The Next Foodservice Frontier

Whether it’s for Delivery, Take-out or Dining-in, produce at foodservice will play a new role.

Originally printed in the July 2021 issue of Produce Business.

There’s nothing more disappointing than being duped by your delivery meal — when the crispy, crunchy, temptingly plated chicken Caesar salad pictured on a restaurant’s online ordering site or brand name mobile food delivery app arrives at your doorstep looking tousled and literally tossed with unappetizing bits of wilted lettuce and croutons clinging to the chicken and take-out container alike.

One thought might be to eliminate to-go dishes that have highly perishable ingredients such as fresh fruits and vegetables. However, more than two-thirds (68%) of adults surveyed said they are more likely to purchase restaurant take-outs now than pre-pandemic, according to the State of the Restaurant Industry 2021, by the Arlington, VA-headquartered National Restaurant Association.

Removing fresh produce from these menus would be a huge, missed opportunity for producers, operators and customers alike. Instead, it’s all about getting creative when it comes to putting produce on the take-out plate.

DINE-IN & TAKE-OUT TRENDS

Restaurant operators are looking at customers’ preferences for dining-in versus take-out and what it means for their operation moving forward as foodservice outlets open to inside table service, states allow greater occupancy, and more people are vaccinated.

Over one-third (39%) of those surveyed about their top food-related activities post-pandemic said they wanted to go out to restaurants more often, according to a June-published COVID-19 survey published by the International Food Information Council (IFIC), in Washington, DC.

That said, take-out and delivery are still going to be essential for many operators’ survival, both in the short and long term, according to Mike Kostyo, senior managing editor and trendologist for Chicago, IL-based market research firm, Datassential.

“In the short term, a quarter of U.S. consumers say they are still avoiding eating out as of late June, while 40% say they are still very concerned about COVID,” says Kostyo. “That’s a large percentage of the population that will still be completely, or at least somewhat reliant, on delivery service for the time being.”

In the long term, Kostyo notes that delivery offerings were already increasing before the pandemic, so he believes the past year only sped up the trend.

“U.S. consumers across demographics became a lot more familiar with using delivery technologies, while operators invested in delivery infrastructure and equipment,” he explains. “Many consumers found that they love getting food delivered, allowing them to hang out and watch Netflix with their favorite meal, while operators enjoy the additional revenue.”

Gene Harris, senior purchasing manager and travel administrator for the Denny’s Corporation, a 1,600-plus franchised full-service restaurant chain headquartered in Spartanburg, SC, with locations in the U.S. and a dozen countries worldwide, agrees.

“Our off-premises sales were experiencing growth pre-pandemic, essentially doubling over three years. However, guest desires for the convenience offered by off-premises solutions accelerated significantly during the pandemic, with traditional pickup, curbside and delivery experiencing exponential growth.”

While some of these eating occasions will undoubtedly shift back to on-premises as dining rooms reopen, Harris says Denny’s is “confident the future of off-premises will outpace pre-pandemic levels.”

WHAT DINERS WANT

It’s important to know what the pandemic and post-pandemic diners want to eat to successfully plan how to keep or put more fresh produce on the take-out plate.

“Our guests are coming back to us and requesting their usual and favorite menu items, with ‘indulgence’ as the name of the game,” says Robert Okura, vice president of culinary development and corporate executive chef for The Cheesecake Factory Inc., a Calabasas Hills, CA-headquartered company that owns and operates 300 restaurants in the U.S. and Canada, with an additional 28 established restaurants licensed internationally.

But he adds that the need for healthier choices “set some deep roots within the general dining public long before COVID. So, our future R&D focus will definitely include dishes that bring the best of both worlds together for some ‘healthy-indulgent’ new menu options.”

Upgrading comfort food to include more produce and the explosion of plant-based eating are two future trends evident in Markon’s recent quarterly trends report.

“Lobster Mac & Cheese was popular before the pandemic, but continued to sell well along with other iterations of this American classic,” says Deena Ensworth, culinary innovations director for the Markon Cooperative Inc., in Salinas, CA. “Try adding roasted Brussels sprouts, crispy pancetta, tender short rib meat, roasted mushrooms, or fried chicken.”

