Rising costs and labor crunch expected to move operators back to basics
Better, leaner, more efficient menus are in our (near) future as restaurant operators, forced to cut costs and streamline operations in the face of changes wrought by the pandemic, have gotten rid of loss leaders and slow movers. Even so, as the cost of doing business rises, guests can expect to pay more for their favorite food in many restaurants.
As restaurateurs face continued supply-chain disruptions, they also are looking at ways to simplify their inventory by finding multiple uses for individual ingredients. The result could be fewer garnishes per dish and multiple uses of the same side dishes and house-made condiments.
Many chains shrank their menus early in the pandemic. The immediate reason for that was rapid declines in customer traffic that often resulted in furloughed staff and a need to streamline operations, but many of those concepts were looking to trim their menus anyway.
Dine Brands Global, parent to IHOP and Applebee’s, trimmed their menus by about a third, but that had been a long time in coming, said Steve Joyce, Dine Brands’ CEO at the time. In July 2020 he said the sales decline that started in mid-March gave franchisees the motivation to agree to the cuts.
Taco Bell removed menu items on separate occasions over the course of 2020, but the Yum Brands subsidiary actually began what it called its “decluttering” efforts in 2019.
Darden Restaurants — parent of Olive Garden, LongHorn Steakhouse, Cheddar Scratch Kitchen and other concepts — also reduced its number of menu items, as did McDonald’s. The result was restaurants that performed better.
In an earnings call in March of 2021, Darden president and chief operating officer Rick Cardenas said the removal of items improved operations.
“This focus makes it easier for our restaurant teams to consistently execute our highest preference items, which means we are serving our most popular dishes to more guests,” he told investors. At Olive Garden, for example, the top 10 entries accounted for about 48% of guest orders in early 2020. That rose to about 55% a year later, he said.
Optimal optimization
McDonald’s reported that its menu trimming resulted in faster drive-thru times.
“2020 was all about menu ‘optimization,’” said John Oakes, CEO of consulting firm Revenue Management Solutions. “A lot of restaurant chains modified their menus … to increase throughput, ease operations and maintain margins.”
“I’m still very careful in trying to figure out not having too many complex preparations, because I’m still very tight on staffing.”
Christophe Poteaux, Bastille
The positive results mean streamlined menus will likely be the norm in 2022, at chains as well as independent restaurants. In the face of rising costs and an extremely tight labor market, many operators plan to keep their menus lean.
Chef Christophe Poteaux, who owns and operates Bastille in Alexandria, Va., with his wife Michelle, said he simplified his plates, cutting down on the number of garnishes, and using the same two or three seasonal vegetables for each dish.
He used fewer starches, too, selecting barley or rice and seasoning it with different herbs or compound butters for each dish. He also reduced the number of entrées on his menu, but he changes them more often, allowing his regulars to continue to enjoy a variety of dishes while not requiring the kitchen to be ready to make all of them on any given day.
He said using fewer seasonal vegetables actually reflects the customs of his native France where, when produce such as artichokes or asparagus are in season, they are served across the menu.
“I’m still very careful in trying to figure out not having too many complex preparations, because I’m still very tight on staffing,” he said, noting that the labor shortage has gotten worse this spring as more restaurants reopen.
He said that, in speaking with his colleagues at other restaurants, they agreed that they would benefit from simplifying their menus.
“In conversations I’ve had with other chefs, we’re probably trying to do too many things at once [in the kitchen],” he said, adding that customers are still satisfied with the more compact menu.
He also has removed more high-cost items such as filet mignon, lobster and foie gras from the menu because he doesn’t want to sit on expensive inventory that may or may not move. Instead, he is focusing on low-cost items that he can add value to in the kitchen, such as duck confit and pork belly, which can be slowly braised with minimal labor.
He also now sells chicken breast, something he hadn’t offered before, because he can add to its appeal with good seasoning and vegetable preparations and still get a decent margin on it.
Use it all
Fewer vegetables, starches and entrées also can help cut down on waste, Poteaux said.
So can dishes such as the lasagna at Puritan & Company in Boston, a $22 dish that chef Will Gilson plans to change based on what’s in the kitchen.
“We refer to it as ‘kitchen sink lasagna’ because we take what vegetables we have available for it and we also put meat in that we have excess of that week. Sometimes it is braised short ribs, sometimes it is pork shoulder, and sometimes it is mortadella,” he said.
