LA QUINTA, CA. – Restaurant and foodservice sales have rebounded significantly since the coronavirus (COVID-19) pandemic hit two years ago, fueled by strong consumer discretionary income, but the industry is now facing headwinds significant opposites that could derail the nascent recovery.
Specifically, the “big three” forces – labor shortages, supply chain challenges and soaring food prices – pose major hurdles going forward as the industry struggles to sustain growth. , and restaurant owners are looking to their bakery suppliers to help them meet these challenges, noted David Henkes, Senior Director and Head of Strategic Partnerships for Technomic at the American Bakers Association’s recent annual convention in La Quinta, Calif.
“Revenue looks really good for many restaurants, but margins and cost pressures are more acute,” he said.
Mr. Henkes set the stage for a wide-ranging panel discussion on the evolving role of the baking industry in serving the restaurant channel by outlining the state of the restaurant industry.
Overall, shipments of baked goods to foodservice operators fell about 20% to $12.0 billion in 2020 from $14.9 billion in 2018, due to the response to the pandemic. While the restaurant industry has yet to fully recover, Technomic predicts that bakery shipments to the restaurant channel will reach $16.1 billion in 2023.
He warned that the rebound had its ups and downs. Tech data indicates overall restaurant sales have slowed since peaking last summer, pointing to the fragility of the restaurant industry, which has seen sales further buoyed by the continued popularity of off-site traffic via dishes take-out, drive-thru and delivery only on-site dining.
Additionally, consumer perception of baked goods has also been impacted by the pre-pandemic period. A recent Technomic survey showed an 11 point drop in the percentage of consumers who say baked goods are somewhat or very important when deciding whether to eat at a restaurant or food service establishment.
Mr Henkes suggested the decline poses a creative challenge for the baking industry.
“How can we reinstate baked goods across the slices of the day as a critical part of that foodservice purchase for many consumers?” He asked. “In many ways, it’s an opportunity to be understood to rediscover and recreate some of that excitement.”
To rekindle the passion for baked goods, Robin Hernaez, division manager, Compass Eurest B&I, San Diego, said he relies on experiential and more memorable products in small portions that offer more variety than the slice of cake. traditional food that can feed a family of four. .
Bakeries, he added, can support foodservice establishments at an operational level by providing baked goods that can be integrated into multiple menu items. In addition to making meal preparation easier for operators, such versatility reduces the number of storage units (SKUs) restaurants need, helping to solve foodservice distribution and supply chain challenges. .
Joe Turano, president of Turano Baking Co., pointed out that the Berwyn, Illinois-based company has reduced its SKUs by 5-10% over the past two years while focusing on product production capacity. bakery staples.
Today, he said, the focus is also on developing high-quality bakery products that are both healthy and indulgent, and that provide a point of differentiation for restaurant customers.
“We probably need to be a lot more aware of unique baked goods offerings that maybe weren’t so prevalent in the United States before – maybe items that come from Europe or are popular in Europe and don’t ‘have yet to cross the ocean from the United States in any major way,’ Mr. Turano observed. United, both on menus and in retail.”
Susan Sarich, founder and general manager of SusieCakes, Los Angeles, recommended prioritizing quality over quantity.
“Like many things in life, bread baskets have gotten super complicated,” she said. “Nobody needs cornbread and a croissant and a parmesan crisp. It’s too much. My personal philosophy is to do less, but do it in high quality.
The same goes, she added, for desserts.
“You go to a restaurant and there are 85 desserts,” Ms Sarich observed. “You don’t know what to order. If you go to a restaurant and there’s only one dessert, you’re like, “I have to buy this shortcake. That’s the only thing they offer. It must be the signature item for them. Less is more and better.
With offsite food, online ordering and limited-service restaurants fueling foodservice sales, Hernaez urged bakers to offer products that hold up better during delivery. As an example, he noted that a burger that may be delicious in a restaurant is often not so good when consumers eat it at home.
“It was a decent product, but the bun wasn’t good when it got to the consumer,” he explained. “Now I’m looking for a bun that holds up well during transport.”
Over the past two years, Turano said, the bakery has adapted ready-to-serve and pre-baked breads and rolls that require less preparation in kitchens to cope with labor shortages. As an indicator of the restaurant industry’s recovery, he added, Turano Baking has accelerated new product development to levels seen before the pandemic.
“Our company would typically produce around 250 new products a year,” he said. “That was our goal for this year. We were a very aggressive foodservice developer of new items, and now we’re back on track with new items.
Turano noted that the bakery industry has turned to frozen foods due to labor, shipping and supply chain issues.
“The movement towards national freezing is real,” he said. “We have more and more customers and distributors adopting this model over time, and that will continue.”
Panelists agreed that supply chain disruptions have had a huge impact on the restaurant industry, with operators being forced to remove items from menus because they cannot obtain ingredients.
However, Turano said consistent service will be key to surviving in such a challenging supply chain environment.
“Reliable vendors will be the winners,” he said.