TORONTO — Day two of Restaurant Canada’s first-ever entirely virtual conference — RC Show 2021 ONLINE LIVE — kicked off with Where do we go from here: COVID-19’s impact on foodservice & hospitality.
In this session, panelists Asad Amin, vice-president, Ipsos; Melissa Wilson, principal, Technomic Inc.; and Vince Sgabellone, Foodservice Industry analyst, The NPD Group shared data and insights on the likely lasting impacts of the pandemic on the industry to help inform operators’ path forward.
Sgabellone highlighted how consumer spending has seen major shifts that we can expect to continue through 2021, including increased spending in the grocery food category and decreases in spending within the experience economy. The state of the economy has also led many Canadians to focus on saving. And, as Sgabellone noted, “Every dollar saved is $1 not spent on discretionary purchases, like restaurant visits.”
Overall, NPD Group data shows that about one-million consumers stopped using restaurant services in an average month and are instead fulfilling their meal requirements at home.
“Now, consumers who are spending are turning to e-commerce or digital ordering. So, not only are we spending on different items, the way in which we shop is changing rapidly,” Sgabellone added, “This migration to online has been taking place for many years, but the events in the last 12 months have certainly accelerated this migration and truly transformed the current retail landscape. And, of course, foodservice is not immune to these changes…And, while we can be certain that some of this volume will go back to brick-and-mortar retailers and restaurants, some of it will undoubtedly remain online.”
All of this, he explained, means that restaurants need to think about how to reach consumers where they’re at and meet their needs in a way that improves their quality of life at home. As examples, he pointed to subscription services and meal kits, as well as finding ways to remind consumers that restaurant meals offer an opportunity “to escape the day-to-day routine.”
Speaking to residual impacts from the pandemic, Wilson pointed to innovative ideas — and a general expansion — of off-premise and delivery services that have taken hold within the industry. And, accelerated consumer adoption and technology innovations in this realm are sure to ensure its continued relevance post pandemic, even once necessity becomes less of a factor.
Wilson also highlighted how the segmentation of the industry will be altered going forward. “A number of brands are rolling out new formats and investing in facilities that will alter both how we, as the industry, define different segments, as well as consumer perception,” she explained, pointing to the aggressive expansion of fast-casual concepts, such as Chipotle, into drive-thru formats.
And, post-pandemic, Wilson noted consumers will have highly polarized need states, with those returning to more traditional work environments and routines desiring convenience, while experience will be of increased importance for dine-in occasions.
“Another key thing to be thinking about that’s not going to go away is that personal environmental safety is here to stay,” Wilson added.
Leaders from some of Canada’s most iconic quick-service brands took to the virtual stage next for Monday’s installment in a series of CEO panels taking place throughout the show. Led by Todd Barclay, president & CEO, Restaurants Canada, the panel — featuring Duncan Fulton, Chief Corporate Officer, Restaurant Brands International (RBI) and Nivera Wallani, president and general manager, YUM! Brands — discussed menu and tech innovations the companies have in the works; how they are evolving their brands to reach the changing consumer; and what they did when faced with the challenges brought on by the pandemic.
“I know we all have some trepidation around our industry, [but] I do feel hugely optimistic about the future of our industry,” said Wallani when asked about what path she sees ahead for the industry post-COVID-19. “We’re part of the fabric of the communities that we serve, we employ millions of people and, as an industry, we give back. Because of that, people will return to restaurants with a vengeance. We’re part of their special moments, part of how they celebrate their lives — you can’t just take that away.”
She said, as a restaurant or as a brand, “you need to be relevant. Consumer and guest experiences and expectations are constantly evolving and you have to be open to evolving with them — but in a way that’s authentic to what your brand or your restaurant stands for.”
According to Wallani, menu consolidation was key to her company’s survival strategy. “It was an opportunity for us and something that we needed to do,” she said of simplifying menus. “The reason we did that was twofold. First, we wanted to make it as easy as possible for our team members and restaurants to serve our guests. And, second, we wanted to ensure our guests were getting the most consistent and quality experience — even when things were so fluid and were changing so quickly.”
The best interests of YUM! Brands’ franchisees was also a priority, she added. “I’ll share this quite transparently, we wanted to ensure the survival of our franchise operators. And, in order to ensure their survival and profitability, we needed to make some adjustments on our menu to ensure that was possible.”
On the topic of off-premise dining and the rise of digital, Wallani said, “Innovation and change is constant in our industry and, to be honest, we were excited about this disruption. In 2017 and 2018, we saw it coming towards us…It really gives us an opportunity to be more available where our consumers are. When we think about off premise, it’s a little bit like the devil you need to dance with — you need to learn how to do that tango in a way that serves your guests, makes it easier for your team members and continues to be true to your brand and who you are. So, for us, delivering off-premise, soggy fries, cold chicken and an experience that is not at least on par with what you would get in restaurant is not acceptable. So, we are excited about the opportunity to deliver our brand in more ways, but we continue to remain focused on the quality and the taste and the experience that I believe cannot be compromised.”
When asked about the costs associated with off-premise and, specifically, third-party delivery, Fulton said, “We have to figure it out — it’s what the customer wants. Yes, we’ve got great partnerships with Uber Eats and SkipTheDishes and DoorDash, but we [also] started building what we referred to internally as [our] ‘white label,’ meaning we’re encouraging guests to order on our apps and then we can build, behind the scenes, a bit of an aggregator [portal] to say, ‘Hey, guys, we’ve got an order here, who wants it.?’ Ultimately, it brings down the cost to the restaurant owner and it gives us more data from the customer — which allows us to better control the guests experience all the way through the order process.”
Kicking off the afternoon on the Speaker Stage, was the session Feeding the Recovery: Understanding Post-Pandemic Industry Shifts. During this panel, industry experts dove into how the industry and consumers have changed through the pandemic and what this means to restaurateurs.
Moderated by Roberto Sarjoo, director, Marketing & Communications, Restaurants Canada, the session featured insights from Sylvain Charlebois, senior director, Agri-food Analytics Lab, Dalhousie University; Andrea Johnson, chief storyteller, Brain Candy Marketing Ltd.; and Vince Sgabellone, Foodservice Industry analyst, The NPD Group.
Among the key industry shifts the panelist touched on were consumers’ deepened desire to support local, demand for comfort food, new business models and how businesses engage with customers.
Panelists agreed that the desire to support local producers and independent restaurants will be a consumer sentiment that continues beyond the scope of the pandemic. As Sgabellone put it, “It’s definitely here to stay because it was here prior to the pandemic. We’ve been tracking growth in independents’ share for many years — and this is despite the decline in independent rooftops,” he added.
And, as Charlebois and Johnson pointed out, consumers aren’t necessarily proactive about searching for local products, because we’re “hardwired for convenience” and ‘local’ has a different meaning to different people. “The necessity to connect back to community is where that emotional connection with consumers really begins and ends,” Johnson explains. “Community is defined based on who you are and how you live and it’s not just a physical space.”
In discussing new and emerging business models in the industry, the panel highlighted how the lines between segments have become even more blurred. Or, as Charlebois put it, “COVID kind of blew everything up.”
“It’s going to be the technology that’s going to allow these concepts to flourish,” noted Sgabellone, adding that its restaurateurs’ entrepreneurial spirit that has been driving these innovations.
“The [business models] that are going to continue on, during the recovery and afterwards, are the ones that really serve whatever the needs states are of Canadians…And, even as the pandemic and recovery continues, we’re going to be seeing new ways to engage with customers [emerge].”