Hospitality’s awkward truth exposed – and how to survive

The food and beverage (F&B) sector has been caught in an economic storm. But it’s exposed an awkward truth — something is missing that the industry didn’t want to think about

Arguably, the F&B industry has been dealing with more disruption over the past year than any other sector, except healthcare. Change has been relentless. But it’s also brought some uncomfortable truths to a head.

When it comes to delivering change, the industry has blown hot and cold over the decades.

On the surface, it’s embraced change in recent years with a feel-good spring in its step. There’s excitement about the popularity of new ingredients, recipes and techniques. The way bars and restaurants are designed, fitted out and branded has involved huge creativity. Industry players of all sizes have excelled at websites, apps and social media too, especially video. The coronavirus pandemic has also seen more establishments adapt with new services, including takeaway.

But in the background, the sector has struggled with change. Deep change. This relates to the stubborn issues that customers don’t notice, investors don’t see and analysts don’t realise. But these problems have been holding back businesses for years. These issues relate specifically to efficiency, performance and insight. And they need attention.  

Why this matters now

Before the pandemic struck, some of these embedded issues were tolerated because margins were good enough — and the chief focus was on the customer experience.

But now the tide has gone out and the sharp rocks have been exposed.

Put simply, bars and restaurants are often deeply dysfunctional. It’s awkward to acknowledge this but it needs recognising and fixing quickly. Fortunately, tech can help.   

Here are three examples:

#1: Key processes are fragmented

Front-of-house and back-of-house operations each hold business-critical information but they fail to sync in a meaningful way. Key events are often recorded long after they happen.

For real change to happen, important datapoints such as stock counts, batch production, wastage, purchases, goods receipting, transfers and other events should be captured in the moment — and then ripple across other processes automatically.

This should be a digital process with zero reliance on paperwork, spreadsheets or people needing to pass on messages. That way, an establishment or chain can become ultra-responsive, flexing to actual events in real-time.

That’s been the experience of UK quick-service chain Farmer J, where real-time information on batch production and stock updates has been absolutely critical to its success.

Using next-gen tech, the chain has gained transparency across its processes, so it’s able to spot margin leakage, check stock levels, manage portion sizes, keep track of suppliers and provide speed and convenience for customers.

“We’ve got that real time data coming through from the back-of-house into the front-of-house and vice versa. So it’s absolutely perfect,” says Rob Hodges, Head of Operations at Farmer J.

#2: Manual tasks are bad for business

Why don’t you treat yourself to a stock take tomorrow? No-one jumps at the opportunity, so it’s no wonder that onerous, manually-intensive tasks such as inventory counts don’t happen regularly enough or are handled poorly. But if they lack accuracy and visibility, then it’s easy for mistakes and waste to creep.

Today, it’s possible to use next-generation tech to streamline and automate a host of routine processes that happen in a bar or restaurant — so tasks are more often just a quick swipe than a slog. Minimising the time needed to complete tasks or even eliminating processes entirely can dramatically improve the ‘people experience’ for your team, while injecting valuable real-time data into your business.

#3: Insights tell the wrong picture

Do you know which of your bars or restaurants had the most sales yesterday, which kitchen team performed the best last weekend, and which dish is your most profitable? And what does that tell you about the latest trends, emerging issues or new revenue opportunities?

So often, establishments rely on old, inaccurate or incomplete data — and try to make up the difference with intuition or gut instinct. But this is no good when you’re sailing a business through dangerous waters, hitting storm after storm, or emerging from a crisis and looking to expand. 

With the right data, you can optimize your business today — and use artificial intelligence (AI) to automatically predict what you’ll need tomorrow with 95%, or more, accuracy. This drastically simplifies everything, from orders and supplier negotiation, through to precise kitchen prep plans and staff scheduling. A next-gen system will do the thinking and planning, while you get to make the smart decisions.

The global franchise chain Dum Dum Donutterie is a great example of how new tech is helping a business that relies on accurate orders to keep products ultra-fresh and reduce waste.

Accurate insights are available on demand too. Head of Franchising Brett Edwards can get sales and operational performance figures across his company’s stores, direct to his mobile in real-time.

Access to trustworthy and timely analytics that provide a single picture of the business has helped the franchise to save managers’ time and increase revenues.

It’s time for a rethink

Next-gen tech needs to play a transformative role within F&B businesses in 2021 and beyond. And this requires real care and practical answers, based on sound industry knowledge.

Some F&B businesses are entranced by the idea of being a tech-driven, streamlined operation that sells food and drink — but they don’t want to become a glorified vending machine. Others may be fearful of getting trapped by complex tech that nobody really understands, or lightweight apps that just tinker at the edges.

These concerns are valid.

What the sector really needs is a way to keep all the great personality and unique touches that make a business stand out, while using tech to handle the ‘daily grind’ of so many tasks and harnessing AI to really give you an edge.

In fact, Farmer J transformed its business, managed to free up vital revenue in food costs and actually grew its profits during COVID crisis.

To explore this topic further and find answers, take a look at F&B Tech Transformation: Prepare for success in the new reality by becoming a tech-first operator.

This helpful whitepaper explores the challenges faced by the industry as well as the Next-Gen solutions needed to re-imagine and deliver what the market needs now.

Ultimately, it’s possible for 80% of daily routines to be automated and self-driving, so you can focus activities that add real value to your customers and give you a competitive advantage, whatever market conditions are around the corner.