Growth of ‘Ghost’ Restaurant Concepts Proves Delivery-Only Trend Has Legs

April 14, 2017

 

Whether you call them virtual restaurants, app-based establishments or headless concepts, it’s impossible to deny the recent rise of delivery-only food businesses around the country.

Restaurateurs are desperate to stem the profit-letting in their struggling sector (especially in the fast-casual world), and this new round of digital-driven establishments solves a variety of perennial industry problems. Add to this the growth of third-party delivery companies, consumers’ increasing comfort with mobile ordering and the recent explosion of meal-delivery kits like Blue Apron, and conditions seem ripe for this idea to blossom.

But first, what are these front-of-house-free restaurants?

A few examples:

David Chang, of Momofuku fame, is the A-list name behind delivery-only Ando in New York City. It offers “second-generation American food” like bibimbap, fried chicken and cheesesteak egg rolls. Orders are accepted via the restaurant’s website or app and third-party services like Seamless. Delivery expanded recently to include more of Manhattan. The business came about as a partnership with Expa, a startup lab with connections to Uber.

In Chicago, home to several virtual restaurants with more on the way, Lettuce Entertain You Enterprises recently debuted Seaside, a delivery- and carryout-only operation that shares a kitchen with its Oyster Bah restaurant.

New York-based startup Green Summit Group expanded to Chicago, rolling out nine virtual operations out of one shared kitchen. Since its launch, Green Summit has raised $3.6 million and is anticipating $18 million in sales this year among all locations, according to the Chicago Tribune.

Even traditional family-dining brands are taking note of these ghost restaurants.

“I’m fascinated by some of the virtual kitchens that don’t have a brand, that are only supported by a kitchen,” Denny Marie Post, CEO of Red Robin Gourmet Burgers and Brews told Restaurant Business magazine earlier this year.

So, does the headless trend have legs?

In short, yes.

It appeals to the on-demand generation that’s grown up watching Netflix on the living-room couch. And it’s a good mesh with the gig economy that has given rise to third-party delivery services. States like Colorado, with legalized recreational marijuana, are expected to be primed for expansion of delivery-only concepts.

Even better for restaurant operators and innovators, these virtual establishments address nearly every foodservice-industry pain point.

They are cost-effective. Without the need to waste square footage on dine-in capabilities, these headless operations can run in a smaller footprint compared to traditional operators. There’s no need to hire a designer, account for parking space or spend money on decor and server uniforms (or servers for that matter). Rent is much cheaper for these locations since they can be built in warehouse space and in lower-rent districts. Lastly, the need to invest in costly renovations for service and seating areas is no longer required for these operators.

In Chicago, for example, Green Summit Group’s nine headless restaurants operate out of a shared 2,000-square-foot kitchen that was once home to a dine-in burger establishment.

These kitchens can also act as commissaries for food-truck or catering offshoots.

With so much attention focused on reducing operating costs and keeping labor expenses in check, this new approach will become very appealing to operators who leverage ordering and delivery services and avoid the dining-room distractions. By putting most of the focus on the food quality and preparation, the strategy is sure to deliver praise and strong reviews. Expect to see continued growth in the “ghost” restaurant space.


How to save money — and avoid talking to anyone — when ordering takeout

November 2, 2016

By Alessandra Malito
MerketWatch
http://www.marketwatch.com/story/how-to-save-money-and-avoid-talking-to-anyone-when-ordering-takeout-2016-11-02?siteid=rss

Tech companies are entering the food delivery scene in full force; here’s how to capitalize

The way people order takeout food has evolved.

Instead of using a phone to call a restaurant, many now use their phones to access apps like Facebook FB, -0.59% or GrubHub GRUB, +0.46% to place food orders. Even though it costs more than cooking at home, it’s still possible to save a few bucks for those nights you just want to order in, especially now that there are so many services available.

Tech giants Google GOOG, -0.88% , Facebook and Amazon AMZN, -1.07% have entered the food delivery races. A Google Maps for iOS update lets users “place an order” from restaurants in major cities with a button on its app, 9to5 Mac reported last week. Amazon expanded its one-hour delivery service for its Prime members to Brooklyn. Facebook jumped in last month with an option to start an order from a restaurant’s page.

“More restaurants are doing mobile ordering, and because of that the younger consumer is definitely engaging,” said Darren Tristano, president of Technomic, a food-service and restaurant research and consulting firm. “Today using your mobile device with either an app or the internet becomes a very good, strong option.”

The fans of the hit 2000s show “Gilmore Girls,” which is returning for a four-episode revival on NFLX, +0.43% later this month, may find this familiar ­­— main characters Lorelai and Rory Gilmore hardly ever had a home-cooked meal on the show, opting instead for takeout and delivery for nearly every meal. Though that is somewhat of an exaggeration of real life, Americans do spend $1,100 a year on average ordering food online, according to turkey company Butterball, which surveyed 1,000 people last year. One in 20 ordered every one or two days, and 25% ordered delivery or takeout at least once a week, the study found.

