for 2020

The Association’s annual State of the Restaurant Industry is out. Report highlights key avenues for growth for the coming year and beyond.

People want to use restaurants.

According to new data from the National Restaurant Association, heading into a new decade, pent-up demand for restaurants remains high. It’s also the 11th consecutive year of industry growth, and operators are interested in using all the tools at their disposal to stay top-of-mind with an evolving consumer base.

The National Restaurant Association’s 2020 State of the Restaurant Industry Report highlights real-time trends and the data behind them. Based on its findings, here are 20 areas of opportunity for growth in 2020 — and beyond.

Source local ingredients. Seven in 10 restaurant operators say consumers are more interested in locally sourced menu items than they were two years ago.

Add healthy options. Sixty-five percent of adults say they order more healthful options at restaurants than they did two years ago, and 85% of operators say they’ve noticed a shift in the amount of attention diners are paying to these options.

Think sustainably — and tell people! Plenty of operators engage in sustainable practices, fewer share this story. Three in four restaurant operators say consumers are more interested in environmentally sustainable menu items than they were two years ago, and over half of diners say they’re more likely to visit a restaurant that features them.

Hop on the plant-based trend. In a recent survey, more than 600 chefs ranked plant-based proteins high in menu and protein categories, indicating sustained interest from consumers and businesses. Mushrooms ranked especially high this year, too, whether blended into burgers or as stand-alone ingredients.

There’s opportunity in alcoholic beverages ... Twenty-two percent of fast-casual operators believe alcoholic beverages will become more popular within their segment in 2020. Then there’s delivery potential: 56% of adults — including eight in 10 millennials (age 24-39) say they would be likely to order alcoholic beverages if they were offered as part of a food delivery order from a restaurant. (The ability to do this varies by jurisdiction.)

… but plenty of interest in creative nonalcoholic and low alcohol-by-volume options, too. There's much greater diversification and availability of nonalcoholic beverages, and a lot more research and development going into the category.

Offer more technology. Consumers are asking for it, and the majority want technology that reduces transaction friction and increases convenience — not the kind of tech that replaces humans.

Don’t get distracted by the flashy new tech options. Fewer than a quarter of consumers say that tech like self-driving cars and delivery drones, or food-preparing robots are a good idea.

Don’t overlook tech basics. Even with all the new technology on offer, the majority of consumers use it for the basics: checking the menu, location, hours, and reviews. Keep these updated across channels.

Invest in off-premises. A majority of operators across industry segments see off-premises options — drive-thru, takeout, curb-side pickup and delivery — as the best opportunity for future growth, including 80% of quickservice and fast-casual operators. Still, only about half of operators say they plan to devote more resources to expanding this side of their business in the next year.

Consider delivery. Overall, roughly half of restaurant operators say their restaurant offers delivery. Fast-casual operators were the most likely to say they offer a delivery option.

Offer easy additions to home-prepared meals. Three in four adults say they are more likely to stay at home and watch on-demand television and videos than they were two years ago. While this can cut down on foot traffic at restaurants, it’s also an opportunity to expand consumers’ at-home options. Fifty-eight percent of adults (including 69% of those ages 18-23) say they’re open to supplementing home-cooked meals with restaurant dishes.

Highlight value. A good deal never goes out of style, and consumers and operators agree that everyone appreciates value. Catch a customer’s attention: roughly 8 in 10 restaurant operators say consumers are more value-conscious than they were two years ago.

Engage your customers, they want to hear from you. Nearly half of restaurant operators say their customers’ loyalty is more difficult to maintain than it was two years ago, but consumers want to stay involved. More than eight in 10 say they are more likely to visit a restaurant that offers a customer loyalty and reward program. And keep talking to them! A strong majority of adults, including 91% of millennials (ages 24-39) say they’d try to take advantage of specials communicated via smartphone app.

Try something unexpected. The time is right for experimentation and creativity. Three in four adults say they would likely pay attention to variable pricing — that is, real-time price adjustments for specific times of the day or days of the week. Busy times mean higher pricing; prices drop during slower periods. Two-thirds of adults say they would be likely to take advantage of a house account, pre-paying a certain amount to receive a bonus amount added to their account.

Get involved. Nine in 10 restaurant operators make charitable donations in their communities. Consumers notice – especially the younger ones. Half of consumers say they are likely to make a restaurant choice based on how much a restaurant supports charitable activities and the local community. Among Gen Z adults (ages 18-23), this soars to 70%.

Think differently across dayparts. Changing times lead to changing habits. Consumers want easy breakfast food and beverage options. Half of employed adults bring their lunch to work less frequently. Over half go out for an afternoon snack or beverage more frequently. And 61% of employed adults say they are more likely to pick up take-out food for dinner on the way home from work than they were two years ago.

Engage an emerging workforce ... Employee turnover in hospitality is high, the highest level since 2007. Still, people view restaurant jobs favorably — 93% of all adults agree that the restaurant industry is a good place to get a first job and learn fundamental working skills. Roughly one in four restaurant job openings in 2019 were filled by people for whom it was the first regular job they have ever had, and the number of teenagers working in restaurants is gradually trending higher.

… and recognize the opportunity for older adults. Older adults will represent a much larger proportion of the overall U.S. labor force in the years ahead, while the number of teens available for work will continue to shrink. The number of adults aged 65 and older in the labor force is expected to increase 6.1 million by 2028.

Be clear when communicating employee initiatives. Given high turnover in the industry, it's always important for the employer to visibly communicate how they're investing in the employee development and training. It's much easier to retain an existing employee than find a new one.