AI in Full-Service Restaurants
Exploring opportunities and challenges for transparency, validation, and trust. Artificial intelligence in the food industry is helping restaurants enhance their supply chains, improve transparency, reduce foodborne illness risks, boost sustainability, and be more accountable to their customers. While there are some challenges around AI, there are also tremendous benefits for the restaurant industry to leverage. For instance, AI has become instrumental in improving the following aspects of restaurant operations: (i) Supply chain optimization. One of the primary benefits of incorporating AI in the restaurant industry is optimizing the supply chain. AI can help restaurants do things like determine the optimal amount of inventory to keep in stock and the most efficient routes for delivery drivers. By optimizing the supply chain, restaurants can reduce waste and cut down on expenses, which ultimately saves them money and improves their bottom line. (ii) Transparency and accountability. AI can also help restaurants be more transparent and accountable to their customers. With AI technology, restaurants can create an indisputable ledger of their supply chain, allowing consumers to track the journey of their food from farm to table. This level of transparency can help build trust between consumers and restaurants and ensure that restaurants meet their ethical and sustainable commitments. (iii) Validation and verification. AI-based systems can validate supplier sources and verify that suppliers are following all the correct safety protocols. AI algorithms are able to analyze data from various sources, such as FDA inspections, supplier data, and public records, to validate and verify suppliers’ claims and maintain a high level of trust throughout the supply chain. This validation and verification is possible with affordable, reliable software that is currently available. But be aware that AI is only as effective as the data it is trained on. If the data is inaccurate or biased, AI will produce inaccurate results. Therefore, restaurants must be certain they’re collecting high-quality data and regularly auditing their AI applications to ensure that their AI is producing accurate results.
Six Ways to Reduce Your Costs
An insider’s advice about restaurant insurance. Restaurant insurance is complicated. Just as owners have to play many roles in management, marketing, and menus, their insurance has to protect their finances, patrons, and employees. And who has the time to read a 100-page insurance policy? According to a recent survey by Wakefield Research, 90 percent of business respondents said they lack confidence that their business is adequately insured. Half the respondents (53 percent) said the most significant barrier to obtaining insurance was understanding what coverage they needed to protect their business. Here are some insider tips to help avoid overpaying for coverage, prevent claims that drive up premiums, and make sure your business is covered properly. Strong safety measures are essential to reduce claims – especially for workers’ compensation. Ensure that all safety precautions are being followed, such as having a non-slip mat behind the bar or counter, servicing stove hoods, and inspecting fire extinguishers annually. Security devices such as surveillance cameras and central station alarms also help reduce premiums. Be sure to train employees properly about injury prevention, especially if they are new or inexperienced. “Restaurant workers can face high-stress levels, especially with staffing shortages,” said Matt Zender, Senior Vice President, Workers’ Compensation Strategy at insurer AmTrust. “Restauranteurs should lean on their onboarding experience to ensure employee safety.” Inexperienced staff that are not adequately trained can also cause foodborne illnesses. According to the Johns Hopkins University Bloomberg School of Public Health, a single foodborne outbreak can cost a restaurant lost revenue, fines, lawsuits, legal fees, and insurance premium increases.
Bielat Santore & Company – Restaurant Industry Alert
FULL-SERVICE MONMOUTH COUNTY, NJ – RESTAURANT & BAR FOR SALE
FINANCING AVAILABLE TO QUALIFIED
Photo used to illustrate a “Restaurant/Bar” and not actual representation.
Well-maintained Monmouth County, NJ restaurant and bar; highly visible highway location w/average traffic count = 20,000 +/- cars per day; 180 seats + 20 at bar; additional 50 outdoor seats; paved parking lot with 38 spaces; operating business with liquor license grossing $22k+/week; business only open 5 days/week for dinner only; unlimited potential for new owner/operator.
Contact Richard Santore, 732-531-4200, for additional information.
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Strategies for Restaurants to Reduce Food Inventory Loss
Maintain profitability and operational efficiency. Food inventory is among the most important operational components of any restaurant. Whether yours is a small neighborhood diner or a high-end eatery, maintaining an efficient and well-managed process is crucial for maximizing profitability. Having the right quantity of food items on hand and in a safe condition is essential for meeting customer demand, minimizing wastage, and controlling your restaurant’s costs. Food inventory loss can be one of the most disruptive influences on restaurants. If your business experiences excessive loss, it not only affects your bottom line but also creates operational challenges that impact customer satisfaction. To mitigate these challenges, your restaurant needs to identify and employ proactive strategies. Perhaps the most important first step in reducing food inventory loss is gaining an understanding of the risks. Without information about how food loss occurs, it’s difficult to create relevant prevention and management strategies. It is vital to act from a place of knowledge so you can make more informed decisions. Food items have a limited shelf life and improper handling or storage can result in spoilage. This may involve inadequate temperature control, failure to rotate stock, and lack of proper inventory management. When spoiled inventory becomes a regular occurrence, it can lead to significant financial losses and disrupt your restaurant’s ability to provide quality service to customers.”
