The Great Restaurant Reopening has begun! Now what?
For all of us in the foodservice industry, with a deep shudder of relief, we are finally seeing the reopening of restaurants and other foodservice providers across the country for dine-in operations. The exact timing and highly stringent requirements of your reopening will be dependent on the locality of your business, as typified by Los Angeles’ recently-released reopening guidelines. As no single article could scratch the surface of the varied requirements for each locality, this article will focus on practical methods and best practices during this COVID-19 era and is not a substitution for governmental-issued requirements and guidance.
Practical Realities of a COVID-19 Reopening
Start With A New Mindset
First and foremost, what is our goal when reopening in this new world? The answer seems obvious, but it is an important exercise to keep top-of-mind as we fall back into normal operating routines. Simply put, our collective goal is to eliminate the spread of COVID-19 (for both our staff and guests) by implementing operating procedures that minimize the risk of viral spread. That’s it. With everything you do, from opening the door in the morning to turning off the lights at night, before every action you direct or take, ask yourself “is there a way I can accomplish this in a way that lowers the risk of contamination?”
Quick Take: Look at even the smallest aspects of your business and consider if there are ways you can minimize the risk of contamination. As an example, even the opening of your doors can be improved to limit contamination with a simple foot-operated door opening attachment.
Your Employees Are Your Most Valuable Asset, But Are You Theirs?
One surprising reality of the reopening will be the difficulty of rehiring staff, both from an economic as well as a health perspective. You will be appropriately cautious in the first weeks and months following the restarting of your dine-in operations, as no one knows how quickly customers will return and become comfortable with dining out. This reality will be reflected in many ways, such as the amount of food you order as well as the size of your staff and the hours they will be asked to work. And although you may want to bring back your full staff as soon as possible, it is far from certain your revenue will increase quickly enough to support a full team. And most surprising of all, your employees may be less excited to return than you might think. Why? Two very understandable reasons. First, they may be afraid for themselves and their family of returning to an enclosed, semi-public space, theoretically increasing their risk of contracting COVID-19 and bringing it back into their home. Second, University of Chicago Economists estimate that over two-thirds of the workers on unemployment insurance are making one, two, and even three times more in jobless benefits than they did at work. Taking these two facts into account, it is easy to understand why it may be difficult to rehire quality staff, especially if offering limited working hours.
Quick Take: (1) Create alternate staffing plans assuming different scenarios (slow, medium and quicker return of customers over the next few months), (2) stay in communication with your staff to determine who is ready (and willing) to return to work and when, and balance this information against your alternate staffing plans, and (3) incorporate new technologies to make your operations more efficient and less reliant on staff volatility (more on this below).
Triage Your Expenses
Few restaurant operators are as diligent in acting upon their financial needs as a professional crisis operator. Luckily, the most powerful tool in a financial crisis is also the most simple, and it only takes three steps. (1) Look at your financial statements or accounting ledger for the last 12 months, (2) sort your expenses from the greatest to the least, and (3) start cutting, optimizing, and negotiating reductions from the top down. The point is that operators get bogged down trying to save a few pennies on low-total-expense items while not devoting enough time to those expenses where a small percent reduction could make a huge difference. Although everyone will have different expenses, your Food/Drink, Staff, and Rent costs will be among the largest expenses for any foodservice operator. As such, most of your time should be focused on these categories. Using staffing as an example, not only will you need to find ways to do more with less from a simple financial standpoint, you also want to lower your total staff density to minimize the risk of viral spread. Once again, new technologies focused on managing and limiting and/or making your staff more efficient is a great way to attack this particular expense category (more on this below).
Quick Take: (1) Categorize your expenses from the largest to the smallest, and (2) invest the time required to negotiate reductions or create new operating efficiencies to reduce your largest expenses, as those actions will have a far greater impact on your bottom line than cuts to smaller expense categories that may be more comfortable to negotiate.
