Many economists suggested 2023 was the year of a recession, but, like most predictions, crystal balls can be cloudy, if not downright murky. Now, some of these same economists believe we may avoid a painful downturn and wake to a gentler landing.
In a survey by the National Association of Business Economics, 33% believe a mild recession will start in the second quarter, while 21% suggest the third quarter.
Despite this sometimes-positive viewpoint, restaurants are preparing for the worst and taking actions that can sustain them should the economy decidedly turn south. One of the best methods for traveling through a recession unscathed is to develop multiple streams of income.
Let’s explore what this means to restaurant brands across the nation.
Restaurants Branching Out
The restaurant industry has always attracted resilient, innovative, and daring creatives, as demonstrated by the continual changes and fast-paced reactions demanded of entrepreneurs and operators these last several years.
According to a survey of 500 U.S. restauranteurs conducted by Square, about 50% of restaurants added new products or services in 2022, and that number is expected to reach about 88% in 2023. Additionally, thanks to our tried-and-true return guests, 44% of customers said they’d bought items other than standard meals from restaurants, including retail items. Almost 100% of those restaurants surveyed are planning to take steps that will help them weather an economic downturn.
For some, this survival strategy includes an online market where they sell their well-known sauces and other packaged products. Some sell catchy t-shirts designed to increase brand awareness. Others focus on the experience and how they can bring it into their clients’ homes through meal kit options that define their brand.
Lazy Dog Restaurant & Bar offers an example of extending brand awareness while increasing sales. In 2022, they came up with a virtual concept, Roadtrip Bowls. Eight handcrafted bowls are available for takeout or delivery and include items like Blackened Chicken Burrito Bowl, Citrus Dill Salmon, Korean Ribeye Bibimbap, and Roasted Veggies + Butternut Squash.
Restaurants offer subscription services in numerous formats. One example is Rib & Chop House, an upscale restaurant that shifted away from a traditional loyalty program to a subscription-based loyalty program. The program costs $50 per month and includes 10% meal discounts, invitations to special dinners and wine tastings, and a knife set.
Yaron Goldman, CEO of the parent company, Finally Restaurant Group, spoke at Nation’s Restaurant News’ first Emerging Restaurateur Live Learning Series of 2023, “So far it’s been going really, really well. Those Royalty members come in three times more often than traditional loyalty members and also spend 28% more per visit on average. They also tip better.”
An example of the possibilities is Yo Tambien, a Cantina in San Francisco that created nine different restaurant revenue streams. These include a subscription service, the Cantina Wine Club, that includes pairing bottles of wines with recipe cards. Catering options and retail also fall into the mix.
Beverage Brand Awareness
One avenue that often gets left on the table is increasing revenue through brand awareness. This includes ensuring staff are educated on the various brands and able to elevate the guest experience with tailored recommendations and memorable brand stories.
F&B Insights connects you to suppliers, giving you the freedom to have any beverage brand on your menu and increase profits. Restaurants can increase revenue through brand education materials, promotions, and staff contests paid for by suppliers. These same suppliers will pay for valuable insight-rich reports derived from your POS sales data.
At F&B Insights, a division of EMERGING, we help bars and restaurants streamline partnerships with suppliers, monetize sales data, educate staff, and optimize their menus through the world’s largest menu database. To learn more about the many opportunities F&B Insights offers or to schedule a consultation, contact F&B Insights today.
What are the revenue streams for a restaurant?
A few alternative revenue streams for restaurants include unique delivery or takeout options, catering, online stores, cooking classes, and meal subscription boxes. Restauranteurs are a creative bunch and continue to come up with exceptional ideas for bringing in additional revenue and enhancing the guest experience.
What is a restaurant subscription?
Just like consumers pay monthly fees for streaming services, pet food, vitamins, and many more items, restaurants are betting they’ll also pay for their favorite food. These subscription models ensure monthly income and offer guests a memorable brand opportunity. Some include a wine paired with recipe cards, while others receive three-course takeout meals once a month. Again, you’re only limited by your imagination.