She also recommends operators give pizzas and flatbreads “a summer makeover by topping with charred zucchini, heirloom tomatoes, grilled melon and ham, house-made pesto, or balsamic-glazed figs.”

On the plant-based side, tacos remain a hot menu item. Ensworth suggests plant-based versions of tacos with charred cauliflower as the main attraction, topped with guacamole, pickled watermelon radishes, shredded green cabbage and charred green onions.

CHALLENGES AND OPPORTUNITIES

Food and labor costs, assuring meals travel well, and getting creative with delivery options are three key challenges matched equally with many opportunities.

1. Manage Food And Labor Costs

Inflation is causing food prices to soar. The Consumer Price Index for all food increased 2.2% in May 2021, versus a year prior, according to Food Price Index Summary Findings released for June by the USDA’s Economic Research Service. Correspondingly, the food-away-from-home CPI was 4.0% higher than in May 2020, while food-at-home CPI was only 0.7% higher than the year prior.

“When foodservice operators look at healthier options, they look at putting more fresh produce on the plate. Fresh produce offers an increased value perception and a lower plate cost compared to proteins. How many other ingredients can accomplish both?” says Bob Bossong, senior director of produce and fluid dairy for UniPro Foodservice Inc., in Atlanta, GA.

Many foodservice operators are moving away from the ‘smiley face’ place composed of 9 ounces of protein, 4 ounces of starch and 3 ounces of vegetable, according to Brad Nelson, vice president of culinary for the Global US and Canada, Food + Beverage, for Marriott International Inc., the Bethesda, MD-headquartered hotel company that operates 30 brands in over 100 countries.

“Produce is featured more prominently, including as the star of the plate. Plus, we’re seeing much more variety. No longer is there just iceberg, romaine, 5×6 slicing tomatoes, onions and potatoes. Stir-fries, rice bowls and wilted salads are some examples, and these travel well in take-out and delivery.”

Downsizing menus to focus on the most popular selections can help control food costs. So can cross-utilization, or the use of one ingredient in several applications. This is especially true for perishable items such as produce.

A good example is how the Irvine, CA-based California Avocado Commission offered tips for off-premises preparation techniques at the start of the pandemic. Operators could use these tips to execute recipes with fresh avocados — in salads, sandwiches and toppings — including adjusting the “build” so that avocados are protected from exposure to oxygen and taking advantage of coatings, such as seeds and panko. The commission also recommended including whole avocados or avocado halves for consumers to cut fresh at home and add to the dish.

Similarly, the Winter Springs, FL-based National Watermelon Promotion Board supports foodservice operators across all segments with on- and off-site menu ideation that features watermelon cross-utilized in several dishes and dayparts. For example, a watermelon chia parfait for breakfast, watermelon poke bowl for lunch, and watermelon pulled lamb sliders for dinner.

Labor availability and its cost is currently a challenge, especially in foodservice.

“Anything that reduces the need for labor is of interest to the industry right now,” says Amy Myrdal Miller, founder and president of Farmer’s Daughter Consulting Inc., in Carmichael, CA. “Restaurants want to attract and keep diners coming back, so quality is an important attribute. The question is, ‘What can a produce company offer that reduces labor while providing great quality at a fair price?’ That’s the winning proposition.”

Fresh-cut produce can be a boon, says Marriott’s Nelson. “We call it speed scratch and we’ve used vegetables like this — peeled and diced onions and carrots, for example — for 30 years now. It won’t work for every culinary concept or every fruit and vegetable, but in many situations, it effectively assists with both labor and food waste concerns.”

Indeed, Markon’s Ensworth says she’s seeing an increase in the company’s pre-cut fruit and vegetable product line, Ready-Set-Serve. The product is 100% plate-ready out of the bag. It ticks key boxes like back-of-the-house prep, dependable yields, reliable cost per serving, and a high level of food safety.

Similarly, US Foods introduced two fresh-­cut products this summer under its Cross Valley Farms label: Pre-washed and chopped cilantro in 8-ounce packs and apple pineapple Pico De Gallo sold in 5-pound packs.

Many operators are resisting the urge to switch to value-added produce such as frozen or canned, says Maeve Webster, president of Menu Matters, in Arlington, VT, “but if the pressures of food and labor costs continue, there is likely going to have to be a compromise. It’s unlikely to be operation-wide, but rather on an item-by-item or produce-by-produce basis.”