Online orders may soon beat phone orders. About 904 million online orders were placed in May 2015, up from 403 million in May 2010, while 1.02 billion phone delivery orders were placed in May 2015, down from 1.39 billion in May 2010, according to research firm NPD Group.

The interest from tech companies and restaurants may be the popularity from delivery startups, such as GrubHub, Seamless some of which these tech companies are using on the back end to see their deliveries through. Ride-hailing app Uber has been on the delivery scene since 2014, though it launched its stand-alone food delivery app earlier this year. These services give those at home or at work takeout options from local businesses without having to eat in, or step into, those establishments.

Americans’ annual expenditures on food away from home jumped 7.9% from 2014 to 2015, according to Bureau of Labor Statistics, while food at home expenses jumped only 1.1% over that same period. The change doesn’t necessarily mean more people are ordering takeout, but that prices are going up, said Warren Solochek, president of food service practice at the NPD Group.

“If you’re working from home, restaurants have to do a lot more to incentivize people to go to a restaurant,” Solochek said. “I can order from GrubHub or I can go to the refrigerator, and guess what, I have most of my meal right there.”

Still, there are ways you can save, even when you do grab for your phone. Here are three:

1. Look for deals: Check food delivery sites or do a quick web search for promo codes before placing an order. Amazon is offering a $10 off code to its Prime members for its one-hour restaurant delivery and other services like Seamless and GrubHub periodically provide discounts for users, such as during the presidential election. Some sites also have first-time user deals.

2. Avoid additional fees: Double check your bill total to ensure you know exactly what you’re paying for, since some sites may tack on additional fees. Uber announced late last month that even its UberEATS service in certain cities would be subject to surge pricing, when there are more orders than drivers. The company said in its announcement the extra fee will appear as a separate line item before checkout and on the receipt.

3. Participate in referral programs: Seamless gives back to those who refer their service, in the form of $7 for every friend. In fact, both parties win — those referred get $7 off their first order and once they try the service, so will the one who recommended Seamless.


Bootler brings comparison shopping to food delivery services

February 3, 2016
Cheryl V. Jackson
Blue Sky Innovation
Chicago Tribune
January 26, 2016
http://www.chicagotribune.com/bluesky/originals/ct-bootler-food-delivery-bsi-20160126-story.html

Food deliveryA Chicago startup plans to feed on the food-delivery boom with a search engine that makes comparing costs and delivery times easier.

Bootler (at gobootler.com) launches Tuesday in Chicago with a platform that allows users to compare menu items, prices, delivery times and fees, and order minimums across a variety of services. Users can add booze to their orders through the company’s partnership with on-demand alcohol delivery service Saucey.

Founder Michael DiBenedetto says customers who use Bootler don’t have to hop from one delivery site to the next to find what they want, then evaluate costs and other information.

The site currently includes Delivery.com, GrubHub, DoorDash, Postmates and EatStreet, with plans to add Uber, Amazon, Caviar and Eat24.

“It’s a very saturated market,” DiBenedetto said.”We think it will work because of how many companies are in the space. We’re driving more awareness and traffic for all the players in the space by arranging them all in one spot.”

Users can search by restaurant or food category then see the total from various delivery services, including menu price, taxes and delivery fees. They can then click through to their preferred service to complete the order.

Using Bootler is free to consumers. The company plans to get a cut of the delivery services’ take.

One-stop shopping for online food and alcohol ordering seems a natural with the growth of restaurant delivery services, said Darren Tristano, president at research and consultant firm Technomic.

“It was only a matter of time before somebody built a site that makes comparisons,” Tristano said. “It makes sense. We’ve seen it in other types of comparative places like with travel, with airfares and hotels and car rentals.”

It could be difficult to get consumers who already order from particular sites to steer first to an aggregator, though, Tristano said.

It “will be interesting to see if they can get consumers for a few dollars’ or a few minutes’ savings,” he said.

DiBenedetto said he started working on the website in June.

“I’ve wanted to order from one restaurant and it didn’t have what I wanted, so you end up having three or four tabs open until you find one that delivers what you want,” he said.

The site began operating beta in December, he said.


