American consumers have embraced the culture of adventurous dining and beverage experiences, indulging in food trucks, pop-up kitchens, craft beverages, farm-to-table and other hipster concepts. Of course, this renaissance of unique food and beverage experiences has been driven largely by agile, independent on-premise venues.
So, where does that leave less flexible chain restaurants? The last place you might expect a unique, on-point beverage or dining experience is an on-premise chain venue. How can they too create these compelling experiences?
Fourth-generation restaurateur, Matt Vannini, points out you can’t compare apples to oranges. “To understand relevancy, we must accept that the value proposition for a chain is completely different from an independent operation,” he said. “It’s why backpackers and families traveling through foreign lands seek out the comforts of a McDonald’s, KFC or other mega-chains during their visits. It’s why Starbucks doesn’t sell passion and dragon fruit cups to time-starved commuters.” Vannini is president and CEO of RASI, which helps restaurants pivot business models, management and operations to cater to new market demands.
(Photo: Courtesy of RASI)
Chains Aren’t Leading Hipster Trends, But They’re Following Them
Is keeping up with foodie culture really even an issue for chain bars and restaurants, or do most not pay much attention to alternative experiences? It depends on how sophisticated the chain is as to what they adopt, explained Jay Bandy, president of Goliath Consulting Group. Goliath Consulting works with large multinational brands and independent restaurants.
“You're not going to go to an Applebee's and see a sophisticated no-alcohol cocktail,” said Bandy, who has opened more than 200 restaurants during his 30+ year career. “On the other hand, I was in a California Pizza Kitchen last month, and they are pretty sophisticated with their offerings on no-alcohol cocktails.”
Chains might not be leading the trends, but they likely have an R&D department or marketing closely following them. “It depends on the operator,” said Bandy. “If you take a Seasons 52 Wine Bar and Grill for example, that type of chain operator takes notice of trends at the bar. They tend to be more progressive in terms of when they adopt. It's just part of their brand.”
(Photo: Courtesy of Goliath Consulting Group)
Picking the Right Trends: Canned Beverages See Traction in Chains
Beverage trends come and go, so chains remain selective in what bandwagons they hop on. “From beer, to alcohol, to wine, everything was ‘craft’ for a while, and when it gets to that point, the word loses its meaning,” noted Bandy.
He’s seeing more activity with canned beverages in the on-premise chain world because of the consistency of product and speed of service. Canned drinks make it easier and more profitable for the on-premise server. “If you're pouring a lot of cocktails during Saturday football in your sports bar, it's the next evolution of having cocktails on tap. That’s the speed of service,” declared Bandy.
Production of new, trending drinks impacts inventory that the beverage manager has to keep on hand. “A special beverage takes things that you only use once or one at a time,” Bandy explained. “If you can put all that into a can or a bottle as a single service, it's much easier for the chain operator to have on hand and serve as is or pour it into a glass.”
Scripted Chain Culture Must Learn New Language
Independents find it easier to embrace a new beverage or food scenario, whereas chains are more scripted and embedded in corporate culture. Speaking about craft beverages, super food or carbon neutral service has never been in their culture or language, noted Salar Sheik, founder of LA-based restaurant consulting group, Savory Hospitality.
“Many chains fail to understand they have to change their language, and some don't want to because it's worked for so long,” Sheik said, who helps new concept restaurants, bars and lounges and established restaurants become profitable, multi-unit venues.
“Chains have to understand how to flip the script a little bit, but not wash out their brand. They have to be nimble enough to speak about why it's different from what else they're doing. It's hard to train staff to change the script from being a steakhouse to serving a vegan filet,” shared Sheik.
The Chains Advantage: Culture, Training, Infrastructure, Purchasing
Success with a trending new beverage or menu item depends on training and how quickly you can roll that out, and chains have the support structure for that, once they make the commitment. “Food trucks and indies typically lack the infrastructure to effectively standardize and scale their recipes,” Vannini pointed out.
A chain with a firm culture and language usually has a well-balanced staff with district managers, area managers, chefs, sous chefs and more. They tend to have more purchasing resources and better support structure behind them, Sheik explained.
One advantage of chains over independent venues is access to R&D departments and a host of mixologists on the bar side, so the chain can see the possibilities of trying new things before they hit the market. Independents often fail when they jump on trend because they have no marketing behind it.
Chains Learn from, Limited by Tracking and Reporting
Once a chain restaurant adopts a trending drink, they routinely and religiously track results. Because they focus on daily financials, most sit-down chain restaurants have better insights into how a promotion is succeeding.
“Every chain that I've worked with personally has a weekly report that tells them a lot about where they are failing. That might be labor or food costs, so they have better controls than the independent,” said Sheik. “They can really go with a trend and see how well they're profiting, but it can also be a painful proposition, because sometimes they only see numbers.”
Many chains don't see a marketing advantage in offering unique on-premise beverages or food experiences. “They're very strict and need to step away and look at the marketing aspect of taking a risk. Sometimes you're just not going to make that 20 to 30 percent cost that you want. It's just that marketing has to oversee it, and then it's a long-term investment,” Sheik said.
“I've been on multiple R&D teams that come up with great ideas, but how does it get through the funnel of equipment, people and the physical layout? Chains are very scripted cultures by their nature,” noted Bandy.
Chains Shine When It Comes to Consistency
One area where chain restaurants and bars shine is consistency in products, partly from having a reliable supply chain. Continued supply chain issues have caused major issues with procurement of quality and price standardization for the independents. “Chains will always receive their specified product before an independent who only buys 25 percent of their groceries from a distributor,” said Vannini.
Beverage suppliers and distributors contribute to spreading and scaling unique beverage and dining experiences. “In the last two years, distributors and suppliers are doubling down on getting out to operators and showing them a whole host of new products and new ways to put products together,” said Bandy. “I'm working with an operator that's really taken off with the fishbowl cocktails that you’re seeing more and more.”
Will Consumers Turn to Chains for Unique Experiences?
For small independents, the extravagant, trendy beverages and menu items take longer to make and serve, and require higher prices. “All in all, consumers are going to be more and more conscious of where and how they are spending their dollars,” noted Vannini. “They may ultimately turn to chains that are much less likely to drastically bump their pricing.”
When it comes to creating a unique hipster atmosphere or beverage experience, chains do have some things in their favor: scale, infrastructure, reporting, purchasing power, R&D and marketing. But will they evolve when it comes to delivering desirable hipster experiences? “Chain leadership needs to adapt, which has been difficult in the past, but I think they're getting better at it,” concluded Sheik.
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