Emerging Brands and How These Restaurants are Redefining the Foodservice Space

With the competition that the saturated restaurant industry market brings, a restaurant has to really stand out to today’s consumer to be successful.

There is now a category of restaurant that Foodable has coined as Emerging Brand, these are the restaurants that are redefining the restaurant business with innovation, and creativity by taking the road less traveled.

These brands have developed a secret recipe that works and keeps the guests coming back.

On the IOChangeMakers live stream, we interviewed Kyle Noonan, restauranteur of FreeRange Concepts, Christina Bourg, SVP of Rotolo's and Jack Gibbons, president and COO of Front Burners Restaurants– all three leaders from emerging brand restaurants to see how these concepts continue to outperform the rest.

“As an emerging brand, we are just much more agile. So we can predict or see trends in the market and make things happen really quickly,” says Bourg.

Gibbons has also noticed as an emerging brand being able to recognize a need in the market and then quickly adapting to meet the demand is often how the restaurant becomes an instant success.

“We have an emerging brand called Velvet Taco and when we opened our first one, we were near late night bars so we stayed open until 5 in the morning to meet an unmet need in the marketplace. We have lines of people who are very young and totally into tacos at 3, 4, 5 in the morning,” says Gibbons. “A big established company just wouldn’t do that.”

But sometimes it's also just about being the new, cool kid on the block.

“There’s a lot to being just new and fresh in the industry. Consumers just want the newest, coolest, freshest thing. So the emergence of a lot of new brands that are dialed into what the consumers are wanting, especially the millennial crowd at Velvet Taco or we have a concept called Mutts Cantina which is our fast casual brand and it’s quick-serve, it’s fresh, it’s cool. There’s a little bit of clout to shopping at the brand,” says Noonan.

Want more tips from these emerging brand leaders? Check out the video above or the full interview is also now exclusively available on Foodable On-Demand here.

Why Millennials are Still Willing to Pay a Premium for Food Delivery

We know that the Gen Y crew is using delivery services in massive numbers. So, what can restaurants do to hold onto sales? Or, better yet, grow those sales that are being driven around in the backseat of a Prius?

In some segments, delivered meals are hovering around 30% of top-line sales versus 10% just two years’ ago. The conversation is real and there are only semantic distinctions between sales within the brick-and-mortar and those that are on the road.

But why?

Looking for insight, go to the source. It’s not always having the answers, but merely asking the right questions.

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What is it about delivery?

It's all about convenience, duh!

From skipping traffic to getting food from A-list restaurants but avoiding the crowds, leisure time is in the balance.

“I prefer the privacy of eating at home after a stressful day, knowing the bathroom is clean, and the amount of time [delivery] can save me,” says Samantha, a 23-year-old in Portland, OR, when asked about her decision to stay home.

“Delivery apps allow us to see all of our food options in one place without searching through Google maps or Yelp.” Solo diners chime in, as well. “I want to enjoy food from my favorite restaurants without having to leave my apartment. I’ll also [order] on work trips if I’m running low on time,” says Jacqueline, a 26-year-old recent transplant from Houston, TX.

Collective dining is still witnessed in the wild by the ubiquity of sharing plates and communal seating. Some have a better time than most can dream, so they stay home - together.

“[We] don’t have to worry about finding a place that everyone likes. We can all order from different places and it will come right to us. My one friend, she gets Chili’s delivered to her house!” says Abby, a 23-year-old in New Castle, DE.

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Why not go to a restaurant for a meal?

The digital natives appreciate being unplugged from their surroundings. Interaction, though, is what happens behind a screen. So uninterrupted time matters. Abby jokes, “I don’t like servers constantly bothering me; if I want a refill or if I need something, I’ll let them know. Or I can just get it myself.”

Samantha, chimes in, “Crowds, wait times, not being asked for my ID respectfully - or being asked for it before I even order anything - is super annoying. Sometimes I feel like waiters and waitresses assume that we won't tip well because we are young and we receive poorer service than others.”

