The Rush by Toast - October 4

By: Isabelle Hahn and Chelsea Verstegen

6 Minute Read

Oct 04, 2019

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Welcome to the tenth edition of The Rush, where we cover notable happenings in the industry. This week's coverage includes a deep dive into how tech and ghost kitchens interact and how restaurants are using food waste to their advantage.

⏳ Here's what you need to know about this week's restaurant trends in 10 seconds or less:

  • Most major technological advancements in the restaurant industry are primarily aimed at big restaurants and franchises.
  • Repurposing unwanted food and combatting food waste makes the environment — and your wallet — happy.

⏰ If you have more time:

The Intersection of Big Tech and Restaurants

  • Growth in restaurant tech increasingly focuses on optimization and customer satisfaction.

  • Delivery is expected to grow into a $220 billion industry by 2020, compared to $30 billion in 2017, according to Morgan Stanley.

Technology will continue to be a hot topic in the restaurant industry. In this series, we often cover how larger national and international restaurant chains are embracing online ordering and guest technology to improve relationships with their customers. 

But do technological updates help small restaurants in the same way? Use of technology isn't evolving very quickly in the average kitchen, and any massive technological updates have largely remained exclusive to franchises with millions of dollars to spend testing new systems. 

In a recent Wired piece, Joe Ray commented on the fact that “smart kitchens” have failed the home cook. Perhaps the act of cooking itself isn’t right for tech disruption, Ray wrote. Even restaurant chefs are wary to switch from classic pots and pans to smart ones. 

Joe Ray wrote, “After centuries of slow and steady progress in the kitchen, the recent push to create connected devices has largely been a turn for the worse.”

So if cooking as a skill and art remains unbothered by BlueTooth and app-driven advances, what does this mean for ghost kitchens? As delivery tech continues to grow, how will increased speed and efficiency translate into the kitchen? 

First, we can look at the side-by-side growth of ghost kitchens and delivery. A ghost kitchen is a concept that exists with no brick-and-mortar and leverages small or shared kitchen spaces for delivery and carry-out-only business. Delivery is expected to grow into a $220 billion industry by 2020, compared to $30 billion in 2017, according to Morgan Stanley. Ghost kitchens also eliminate the issue of rising rent prices and staffing overhead. 

While the growing trend of ghost kitchens is shaking up the restaurant industry, all ghost kitchens have one key thing in common: They're traditionally owned and operated by larger companies and franchises and center around fast-food-type concepts — meaning smaller, more developed menus that can be executed in a short amount of time. 

Ghost kitchens are a product of the modern age. The concept takes advantage of consumers' affinity for delivery and convenience and melds it with larger updates in technology such as AI-based menus and customizable loyalty programs.

But it’s hard to imagine the appeal of turning your local family-owned Italian restaurant into a ghost kitchen. Perhaps making way for more efficient delivery means a more segmented industry. 

The booming trend of ghost kitchens doesn't signal the end of small, family-owned restaurants — they've always been a cornerstone of American small business and aren’t going away. Where small businesses can take advantage of advancements in kitchen technology are through use of modern POS systems and kitchen display systems, allowing them to maximize efficiency.

Scrapping the Scraps Saves You Cash

  • Roughly one-third of the world's food produced each year ends up wasted.
  • Restaurants and companies are working to change this, and their efforts are literally paying off.

You’ve heard of scratch kitchens; now there are scrap kitchens. A band of startup companies and big retailers are using rejected food — like disfigured fruits and vegetables or leftover wheat from beer production — to create one-of-a-kind products. Nationally, 70 organizations are selling food from what would have been waste according to ReFED, a nonprofit committed to reducing U.S. food waste using data to provide solutions. 

The reasons for global food waste occurrence vary. Developing countries don’t always have proper means to store or sell products, but the U.S. has a different issue: visual appearance, like fruits and vegetables that may not look "normal."

In the U.S. alone, the USDA estimates that 30-40 percent of food supply and produce is wasted, and according to the ReFED Restaurant Food Waste Action Guide, 11.4 million tons of food waste are accumulated from restaurants alone — that equates to more than $25 billion wasted. At the same time, 12.5% of the population doesn’t know where their next meal will come from. 

The aversion to “ugly” foods that plagues many Americans is being addressed in some very creative ways. Companies like Imperfect Foods and Misfits Market are selling subscription boxes of produce at discounted rates, simply due to the produce's flawed appearance. Jordan Fiueiredo, a solid waste specialist at Castro Valley Sanitary District, uses his social media platform to post pictures of “ugly” produce with funny captions aimed at drawing attention to food waste. 

The Coffee Cherry Company upcycles the byproduct of coffee beans to use in their other menu items. Real Good Stuff Co., a Chicago-based cold-pressed juice company, turns extra juice pulp into popsicles and dog treats. White Moustache, a Brooklyn-based yogurt company sells whey, a byproduct of yogurt, as a “probiotic tonic." Other chefs use misshapen fruits and vegetables to make juices, alcoholic drinks, chips, and even in full meals.

There’s a definite opportunity to take advantage of in this repurposing strategy. ReFED produced the following restaurant benefit-to-cost ratio of food waste reduction efforts in restaurants: For every dollar invested in food waste reduction, restaurants can obtain approximately $8 of cost savings. A study by Unilever said that 72% of U.S. diners care about how restaurants handle food waste, and 47% would be willing to spend more at a restaurant that has an active food recovery program.

So whether you’re reducing your food waste through meticulous tracking and reflective purchasing, donating unused or unsold food to feed the hungry, or utilizing unattractive food in your dishes, your contribution to food waste reduction is both environmentally- and wallet-approved. Check out this handy infographic for more ways you can combat food waste in your restaurant.

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