2. Dine-In Quality Delivered

There is a big difference in menu planning when a dish is served 10 feet from the kitchen versus 20 miles away by car, says Marriott’s Nelson. “The worst is to expect a great meal, open the container and find it didn’t travel well.”

Nearly all (91%) of consumers say it’s important that off-premises food has the same quality they would get in a restaurant, according to the December 2020-released Food @ Home Keynote Report, by Datassential.

“The No. 1 reason that operators tell us they offer a different menu for delivery compared to dine-in is that some items just don’t travel well. Operators should do an item-by-item analysis of their menu to determine what does and doesn’t hold up for delivery. If a produce item is wilting or getting soggy, look for ways to mitigate those issues by swapping in other options or packaging them differently,” says Datassential’s Kostyo.

Cooked vegetables can lose their desired serving temperature with to-go food, but the damage to flavor and texture isn’t nearly as severe as it is with salads.

“We try to serve our salads ice cold in our restaurants simply because they taste better that way,” says the Cheesecake Factory’s Okura. “That’s the biggest quality challenge we have with take-out salads for pick-up or delivery. Because we serve the dressing on the side with salads to go, all the ingredients hold up relatively well. It’s just that ideal temperature of being well-chilled that’s lost.”

Denny’s has used unique take-out packaging that is recyclable and microwave safe for quite some time to help protect food along delivery routes, says Sharon Lykins, senior director of product development.

The packaging containers are deep enough to handle all entrees, and the top plate is equipped with a vented lid to keep items such as pancakes and French toast from becoming soggy, explains Lykins. There’s a section beneath the top plate for side items such as fruits, vegetables or other items that need to retain moisture.

“It has worked to successfully put more produce on the plate in take-out and delivery service,” she adds.
How food is packed is just as important as the packaging.

“Presentation is everything, because when we added pictures of our dishes to our online ordering site, sales went up significantly,” says Aaron Fish, chef de cuisine for the Eat Good Group, a collection of 10 restaurants each with its own culinary concept, plus a bakery and catering operation, based in Liberty Lake, WA.

“For example, when we plate tabouleh to go, we’ll put the grain part on the bottom and veggies like tomatoes on the top carved into roses. For a Cobb salad, we plate the ingredients in neat rows in a relatively flat, 2-inch-high, rectangular biodegradable box that protects the salad from getting tossed around, with dressing on the side.”

3. To-Go Re-Imagined

Take-out, curbside pick-up and home delivery are all options diners have used to enjoy restaurant food.

Many restaurants have taken advantage of programs like GrubHub, Uber Eats, and other food delivery services to keep some momentum. “The challenge with these services is that nearly all profits are lost (typically 35% of the check goes to the delivery service). The restaurant simply covers costs for staff and food, at best,” says Farmer’s Daughter’s Myrdal Miller. “Many restaurants that signed on for these programs early in the pandemic are no longer participating due to the low to no profit margins.”

Curb-side delivery has picked up in some markets, according to Kim Adams, chef for Coosemans-Denver Inc., in Denver, CO. “This lets diners support their local restaurant community by eliminating the need for a delivery service and fee.”

Innovative chefs have seen the trends in take-out as an opportunity to redefine, retool and reset their businesses to present new versions of an elevated meal experience, says Markon’s Ensworth. “For example, 10 of Los Angeles’ top restaurants curated a 10-course drive-through meal. Resy and American Express organized a safe way to offer trays of food featuring celebrity chefs like Nancy Silverton, David Chang, Curtis Stone, and Mei Lin — serving 1,200 guests over two nights.”

In the end, Menu Matter’s Webster says she believes one of the enduring trends beyond the pandemic is a broader scope of off-premises possibilities.

“While many fine dining operations are likely to abandon off-premises because that wasn’t, and isn’t supposed to be, part of their value proposition. Others, however, will keep it, and that availability of finer food for off-premises is likely to impact consumer expectations of off-premises long-term,” Webster says.

“There’s no reason why fresh produce can’t be incorporated into a wide range of off-premises offerings if it’s handled not only in-house but en route to create more significant traffic and revenue for the operator and ensure the quality of the produce doesn’t disappoint when it arrives at a patron’s location.

