Potatoes at Foodservice: Monthly Update – November 2020

November 9, 2020

Consumers & Dining Out

• Overall, consumer spending was up in September (+1.9%) versus August according to Technomics.¹
• As of October 28, 52% of consumers indicate they are very concerned about eating out, and 42% say they will definitely avoid eating out.²

• Average consumer weekly restaurant visits are around 3, up from 2.2 per week in April. Visits are improving the most at limited-service restaurants.¹
• When it comes to saving money while dining out, 28% of consumers have chosen less expensive restaurants, 27% skipped appetizers/sides/desserts, and 26% have been ordering from restaurants less often.³
• Nearly half of people perceive delivery as being more expensive.³
• As of October 9, more than half of restaurants are currently open for seating (indoor and outdoor) and delivery. Seating availability is increasing from August levels, led by increased indoor seating at restaurants and on-site locations.⁴
  • However, this will be challenged as northern-tier states move into the cold weather of fall. Thus far, about 75% of full-service restaurants have been taking advantage of outdoor dining, accounting for about 44% of sales exclusive of take-out and delivery.⁵
• When getting food from restaurants, consumers feel the safest getting it from: drive-thru (78%), curbside pickup (72%), delivered (68%), and lastly, going inside a restaurant to pick up a takeout order (65%).⁶
• When eating on-premise, consumers feel most comfortable and safe when: dining in outdoor seating (50%), getting drinks in outdoor seating at bars (45%), dining inside at sit-downs (38%), dining inside at fast-food (36%), and lastly, getting drinks inside at bars (35%).⁶

Restaurant Industry

• Foodservice retained 3.8 million jobs lost in April but is still down 2.1 million since September 2019.¹
• September’s sales were up 2.1% ($1.1 billion) from August’s seasonally adjusted volume of $54.5 billion.⁷
• Limited- and full-service restaurants performance improved, mainly due to regional/state re-openings, better execution on takeout/off-premise, and consumers becoming more comfortable getting away from home meals.¹
• Pizza and Chicken restaurant brands, such as WingStop, Papa John’s, Popeyes, and Domino’s, all reported positive same-store sales growth. This is due to already having off-premise/delivery orientation, family-friendly concepts, and strong technology.¹
• Restaurant reservations year over year are only down 40%, compared to being almost 100% down in May.¹
• Hotel business occupancy is improving, down 30% compared to 70% in April.¹
• As companies extend work from home beyond the pandemic, businesses in urban areas near office centers have been dramatically impacted.¹
• Forty-eight percent of colleges and universities planned for in-person learning in July, but only 27% currently have in-person classes; operators have adapted meals for more grab-and-go options.¹
• Technomic predicts that there is greater potential for off-premise meals and kits since family gatherings will be limited and consumers may not want to cook for the holidays.¹
• Out of the operators who offer self-service, 76% suspended food/salad bar or buffet-style during COVID.¹

Restaurant Trends

• With cold weather on the horizon, restaurants are getting creative in seating diners in winter conditions, such as City Winery in Chicago’s heated igloos.
• Technology platforms offer ways to serve the restaurant industry with more contactless payment:
  • Facial recognition has been used in China for several years. Now, LA-based company, PopID, is offering “pay by face” to more than 100 restaurants in California.
  • Contactless Coca-Cola Freestyle menu technology piloted at Wendy’s, Five Guys, and Firehouse Subs.
• Innovative protection solutions, such as Airshield, have entered the market. FoodSignPros ‘Airshield’ protection uses continuous downward airflow (as an extension of a sneezeguard) to prevent particles or pathogens from crossing buffet barriers without disrupting the person’s ability to access the food.
• Virtual restaurants (a.k.a. ghost kitchen or dark kitchen) are delivery-only concepts that do not offer dine-in serves and are on the rise. Well-established restaurant brands are adding new virtual brands to their repertoire, such as Bloomin’ Brands with Tender Shack, Brinker International with It’s Just Wings, Chuck E. Cheese with Pasqually’s, and Boston Market with Rotisserie Roast. The growth of this type of “restaurant” is gaining in popularity in order to meet the demand for online food delivery.
• Wow Bao, a fast-casual Asian concept and ghost kitchen, with automated stores and ordering, surpassed 100 locations nationwide in only a six-month time frame.  
• WaWa opened a drive-thru only location in Pennsylvania this year.
• Mealpro delivers pre-cooked, pre-portioned “health-conscious” meal plans to students.
• Resy Drive Thru collaborated with Los Angeles restaurants and American Express to open a “first-of-its-kind restaurant drive-thru experience created specifically with COVID safety protocols in mind.”

Potatoes on Menus

• El Pollo Loco debuts the California Queso Burrito, which features Tapatio Fries inside the burrito.
• Shake Shack in South Korea adds Gochujang fries to its menu, among other Korean-inspired dishes.

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¹ Technomic State of the Industry Report – Fall 2020
² Datassential COVID-19 Report 38: Decision 2020. Published 10/30/20
³ Datassential COVID-19 Report 37: Sticker shock. Published 10/16/20
⁴ Datassential COVID-19 Report 36: Operators hunker down. Published 10/09/20
⁵ Nation’s Restaurant News article: November 2, 2020
⁶ Datassential COVID-19 Report 35: Learning as we go. Published 10/02/20
⁷ National Restaurant Association article: October 16, 2020