Saying 2020 wasn’t an ideal year is the understatement of this current decade. The global COVID-19 coronavirus pandemic wreaked havoc on the overall economy, taking no prisoners in regard to industry type. Those in the foodservice and hospitality industries have experienced firsthand the trials and tribulations of trying to stay afloat during such unprecedented challenges. However, we’re a resilient bunch. Though there’s still cliffs to climb on our return journey to pre-pandemic normalcy, things are starting to look up.
Not to relive 2020, but let’s get the bad news out of the way first.
Consumer spending in 2020 was down $535 billion over 2019*. This is reflected in the 2020 industry sales performance which was down 26.4%. More money was shifted from traditional services, like dining out, to non-durables with a notable increase in retail purchases. Instead of dining out, consumers shifted to shopping at grocery stores to prepare meals at home, and on supplies for home improvement projects.
Unemployment hit shocking highs within the industry, which already had a high turnover rate as it was. The national unemployment rate hit its highest peak at 14.8% in April 2020, a massive spike compared to 4.4% the prior month. Specific to foodservice, industry employment in April plummeted 48.2%.
We saw a massive jump in non-traditional dining services as establishments rushed to find new means of revenue and adapt to varying government mandates. In the first month of the pandemic, 42% of restaurants added curbside pickup, 27% added delivery, and 26% added takeout services. This is reflected in the sales growth of popular third-party delivery services. During the first nine months of 2020, DoorDash sales increased by 195% over prior year, GrubHub by 45%, and Uber Eats by 77%. Based on a poll of 750 restaurant operators conducted by Technomic, Inc. for DoorDash, 73% say that these third-party delivery platforms are good for the industry and 69% say they allow them to reach new customers.
The economy is on the rebound and the numbers are painting a hopeful picture for the industry. Since April 2020, the national unemployment rate has gradually settled back into near pre-pandemic numbers with the first month of 2021 reporting a 6.3%, with a decline of an approximate average of 10% each month since April (ending January 2021). For a comparative reference, March of 2020 boasted a 4.4% unemployment rate.
Based on a poll of 1,000 consumers, when asked what activities they’re most looking forward to in a post-COVID world, 43% said going out to eat at a restaurant. A promising statistic demonstrating pent-up demand. Now that a vaccine is here and rolling out in phases to the masses, (60% of this same poll of 1,000 supporters indicated they plan on getting it assuming it is safe and available, while 23% said they’re unsure), and federal relief packages to support small businesses and encourage consumer spending, 2021 promises a year of recovery for dining and hospitality industries.
The Four S’ of the Recovery Process
Where we were in 2020, adapting however we could just to stay afloat.
The ramp-up to strengthening, now that we have some solid footing under us. This is the stage that we see the industry start going again, and experts agree, is where we are now.
The stage where the bulk of recovery takes place. As vaccines become more available and mandates on public spaces begin to ease, our industry is projected to enter this stage in Q2 or Q3 of 2021.
Long-term investment and growth in the industry.
2020 changed the state of the industry for the long-term. It is unlikely the industry will ever fully resemble what it looked like prior to COVID-19. Many of the surging trends that helped operations adapt to meet shifting demands in 2020 look like they’re here to stay and will likely continue to adapt to help restaurants flourish in the years to come. These include:
Food safety and sanitary practices have always been a priority in commercial foodservice operations. Now it’s more important than ever for guests to see sanitation in action.
Per polls conducted by Technomic in November 2020, 89% of consumers say that seeing employees visibly cleaning and sanitizing at all times makes them feel safer. 77% indicate a restaurant’s cleaning policies will impact their decision to dine there, and 61% Want to seem more cleaning and disinfecting done in front of them during a post-COVID world.
This currently looks like an abundance of safety shields, table partitions, face masks, a plethora of sanitizer dispensers in all high traffic areas, floor signs to encourage social distancing, etc. Even as vaccines become more mainstream and herd immunity starts weaving its way throughout our communities, guests will still want to see regular cleaning, sanitizing, and disinfecting practices put into place.
- Clean, Sanitize, or Disinfect: What’s the Difference?
- Proper Coronavirus Cleaning Procedures for Restaurants
- Disinfecting Solutions: Should You Be Using Bleach?
- How to Properly Disinfect Stainless Steel Equipment
- Foggers and Misters: A More Efficient Way to Sanitize
- Efficient Sanitizing Solutions for the Bar and Beyond
From menus to hiring, door openers, automatic faucets and dispensers, and more. The less hand-to-hand contact guests have, the safer they’ll feel.
Ventless innovations have been an emerging trend for a while, but there was a notable rise in popularity during the pandemic. Ventless hoods offer more flexibility, are mobile, alleviate space restraints, create menu efficiencies, and enable operators to easily setup a cooking operation just about anywhere.
We’re likely to see more ventless operations and sous-vide cooking that minimizes staff interaction with food products while assisting with bulk prep and cooking.
Even before the pandemic, 60% of all restaurant traffic was already off-premise. And delivery isn’t going anywhere. If you’ve started offering delivery services via third-party platforms, we encourage you to keep it going even after we enter the Strengthen and Surge stages of recovery. The boom in ghost kitchens – separate, remote kitchen spaces used to enhance food prep and cooking efficiencies for delivery services, catering, concept ideation, etc. – during the pandemic shown a light on new efficiencies and helped operations adapt to accommodate new services. Their popularity is expected to grow, especially as big industry brands continue exploring new types of foodservice concepts.
Sales in wings and pizzas have soared during 2020. The reasons for this are obvious ones. They’re comfort food, affordable, travel well, and meet a variety of flavor profiles. The simplicity of these two foods have inspired some establishments to create new concepts and brands to drive revenue. Buffalo Wild Wings, for example, revealed a new to-go only concept specifically for to-go and delivery orders. There’s still a seating area with TVs to entertain customers while they wait to pickup their order, but the facility is significantly smaller than traditional BWW locations, and doesn’t feature a bar or alcohol service.
Similarly, Burger King revealed a new ‘touchless’ restaurant design that will not feature an indoor dining area, requiring approximately 60% less square footage than traditional restaurants. They’ll have a drive-thru and walk-up counter only.
After the numbers have been crunched, the key takeaways include:
- Experts predict the recovery of the foodservice and hospitality industry to start relatively quickly.
- 2020 showcased a recession of supply, not demand, and safely dining out again has been on everyone’s mind.
- The speed of recovery still depends on how swiftly vaccines get distributed.
- All in all, the experts predict industry growth rates of 17 – 20% in 2021.
It appears we’ve turned the corner and things are looking up.
*All data comes from the U.S. Bureau of Labor Statistics and the National Restaurant Association in partnership with Technomic, Inc., a research-driven company providing insights for the foodservice industry since 1966.
Chase joined Central Restaurant Products in February 2016 as a Content Specialist, bringing to the role years of various foodservice experience, including front-of-house service (slingin’ chicken wings and libations with a smile on his face) and back-of-house food prep using heavy-duty commercial cooking equipment to prepare for peak dining hours at his university’s dining hall.
He puts this experience to use writing for Central’s Resource Center, website, and print catalog. ServSafe certified, he enjoys educating on food safety in the commercial setting, researching new dining room and tabletop trends, and sharing innovative solutions to enhance operational efficiencies. He also enjoys (in no specific order) long hikes with his dog, bingeing 90s sitcoms, red wine, and live music.