“I don’t like dining in [a restaurant] when I don’t want to deal with people or would rather [...] eat at my own place,” says Celine, a 25-year-old in Newark, Delaware.

The cost of dining on site has an expense that can be buffered by avoiding the restaurant. “Two pints of beer in Portland [Oregon] are equal to the cost of a six-pack. So for the cost of having drinks for two, you can buy beer for a week. When you order food in you also have your at-home entertainment, like Netflix or Hulu, which is also a big factor, and you drink whatever you want to,” says Samantha.

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Are the costs that ride along with the order an issue?

“Costs can be a problem depending on the restaurant, with many online sites such as Uber Eats, GrubHub, and Seamless; they add extra [fees] for delivery and have more out of pocket for a tip, like spending $25 on a $15 meal,” says 23-year-old Jamil.

Samantha adds, “Certain apps do not explicitly tell you the delivery fee price until you are about to click 'buy.' I think they do this so you are too decision fatigued to go back and pick something else, but we always do. Especially if it’s a place we have never tried before.”

Does the charge sway the decision? Apparently not. “I’m content with paying delivery costs, especially if it’s a restaurant I frequent,” says 26-year-old Fortuna.

While some delivery services put quite a pinch on operators to pay 30% of a sale, the customers placing the orders are an adaptable breed. “It’s still usually less than what you would tip a waiter. It’s still more convenient to stay in. I’d rather pay the delivery fee,” says Abby.

Is the trend going to last a thousand years into restaurant life? We only know as much as the tweezer-wielding cooks and the baked-Alaska chefs that redefine what’s hot and what’s not.

Until then, pack it to go and don’t forget to staple the dupe onto the environmentally friendly bag loaded with Brussels sprouts, fish tacos, and quinoa bowls. So, yes, Netflix and Chill is a real thing for millennials and it’s often paired with food delivery.

Why the Mobile Takeout Trend is Here to Stay

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Smartphones have opened up a world of digital social interaction. So much so, that this has become the most common way that consumers connect.

With that being said, diners have naturally gravitated to digital systems like online ordering and food delivery. It's convenient and can be done from their home, office, etc.

Besides delivery becoming more of an expectation, more guests are using mobile ordering as their form of takeout. They are placing their order via an app or website prior to visiting a restaurant so that their food is ready when they arrive. Not only does this mean the eater has more control over when they eat, but his option allows users to forgo the pricy delivery fee, the tip, and service charge too.

According to a recent study from BRP and Windstream Enterprise, 20 percent of participants are using a pre-order option. When it comes to millennials, in particular, this percentage spikes to 32 percent.

"They are less likely than older generations to dine out and more inclined to order their food for off-site consumption," writes the study.

Food delivery has become somewhat unpredictable. The food can arrive much later than expected and the meal may be in poor condition when it arrives. With the pre-order option, diners can get the food directly from the source and then can either eat it right away or take it on the go.

Fast casual brands like Panera Bread, Chipotle, and Shake Shack are leading the way with mobile ordering.

Panera offers "rapid pick-up", where guests can order through the restaurant's mobile app for a specific time and collect it from a destinated area, without even getting on line or talking to a staff member.

"The dining journey has radically changed, as have guest expectations of what makes a great dining experience," says the report. "Therefore, embedding full digital dining support – everything from social engagement to guest WiFi to flexible ordering options, and real-time promotions – should be part of every restaurant’s strategic DNA."

Even though online ordering has become wildly popular, only 26 percent of restaurants surveyed in the BRP and Windstream Enterprise study said they have mobile point-of-sale technology.

Read more about the mobile takeout trend at “Forbes” now.

This is surprising that restaurants considering the multiple third-party solutions out there offering online ordering and food delivery for restaurants. But this could be partly because of the rising costs and poor service of third-party delivery platforms.

Want some tips on how to work with third-party service providers? Check out this recent episode of The Takeout, Delivery, and Catering Show below where the Hosts Valerie and Erle sit down with the director of sales for Jason’s Deli and gets tips for operators on how to make sure they don't get outmaneuvered by third-party service providers.

