Restaurant Owners: 5 Things to Know for Success in 2017

For fast-casual restaurants, the future is cloudy. Brighten your outlook by preparing for what’s ahead.
Modern ethnic cuisines, such as vegetable-based noodle bowls, are predicted to be one of the biggest food trends of 2017. (Photo: Medtech THAI STUDIO LAB 249/Shutterstock)
Modern ethnic cuisines, such as vegetable-based noodle bowls, are predicted to be one of the biggest food trends of 2017. (Photo: Medtech THAI STUDIO LAB 249/Shutterstock)

What will 2017 serve up for restaurant owners? And how can you prepare now to boost your chances of success? Here’s what restaurant owners need to know going into the new year.

Spending is unpredictable

The forecast for the industry as a whole is cloudy, according to a trends report from Andrew Freeman & Co., a consulting company that has been predicting restaurant trends for 11 years.

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“Small businesses and restaurants should look at what their business is really about and what they do well, and hone in on that.” -Kyle Osher (Photo: Kyle Osher)

Among the difficulties the industry is facing, according to Kyle Osher, account manager for concept strategies at the company, is uncertainty about the economy and spending post-election. In August, during the runup to the election, the National Restaurant Foundation found that 31 percent of consumers were less confident about their spending. Yet this year, people have spent more on dining out than groceries.

“We don’t see people’s confidence going up anytime soon with the election and economy,” said Katie Haggart, a marketing and concept strategy consultant at Andrew Freeman.

“But people are eating out and want to eat out more.”

Fast casual is down

In the last five to seven years, Osher said, the fast casual sector has seen incredible growth and investment. But it’s possible it’s hit its peak. Osher said his team is seeing a compression of this part of the industry, with many such restaurants starting to close.

“You’re seeing this natural selection process happening because of a surplus of fast casual restaurants,” he said. “It’s forcing businesses in that segment to really up the bar.”

As owners scramble to compete, Osher predicts an increase in cafeteria-style fast casual restaurants like Lemonade in California, where customers mix-and-match their plates and buy whatever they want, versus following a formula (i.e. pick your grain + protein + two sides).

Vegetables rule, and modern exotic is in

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“You’ll see more restaurants devoted to vegetarian cuisine and more animal alternatives like dairy-free cheese and veggie burgers on menus, vegetables won’t be overlooked anymore. They’ll be at the center of the plate.” -Katie Haggart (Photo: Katie Haggart)

Perhaps the biggest food trend on Andrew Freeman’s radar for 2017 is the rise of vegetables and vegetarian/vegan options.

“You’ll see more restaurants devoted to vegetarian cuisine and more animal alternatives like dairy-free cheese and veggie burgers on menus,” Haggart said. “Vegetables won’t be overlooked anymore. They’ll be at the center of the plate.”

Haggart said her company is forecasting that fermented foods will be very popular. Think housemade kimchi and other vegetables, vinegars, soy sauce and miso.

Another big food trend we’ll see in 2017 is “modern” ethnic cuisines. Everything from Indian food to Middle Eastern is getting fused with other cuisines and remixed in fresh, artful ways. Many of these dishes will be vegetable-forward.

“People are expanding their palates,” Osher said.

Labor costs are going up

Recruiting and retaining labor will be one of the biggest difficulties of 2017. This will be true especially on the coasts, where the cost of living is high. The middle of the country, on the other hand, is seeing a boost, as chefs open restaurants there for the lower labor costs and risk.

To attract employees and keep existing ones happy, Osher said Andrew Freeman has seen more restaurants offering benefits packages. But restaurants in certain states and cities are also trying to figure out how to accommodate higher minimum wage laws (Arizona, Colorado, Maine and Washington will increase their minimum wages to $12 an hour), and all will have to adapt to the new federal overtime law when (and if) it takes effect.

With all this uncertainty about labor costs, 2017 is a great year to get your books in order, save money for the future — and find new sources of revenue.

According to Haggart and Osher, delivery and to-go menus are growing. Restaurants are also finding creative ways to use their space to make money during slow periods. For example, some are using apps to rent tables for co-working. Others are adding to-go windows for customers to pick up food during lunch. Still more are turning to catering or brand extensions, selling food products and gifts for customers to buy and take home.

Branding is still key

Branding will be more important than ever in 2017.

“Small businesses and restaurants should look at what their business is really about and what they do well, and hone in on that,” Osher said. “Make all future business decisions with your messaging and brand in mind.”

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