New research: Restaurants must diversify
I promise that I tried to write this post without a Noma reference. I tried!
When the world’s most famous fine dining restaurant announced a pivot to retail goods, it turned heads; even some unexpected ones. In hindsight, I should’ve expected a big reaction from a certain subset of the technology press. Taking away a fancy and exclusive thing and replacing it with a less fancy and less exclusive thing is the kind of change people in power might call disruptive. Daring, even.
The great Noma pivot is still nearly two years away, and who knows how much credit the restaurant’s famous chef will receive for ditching spotless service in favor of selling packaged goods over the internet. But in this case, the world’s best restaurant (twice over) isn’t the trendsetter.
Just ask restaurateurs.
A new report from payments and point of sale provider Square finds a fifth of restaurant revenue comes from sources other than core restaurant offerings. Besides serving hot food to seated diners, restaurants are hawking products and services like merch, take-home frozen meals, and online classes to receptive customers.
The data comes from a survey of 1,000 restaurateurs in the US and Canada, and the numbers are self-reported. But it speaks to the future of the business; 2 in 3 operators said these “non-core” offerings are necessary to diversify revenue and grow their brands.
We’re nearly three years past the earliest pandemic emergency restrictions. It’s easy to point to those times as the moments that changed the way restaurants work. But, surprisingly, 59 percent of restaurateurs said they didn’t start offering new products and services because of the pandemic. Further, 56 percent said their business diversification was not a response to economic conditions.
“The pandemic proved restaurants need a backup plan,”
…is a thing I have written and said more than a few times over the past three years.
At this point, it’s hard to separate the changes mandated by pandemic operating conditions vs. how new technology and social change caused business to evolve naturally.
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