Bloomin’ Brands Struggles in Quarter, as Chain Restaurants Face New Chef-Inspired Concepts

November 9, 2015

Justine Griffin
© 2015 Tampa Bay Times
http://www.tampabay.com/news/business/retail/bloomin-brands-struggles-in-quarter-as-chain-restaurants-face-new/2252436

While the “anti-chain” movement across the U.S. isn’t new, it is slowing down sales at some of the best known restaurant brands, including Outback Steakhouse and Carrabba’s Italian Grill. Bloomin’ Brands, the Tampa parent of Outback and Carrabba’s, is the most muscular restaurant company in Tampa Bay with $4.4 billion in revenue last year and 1,500 restaurants worldwide. But it’s anything but local to consumers here.

The company on Tuesday reported disappointing sales for the third quarter for most of its brands. CEO Liz Smith said casual dining as a segment in the hospitality industry was down from July to September, not just at their in-house brands.
“We knew the trends would be challenged,” Smith said. “And our marketing didn’t break through as expected.”

Bonefish Grill, which was intended to be the engine powering new growth for Bloomin’ Brands’ restaurant portfolio this year, saw the steepest declines, with sales down 6.1 percent for the quarter and traffic down 8.5 percent. It’s the second quarter of decline for Bonefish, which is in a competitive class of “polished casual” chain restaurants, and tends to be more pricey than dining experiences like a TGI Fridays or Olive Garden. The menu quality is more on par with restaurants like Seasons 52 or Carmel Cafe.

Carrabba’s Italian Grill reported a decline in the quarter of 2 percent sales and Fleming’s Prime Steakhouse & Wine Bar saw a 0.6 percent drop.

Outback Steakhouse, which performed well in new international markets like Brazil, was the only brand to report modest growth, at 0.1 percent, this quarter.

Chain restaurants are struggling to meet the changing trends fueled by younger demographics in the U.S., said Darren Tristano, executive vice president with Technomic, a restaurant research firm in Chicago.

“These are the same issues that most casual dining restaurants face today,” Tristano said. “Bloomin’ is no different than Darden” — the Orlando parent of Olive Garden and several other chains — “and most others in this regard.”

Another blow landed this summer when Bloomin’ Brands lost a bid to open an Outback Steakhouse and a Bonefish Grill in Tampa International Airport after $953 million in terminal renovations. The aviation authority board sought to make the airport’s restaurants feel more local, and one board member noted the company’s widely located chains made it feel less so. The Carrabba’s in the main terminal, which opened in 2008, is slated to close next spring.

Millennials and generation X-ers look for value but tend to try locally owned or chef-inspired restaurants rather than a chain, so it’s difficult for the casual dining chain restaurant to stand out in what’s become a very competitive market, Tristano said.

“It’s hard for chains to add more regional flavors to a menu, like local craft beer or local food options that the independent restaurants can do so easily,” he said. “They need to be more innovative and focus on the strengths that they do have, which usually is price, to get the attention of this next generation customer.”

Outback Steakhouse will roll out a new mobile phone app next year, which the restaurant chain has been testing in Tampa Bay. Through the app, customers can add their names to the wait list before they arrive at a restaurant, place take out orders and use to pay at the table.

“We will continue to invest in this kind of innovative tech platforms,” Smith said during Tuesday’s earnings call.

Carrabba’s Italian Grill will debut a simpler menu next year. Fewer items will be available, but the chain will add a new small plates category for tapas-style sharing at the table. Bloomin’ also changed the menu at Bonefish Grill earlier this year, with the same “less is more” theme.

“Too much on the menu overwhelms the customer,” Tristano said.

It also keeps food costs down, said Brian Connors, with Connors Davis Hospitality, a restaurant consulting firm in South Florida.

“Chains are the safe choice. Customers know what they’re going to get there and the restaurants know what they’re good at,” Connors said.

Bloomin’ Brands plans to continue to expand aggressively in new international markets like Korea and China. Much of the company’s growth has come from international openings this year.

“They don’t have to reinvent the wheel this way,” Connors said. But in this country, he suggested, they’ll need to come up with something new to keep attracting diners.

“We’ve entered this new age of adventure eating. Food recipes is one of the highest pinned categories on Pinterest,” Connors said. “People are willing and wanting to try something new.”

Bloomin’s brands: Tough quarter for sales
U.S. sales in the last four quarters
BrandQ3Q2Q1Q4 (2014)
Outback Steakhouse0.1 %4%5%6.4%
Carrabba’s Italian Grill- 2%2%1.9%0.3%
Bonefish Grill- 6.1%-4.6%0.9%0.7%
Fleming’s Prime Steakhouse & Wine Bar- 0.6%3.2%3.0%3.4%
Source: Bloomin’ Brands


How 10 Food Trends for 2016 Will Transform Restaurants

November 2, 2015

2015 Forbes.com LLC™ All Rights Reserved
http://www.forbes.com/sites/darrentristano/2015/10/28/how-10-food-trends-for-2016-will-transform-restaurants/

At this point a couple years ago, if you asked a restaurant executive how she might user Uber to build sales, she might have guessed as a prefix for the name of her brand’s Oktoberfest-theme burger. But now, Uber and Postmates are just two of the sharing-economy apps rapidly transforming foodservice and shaking up consumers’ expectations everywhere.
Going into 2016, there are dozens of similar forces shifting the ground beneath restaurants, and most of them are far beyond what brands have the power to control. While they are hard to predict, even for a data-rich firm like Technomic, they are easy to identify and understand, because they all spring from evolving consumer demand. Major moves from the biggest restaurant companies—McDonald’s moving its food supply toward more cage-free eggs, for example—aren’t dictated solely by the bottom line. They’re dictated by what consumers need from foodservice brands.

