The hospitality industry is struggling. While there has been an uptick in the number of Americans on-the-move and guests venturing back to restaurants, the hospitality industry has yet to recover completely, and the harsh reality is that it may be a long time until it does. However, there is technology that food businesses can deploy to improve operations, especially amidst the ongoing labor shortage.
A survey conducted by the National Restaurant Association (NRA) last year found that at the beginning of 2021, restaurant and food-service sales were $240 billion below its 2020 pre-pandemic forecasts. More than 110,000 eating and drinking establishments closed in 2020, and the NRA expressed hope that 2021 would be a year of rebuilding. However, labor shortages have put a drag on hospitality recovery.
That challenge become evident in a follow-up survey 2022 State of the Restaurant Industry, released by the NRA earlier this year. According to the report, roughly half of restaurant operators expect that recruiting and retaining workers will be their biggest challenge this year and a full seven out of ten operators reported not having enough employees to support demand at their restaurants. They do not expect that situation to improve.
Restaurant operators are looking to adopt technology that lets them do more with fewer staff members and at the same time, reduce costs on line items such as higher-than-usual food costs. Here are three reasons that food businesses are choosing digital solutions to address chronic labor shortages and manage the bottom line:
- Automating Accuracy
Operators of understaffed food businesses are often basing their labor model and inventory on bad data. Therefore, data accuracy is step one. Having accurate data offers a flywheel to become more surgical about labor to ensure food safety, take buffers out of inventory and reduce waste.
Staffing to match fluctuating needs has always been a challenge in the restaurant industry, pegged to several factors like daypart, holidays and other aspects that change like the weather (and often even is weather!). Now with quick serve and full-service restaurants operating with a sub-optimal number of service providers, those challenges are mounting.
There are five pillars of data accuracy that digital solutions provide to address food safety and reduce the costs incurred by waste amidst ongoing labor shortages. With persistent labor shortages, data-driven solutions promote accuracy through automated processes, specifically:
- Availability: Items are available, without substitution, on the advertised menu.
- Quality + Freshness: With best-in-class product specifications and the longest possible in-storage freshness
- Safety: Food safety is a paramount consideration for the customer, weary of news of recalls and wary of food outside the home
- Value: While price is obviously a major consideration, guests are enticed by food quality and freshness.
- Sustainability: Customers want the brands they patronize to be stewards of the environment and make business decisions that reduce waste and support sustainability.
A data-driven profile of food items offers the food business operator reliable information that ensures food safety. A solution that combines hardware, software, and barcode or RFID technology provides insight into the food ingredients the facility is receiving, storing, serving, and importantly where margins are so tight, identifying where there might be waste. In fact, automated, accurate data capture for every item provides new visibility to maximize the promise of freshness.
Consider information gathered along the food supply chain that ladders up to a freshness guarantee the hospitality brand can offer guests and stand behind:
- Origin Information
- Harvest Date
- Safety Details
- Condition Details
- Days Fresh
- Brand Information
Any or all that information can be contained on a label, depending on how far upstream the label is created. The data on the label can be simply and quickly scanned by an associate with minimal additional training, enabling software to manage the inventory. By automating accuracy, food businesses do more with less human resources. Freshness due diligence can also be purposed as the customer-facing brand attribute of “freshness you can trust.”
- Digital Solutions Control Costs and Drive Sustainability
While freshness and food safety are central to hospitality operations, controlling food waste helps to control costs. The amount of food waste in food businesses is significant and expensive. Accurate data on ingredient expiry dates means that items can be rotated properly to ensure they are used. For example, accurate data enables the operator to utilize ingredients that are nearing their expiry instead of having to discard them. Utilizing this data, they can establish an inventory system that forecasts and tracks food product usage so that it can be offered to guests safely, and not end up as waste.
For guests the issue of sustainability has also become paramount. According to a post-pandemic study conducted by Deloitte, “sustainability remains a key consideration for consumers in 2021 with 32% of consumers highly engaged with adopting a more sustainable lifestyle.” That means restaurant operators should find ways to make their business processes more sustainable and be accountable to their guests.
While forecasts for the hospitality industry may improve overall, two challenges will continue to plague food businesses. Unfortunately, labor shortage situation will not magically evaporate, and food businesses will continue to be hit by escalating increases in food prices. The good news is that digital, data-driven solutions that ensure accuracy, support food safety and control food waste are three ways that technology resources can support limited human resources.
ABOUT THE AUTHOR
Adam Anderson, Vice President, Food, Avery DennisonIdentification Solutions, is responsible for the creation and execution of the company’s global strategies for the Food segment which incorporate data-driven digital solutions encompassing hardware, software, and labels. Avery Dennison Corporation (NYSE: AVY) is a global materials science company specializing in the design and manufacture of a wide variety of labeling and functional materials. The company’s products and solutions are used in nearly every major industry