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No shoes dropping
We’ve spent the past year-plus trying to figure out why the pressured macroeconomic environment hasn’t really phased restaurant consumers, and why those consumers are saying the economy stinks yet they’re spending like it’s the (original) roaring ’20s. That spending is coming despite record high credit card debt, student loan debt, car loan debt, etc., which has made us here at Nation’s Restaurant News repeatedly ask, “When is the shoe going to drop?” I don’t want the shoe to drop in 2024. I don’t want the shoe to even be on the ledge anymore. I much prefer the idea of a resilient consumer who becomes a little bit more responsible with their debt but who still spends liberally at restaurants because they know restaurants provide a unique experience and value they simply can’t get at home. Call me pollyannish, I don’t care. I’ve been called much worse before.
Harnessing pricing
I chose words over numbers as a career for a reason, and I certainly don’t envy anyone in this industry who has to make pricing decisions in this wonky environment. But it looks like we’ve gone too far on pricing, as evidenced by widespread traffic drops in the past quarter or so. Those drops have been steep in some cases, with consumers citing price fatigue as the culprit. And no wonder: Restaurants have raised prices by nearly 30% since 2019 and those prices remain elevated even as general inflation has cooled significantly. Sure, operators must protect margins as COGS and labor and rent remain high, but, as Potbelly CEO Bob Wright recently said, “traffic is the heartbeat of long-term health,” so it’s time to double down on alternative solutions to improve four-wall economics. Those solutions should be focused largely on driving traffic.
The California effect
All eyes are on California as the minimum wage hike goes into effect April 1, raising hourly pay for QSR employees to $20. This could very well cause a ripple effect to other segments and markets and will create strain on concepts with low AUVs. Expect some hail Marys and a ramp up of productivity-focused technology. Outside of California, wage growth will finally start to slow after the past three years of big gains for the lowest-paid workers. In 2022, the lowest earning employees saw weekly pay grow 9.8%. This slowed growth could benefit margins, but it will also likely lead to consumers reining in their discretionary spending at restaurants. Cycles always repeat and pendulums always swing.
More marketing levity, please!
As a recovering marketer who spent seven years running social media at the University of Louisville, I can’t help but gravitate toward savvy campaigns that really showcase the cultural relevance of this industry. Take Chipotle’s recent “Chipolte” campaign as an example, created in response to resurfaced Travis Kelce tweets and tapping into the cultural phenomenon that is Kelce’s relationship with global pop icon Taylor Swift. The restaurant industry has done a tremendous job catching lightning-in-a-bottle moments through influencer partnerships, pop-ups, bringing TikTok hacks to the menu and more, and it’s provided a nice distraction for American consumers who have been beaten down by a once-in-a-lifetime pandemic and debilitating inflation and geopolitical crises and so forth. This industry is meant to be fun and social — an escape — and regardless of whatever drama happens in 2024 (because we’re all bracing for more at this point), I hope we never forget that.
Indian cuisine, finally
Trend watchers have been waiting for Indian cuisine to really take off in American dining for decades, and it seems to finally be happening. Medium- to high-end independent Indian restaurants are opening across the country, some led by big-name restaurateurs including Maneet Chauhan in Nashville, Rohini Dey in Chicago, and Srijith Gopinathan in San Francisco, and others by operators still developing names for themselves. Then there’s the growing roster of fast-casual Indian restaurants including Rasa, Curry Up Now, The Kati Roll Company, Tarka Indian Kitchen, Inday, Choolaah Indian BBQ, Tulsi Indian Eatery, and many more. Also of note is the addition this past August of a Zingers Tikka Wrap on the permanent menu of Miller’s Ale House, a casual-dining chain not known for its adventuresome cuisine.
The Zingers is what Miller’s calls its signature chicken tender, but in this case, it’s wrapped up to resemble a kathi roll.
Coffee as the base for spirit-free cocktails
Consumption of coffee is on the rise, as are energy drinks and non-alcoholic cocktails. Young consumers, dating back to when Generation X was young, have long enjoyed energy drinks — often Red Bull — spiked with alcohol. And what has arguably been the trendiest cocktail over the past few years? The Espresso Martini.
Put all of that together, and the stage is set for a proliferation of coffee standing in as the base for spirit-free Old Fashioneds and espressos and tonic. Versions of those drinks are already available at some coffeehouses, notably Everyman Espresso in New York City and Paper Plane Coffee Co. in Montclair, N.J.
That’s already a lot of factors pointing to a beverage trend in the making, but there’s another one, too: Cold brew coffee, the increasingly popular version of America’s favorite pick-me-up, is getting better. Some coffee aficionados have long said cold brew doesn’t extract the unique flavors of high-end beans, but new technology from companies such as BKON, based in Morriston, N.J., have developed technology to extract those flavors. That allows coffeehouses to develop cold brew concentrates unique to their brand, and also makes premium coffee available to bars that might not want to make their own.