Technomic just released its 10 major food trends for 2016 with this dynamic in mind. Because consumers are the impetus behind all the upheaval, take a look at each trend and see how many of them you’re driving with your own dining out preferences.

The Sriracha Effect: This hot sauce from Thailand will continue to grow in popularity, but the “effect” Technomic predicts is that chefs and chain restaurant executives will search for the next hot ethnic flavor to find lightning in a bottle again. Early indications are that this will drive more use of and consumer interest in ghost pepper from India, sambal from Southeast Asia, gochujang from Korea, and harissa, sumac and dukka from North Africa.

The Delivery Revolution: Popular apps that simplify online and mobile ordering making “dining in” even easier and, in some cases, “dining out” irrelevant. Delivery services like GrubHub are starting to proliferate far beyond urban centers, bringing the convenience of a restaurant meal home, where plenty of people are likely camping out in front of the TV to binge-watch a season or two on Netflix. Other services are muscling in, including the aforementioned Uber and Amazon, which is expanding its Prime Fresh memberships for grocery delivery.

One particular threat to restaurants could be app-only services like Munchery, which delivers restaurant-quality food from a commissary, cutting out brick-and-mortar restaurants completely.

Negative on GMOs: In some cases, consumers have made up their minds before scientists have reached consensus, but many restaurant customers are declaring genetically modified organisms to be nonstarters. Many diners will agree with calls for labels of GMOs on menus and food packaging; some will go further and gravitate toward restaurants that advertise a GMO-free menu. That will be a major issue for the nation’s food supply, since many crops—particularly soy fed to livestock and other animal feeds—have been modified to boost their yields and productivity.

Modernizing the Supply Chain: Speaking of the supply chain, it already has enough challenges to deal with, including climate destabilization, rising costs for transportation and shipping, and pests. These will cause frequent repeats of shortages similar to those witnessed in 2015, like the unseasonable freeze that decimated Florida’s orange crop or the egg shortage that resulted from avian flu. Those hurdles will proliferate while more and more consumers demand food that is “fresh,” “local,” or just free of additives and artificial ingredients. Every brand, from restaurants to grocery stores and convenience stores, will make big investments in supply chain management in 2016.

Year of the Worker: Restaurants will also contend with rising labor costs, because of new mandates to cover full-time staff with health insurance and because the minimum wage could increase sharply depending on the state or city where they’re located. Pressure groups will ratchet up their call for a $15-per-hour wage, and they could possibly succeed in more cities like they have in New York and Seattle. Don’t expect any changes to the federal wage floor of $7.25 per hour, because no cooperation between a Democratic White House and a Republican Congress is possible, especially in an election year.
How will restaurants respond? Most will raise their wages to either comply with a new law or to compete for the best staff—but that means menu prices are going up as well, everywhere from fast food to fine dining. Also, more brands will experiment with technology and automation in the kitchens and the dining rooms to do more with fewer employees.

Fast Food Refresh: Consumers gravitate to “better” quick-service restaurants, which has transformed the industry. That has created a subset of “QSR-Plus” concepts with fresher menus and more contemporary designs, which exploits a price threshold between fast food and fast casual. Culver’s, Chick-fil-A and In-N-Out Burger are examples of this. “Build-your-own” menus are springing up across the industry, and many quick-service brands are adding amenities like alcohol.
QSR-Plus also helps other restaurants clarify their positioning by giving up their attempt to go upscale in a piecemeal approach, and those chains instead are returning to their roots with simplified menus and lower prices.

Elevating Peasant Fare: The popularity of street foods and consumers’ demand for portability and affordability have put things like meatballs, sausages and even breads back in the spotlight. But this time, those meatballs might have a nouveau twist, such as a blend of fancier meats like duck or lamb. Multiethnic dumplings will also continue to grow in popularity, from Eastern European pierogi to Asian bao.