“Consumers will not accept less as we move into 2022.”

Ghost Kitchens Can Boo-st Avenues For Fresh Produce Foodservice Sales

Ghost kitchens and virtual brands were a trend in the foodservice industry even before the pandemic. Ghost kitchens are FDA-licensed kitchens that offer only delivery, take-out or to-go service with no dine-in facilities. Virtual brands are those that exist in the digital world as delivery only, with no physical restaurant or even pick-up spot. Examples of virtual brands are MrBeast Burger, Tyga Bites (chicken nuggets), and Chef Bill Kim’s Pizza & Parm Shop, ranked as the top three of America’s 57 Most Exciting Virtual Brands, according to a May 2021-published article in QSR magazine.

“The COVID-19 pandemic served as a catalyst to increase the number of ghost kitchens in the U.S.,” says John Madigan, senior analyst for New York, NY-based IBISWorld Inc., which published its Ghost Kitchens Industry in the US – Market Research Report in January 2021.

Ghost kitchens and virtual brands let operators test new brand extensions and menu items, pivot quickly, cross-utilize ingredients, enter new markets, and make use of existing kitchen space, according to Mike Kostyo, senior managing editor for Chicago, IL-based market research firm, Datassential.

“Awareness is increasing quickly, from 35% of consumers who said they were aware of virtual brands last October to 50% of consumers saying the same thing in March of this year. Younger consumers are far more likely to be aware of and have ordered from a virtual brand, with 52% of millennials saying they have knowingly ordered from a virtual brand.”

Fast casual and casual dining for delivery comprises the lion’s share of sector’s revenue, according to IBISWorld’s Madigan.

Denny’s has launched two virtual restaurants, The Burger Den and The Meltdown, since the start of 2021. These virtual brands operate exclusively on third-party delivery marketplaces.

“We’re excited about these opportunities because they bring in new guests, drive incremental sales for Denny’s operators, and leverage a number of our strengths as a 24-hour diner with a varied menu,” says Gene Harris, senior purchasing manager and travel administrator for the Spartanburg, SC-headquartered chain, which has 1,600-plus franchised restaurants in the U.S. and a dozen countries worldwide.

US Foods was among the first foodservice distributors to offer a formal Ghost Kitchen program to provide restaurant owners a soup-to-nuts set of tools necessary to set up their own such operation. These resources included proprietary technology to help identify menu opportunities and a detailed playbook to guide decision-making and branding. In addition, the company provided free one-on-one support from company specialists.

“One of the key aspects of optimizing a ghost kitchen inside an existing and functioning brick-and-mortar restaurant is product optimization,” says Jim Osborne, senior vice president, customer strategy and innovation for the Rosemont, IL-based company. “In other words, looking at what products you are buying for your existing operation and finding ways to leverage those same products for the new ghost kitchen operation.

“So, if you are a sandwich shop and you already buy a variety of produce for your sandwiches, such as fresh lettuce, tomatoes, onions, and peppers for instance, that could potentially translate well for a ghost kitchen concept that focuses on salads.”

Ghost kitchens and virtual brands also allow operators to capitalize on trends quickly, says Datassential’s Kostyo. “If a dish starts trending, they can create a virtual brand that specializes in that dish virtually overnight. That’s why it will be so important to stay on top of the trends if you want to target this space.”

Overall, one of the largest challenges for fresh produce in this arena seems to be market access, according to IBISWorld’s Madigan. While fresh fruit and vegetables are available year-round and in a wide variety, ghost kitchens located farther away from agricultural production centers may have higher operating costs to secure that produce.

“Fruit and vegetable farmers can provide ghost kitchens with access to locally available, organic produce, not only capitalizing on farm-to-table and local eating trends, but also that of organic and sustainable eating. Perhaps most importantly, organic products sell at a premium, garnering ghost kitchens with more revenue per sale,” says Madigan.

Looking ahead, he adds, it is likely that ghost kitchens may service a larger portion of total takeout delivery demand since these kitchens have lower costs of operation since they do not have a storefront. Furthermore, these services may be combined with robotic delivery systems to further reduce costs.