“A mega trend that looks to grow tenfold over the next decade.”
This is what Swiss investment giant UBS said about the online food delivery trend after its in-depth research arm Evidence Lab released the findings of an intensive report in 2018.
“We estimate the global online food ordering market could grow more than tenfold over the next decade or so, to $365 billion by 2030 from $35 billion today. The ramifications could be substantial. We see a bright future for food delivery platforms, and positives for the restaurant sector as delivery adds a further growth engine.”
Is ‘Netflix and Chili’s’ here to stay
As home television screens get bigger and entertainment streaming services more comprehensive, people cocooning themselves at home most nights doesn’t appear to be a passing fad. We can now order from our favorite restaurants on an app and have the food brought right to our doors without making reservations, fighting traffic, or enduring long waits for a table.
This is a great way to satisfy an immediate craving, but it would be incredibly unfortunate if the art of dining out gets lost in the push for convenience. There is still much to be gained by meeting friends, enjoying the atmosphere of a great restaurant, and having an interpersonal exchange with your dining companions and service personnel. Not to mention experiencing food prepared and presented as it was meant to be – fresh to order, delivered to your table at the proper temperature.
Some additional numbers
According to an October 2018 column by Forbes Food and Drink senior contributor, Alicia Kelso, “statistics for off-premise dining are staggering.” She cites a study by CHD Expert indicating that restaurants are going all-in on these options.
- Takeout for pickup is projected to generate $124 billion in sales this year
- Takeout with direct delivery from a restaurant: $32 billion
- Takeout with delivery from a third-party delivery company: $13 billion
- Catering for pickup or delivery: $40 billion
The explosion of online ordering fills more than an “in-between” niche. People who are busy with work, commutes, kids’ activities, meetings and events don’t have to settle for frozen or fast food for speed and convenience. Just a few short years ago, cities such as New York or San Francisco were the envy of much of the rest of the United States because they had delivery options that varied outside the realm of pizza and occasional Chinese to “you can have anything delivered!”
Now, with apps like GrubHub, Postmates, DoorDash, and UberEats, a variety of delivery options are available for cities large and small throughout the country. You can get food as basic as Burger King to items as indulgent as rack of lamb and lobster delivered to your door, depending on which of your local restaurants are partnering with the third-party delivery services and what menu items they’re offering.
But how do restaurants maintain excellent food and brand standards when product is not being conveyed in a controlled environment that helps provide optimal quality?
Before we answer that, let’s first examine some of the pros and cons of offering online delivery:
The good and the bad of online delivery
- Extends reach beyond normal geographic range, introducing your restaurant to an audience it might have previously missed
- An additional revenue stream that can transcend seasonal cycles and build towards large orders, etc.
- Helps customers discover favorite menu items to create repeat business
- Great marketing reach and impetus to customers coming in for full dining experience
- Menu items are not presented at ideal temperature, timeliness or presentation
- There is little room for error; incorrect or inadequate orders are not easily rectified as they are in-store. This may result in customer annoyance far greater than a situation where a manager can quickly control and solve.
- To-go orders, particularly large orders, take a lot of additional organization, packaging and production space. For instance, all sauces and condiments must be on the side, menu items often need to be deconstructed, so one element doesn’t compromise another, etc.
Logistics, logistics, logistics
To-go drivers wading through a crowd of in-house diners and those waiting to be seated can be chaotic, to say the least. Sufficient space and manpower to properly execute high delivery volume or large catering orders are becoming a necessity for many restaurants. The needs for this niche are so demanding, creating a proper workspace could require remodeling the front or back of the house or both. Parking adjustments should also be made.
As mentioned above, there is a very small margin of error and the best way to minimize a confusing clash of takeouts and dine-ins is by providing team members organized space from which to work. If one Uber Eats driver accidentally receives an order meant for another, it will likely result in two separate parties being extremely unhappy.
Takeout packaging areas should be designed for maximum efficiency the same way the line and the expediting areas are. All common tools should be in easy reach, which includes condiment cups, containers, wraps, utensils, bags, etc. Anything the team member needs, such as dressings, garnishes, condiments, etc., should also be easily accessible.
When evaluating a dine-in order in the kitchen, the chef and/or expediter can easily do a visual assessment to ensure every plate is correct. This is not nearly so easy for takeout. Once an order is packed away, viewing a menu item is difficult, particularly when using any eco-friendly packaging that isn’t transparent plastic. Every time a container is opened to check for accuracy, you expose the item to air, which increases the risk of it getting cold or stale.
Wood Ranch debuts WR Kitchen & Bar to rectify this challenge
It’s taken time, commitment and care to build your brand, reputation, following and customer relationships. Those who love what you offer are the heart of your company’s success. The last thing you want to do when keeping up with evolving trends is to turn your back on your brand’s history and loyal supporters.
In the evolution of every restaurant or product, there will be times when you need to evaluate what is working, what is not, and how you translate any changes to be consistent with what people already love and trust about you. If you betray the trust of your brand loyalists and brand ambassadors, you may deeply undermine your company’s reputation. So how do you weather seismic shifts in the market without risking that trust and loyalty? The leadership team at Wood Ranch had an idea for the rising costs of running a restaurant with a large footprint, requiring significant staffing day and night while a share of its business was converting to pickup or delivery options.
Known for its cozy, dark-wood, rustic atmosphere, the flagship brand was having difficulty translating to lighter, brighter, faster restaurant trends. But those who know and love Wood Ranch expect the traditional architectural and thematic elements.
What if they created a sub brand that wasn’t a replacement of their flagship but an extension? It could solve many of the dilemmas the company was facing without undercutting its existing brand elements. The solution: WR Kitchen & Bar, a “more casual dining brand with a smaller format and streamlined ordering system,” according to media reports announcing the first location in Laguna Niguel, California. It opened May 2019, and a second location is set to open in Carlsbad, California in the fall.
Not an overnight decision
According to media reports announcing the new concept, the operators of Westlake Village-based Wood Ranch had been considering the idea of opening a smaller-format concept for more than eight years. Rising costs of maintaining Wood Ranch was becoming prohibitive and they wanted to find a way to offer more value to guests with a new twist. Leadership was clear that they didn’t want the new concept to be fast-casual but they did integrate some of the more efficient elements to form their hybrid idea.
The full bar element elevates it from any fast-casual confusion, even if the ordering/delivery element is a bit more automated than most full-service establishments.
When diners enter, they see a bar that goes along the length of the restaurant. This is where diners order food and drink, similar to how it’s done in London pubs. The bar has three ordering stations.
Once they’ve ordered, diners receive a pager and can seat themselves at any available table. There are servers on the floor who will assist with additional food and drinks, though non-alcoholic beverages can be refilled at a self-serve station. Customers pay via iPad on tables for those who have ordered from the table.
The quality of food, drinks, and friendliness of the staff are all designed to maintain the level Wood Ranch has cultivated since it first opened in 1992, an era known for big restaurant footprints and large portion sizes. Other similar concepts, like Claim Jumper, also based in Southern California, are now struggling because a unique course correction couldn’t be made in time to keep the flagship afloat in shifting trade winds.
It will be interesting to see where this goes. When a company with a 27-year history understands it needs to pivot without making a full about-face, maybe that will spur the innovation of others facing similar challenges.
Innovation and a clear understanding of goals and challenges are key. Restaurants considering such a significant shift should consider bringing in the expertise of a consultancy. They can help you address every element of the change, from branding and product to operations and marketing logistics.