Executive Briefing
The new table stakes for the restaurant industry
It’s time to think beyond being chefs and hosts and more like merchants, publishers, creators, and community leaders.
By Dan Frommer on Wednesday, March 10, 2021 at 8:00 am
Here’s something that’s been driving me crazy for the past year: Seeing some of my favorite restaurants — popular, successful ones — go out of business because of a lease. Because a contract someone signed years ago — which tied their fate to a specific room in a building — went south during the pandemic.
This bothers me — as someone who spends an inordinate amount of time contemplating the value of intellectual property, brand “world” creation, and audience — because restaurants are so much more than kitchens and dining rooms.
Chefs and restaurateurs have built many of the world’s most beloved and influential brands, but they haven’t captured nearly a proportionate amount of value.
Restaurants provide sustenance and hospitality, yes, but also entertainment, education, identity, culture, and community. This has been dramatically magnified over the past decade by social media, global travel, and the popular rise of food culture.
Yet for most restaurants, their enterprise value is still tied primarily to a room full of tables — and a rigid, unimaginative, now-outdated idea of their business.
The Covid-19 pandemic has been downright nasty to the restaurant industry. But if there are silver linings, they include:
- Chefs improvising and pivoting into new business models for survival.
- Restaurant operators embracing technology and starting to gain some fluency in digital business.
- People missing their favorite restaurants like they’ve never missed restaurants before.
- Rapid consumer adoption of new habits and preferences when it comes to food and beverage, including what and how they eat and how they pay for it.
Chart of the Day
As the pandemic recedes, restaurants now have an opportunity — if not an obligation — to reinvent themselves, building better, more resilient businesses in the process. This involves thinking beyond being cooks and hosts and more like merchants, publishers, creators, and community leaders.
The idea here is to capture more spending and frequency from a restaurant’s highest-value and most devoted customers — including some spending that would have previously gone to grocery or retail stores or other forms of entertainment — and to diversify their businesses with new lines of higher-margin, non-dining-room revenue.
There’s also an opportunity to build a brand and a business — local, national, or even global — doing new things with food that might not have made sense, or have even been possible, before.
“One thing the pandemic has showed is that for a certain segment of the dining population, restaurants are really, really important to them,” says Lindsay Tusk, co-owner of the San Francisco restaurant Quince, who recently launched an ambitious new business for her group — more on that shortly.
I won’t pretend there’s a simple, magic playbook to building a better restaurant business. But here are some of the most promising emerging ideas.
The rest of this post is for paid members of The New Consumer.
Join for or .
Already a member? Sign in here.
Hi, I’m Dan Frommer and this is The New Consumer, where consumer operators, founders, and investors get the real read on what’s happening — original reporting, proprietary data, and sharp analysis you can take into your next meeting.
You’ll get my twice-weekly newsletter, read by leaders at Sweetgreen, David Protein, Forerunner, and L Catterton. Plus Consumer Trends, our research series cited by the Wall Street Journal, Axios, and WWD.
Not ready to join? Start with a free account.