In this festive episode, Carl and Meredith explore five transformative trends in the restaurant industry as we wrap up 2024. They kick things off by discussing how personalization is finally becoming a reality for big brands like McDonald’s and Yum! Brands, leveraging data to craft tailored offers for customers. The conversation then moves to the latest Toast Trend Report, revealing intriguing shifts in dining habits, such as the growing popularity of early-week and same-day reservations, reshaping how restaurants plan and operate.
The discussion continues with DoorDash's proactive efforts to tackle fake Dasher accounts, a move with wide-ranging implications for delivery costs and gig economy efficiency. They also highlight Fresho, an Australian startup revolutionizing the wholesale food supply chain with a $17M funding boost. Finally, the hosts examine how smart technology is integrating with restaurant operations, from POS-connected kitchen equipment to predictive maintenance tools. This episode is packed with insights into how innovation is driving change across the industry.
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transcript
Carl: Happy Monday, Meredith. How are you doing today?
Meredith: Very well, Carl. How are you doing?
Carl: I'm getting into the festive spirit. Are you getting into the festive spirit? Have you got all the family's Christmas presents yet?
Meredith: I do. And I'm wearing a green sweater. And today I went to Lincoln's Christmas performance.
So adorable.
Carl: Nice. What what did he play?
Meredith: It was singing and recorders because it's you know, the third grade and I confess I cried a little bit.
Carl: Because the recorders were that bad. I get it.
Meredith: It was just it was so stinking cute.
Carl: Oh, okay Bad recorder playing. Makes me cry.
Meredith: They were excellent.
Carl: Very good
He takes after his uncle. That's good. We have lots of stories this week.
And we have to only choose five, but you're kicking us off with the first one. And personalization, Meredith, is it finally happening? Tell us.
Meredith: You'll remember we talked about personalization quite a bit in the very first book that came out in 2021.
And here we are at the end of 2024. And it would appear that the big brands are finally making a push toward it. This is the inevitable conclusion of all this digitization. As consumer transactions become increasingly digital, that means they are easier to track, they are easier to find patterns in, and then they are easier To personalize as a result.
Now, maybe it's just because of the year we're in coming off all this inflation, or maybe it's just, this is the imagination that we have here in the restaurant industry, but at least in this article, which was in NRN by Alicia Kelso, most of the brands she cited, we're talking about personalization of offers. Chris Turner said that's what they were doing at YUM. The CEO of McDonald's, Chris Kempinski said they could better target value meaning they could give both pricing and offers differentiated to consumers. It was less around to say experience or menu, at least the examples cited in this article and much more around pricing and promotions.
Carl: It's good to hear there's some momentum happening in that direction, but I think there's so much more to come in this. We really are in the early days of it, but it starts by getting a handle on your data. So to hear that hopefully is showing that maybe some of these bigger groups are starting to get a handle on it.
Meredith: Another trends report is out: this time Toast has their trends report and it is reflecting a shift in dinnertime. What else is in this report? Tell us about it, Carl.
Carl: There are a few things that interested me about it. It's first of all 127, 000 locations were included in this.
They were looking at their reservation patterns in particular. Toast - they have a myriad of various different products right now. This was supporting their reservations aspect. And as you say, the main thing that stood out was that there's an increasing trend of diners Making reservations on slower days.
Compared to the same period last year, restaurant reservations for Mondays and Tuesdays have gone up by something like 11%, while those for Saturdays have actually decreased by 1%. So it suggests that perhaps guests are opting for a quieter dining experience, maybe earlier in the week, maybe to avoid crowds typically associated with the weekends.
The busiest days, of course, for reservations still remain Saturday and then Friday. Those account for something like 27 and 21 percent respectively. And all of that was attributed to Q3. Now bear that in mind because that's also important because Q3 is the summer months, the nights are a little lighter, of course.
There's been a rise in reservations on Sundays up at 6%, Wednesdays up 8%. The main thing that really stood out to me here: dinner bookings at 5 p. m. saw an 8 percent increase or reservations at 4 3 percent increase, whereas 7 p. m. reservations dipped slightly. There are some other elements in the report as well: decreasing cancellation rates and increasing same day reservations with the main theme on this: cancellations dropped to 17 percent down from 19 percent the previous year. Maybe people are now getting better reminders and notifications from toast about the reservations that have been made. That's encouraging because cancellations are terrible for restaurants because they might've said no to someone that was just a walk in for example.
It's why on open table, for example, you only have a certain amount of tables. dedicated for an open table reservation, which means the restaurant sometimes may actually have available tables, but just not through the open table interface. On the same day reservations piece they've also increased: 45 percent of the reservations made on the day of dining.
