It’s been a big year for the restaurant industry. Ambitious brands took advantage of the pent-up demand and expanded their footprint. Others increased their digital presence. Then there were those that continued integrating the latest technology, and innovative concepts leveraging the power of artificial intelligence, geofencing, and QR codes.
Technomic projected the restaurant industry to end the year with an annual 9.9% increase in sales dollars. However, when you consider the increased menu prices, the real growth comes to 2.6%.
Of course, we all know the challenges that plagued the industry throughout the year, like rising food costs, labor shortages, and supply chain disruptions. So, where are we headed as the year comes to a close? Let’s explore the trends that shaped the industry in 2022 and where it’s headed in 2023.
The Industry Continues to Embrace Technology
Our industry has always been a little slower than most when adopting technology. Then, the pandemic hit, and there was no choice but to grab ahold like one grasps a lifeline. A few of the growing techno-trends include the continued use of QR codes, restaurant apps, and kiosks. Many restaurants also embrace technology that easily integrates the growing delivery and takeout segment.
According to the National Restaurant Association, off-premise dining accounted for 70% of restaurant traffic in 2022. They expect the industry to be more off-premise oriented well into the future.
Staff Shortages Front and Center
Almost every restaurant faced staffing shortages as the pandemic and resulting shutdowns receded. The result was reduced operational hours, closed stations, and some disgruntled customers. In July 2022, the industry was still down 750,000 jobs, or a little over 6% of its workforce, compared to pre-pandemic levels.
The good news is that restaurants added 62,100 jobs in November, reducing the number of jobs to 400,000 below pre-pandemic levels. That said, some restaurants reduced expected holiday hiring due to inflation and the unknown effect on consumer spending. In 2023, it’s estimated that the labor shortage will continue to decline.
Inflation Status as the Year Ends
2022 was a historic year regarding inflation, with headlines announcing a 40-year high in June 2022. This resulted in the Fed tightening its monetary policy in an attempt to reign in the highest inflation seen in four decades. Despite overall inflation slowing down, food prices continued to soar.
In November 2022, economy-wide inflation was up 7.1% year-over-year. In comparison, food prices rose 10.6% compared to November 2021. Grocery store purchases were 12% higher and restaurant purchases were 8.5% higher. In 2023, the USDA expects grocery prices to increase by 3-4% and restaurant prices to increase between 4-5%.
Trending Food & Beverage
Some trends just keep getting trendier. Sharables that started making headlines several years ago continue to advance. These include ambitious sharables that attract those interested in experiential dining. These shared plates enable diners to try different flavors and foods, often from distant cultures, embracing the adventurous spirit.
Restaurants also continue to incorporate mocktails as the younger generations look for alcohol-free beverages when dining out. These drinks emulate their alcohol-containing counterparts, offering the unique, inspiring combinations today’s bartenders are creating. According to the Marketplace Morning Report, while 42% of millennials drink alcohol on a regular basis, that number dwindles down to 21% for Gen Z. If you haven’t entered the world of the mocktail, 2023 is the year to embrace it.
Best New Restaurants
Despite the challenges, new restaurants entered the fold, providing us with unique venues and inspiring menus. These three made Esquire’s Best New Restaurants in America’s list in 2022.
Kann in Portland, Oregon
Chef and owner Gregory Gourdet’s restaurant combines Haitian cuisine with health-conscious fine dining. Diners find brined hearth-grilled chicken, griyo twice-cooked pork with pikliz, a Haitian slaw, and lima beans and Haitian mushrooms combined to create diri ak djon djons.
Yangban Society in Los Angeles
This Korean American restaurant was created by two married chefs, Katianna and John Hong, who cooked alongside three-Michelin-starred chef Christopher Kostow in Napa Valley. Their restaurant, however, isn’t aiming for fine-dining territory but to inspire their guests with delicious food that’s hard to define—experiential dining at its finest.
Neng Jr.’s in Asheville
Esquire named Silver Iocovozzi the Rising Star of the Year. The chef and owner of Neng Jr.’s, a Filipinx restaurant, combines ingredients from the Philippines, France, and the American South to create unique, evocative flavors.
Rounding out the top 10 restaurants that made Esquire’s list include Canje in Austin, Le Rock in New York, n/soto in Los Angeles, Kasama in Chicago, Saffy’s in Los Angeles, June + Audrey in Nashville, and San Ho Won in San Francisco.
As history has taught us, making predictions is very much like looking into a cloudy crystal ball. What we can say without hesitation is that we wish each and every one of you a happy and prosperous New Year.