Restaurant Industry Insights

Hot Topics in the Restaurant Industry: Macroeconomics, Third-Party Aggregators, Sustainability, and Whiskey

Keeping track of consumer preferences is a tall order in today’s restaurant environment. There are, however, some things you can count on in our current culture: the desire for personalization, a unique experience, and an interest in positively impacting the world. No small feat! And while you’re tackling these priorities, make sure to place an order for some of the trending whiskeys.

Let’s explore some of our customers’ current proclivities and how restaurants answer the call.

Whiskey On the Rise

Toast’s recent Q4 2023 Restaurant Trends report found that whiskey orders were up 21 percent compared to the Q1 through Q3 average. According to Drinks International, while guests may be drinking more, their favorite brands remain fairly consistent. 

The bestselling brands include Maker’s Mark, Bulleit, Michter’s, and Woodford Reserve. Michter’s, a whiskey with a legacy dating back to 1753, finding its way from one of the first whiskey companies in America, has been gaining ground and has reached the pinnacle of the number one trending brand. The number one Kentucky Straight Bourbon has a distinctive smoky aftertaste due to the fire-charred barrels made of white American oak wood that it’s aged in. Other notes are caramel, honey, and vanilla.

Macroeconomics and a Tempered Pace

Mastercard SpendingPulse foresees continued growth for the restaurant industry, though at a more tempered pace than the previous year, which saw a year-over-year change of +10.2 percent. Some dining experiences gaining attention are fine dining restaurants with seasonal ingredients and fast-food livestreams where thousands of participants eat a shared meal via video.

Consumers are looking for value. This translates to many of them showing up for PF Chang’s weekday happy hour when food and drink options are priced at $6 or less. If you haven’t embraced happy hour, also known as social hour, now may be the time. That is unless you live in states that aren’t too keen on the practice, such as Alaska, Massachusetts, and Vermont.

Along these same lines, the study noted that virtual brands are declining, finding that separate branding and menus took their focus away from their core presence.

Some of the latest economic key indicators, as reported by the National Restaurant Association, include: 

  • In February, eating and drinking places added 41,600 jobs, displaying the strongest increase since January 2023 and well above the 11,700 job reductions in January. The reduced quit rate and job openings translate to a normalizing labor market for the industry.
  • In January, eating and drinking places saw sales of $95.1 billion. These sales were up 0.7 percent from December and kept pace with 11 consecutive months of growth. By comparison, most retail spaces saw a reduction in consumer spending.
  • Newly released data showed that 2022 made records regarding restaurants’ investments in structures and equipment. Companies involved in eating and drinking places invested about $30 billion, up 30 percent from 2021 and breaking the 2013 record of $23.9 billion.

A Change in Loyalty

Digital loyalty programs are estimated to reach over 32 billion by 2026, according to Juniper Research. As a result of the growing use of loyalty programs in the restaurant industry, people are looking for dynamic offers and rewards. Loyalty programs boost customer retention, incentivizing guests to return and become brand-loyal patrons.

For this reason, more restaurants are looking for ways to personalize the rewards program experience. Using AI, research, and consumer data, they’re taking their rewards programs to the next level, offering rewards based on a consumer’s preferences.

Third-Party Aggregators

As delivery and takeout have intensified, restaurant operators are continuing to wonder if the high cost associated with third-party delivery services is worth it. They are also looking to increase the bond with their brand and gain better control of the customer experience. 

And yet there are those like Panera Bread that ended in-house delivery after five years and returned to third-party delivery only a few years ago. According to the brand, the change was in response to the growing demand and third-party aggregators’ ability to help respond to that demand.

Making Sustainability a Priority

Younger generations are making their voices heard. They want sustainable food options and choices that reduce the environmental impact. Today, it’s important to tell your story, including what you and your suppliers are doing to support the environment. 

More restaurants are increasing the number of plant-based items on their menu. These options help reduce the carbon footprint, requiring fewer resources and conserving land, energy, and water. Other tactics include reducing food waste and single-use plastics. Sourcing from farmers who practice regenerative agriculture is also gaining ground.

While change can be somewhat challenging, today’s consumers are, ultimately, urging us to create a better world, and while we’re doing that, they’d like to enjoy a good whiskey and personalized service.

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