Trash to Treasure: Rising prices for proteins will raise the profile of underused cuts of meat, organ meats or “trash fish.” The “use it all” mindset has also moved beyond the center of the plate. Some restaurants will use carrot pulp from the juicer to make a veggie burger patty, and perhaps other chains will follow the lead of Sweetgreen, which last year partnered with celebrity chef Dan Barber to make the wastED Salad, an entrée that saves vegetable scraps like broccoli stalks and cabbage cores and combines them with upscale ingredients like shaved Parmesan and pesto vinaigrette.

Let them eat kale stems!

Burned: Smoke and fire are showing up everywhere on the menu—smoky is the new spicy. Look for more charred- or roasted-vegetable sides, desserts with charred fruits or burnt-sugar toppings, or cocktails featuring smoked salt, smoked ice or smoky syrups.

Bubbly: Effervescence makes light work of the trendiest beverages. Technomic expects rapid sales growth of Champagnes and Proseccos, Campari-and-soda aperitifs, and adults-only “hard” soft drinks like ginger ales and root beers. In the nonalcoholic space, sales will also increase for fruit-based artisanal soda and sparkling teas.


Take the Grub and Run

September 9, 2015

Karen Robinson-Jacos and Laurie Joseph
Copyright 2015 The Dallas Morning News. All Rights Reserved.

Between killer work schedules, soccer games and sagging skill levels, many adults don’t have the inclination to prepare a three-course meal, or the time to sit in a restaurant and enjoy one. That helps account for the growth in “off-premise” dining, where a restaurant chef does the cooking and you enjoy the meal in front of your TV. Now technology, including apps that allow hungry consumers to order and pay in advance, is expected to make restaurant dining rooms even emptier.

Fiesta Restaurant Group

Addison-based Fiesta Restaurant Group, which operates the fast-casual chains Taco Cabana and Pollo Tropical, hopes to double its current off-premise business over the next 10 years and has hired its first corporate director of off-premise consumption. The new director, Willie Romeo, will focus on to-go, online ordering, catering, drive-through and mobile app orders.

Corner Bakery Café

Off-premise sales** at Dallas-based Corner Bakery Café have been growing about a percentage point a year. Next year, the 24-year-old company hopes to begin testing its first drive-through lane.

Mooyah Burgers

Plano-based Mooyah, which competes in the “better burger” space, is looking to boost its to-go business. The company has opened two locations with drive-through lanes but is not focusing on that model.

Essential takeout

More than a third of working-age adults consider buying to-go food “essential” to the way they live, according to the National Restaurant Association.

Deliveries on the rise

At fast-food restaurants, more than 70% of the orders are eaten off-site. Figures from the NPD Group show that delivery orders, which account for the smallest segment, saw the largest percentage growth rate for the year that ended in June.

There’s an app for that

Restaurant chains including Plano-based Pizza Hut and its corporate cousin Taco Bell, along with Starbucks, Subway and others have rolled out apps that allow you to order, pay ahead of time, and just pick the food up on the fly. Look for more chains to launch their own apps or to partner with players like http://www.orderaheadapp.com (not available yet in North Texas) or MasterCard’s Qkr.

The bottom line

“The biggest thrust for operators has been in the catering area to promote off-premise sales opportunities. Most of the growth in takeout has been in independent restaurants that have changed their business model to accommodate takeout opportunities for their customers. Also, there have been a lot of delivery discussions from brands such as Uber and Postmates.”

Darren Tristano, executive vice president, Technomic restaurant research service

“We are seeing that currently on-premise visits are growing while off-premise is holding steady or declining. That partly has to do with generational differences. Millennials are cutting back on restaurant visits. They were more inclined to use off premise. Baby boomers are now heavier restaurant users and they have a tendency to eat on premise.”

Bonnie Riggs, restaurant industry analyst, NPD Group

“‘What’s for dinner, Mom?’ was sometimes the scariest question I heard all day. With healthier restaurant options and technology that helps meal-pickup-time fit your schedule, restaurants can grow revenue and reduce the strain on the dining room during peak periods.”


Restaurant Doesn’t Deliver? New Uber-Like Services Will

August 17, 2015

2015-08-17_1057Kyle Arnold, Staff Writer
Copyright 2015, Orlando Sentinel Communications. All Rights Reserved.

http://www.orlandosentinel.com/business/os-restaurant-delivery-20150812-story.html 

The race is on to be Uber for restaurants.

Following the success of ride-sharing businesses, a handful of companies are pushing into Central Florida as on-call food-delivery services for restaurants that don’t have their own drivers.

Groupon-owned OrderUp launched Tuesday in Orlando with a fleet of about 60 drivers bringing food from restaurants to homes and businesses. Two local companies, Doorstep Delivery and Munchem, are also trying to find their place amid growing national competition from app-based services.

The services use an independent-contractor model, dispatching drivers to pick up orders at restaurants and then drive the food to its destination.