White lamb
There’s a fairly new breed of sheep arriving in the U.S. from Australia. The Australian White Sheep has hair instead of wool, giving it a somewhat milder flavor because it doesn’t taste of lanolin from the wool, a plus for people who find lamb to be gamy. But it still tastes very much like lamb. It also has a lot of intramuscular fat, but unlike wagyu beef, which also has a lot of marbling, the meat is nonetheless firm. However, the fat has a lower melting point than traditional lamb, resulting in less of a greasy feel, and arguably a better nutrition profile since it contains less saturated fat. Also unlike wagyu, Australian White Sheep is all grass-fed.
It's likely to sell at around a 10-15% premium to conventional lamb.
Ammonium chloride
Residents of the Nordic countries — Denmark, Finland, Iceland, Norway, and Sweden — have long enjoyed salmiak, a salty licorice that gets part of its distinctive flavor from ammonium chloride.
Also called salmiak salt, Ammonium Chloride is a slightly toxic substance that researchers from the University of Southern California and the University of Colorado recently discovered might trigger a unique taste all its own, apart from the five senses of sweet, sour, salty, bitter, and umami.
What does it taste like? Well, Andrew Richdale, writing in Saveur magazine in 2017 and recently cited by bigthink.com, said it “felt simultaneously fascinating and … abusive? Or at least odd like a knocked funny bone.”
Others say it tastes bitter, salty, and a little sour, with hints of window cleaner.
Given Gen Z’s penchant for trying new things, and their pleasure in consuming energy drinks that some of their elders (I, for one) have described as tasting like sweetened battery acid, and you have the potential for a whole new polarizing flavor profile.
Restaurants will know you better than you know yourself
With the rise of data analytics-driven restaurant operations, it’s only a short time before restaurants are able to know you (and your order and your hospitality preferences) better than you know yourself. In the near-ish future, customers will be able to place a delivery order with their favorite restaurant without actually telling the delivery app what they want to order. Then the app, based on time of day/year and customer preferences from previous orders, will be able to know exactly what the customer would have ordered for him or herself.
This type of automated hospitality will soon extend to in-person dining, where based on hyper-personalized data, restaurant servers will know exactly what type of hospitality a customer prefers (ranging from conversationalist to “leave me alone after I order”) and will be able to automate consumer menu preferences as well. This will give a whole new modern meaning to the phrase, “I’ll have the usual.”
The opening of (and subsequent closure of) the first AI-generated restaurants
As generative AI begins to lend a helping hand in generating menu images and wording, designing restaurant websites, and even coming up with ideas for dinner specials, it’s only a matter of time before the first entirely AI-generated restaurant opens. Everything about these restaurants — from design and décor to the menu and music selections, and even server uniforms — will be created by ChatGPT.
However, there is a fine line between using AI as a tool and cashing in on the OpenAI craze to operate a gimmick, and we predict that almost as soon as these AI-generated restaurants open, they will likely close by the end of the year.
Eatertainment’s resurgence continues
These aren’t your old eatertainment brands; the new bunch of eatertainment restaurants are all focused on sports. The very popular sport of pickleball is the subject of several concepts, while golf is another popular one. While the sport is the draw, the food is high-quality, too.
Virtual brands stick around as a niche
While there has been much tumult in the virtual-dining industry, some smaller chains are making it work well for themselves. Salted, a virtual brand concept out of Los Angeles, just finished a Series B funding round of $14 million and acquired a new Mediterranean concept, Xenia.
“We really want to be the company that is focused on hospitality in this space,” CEO Jeff Appelbaum recently told NRN. “Up until now, that has been a huge pain point. If you’re ordering online, it’s a roll of the dice … and we want customers to know that when you order from a Salted brand, you are going to get an experience that's really consistent. … We had to build software to win on consistency and quality at scale.”
Employees going the extra mile
Some brands will embrace employee training and get it right. This is where independent restaurants really have a chance to shine.
I frankly have never seen service levels so low or seemingly scattered than at sit-down restaurants these past few months. Fortunately, I was pleasantly surprised this past weekend: I went to a small, 17-seat omakase restaurant where the waiter suggested I lend him my phone so he could take a photo of the chalkboard menu that was handwritten on the other side of the room. That made it much easier for me to read.
That is initiative, and it made the dining experience so much more enjoyable — and it’s something I would have never thought about suggesting.
The tipping code is cracked
In the new year, I will learn how and when to tip — and so will the industry. I frankly am with the majority of people who are growing skeptical of counter-service joints expecting a tip. (My chain hair cutter’s credit card payment pad now starts at a $6 tip on an $18 trim, a 33.3% tip that bugs me to no end.) Tipping remains ingrained in the restaurant industry, but someone will figure out how to make it easier and more logical for the customer.
