Why Now is the Time to Diversify

They say when a storm knocks the power out, life reverts back two hundred years. No electric heaters, no television, no video games, no computer. Just the hum of conversation and a gentle flicker of candlelight, if you’re lucky.

When the pandemic hit the restaurant industry, life went medieval for many business owners. Customers were banned from their stores as food spoiled in their kitchens. In order to reopen, states forced draconian restrictions on restaurants, causing some industry analysts to conclude up to 75 percent may permanently close before the pandemic ends.

To make matters worse, many customers didn’t come back when their favorite restaurants reopened unless they offered to-go and delivery options. According to a recent poll from Eater Portland, 48 percent do not feel comfortable dining-in at a restaurant.

These changes caused many restaurants to reimagine the way they serve their customers. In turn, customers began shifting their expectations of service.

That’s why now is the right time for restaurant owners to diversify their offerings, whether it’s through new menu items or by relocating to a new retail space. Here are a few ideas you can use when conceptualizing how to accomplish this.

Offer Nutritious Menu Options

There is a lot of evidence the pandemic is changing the way we eat. Consumers are increasingly choosing healthier, cleaner foods. Business owners would do well to follow this newfound favoritism as it presents a benefit for both businesses and the communities they serve.

Recent research suggests more consumers are reconsidering the food they eat at home as well as the ones eaten at restaurants, opting for low-carb and calorie meals. Other research found these choices include avoiding refined sugars and eating organic meats.

Taste and nutrition company Kerry reported that the pandemic may be contributing to the rise of these trends, arguing that the pandemic-fueled anxiety many consumers are feeling is abated by having the control over what they eat at home.

“This is why clean label meat products with fewer chemical-sounding names on the ingredients list are increasingly viewed favorably,” Brian Nevin, vice president of food protection at Kerry, said in a statement.

Many restaurants were seemingly ahead of this trend. Chipotle responded by offering health-conscious items like cilantro-lime cauliflower rice to its menus in July. Even restaurants opening amid the pandemic are focusing on healthy foods. In Brevard County, Florida, three restaurants opened up over the Labor Day weekend that focused on vegan-inspired dishes.

Acquire New Real Estate

Menu options aren’t the only way the pandemic has reshaped restaurants. By forcing many businesses to survive primarily on to-go and delivery orders, business owners are repurposing their retail space to provide efficient takeout service.

Both Starbucks and Shake Shack recently went on real estate purchasing sprees focusing on spaces that “bust the line” by prioritizing takeout and delivery service. Starbucks estimates it will open “several hundred” of these stores in the next 12-18 months.

“And so, we’re able to get out of the store, get out in that line, put an order and in a queue much faster, and get those out-the-window times down and get the beverage and food items to the customer much quicker,” COO Roz Brewer told investors during a conference call in September.

But, this strategy isn’t just for the corporate elite. Mom-and-pop operations would dramatically benefit from either reducing or reprioritizing their square-footage to adapt to changing customer demands. Some analysts project the takeout and delivery market will be worth over $110 billion by the end of the year with a combined annual growth rate (CAGR) of 3.6 percent through 2026.

Change the Way You Sell Your Product

While revamping retail space is an important part of fully recovering from the pandemic, another aspect that shouldn’t be overlooked is whether you are selling your product in a way that maximizes your return.

For example, if you own a pizza restaurant there are few reasons to continue following the traditional brick-and-mortar model when competitors are learning to survive on delivery and takeout alone.

Elegance Brands, Inc., a global beverage company with a portfolio of CBD-infused drinks, recently made headwinds into the direct-to-consumer market when it released Gorilla Hemp CBD Energy Drink in September. Meanwhile, the company also developed a new bitters brand—Bitterless Aromatic Bitters—and an online beverage marketplace in Australia called bevmart.com.

All of these developments will help the company serve customers who prefer an at-home cocktail now, the company said in a press release.

  • Subscribe to our latest insights


Are you capital raise ready?