“You’ve always had the takeout-taxi model, but what we are seeing now is the younger generation who is very mobile-device-enabled,” said Darren Tristano, executive vice president of restaurant-research group Technomic.

The industry is more crowded nationally, with companies such as Postmates, GrubHub and Uber’s own restaurant delivery service, none of which has launched in Orlando.

Restaurants have been eager to get in on the trend, hoping to expand into delivery without hiring drivers. Chipotle, Olive Garden and Publix’s deli-sandwich counters are experimenting with the services at select locations locally.

Customers use the delivery services’ apps to place food orders, which are relayed to restaurants. The delivery service then picks up the completed orders and delivers them.

Third-party delivery services usually cost $4 to $6 per order, and customers are expected to tip the drivers. The delivery service often takes a cut of the total bill from restaurants, too.

Doorstep has about 300 partners in Central Florida, while OrderUp started with 31 partner restaurants. Munchem takes orders for any restaurant in which it can find a menu.

“These days everybody expects on-demand service,” said Andrew Brown, co-founder of Orlando-headquartered Doorstep Delivery. “People expect what they want, and they want it brought to them.”

Doorstep Delivery is the oldest of such local third-party restaurant delivery companies. It started in the Orlando area seven years ago without smartphones or an app, using dispatchers taking orders on a notepad and calling them into restaurants.

Brown said the rapid pace of technology has pushed the company to redevelop its model, leaning heavier on Web and mobile ordering. Doorstep is revamping its app to allow real-time tracking of delivery drivers, a feature popular with other services.

It is in 19 markets, mostly in Florida but also places such as Charlotte, N.C.; Dallas; and Denver. Nationwide, it has about 600 drivers and about 60 locally.

Gator’s Dockside has been working with Doorstep Delivery for about five years. It had considered its own delivery drivers but decided to go with a third-party company.

“When you figure 150 orders a month per location is probably average, I would say it’s definitely worth it as a business to try to reach those people,” said Gator’s Dockside director of operations Joe Foranoce.

OrderUp says its drivers can make up to $25 an hour during peak periods. The company, as well as others, does background checks on drivers and issues them a car magnet and “hot and cool” bags to keep food at temperature.

Delivery times aren’t guaranteed, since restaurants prepare food at their own pace. But the services are designed to have drivers arrive at the restaurant as soon as food is ready and hit the road.

Moises Almaraz, 20, took OrderUp’s first delivery Tuesday from Church Street Tavern in downtown Orlando to a nearby office building.

“I hope to make about $20 an hour,” said Almaraz, who recently moved from Naples after earning his associate degree and hopes to enroll at the University of Central Florida. “I’m just looking to earn some extra money before I go back to school.”

The independent-contractor model has been used by ride-hailing companies Uber and Lyft, requiring drivers to pay for their own gas, maintenance and taxes.

Another Orlando-based service, Munchem, launched to customers earlier this year with an app.

The service started in the Dr. Phillips neighborhood and has expanded to downtown and the UCF area. Munchem has seven drivers and is hiring more.

“We’ll deliver from pretty much any restaurant that we can get a menu for,” said Andy Kordalski, a spokesman for Munchem. “The ones that want to work with us are great, but we don’t necessarily need to partner with them because we’ll make the order and pick up the food ourselves.”


App May Offer Doughnuts on Demand ; Dunkin’ is Exploring a Delivery Service

June 17, 2015

8849e1f883b10fbaf86357823c2ecf69Taryn Luna
© 2015 The Boston Globe. Provided by ProQuest Information and Learning. All Rights Reserved.
http://www.betaboston.com/news/2015/06/09/dunkin-donuts-app-may-offer-doughnuts-on-demand/

At a time when a consumer can use an app on a smartphone to have a bottle of whiskey or an iPad Air delivered to the door in an hour, an instant order of munchkins and a Box O’ Joe might not be far behind.

Dunkin’ Donuts is the latest quick-service restaurant chain to wade into the so-called on-demand economy, acknowledging Monday that it is evaluating delivery services in conjunction with new mobile ordering technology the coffee-and-doughnuts chain is developing.

Dunkin’ is following in the footsteps of two rivals, Starbucks Corp. and McDonald’s Corp., both of which are testing deliveries to homes and offices this year.

Nigel Travis, chief executive of Dunkin’ Brands Group, the parent company, called delivery a “big opportunity” in an interview with CNBC.

The company said delivery might be built into an application currently in development. The app, which Dunkin’ began testing last year, would allow customers to order and purchase coffee and food on a smartphone and pick it up at a store.

Dunkin’ declined to provide details about how a delivery service would work and said it has not begun to test the system.

Dunkin’ Donuts and other fast-food chains face a particular challenge in delivering products: keeping their hot food and drinks at the right temperatures, said Darren Tristano, an executive vice president at Technomic Inc., a Chicago food industry research firm. While things like pizza and Chinese food retain heat during transport, Tristano said, some fast-food products don’t survive as well.