So people are booking, but they're only booking ahead slightly. It's just a growing trend of last minute bookings. The last thing I'll mention is about pricing trends when it comes to food and alcohol. On the alcohol front beer prices rose by 2. 4 percent while whiskey and vodka drinks saw price increases of about 2. 7. The highest price of all beverages, can you guess which one it was Meredith? Average highest price for the average spirit beverage?
Meredith: Tequila
Carl: 13. 48 per serving typically.
Also food prices going up as well.
No surprise here. Chicken tenders gone up by 5 percent burritos by 4 percent fajitas, bowls, and pasta dishes also saw increases. Interesting to be able to see what we'd expect in the inflationary environment that we're in, but they were able to put some very specific. price points down.
So those of you that are interested in where your prices are relative to the competition, seeing what's going on, maybe you've taken a price increase this year on certain items. It might be useful to look at the reports to compare on that front.
There was a whole bunch of other things in the report around staffing and tips, but I won't go into that because we've covered that one in the past and California, we still got some work to go.
Meredith: The most interesting thing about this report Is that it is not survey based. This is just data flowing through the toast system. This is what all this data enables. We now have visibility into what's going on in the restaurant industry nationally on a host of fronts. Whether it's the menu and consumer facing behavior or back of house and labor behavior.
There's just a lot of information that before we either had to do surveys to figure out or we were just flying blind.
Carl: You're absolutely right. Imagine what it must be like for the marketplaces. The frequency of transactions across all these different areas. They are sat on so much data themselves, I'm sure, and I know they put their own reports out, but it's only probably a small amount of what we really get to see when they publish those.
It just goes to show how data really is the real currency of success in this space now.
Carl: Talking of the marketplaces, DoorDash have been in the news. They're cracking down on fake driver Dasher accounts. What's going on there?
Meredith: DoorDash is proactively clamping down on fake driver accounts. The Reasons that they're fake using someone else's account might be because your own account was deactivated. Might be because you are not legally allowed to work in the U S a whole bunch of reasons why you might have a fake account to begin with. What I thought was most interesting about this article is that not Everyone is being asked to re verify themselves, only 150, 000 of the dashers are asked each week to re identify themselves.
Some of those I don't know if these are the ones that AI has flagged as the most likely to be fake. Some of those actually have to verify mid delivery. Who they are, that's doing the delivery. So someone can't hand off to the driver and then let someone else execute. And the other thing that was interesting here is that they said monthly deactivations have more than doubled.
Presumably it's because of the efforts that DoorDash is going through. Will be interesting to see if that causes the cost of delivery to go up if there are enough drivers to go around, if it affects some areas more than others, there were certain cities they mentioned where they're really focusing this in on.
Can't wait to see the fall on effects of this and kuddos to DoorDash for taking it on.
Carl: I wonder what the other side of the story is on that. For those dashers that have had multiple accounts, are they doing it because of reasons that they feel like they might be able to gamify the system in some way?
It'd be great to hear from them. If you know anyone that has multiple dasher accounts, they'll be anonymous but, we like to, get extra sources on this kind of stuff, so do get in touch
Carl: Hi Carl here, just to interrupt the show briefly to remind you that if you have yet to get your copy of either of the Delivering the Digital Restaurant books, now is the time to get one. If you head to thedigital. restaurant, you're going to be able to get the best price available. You can also listen to both books with yours truly talking about them on Audible.
You can get a copy off Amazon if you'd prefer to order through them, but if you haven't got the books yet. Get them. They really are going to transform the way in which you look at the restaurant industry and the way in which technology is disrupting it.
Meredith: A company called fresho has raised a 17 million. Tell us about Fresho and what they're doing that's worth so much money.
Carl: I hadn't actually heard of them before. They're a Australian based company. They're in food order management. They've got a platform which allows restaurants to be able to order from various different suppliers and do it in a very automated fashion.
Now the company has raised up to about 50 million up to this point . As I say, they're based in Australia. They were founded about nine years or so ago, and it's all about automating the wholesale food supply chain. It's platform connects restaurants with suppliers and therefore simplifies the often complex and error prone process of food ordering.
And of course, the challenge of managing food orders, which is the pricing, the supply relationships. It's a significant one especially in the restaurant industry, and traditionally restaurant operators and wholesalers have relied on relatively manual systems, which of course are more prone to errors, inefficiencies, and certainly increased costs.
Fresho has built this platform to eliminate many of the challenges by automating a lot of the key processes. And that includes things like real time pricing and availability from suppliers. It reduces the need for the back and forth communication that often will exist. And as a result of removing the manual entry, it can minimize a lot of the errors as well.