The Rise of False Advertising Lawsuits
In the food and beverage industry. False advertising lawsuits are becoming increasingly common, particularly in the food and beverage industry. And they can be quite lucrative for successful plaintiffs and their enterprising counsel. For instance, Clif Bar & Co. recently settled a claim for $10.5 million over its “healthy” protein bars that allegedly contained large amounts of sugar. But what exactly constitutes false advertising? Defined broadly, false advertising lawsuits may be brought against companies on the basis that their advertisements are false, misleading, or deceptive to a reasonable consumer. The law distinguishes between (1) product statements that are general, vague or clearly subjective claims of superiority understood as opinions—which are considered non-actionable exaggerated boasts or “puffery” (e.g., “world’s best pizza”)—and (2) product claims that are specific and measurable factual representations, which are actionable (e.g., an ad claiming that a product contains “no preservatives”). An actionable product claim can be literally false, or literally true but tend to mislead, confuse or deceive the consuming public. While false advertising suits are not a new phenomenon, they are steadily on the rise, with over 200 class action lawsuits filed each year from 2020-2022, compared with 53 suits filed in 2011.
How Does Your Service Measure Up?
Feeling appreciated, more than anything else, is what brings them back. Restaurant customers are back, with many restaurants reporting business close to pre-pandemic levels. And those consumers want the restaurant experience, according to a survey earlier this year by the National Restaurant Association. It reported that “84 percent of consumers say going out to a restaurant with family and friends is a better use of their leisure time than cooking and cleaning up.” Take a minute now and think of five things that you believe bring your customers back time and again. The first thing on that list shouldn’t be the food – it’s the service. Great service will make someone a regular customer who comes in once or twice each month. In my frequent travels, I have my favorite restaurants, and I don’t always go to the restaurant with the best food. I always go to the ones with the best service. With all of our restaurant expertise, you would think that we could easily define what is good service vs. what is poor service. Here’s my take on making good service great. It might surprise you, but for me great service begins before I walk into a restaurant. As I approach the front door, I put a lot of stock into how clean and neat the façade is. If there’s trash on the sidewalk, worn or torn signage, dead plants or burned-out bulbs, right away I am feeling like this restaurant doesn’t care enough about its customers. I want to walk up and think how great and welcoming everything looks.
Inflation Drives Surge in Happy Hour Traffic
Early evening restaurant visits are up across the board. Free from the shackles of COVID-19 and on the run from inflation, Americans are flocking to happy hour, where they can once again socialize safely while saving some money on food and drinks. That’s according to newly published data from researcher InMarket, which found that restaurant traffic in the hours between 4-7 p.m. was up across the board in the second quarter compared to the same period last year. That includes a 9% increase on weekdays and 13% on weekends at casual-dining restaurants and a 20% jump on weekdays and 25% on weekends at limited-service concepts. InMarket’s research is based on location data from more than 200 million consumer mobile devices. The rise in happy hour visits comes as industry traffic has been generally stagnant over the past year, particularly at full-service concepts. And some of that traffic is apparently moving to an earlier time slot. “4 o’clock is the new 7 o’clock,” said InMarket Chief Strategy Officer Michael Della Penna in an interview. Some of them have to do with the ongoing fallout from the pandemic. Americans continue to enjoy the ability to move freely and gather in public. They’re “beginning to learn how to be social people again,” Della Penna said, and that has benefited businesses that encourage that sort of activity, like restaurants.
Menu Prices Finally Started to Ease
In June. Some good news for weary consumers – inflation fell to 3% in June, marking the 12th consecutive month of declines and the lowest rate since March 2021. According to the Bureau of Labor Statistics’ Consumer Price Index, the core inflation level (excluding volatile food and energy prices) remains at 4.8%, or well above the Federal Reserve’s 2% target, which could trigger more interest rate hikes. Notably, gas prices had the biggest impact in June, dropping over $1 from last year, which bodes well for travelers and on-the-go restaurant consumers. Meanwhile, the food index rose 0.1% during the month, with food-at-home, or grocery, remaining unchanged, while restaurant meals ticked up 0.4%. The index for full-service meals rose 0.3% over the month, while limited-service meals increased 0.4%. Menu prices eased a bit in June, with food-away-from-home prices up 7.7% versus last year, including 7.8% at limited-service restaurants and 6.2% at full-service restaurants. This is compared to May in which food-away-from-home prices were up 8.3%, including 8% at limited-service restaurants and 6.8% at full-service concepts.
Did You Know?
Is it OK to charge no-show fees when a party size changes last minute? I am all for no-show fees when judiciously applied. Before the days of electronic reservation systems, many guests had bad behavior when it came to making reservations. They used practices like holding tables at multiple restaurants to give their date options. Others kept a reservation just in case they wanted to go to a hot place at a prime time. Some still do. Better systems and disincentives for bad behavior such as no-show fees have definitely helped minimize these practices.
Employee Tip
Fast Act’s on hold – but California has pushed through another way to raise fast-food wages. Proponents of raising fast-food wages in California have hit on a way of altering the pay scale in workers’ favor regardless of what happens when the Fast Act is put to a ballot vote in 2024. California has quietly resurrected a 1920s institution empowered to set the wages and working conditions for specific industries. The newly recreated Industrial Wage Commission is chartered to begin its wage setting with industries in which at least 10% of the workers are below the poverty level.