“It might reflect negatively on the brand,” Tristano said. “There’s great risk along with the opportunities.”

Food chains are quickly trying to catch up with the explosive popularity of on-demand delivery services such as Postmates and GrubHub, which can provide nearly anything consumers want, whenever they want it. The chains also hope deliveries will increase sales in a relatively stagnant quick-service industry.

Dunkin’ Donuts’ same-store sales in the United States increased 1.6 percent in fiscal 2014, compared with 3.4 percent the year before. Meanwhile, McDonald’s comparable sales declined 2.1 percent in 2014. Starbucks, the leading coffee and bakery chain in the country, reported a 6 percent jump during the same period.

Earlier this year, Starbucks and McDonald’s said they both planned to work with Postmates, the San Francisco-based 24-hour service, to deliver in select markets. Customers place orders on the Postmates app or website and local couriers pick up the goods from restaurants and stores. An order of a Big Mac and medium fries from McDonald’s, which includes a $5 delivery fee, costs about $11.

Although many consumers already can order a Big Mac or a Frappuccino through the Postmates system, the partnerships allow companies to integrate the ordering process into the food chains’ own mobile applications, control the transaction, and track consumer interests, Tristano said.

Starbucks said it will launch a “Green Apron” program with actual baristas delivering coffee in New York later this year.

Dunkin’s delivery and mobile ordering initiatives are being led by Scott Hudler, global vice president of consumer engagement.

The company said he was not available for an interview.

Tristano said Dunkin’s delivery service would probably increase sales modestly as existing customers shift to delivery. He said the service would appeal to consumers who are physically unable to visit a store, don’t have a car, don’t want to deal with parking, or “are just lazy and don’t want to get up and go.”


First Watch Evolves to Attract Younger Customers

June 9, 2015

By Justine Griffinbilde

http://www.heraldtribune.com/article/20150527/article/150529734?p=2&tc=pg

Like nearly all other industries, the restaurant business has metamorphosed through the years.

Some national and regional chains are feeling the push to compete with small businesses, as millennials and Generation X consumers flock to support hole-in-the-wall eateries within their communities that reach a younger customer through robust social media presence and online apps.

First Watch Restaurants, the Manatee County-based chain of breakfast, brunch and lunch cafes, also has evolved through the years to meet the demands of these new customers.

This year, First Watch introduced a new urban layout in restaurants across the country, including two sites in Florida: Largo and Estero.

The “urban farm” design is bright, colorful and modern. The build-out looks like something you’d see on a busy street in a bigger metro area than Sarasota.

“The new concept is more in line with the customer First Watch is targeting,” said Darren Tristano, executive vice president of Technomic, a food research firm based in Chicago. “It’s not fancier, but it plays on freshness and the importance of being local.”

First Watch has expanded into more urban areas in recent months — such as Denver and the Washington D.C. metropolitan area — where reaching a younger demographic is key.

Inside the new restaurant, the dining room has funky light fixtures and exposed brick walls. An array of blackboards make up the host and check-in counter, where messages can change daily.

One wall is devoted to old wooden crates that once would have shipped fresh eggs and other goods that the restaurant might use inside.

“Breakfast and the farm naturally go together,” said Richard Renninger, First Watch’s chief development officer, who helped come up with the new design. “But it has an urban look that makes customers feel like they’re still in the hustle bustle of their community.”

It took some time, and a lot of tweaking, to come up with a design that fit the needs of the aging baby boomer demographic and the millennial and Generation Xers, Renninger said.

“It was important for us to create a new space that is comfortable for all our customers, but still somewhere where millennials would want to hang out,” he said.

This is the third redesign of the restaurant that First Watch has implemented since the chain began in the 1980s.

The restaurants in Sarasota County showcase both older looks. The company plans to renovate some properties in Florida next year.

“First Watch is making all the right moves. They’re following millennial and Generation X dining habits — which tend to be more health conscious for themselves and their young families,” said Brian Connors, a consultant with Miami’s Davis Connors Hospitality.

To attract more younger customers, First Watch also debuted a new smartphone app service at its restaurants this year through “NoWait.”

NoWait is a free app that allows users to compare restaurant wait times within a 30-mile radius of wherever they are.

Users can then add their name and the size of their party to a wait list. The app notifies users when they are close to being seated.

“It’s sort of like they’ve found the Holy Grail,” Connors said. “It’s the perfect concept that doesn’t discriminate against the baby boomers either — it’s the type of restaurant my parents would go to and feel like they’re a part of their local community.”


