For most restaurants in the U.S., the news that they would no longer be able to accommodate dine-in customers came quickly, with limited prep time. Some establishments shut down completely, others added online order/pickup operations, and still others turned their dining rooms, bars, and other restaurant touch points into staging areas for a ramped-up takeout operation. The reduced service hours also meant a greater supply of inventory that could go to waste.
A resourceful group of several restaurateurs came up with a bright idea: sell their surplus goods to customers who were having a difficult time finding essential products at their local grocery stores. Be it fresh meat, produce, or even highly coveted paper products, eating establishments have the products that consumers want.
The transition puts restaurants in a new position in the supply chain — many of them have made the transformation from restaurateur to grocer overnight. This positions restaurants as both an expanded resource for their customers and a support structure for their suppliers.
With independent restaurants spending between 20–35% of their revenue on supplies, suppliers have been heavily affected by both the closure and scaling back of restaurant operations nationwide.
Their new role may endure longer than originally anticipated. According to the National Retail Federation, 71% of consumers are practicing more social distancing, shopping less in physical stores, and stocking up on groceries and household items.
Making quick moves
With 74% of consumers expecting activities like dining out to be affected for years to come, fast-casual restaurants like Panera are adapting to delivery and pickup. They have pivoted to allowing consumers to “order from their pantry” and purchase items like milk and fresh produce for delivery or pickup, NRF reports.
From Panera’s website, customers can order groceries for contactless delivery or drive-up (the restaurant’s curbside ordering and pickup service). Panera offers customers items like avocados, tomatoes, kids’ yogurt tubes, and milk.
Other large restaurant chains that have shifted to selling groceries include Subway and Potbelly Sandwich Shop. Denny’s is selling paper goods, cheese, bread, raw and deli meat, fruit, and vegetables right from their parking lots in some states. After ordering online or from their cars, customers have the packages brought out to them, making the experience as contactless as possible.
This new sales approach isn’t limited to fast-casual restaurants. In Tampa, FL, the Tavern at Cheval was among the first restaurants in the area to start offering “grocery essentials” to diners who were ordering for pickup or delivery.
Situated on a golf course and within a gated community, the eatery put on its “grocery” hat in mid-March, right around the time that area grocery stores were having a difficult time keeping their shelves stocked. Advertising the option on social networking sites like Nextdoor and via its own website, the eatery has been selling butter by the pound, gallons of milk, Cuban bread, toilet paper, paper towels, and other goods ever since.
Supporting the at-home cooking trend
In a world where staying and cooking at home has become the norm, restaurants are thinking out of the box and supplying home cooks with the ingredients they need to make delicious meals at home. Panera’s website, for example, invites customers to buy some fresh blueberries, a loaf of bread, an avocado, or a gallon of milk to round out their recipes without making an extra trip to the store.
In a related twist, some restaurants are sharing recipes and meal kits with customers who would otherwise be enjoying dine-in meals at their establishments. At California Pizza Kitchen, participating restaurants are selling meal kits that include over 35 different food and beverage options. Branded as “CPK Market,” this pop-up market offers lettuce wrap kits, build-your-own pizzas, and a “celebrate at home” dessert kit.
In April, Texas Roadhouse hosted dozens of “drive-up farmers markets” in U.S. cities like Milford, Texas; Bismarck, N.D.; and Fayetteville, N.C.
Filling a void in the supply chain
With the exception of extreme weather events — hurricanes, blizzards, etc. — it’s rare that something mobilizes consumers to rush to empty grocery store shelves. And while anyone whose grandparents endured the Great Depression isn’t surprised by closets filled with toilet paper due to the fear of running out, most of us don’t know what it’s like to roam empty grocery aisles in search of life’s basic necessities.
When it added the scarcity of food and essentials to our list of concerns, COVID-19 created both hardships and opportunities for the world’s restaurants. From the single-location breakfast nook up to the global restaurant conglomerate, the chance to fulfill a new role in the supply chain opened up almost overnight.
To restaurants that want to leverage their supply chains by selling groceries, creating meal kits, or implementing some other creative strategy, here are four tips to get started:
- Talk to your customers. What do they want or need? What would help make their lives easier and what tools do you have in your own toolkit that can help accommodate these needs (while supporting your own sales goals)?
- Get creative with it. This is a time when your establishment can get into lines of business that you would never have thought of otherwise — like selling paper products — but challenging times call for innovative ideas.
- Sell more online. Develop meal kits and post details about them (and how to order them, pick them up, or have them delivered) on Instagram or Facebook, or include them in an email to customers.
- Market what you have. Things have changed, and they’ve changed quickly. Send your customers an email (and use whatever social media you use most) to let them know what you’re still serving and when or if there are other ways they can support your business and employees.
Even as the government shutdowns start to roll back, restaurants will still need to supplement their revenues to offset the impacts of the six-foot social-distancing rules and possible limits to the number of tables they can serve at any given time.
By connecting their customers with the food items and essentials that they need, and by reducing the amount of human-to-human contact required for the transaction (i.e., by not having to visit a grocery store, individuals can help reduce the spread of COVID-19), restaurants are fulfilling a critical need in the food supply chain. Along the way, they’re also helping their suppliers stay in business and shoring up their own bottom lines.
