By now, we’ve heard the dire, post-pandemic forecasts for the restaurant industry, whenever that may be. Those include a projected decline of $225 billion (that’s with a b) in sales during the next three months alone, and the loss of between five and seven million jobs.
The road to recovery will no doubt be long and rocky, which is a challenge for an industry already struggling with oversaturation, stagnant traffic and a bit of a chef shortage. This crisis could very well change the restaurant industry forever, as many predict, including the approach to culinary education.
Rick Camac, dean of restaurant & hospitality management at the Institute of Culinary Education in New York City, believes the necessary skills to thrive in a post-coronavirus industry will evolve beyond the kitchen to include a sharper focus on strategy, negotiation, management and leadership, as well as faster execution and a stronger understanding of key performance indicators.
“In the industry, many aren’t formally trained in these skill sets, unfortunately,” Camac said.
The ability to negotiate is especially critical in times like this. Restaurant concepts across the country are now having to negotiate lease terms or delivery fees simply for survival, for example.
“On your own or with the counsel of an attorney, this is a time to negotiate everything–from rent to utilities to taxes to vendor payments,” Camac said. “Quick action from restaurateurs may result in their ability to come out of this. They need to stop the bleed, and unfortunately time will not help, as it will only add more debt.”
Camac has navigated crises in the industry before, including the 2008 financial crisis–which eroded restaurant sales by double digits–and Hurricane Sandy. He expects the recovery from the coronavirus to be a bit different, with more aid provided to restaurants because of the anticipated widespread closures. Indeed, industry organizations are lobbying hard for restaurants. Last week, the National Restaurant Association called on the Trump administration to enact targeted financial relief, loans and insurance options for small businesses and tax measures.
Even if that aid is issued in its entirety, Camac predicts full recovery to take a year for every month restaurants are shut down.
“Ultimately, the industry will survive. Unfortunately, not every restaurant will be able to make it, but the industry as a whole will recover,” he said. “There will be a lot of work to do and, unfortunately, restaurants to replace. Restaurants as we know them will change in the long term.”
What that means essentially is that restaurants, especially full-service concepts, will come out on the other side leaner by necessity–more efficient operations, less staff, smaller menus and a bigger focus on delivery.
“You need to get leaner, negotiate everything and rethink your entire concept. You may even have to pivot to a new model,” Camac said. “We know the world is eating differently–quicker, more affordable, better quality–and the restaurant industry needs to pivot and accommodate that. Quick decisions and perfect execution are key to recovery.”
The large, heavily capitalized companies are in the best position to recover, as are quick-service brands running smaller venues. No doubt, the trend was moving in this smaller-format direction prior to the outbreak. According to the National Restaurant Association, off-premise sales now make up 60% of all foodservice occasions and, as such, many brands are experimenting with smaller models. Think Starbucks’ pickup-only location in New York City, for example.
About a year ago, the Institute of Culinary Education even adopted a professional development class covering the shift to off-premise. The class focuses on operational opportunities, such as less rent, less payroll (no front-of-house employees) and less cost of sales from a smaller menu. That’s not to say such a shift is easy, however.
“A word of caution: Many will jump in too soon due to necessity, and ultimately there will be a fallout as the ones that execute better will rise to the top,” Camac said.
Meanwhile, one-off, full-service brands and venues and undercapitalized groups will struggle to emerge from the crisis.
“Most restaurants don’t have the funds to last more than a month or so being out of operation,” Camac said.
Further, he expects corporate organizational charts to flatten with smaller levels of management.
“That was already happening, as some of the best people I know at the highest levels of management were already out of work prior to the crisis,” he said. “Sadly, I expect that trend to continue.”
It’s worth noting that just because core competencies like strategy and negotiation rise in demand, that doesn’t mean the culinary piece will go away. In fact, research and development will be critical for recovery.
“It’s more important than ever to create new menus that can be sold profitably, have perceived value and can be executed more easily,” Camac said.
His final prediction? Those new menus might be served by robots or delivered by drones versus actual employees, which could add a whole new layer of curriculum.
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