Americans Turning to Restaurants, Not Grocery Stores, for Mealtime

April 30, 2015

by Mark Fisher

http://www.daytondailynews.com/news/news/americans-turning-to-restaurants-not-grocery-store/nkxP2/picture

Restaurants cater to younger diners who are leading the trend
The Census Bureau reports that in March, for the first time since such records have been kept, Americans spent more money in restaurants than in grocery stores. Millennials led the charge. Local restaurant owners, including Dan Young owner of Young’s Jersey Dairy, say they’re not surprised about shift occurring in the dining scene in this region and across the country.

For the first time since the government started keeping track in 1992, Americans—led by those in the millennial generation—spent more money last month in restaurants and bars than they did in grocery stores.

This region’s restaurant owners say they’re not surprised at the shift in spending patterns, and they’re taking steps to attract younger diners.

Dan Young, CEO of Young’s Jersey Dairy and the Golden Jersey Inn in Clark County north of Yellow Springs, said today’s families work long and sometimes unpredictable hours and have limited time to spend together.

“Yes, they can get a nice meal from the grocery store, but if your ‘together’ time is limited, who wants to spend that time preparing the meal?” Young said. “Why not meet your family or friends at a local restaurant and enjoy each other’s company while choosing from a much wider selection of food than you typically would at home?”

The U.S. Department of Commerce reported last week that Americans spent $52.3 billion at restaurants and bars in March, and $49.7 billion in grocery stores—the first time grocery spending lagged restaurant/bar expenditures.

The National Restaurant Association reported earlier this month that despite extreme weather in many parts of the country, its “Restaurant Performance Index” (RPI)—a monthly barometer of the the health of and outlook for the U.S. restaurant industry—held steady in February, which also marked the 24th consecutive month in which the RPI signified improvement in key industry indicators.

Hudson Riehle, senior vice president for the restaurant association, said restaurant operators are increasingly optimistic about business conditions and potential sales growth in the months ahead. About 59 percent of restaurant operators expect to have higher sales in six months, compared to the same period in the previous year, up from 57 percent the previous month. In contrast, only 4 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, restaurant association officials said.

The association offers advice to restaurant managers on its web site on how to cater to the twenty-somethings and early-thirty-somethings who are increasingly likely to let others prepare their meals.

“Millennials view dining out as a social event (i.e. a chance to connect),” the association says on its web site. “They prefer to eat at restaurants with a lot of choices and lower price points. They tend to favor fast food, deli food and pizza restaurants over coffee shops, high-end dining and casual dining.

“Equally important for restaurateurs to remember is that millennials can be moving targets. While they develop brand attractions and support reward and loyalty programs, their allegiances can be very flexible according to their circumstances.”

Young, whose restaurant and ice cream shop are geared toward families, said diners in the 25-to-34 age group are “eager to try new tastes, probably because they have been exposed to more variety growing up.”

“Plus, with today’s amazing technology, it just takes a few tweets or texts and you can be visiting a nice restaurant with family and friends in a few minutes,” Young said. “Spontaneous is so much easier than when most of the 25-to-34-year-olds were born —when the family had one, maybe two phones at home, and families had to plan out the day ahead of time.”

Shanon Morgan, president of the Miami Valley Restaurant Association, agreed that technology — and in particular, social media — are stimulating restaurant and bar business, especially among younger diners.

“It’s much cooler to check in at the local tap room than the local grocery store,” Morgan said.

Jay’s Restaurant in Dayton’s Oregon Historic District has begun advertising more heavily on social-media sites and has launched “happy hour” specials on Tuesday and Wednesday in part to attract more younger diners, according to Amy Haverstick, Jay’s Restaurant’s owner, who is herself the mother of a 2-year-old.

“People my age, the couples are working full time, and they’re finding the easy way out — it’s all about convenience,” Haverstick said. “Life just seems to be a lot more fast-paced for our generation.”

Darren Tristano—executive vice president of Technomic, a Chicago-based food service research and consulting firm—said his company’s research “continues to show that the millennial consumer has integrated dining away from home deeper into its identity compared to older generations. They appreciate the socialization and the lifestyle element that restaurant visits bring to their overall quality of life.”

Tristano said members of the millennial generation “continue to use restaurants with great frequency, and as their spending power builds, so will their dining (expenditures). Favorable employment and disposable income growth trends along with lower gas prices are fueling the return by many younger consumers to restaurants.”

Millennials, Tristano said, “are the future, and along with them, the key to many restaurants’ future.”
________________________________________
Americans’ shifting spending patterns
March 2015
Restaurants and bars: $50.4 billion
Grocery stores: $50.1 billion
February 2015
Restaurants and bars: $50.0 billion
Grocery stores: $50.4 billion
March 2014
Restaurants and bars: $46.8 billion
Grocery stores: $49.1 billion
Source: U.S. Department of Commerce