Supercharge Your Revenue
Just as with your expenses, you need to fully understand the financial impact of your offerings. This means not only understanding which items provide you with the greatest margin, and particularly during the COVID-19 pandemic, which items (1) account for the least spoilage, and (2) require the least amount of time, training and human resource to prepare. Let's look at an upscale restaurant example, where a steak that cost the restaurant $15 could sell for $38, which is about a 60% profit margin. Yet this does not include the food item’s preparation cost of the chef’s salary and the time he or she spent making that one dish, as well as any time and costs of accompanying sides included with that offering. Moreover, if that steak is not sold promptly, it will spoil and the food cost would be a total loss. Compare this to cocktail sales, that not only provide much higher margins (which can be over an 80% profit margin) but when using new technology such as Somabar’s automated professional cocktail machine, fresh drinks are crafted at the tap of a button (requiring no additional staff or salary allocation) in less than ten seconds (requiring very little time input). Moreover, most alcohols have a very long shelf-life, so any loss to spoilage is minimized. The learning from this example is clear. Although customers may come to our establishments for a good steak (or other main courses), we must optimize our offerings, advertise and train our staff to sell those items that provide our restaurants with the largest profit margin and lowest preparation costs and spoilage factor.
Quick Take: Understand each of your offerings' profit margins, including consideration of the cost of preparation and potential for spoilage. Optimize your menu, advertising, and staff training to sell your highest margin, lowest-cost items, such as cocktails, especially if such margins are supercharged by new technologies and efficiencies.
New Technologies and Opportunities in the Age of COVID-19
There are a variety of new technologies in the foodservice space to help with the challenges and needs of a restaurant’s reopening.
The coronavirus pandemic and fear of surface-based contamination have already changed our society, and one of the most lasting results will be the accelerated transition from paper money to touchless electronic payments. This does not only mean cash but also plastic credit cards, both of which can carry germs including the coronavirus. And it has been reported that paper money, on average, is kept in general circulation for up to 9 years.
Best payment practices, for protection of both your staff and guests, will be to invest in methods to accept contactless, tap-to-pay, and mobile-app based payments. When properly handled, there will be no person-to-person cross-touch of cash or cards thereby further reducing the chance of the coronavirus spreading throughout your establishment. Although there are a wide variety of solutions offered today, the most common will be through advanced point-of-sale (POS) systems, such as the Clover handheld flex that allows for tableside payment via smartphone or tap-enabled credit cards.
Quick Take: Make sure your establishment not only encourages but requires contactless payment, and make this policy clear to your customers before being seated or placing their order. Most will be appreciative of your policy and may even encourage them to return!
Delivery & Customer Pickup
We all know about delivery & takeout, and the proliferation of mobile apps and platforms facilitating the process, but have you considered the complicated “chain of custody” of such orders? The food is prepared, moved to packaging, boxed/bagged, and then held in a location at your restaurant for pick up by your delivery staff / third-party partner or the customer. Even though you cannot control every step of the process perfectly, best practices include a locker-type system that maintains the food at a proper temperature until the time of pickup that can track, secure, and record who took the food as well as log the time of order pickup.
Quick Take: Preparing food for takeout & delivery is prone to more points of contamination. Create best practice procedures to store and track each order as it makes it way through the process to maximize food and health safety and accountability.
Temperature Checks upon Entry
For your staff’s and customers’ safety, prior to allowing admittance to your establishment, consider checking everyone’s temperature to minimize the likelihood of admitting a person into your enclosed environment that is actively infected with the coronavirus. There are a variety of methods to conduct temperature checks ranging from expensive temperature screening tablets such as those from Tauri, to standard hand-held contactless thermometers found at most retailers such as Target and Amazon. Although requiring temperature-confirmation prior to allowing people into your restaurant may feel heavy-handed, once inside, your customers and staff will breathe much easier knowing that you required the check of everyone, and will allow people to relax and not be as concerned about the people at the next table over.