As part of its growth strategy, Fresho serves a wide range of clients. They currently support 53, 000 venues in Australia, in the UK. They're growing their presence here in the
U S as well. They've got 1500 suppliers across these countries, which Tells me that they've probably still got some way to go because there's probably a lot more than that out there in terms of those servicing those venues and the other venues that they actually want to support.
But many of those restaurants are the small independents. You can understand why for those folks in particular, why this would be really attractive because a lot of the larger scale establishments probably already have systems like this in place. Comes back to this whole idea of SaaSifying the industry.
It's just another Part of it being satisfied.
Meredith: Their pricing model was really interesting because it's not a SaaS fee to the restaurant, it's actually a SaaS fee to the wholesaler and then free for the restaurant to use. It sounded like it was a volume based SaaS fee, it was not a straight up percentage.
I feel like a win for restaurants.
Carl: I think so. Look, ultimately you've got to help both sides of it. The restaurant clearly gets a lot of benefits, not only on just the price, but also on the efficiencies on their end. The supplier is going to be able to benefit also by being able to just remove a lot of those inefficiencies that ultimately end up costing them one way or another.
It's a really interesting way of automation and AI coming together to be able to help make better decisions. As I've been saying for a long time now this idea of how can you help the GM get out the office and spend time in front of the guests, in front of their team members and not do these types of activities, which back in my was often done late at night.
Last thing to do, which, of course, after a long day , you're more likely to make errors. You can understand why using a platform like this can address a lot of those types of challenges. It's great to see a technology company getting more investment. It doesn't happen that often these days. We don't see as many as we did a couple of years ago. So clearly the investors behind fresho are excited about where they're going to take this. And probably we're going to see more of them in the U S too.
Carl: Okay. Last up this week, equipment integrated into the restaurant's tech stack. Bringing back memories here, Meredith, of our time together at Kitchen United, when we started looking at ways to bring automation and equipment together with helping us run that operation. Does this link to that in any way?
Meredith: This is an article by Patrick Knapp, who's the VP of ops at Bobby's Burgers, that's Bobby Flay's burger concept. He goes through a variety of different technologies tech solutions that they are deploying at Bobby's burgers. But the most interesting one to me was when they said that they were going to integrate their POS with smart kitchen equipment. We have heard that certainly from more like robotic oriented concepts, but this is the first just straight up standard concept that said their kitchen features a "Garland clamshell grill, which will soon be fully integrated with the company's tech stack, including the toast POS system, Olo, and Thankx integrations." They're also able to monitor how often fryers are used and track oil efficiency. He doesn't go into a lot of detail to talk about what exactly the benefit of that is or how they're doing it, but I'm imagining what's possible.
If your clamshell grill knew what the inbound order volume was coming across all of your different channels and was then able to change settings or determine how many need to be cooked and whether or not there's a backup on that station and if it should be pushing orders back and saying no more right now. There's all kinds of possibilities and I think that's pretty exciting.
Carl: Yeah, that's that does sound pretty interesting. Again, it comes back to that point around data, doesn't it? I was talking to a restaurant only earlier today, who's telling me about how they're using their security camera footage now to help them with managing remotely GMs and the amount of time they're spending on the shop floor.
So That kind of data can then generate a report, which can then drive an insight to be able to help you be able to have a perspective on what your team are doing. If you can do that and extend that to what your equipment is doing as well, again, more data points, better decisions over time if you can compile the data.
But as much as you can collect the data, it's about whether you're going to use that data to ultimately make better decisions.
Meredith: Yeah, then how do you use it? And your point about the multi unit is so fascinating. I think there is a great deal of field infrastructure out there for all multi unit both retail and restaurant and hospitality.
And I think as we get to a place where maybe, The area coach doesn't have to touch the restaurant as often in person because they're able to do so much more remotely. Does that mean they could cover more restaurants at a time? Does that mean they could focus only in the areas that need help rather than reviewing everything?
Pretty exciting times.
Carl: Yeah, and again, it's not new news. This the whole piece around monitoring equipment, right? Don't forget that piece of it in the bit in the ability to be able to detect when a piece of equipment may go out of service in the next month. It's much better to know that in advance versus that time when it goes out of service.
So those types of capabilities, they've been around for a while, but that I think is another example of being able to have a fully connected Tech platform, which is not just your software. It's also the hardware in your kitchens, too So really interesting stuff. That is it for this week's digital restaurant next time we're back we're going to have a special guest on the show So special festive treat for you all.
So happy holidays to everyone that is listening we'll be back at the turn of the year with our predictions for 2025, but If you've got your view on what you think is going to be coming down the way of the digital restaurant landscape Bye In 2025, please let us know. We'll we'll take a look and see whether it makes the list, but until next time, happy holidays and we'll see you in 2025.
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