Cross-utilization is a key to the success of Southside Pizza Co., a virtual concept that operates out of Oak Wood Fire Kitchen, a casual-dining restaurant in Salt Lake City.
Both concepts sell pizza, and both types of pizza are made with the same ingredients on the same line, said owner Michael McHenry, but they cater to different customer bases.
Puritan & Company’s “kitchen sink lasagna” uses any vegetables available and meat that the restaurant has excess of that week.
So the straightforward Margherita pizza served in Oak’s dining room is delivered as The Marg from Southside to younger customers at a price that’s around 30% lower.
McHenry said that’s possible because the fixed costs of overhead and labor are already paid for.
Both concepts also sell chicken wings, but at Oak they’re whole wings with only one choice of sauce — currently honey Sriracha — whereas from Southside they’re wing segments in a choice of six sauces. McHenry said using multiple sauces is a great way to offer variety with minimal cost or labor complexity.
The simpler menus we can expect to see in 2022 also are a key part of Tiffany Derry’s vision for Roots Chicken Shak, a fried chicken restaurant the “Top Chef” alumn hopes to franchise to operators in underserved, low-income communities.
She and business partner Tom Foley created the concepts with the intention of keeping it tight on costs so they can serve affordable food in neighborhoods where other chains wouldn’t likely open.
"A lot of this was figured out before we opened the door,” Tiffany Derry, Roots Chicken Shak,on using fewer, less expensive ingredients.
So they’re using less expensive chicken thighs instead of breast, and their two other proteins are bacon and eggs. Vegetables are just lettuce, tomatoes and onions.
“That’s all,” Derry said.
“A lot of this was figured out before we opened the door,” she said of the concept, which currently has two company-owned locations in Austin and Plano, Texas.
Labor saving efficiencies
Smaller square footage and kitchens designed for efficiency also make the model work, she said.
Operations were top of mind when Mike Turner rolled out the new menu last month at Walk-On’s Sports-Bistreaux, a 51-unit chain based in Baton Rouge, La.
Turner, Walk-On’s senior vice president of culinary and supply chain, said he worked to focus on serving food that could mostly be prepped in advance to avoid moving parts on the line.
That meant having his suppliers bake and scoop out potatoes, something his staff used to do. Now, for the chain’s fully loaded mashed potatoes, the staff simply adds sour cream, cheddar cheese and bacon.
His mango salsa is made with fruit that arrives already diced.
“Cutting mango in-house is almost impossible,” he said. “That’s one of the most difficult things to do on the planet.”
The salsa goes on the chain’s mahi mahi entrée, as well as ahi tuna tacos and Hawaiian pulled pork tacos. And that pork is the same barbecue pulled pork that goes on a salad with spicy slaw, pickles and onion rings, and that’s used as a topping for large and small orders of cheese fries.
Many operators are hesitant to raise prices, sympathetic to their customers who might have seen their own income take a hit over the past year. That’s one reason why Poteaux introduced chicken breast and removed filet mignon at Bastille, resulting in overall prices that are about 10% to 15% lower than they were before the pandemic started.
“There’s always ways, if you know how to run this business, to keep prices down and still maintain some margins,” he said.
The same pizza served in Oak Wood Fire Kitchen’s dining room is delivered to younger customers from Southside Pizza Co.
That might be less true at restaurants with simpler menus, such as Martin’s Bar-B-Que, a 10-unit barbecue concept based in Nashville, where pit master and owner Pat Martin has raised brisket prices four times in the past year, from $16.99 per plate to $19.99, mostly to offset skyrocketing chicken wing prices. (Customers are more accepting of price hikes for beef than they are for wings, he said).
Regardless, now might be a good time to raise prices, said Oakes of Revenue Management Solutions.
In RMS’s latest consumer report, “most respondents believe safety precautions, increased minimum wage and cost of food justify price increases,” he said. “Specifically, 55% agreed that minimum wage increases were a justifiable reason for restaurants to increase prices.”
He cited Bureau of Labor Statistics data indicating that overall menu prices are up by 6%.
According to the RMS survey, Baby Boomers, born between 1946 and 1964, are the most receptive to higher menu prices, with 70% saying higher food costs justified higher prices. Gen Z, those born after 1995, are the least receptive, with just 41% accepting that justification.
McHenry in Salt Lake City said that his customers have already shown a willingness to spend 25% to 35% more for the convenience of delivery — something reflected by the nationwide upsurge in delivery.