Why Millennials are Drinking Less and It's Not Only Because of Dry January

In 2018, it was revealed in multiple studies that millennials are drinking less wine than the baby boomer generation, meaning that wine sales are expected to decrease come 2019.

With the Dry January Movement becoming popular, where participants abstain from drinking alcohol for the 31 days of the month, millions of millennials aren't drinking libations at all.

But it appears as though millennials drinking in moderation is also part of a much larger trend and restaurants and bars are going to have to get more creative with beverage options this year.

"There are signs that a more sweeping and permanent moderation movement is taking root among millennials. The generational shift is forcing bars, restaurants and alcohol brands to adapt," writes "Ad Age." "More low- and no-alcohol products are in development, and some, like Heineken's new no-alcohol 0.0 beer, are already hitting store shelves. Drinking establishments, meanwhile, are adding fancier non-alcoholic cocktails, or mocktails, to their menus as they look to keep their drink revenues flowing."

But it isn't just millennials drinking less. New of-age drinkers aren't drinking nearly as much as the generations before.

"Entry-level drinkers are drinking less," says Benj Steinman, "Beer Marketer's" publisher "It's a real 'watch-out' for the future."

This is partly because younger generations are living a healthier lifestyle and are more educated on nutrition.

"Older generations were ignorant, young drinkers today are not," says Kit Yarrow, a consumer psychologist to "Ad Age." "This more educated and informed generation knows the perils of drinking and driving; the health issues associated with alcohol; and the calories associated with drinking."

Read more about how younger generations are drinking less at “Ad Age.”

While consumers may be gravitating away from alcohol, they are instead interested in natural remedies like cannabis.

We are already seeing several beverage giants jump on the cannabis bandwagon. CBD, the cannabis compound that is legal in all of the U.S., is now being served at restaurants and bars in most major cities.

With that in mind, artisan CBD infusions in particular have become popular. Listen to this recent episode of The Barron Report below where Host Paul Barron discusses the CBD trend with the executives of Azuca, a company that is thriving with its chef-quality CBD infusions.

The Wine Industry to Face Challenges in 2019

Wines

Although today's wine drinkers, especially millennials, are more adventurous, they aren't drinking nearly as much wine as baby boomers.

This presents a future challenge for the wine industry because it’s no secret that the millennial generation has and will continue to have the greatest buying power in the market. There are more millennials working and earning a living than any other age group. With that in mind, brands are all fighting to appeal to this segment of the population.

According to Lulie Halsted, CEO of London-based market-research firm Wine Intelligence, millennials are drinking less wine than the previous reigning population segment.

“We’re proportionally losing some wine drinkers,” said Halsted at 28th Sonoma County Winegrowers Dollars & Sense Seminar and trade show last week.

The population that drinks the most wine is aging. 21 percent of the wine drinkers in America are over 65 years old. This is quite a spike from the 16 percent of wine drinkers being in this age bracket in 2015.

Three years ago, there were 7.5 million wine drinkers between the ages of 21-24. Fast forward to 2018, there were one million fewer wine drinkers in this age group.

“It feels like from the information and insight we have that we have kind of reached a sort of plateau and a peak in terms of growth in the number of drinkers we have in the marketplace,” said Halsted.

But this isn't just the trend in the U.S. either. In the U.K. and Australia, there fewer and fewer wine drinkers as the baby boomers grow older.

So what are millennials gravitating too instead?

Well, today's market offers a range of alcoholic beverages including craft cocktails, craft beer, and even boozy milkshakes. These alternatives could be tempting millennials away from wine.

“It feels to them like there is more choice available, and maybe wine isn’t quite up there in their consideration set,” said Halsted.

Read more about how millennials aren't drinking as much wine as their parents did at the "North Bay Business Journal" now.

It's more important than ever to have a wine list at your restaurant that is compelling to pique millennials' interest.

On this recent episode of The Barron Report, we took a closer look at some of the top wines on the "Wine Spectator's" annual list with the Wine, Sake and Cocktail Journalist and Consultant Shana Clark. Watch the video below to learn more about these beverages and why they made the coveted list from this wine expert.