Quick Take: Consider requiring everyone entering your restaurant to first confirm they do not have a temperature to minimize the risk of viral exposure to your patrons and staff.
Even with the CDC recently deemphasizing surface-based spread of the coronavirus, active viruses have been shown to exist on paper and plastic surfaces for several hours, if not days, and your customers will be sensitive to touching anything handed to them. This is particularly concerning with respect to a menu that may have been handed to possibly dozens of people in the last few hours alone. In our COVID-19 world, is it essential to provide contactless options for guests to view your menu with alternatives such as tableside digital or chalkboard signs, or even on their own smartphones. And although it may not be the most ecological solution, another alternative is single-use paper menus that can be provided to customers and thrown away after each use.
Quick Take: Get rid of old-school standard paper and plastic menus in favor of contactless displays or single-use paper menu alternatives.
Contactless Food & Drink Preparation
With advanced robotics and automation, many areas of food and drink preparation can now minimize, and in some cases, entirely eliminate, human interaction, dramatically reducing the risk of viral food-borne contamination. Some technologies in this space include Flippy the [Kitchen Assistant] Robot, Creator’s fully automated hamburger line, and Makr-Shakr’s robotic cocktail installation. Yet while the foregoing technologies are impressive, they are also expensive and require significant advanced planning, training, and investment. On the other hand, Somabar, the world’s first fully automated professional countertop bartender, provides restaurant owners with the same value proposition yet only requires a small space, very little cost, and almost no advanced planning. Somabar fits within +/-2 square feet of counter space, requires little or no training, and can be set up in less than an hour so cocktail service can start the same day you receive your machine. Moreover, the company has recently supplemented its best-in-class sanitation with new COVID-19 enhancements, including completely touchless voice-activated drink preparation. Additional benefits of automation include the ability to limit the number of staff required to operate your restaurant while maintaining the professional quality and consistency of your offerings.
Quick Take: New technologies in food and drink preparation, especially if done in a cost and time-efficient manner similar to that of Somabar’s automated bartender, can minimize contamination while decreasing staff density and movement within your restaurant.
The Opportunity of COVID-19 Alcohol Regulations
Cities, counties, and states across our country have been busy enacting programs to assist our beleaguered restaurants and food service industries decimated by the COVID-19 pandemic. And none are as powerful (and lucrative) as the loosening of alcohol restrictions in many jurisdictions around the country. Simply put, using California as a prime example, the state allowed - for the first time in recent history - alcohol licensed restaurants and other foodservice operators to sell takeout and delivery alcohol and cocktails together with food orders. This is nothing less than game-changing, as 56% of consumers (age 21+) say they would order alcoholic beverages if offered with food delivery. And even though many restaurants have yet to understand the huge revenue opportunity of cocktail takeout and delivery, it is certain that with the reopening of full restaurant operations, and for as long as the relaxed alcohol regulations continue, re-energized operators will start to aggressively enhance and promote their alcohol offerings. Why? Because cocktails are almost always the highest margin sale you can make in a restaurant.
Municipalities are recognizing the power of new cocktail revenue channels for their local restaurants as well. Los Angeles, for example, is finalizing its new Restaurant Beverage Program that creates a much easier process to obtain an alcohol permit in weeks (compared to the current months-long processing time) as well as lowering its cost from over $13,000 to around $4,000.
Quick Take: Takeout & delivery cocktails, coupled with efficient, cost-effective, and low contamination drink preparation (such as with Somabar’s automated bartender), can be the rocket fuel supercharging our country's great restaurant reopening. If you have an alcohol license and have not yet launched your takeout and delivery cocktails, so long as it is legal, consider immediately ramping-up your program. And if you do not currently have an alcohol license, consider immediately applying for a beer and wine license, as with new streamlined procedure, reduced costs, and the ability to sell cocktails with wine-safe alcohols, it could be the best investment you make for the success of your establishment.