Member Reviews
I struggled with this book. It is written in quite an academic manner and is very US-centric. The topic is pertinent and important, but for a busy restaurant owner, the reading is very dense. It would be much improved with a lighter summary of particular point that could then be read in depth further. Not one for my book shelf I am sorry to say
Quite a well done writing. The author uses personal stories to demonstrate current culture and changes regarding digitalization and its effect on restaurants.
Well researched describing the evolution of the food industry over the last decades, describing how internet, ability to order food online and deliver, and the effect the pandemic has had.
Great read for restauranteurs, and for those interested in learning the second and third order effects digitization has.
As digital technologies change many industries, this book is a useful discussion with examples and strategies. Overall this book would benefit those in the industry, or researchers, writers and forecasters. Thank you to NetGalley for a copy of this book in exchange for an honest review.
The COVID-19 pandemic has upended many conventional notions which otherwise represented an ordinary way of life. Whether it be the concept of working from home or maintaining social distancing, there have been paradigm shifts in thought and deed both in the professional and personal domains. The restaurant business is no exception to the norm. Dining-in has almost faded away on account of a combination of necessity and apprehension. Delivery has become the clinching factor standing between the survival and collapse of many food service providers, especially the independents. The future trend when it comes to consumption food may well be a restaurant going to a consumer’s home rather than a consumer paying a visit to the restaurant of her choice. Unless and until restaurants innovate and adapt to the changing mores of time, their chances of sustenance are very slim. However just like every crisis throws d What own a marker for opportunity, the restaurant segment finds itself positioned on the cusp of a phenomenal innovation curve. In their fantastic book, “Delivering the Digital Restaurant”, Meredith Sandland and Carl Orsbourn take their readers on a roller coaster ride as they explain some of the ingenious ways in which some bold restaurants and restaurateurs have attempted to reinvent themselves, and have succeeded beyond their wildest imagination.
Long before the pandemic struck even, the eating habits of people had undergone a perceptible shift. As the authors illustrate, longer work commutes as well as the entry of women in the workforce resulted in Americans spending just sixty minutes each day (thirty seven minutes less than the Chinese and sixty seven minutes less than the French). When one adds the awareness quotient permeating the Millennials and Gen Z, the one uncompromising demand when it comes to food is adherence to quality, speed and variety. In other words as Sandland and Orsbourn elucidate using a very alluring but lengthy acronym, the need of the hour is the phenomenon called, “I Want What I Want When I Want It” (IWWIWWIWI). Books such as Eric Schlosser’s damning polemic against the fast food industry, “Fast Food Nation” and eye-opening documentaries such as Forks Over Knives, Super Size Me, Food Inc and Fat, Sick and Nearly Dead have influenced eating choices and preferences to degrees hitherto unimagined.
Restaurant brands such as True Foods Kitchen, Blaze Pizza and Oath Pizza have not just assimilated healthy customer preferences into their philosophy but have also literally “baked” them in, in their product portfolio. Pizzas are now “cocreated” whereby customers can create their own pizza moving away from run-of-the-mill ‘classics’. Blaze in fact went the whole distance in making their menu a veritably healthy experience by enlisting the universally acclaimed chef, Brad Kent, owner of Olio Restaurant and Pizzeria. The result – pizza crusts with no gluten and a potential foray into gluten free dough too.
One of the most influential changes that has had the effect of literally transforming the restaurant industry has been the phenomenon of delivery. Delivery Platforms such as Grubhub, DoorDash and UberEats are now ubiquitous in their reach and service. These Delivery Platforms have ensured digitalization of the restaurant in a humongous manner. For example the restaurant brand such as Chipotle expects digital sales in 2020 to net revenues worth $2.4 billion.
What is it that makes delivery platforms the harbingers of future tidings in the restaurant industry? Sandland and Orsbourn think that three facets in the form of access to technology, customer acquisition and Logistics acquisition make delivery an indispensable ally to good prospects. Digital Delivery companies like Uber and Grab (in South East Asia) have ushered in a degree of disruption in customer acquisition, that makes it comparable to fantasy. Benefitting from local network effects and economies of scale these companies have birthed a virtuous cycle that is most cost-efficient from a customer perspective. Hence an obvious shift to the ‘Delco’ (delivery carryout) model which was hitherto seen as the prerogative of only Pizzas and Chinese food. Innovations in the field of delivery, such as introduction of a Pizza tracker and an iPhone app amongst others ensured that a near bankrupt Dominos Pizza with $2 billion in debt, leap frogged over its rivals on all parameters to the extent that their share price which was languishing at $3 in 2009 touched nearly $400 in 2020
With a view to cutting fixed costs in the nature of rent and labour, restaurants are also exploring with great interest the concept of ‘ghost kitchens’. Popularly referred to as dark kitchens, ghost kitchens are commercial kitchens dovetailed to optimize food delivery. Each kitchen is located in areas boasting a high concentration of delivery demand. The kitchens per se do not have a storefront and the staff prepares dishes off of their menus that are only available for delivery. Classic examples of ghost kitchens include Kitchen United, All Day Kitchens, C3, Zuul, Colony, and Little Fatty.
However an important lacuna to be addressed by restaurants in using third party delivery platforms border on both customer satisfaction as well as exorbitant delivery charges. Not only does a restaurant fork up to 30% of their costs on delivery charges, but also are at risk of losing repeat customers due to differing and conflicting incentives. While a delivery platform seeks to maximise its delivery potential by hooking up with as many brands as possible, a restaurant’s intention is to wean away customers from competing brands. Hence a need to transition from third party digital platforms to first party or own technology tools/platforms. This is where companies like Brightloom and Thanx come into the picture. Using predictive customer Lifetime Value (“LTV”) models and predictive recommendation models, they make available mega data and intelligence to restaurants enabling them to measure incremental benefits. Even small independent companies can avail of this Software as a Service (“SaaS”) model to their advantage.
Restaurants are also going “virtual” in more ways than one. For example, Canter’s Deli operating since 1931 have an exclusive menu called Grilled Cheese Heavens, catering exclusively to the sandwich needs of its customers. However Grilled Cheese Heavens does not appear on any storefront, does not possess any website and vests solely in the kitchens of Canter’s Deli. A subtle variant of this owned virtual model is the licensed virtual model under which restaurateurs pay a fee to use a brand created by another company. Uber Eats for example carries brands such as Lucky Cat Vegan, Ha! Poke, and Hot Lips Fried Chicken only on their platform. Extending the licensed model is the franchise model. Under this variant, the franchisee pays the franchisor royalties for using the latter’s brand, supply chain and operating systems. The ultimate virtual restaurant model is of course going completely virtual! This amazing model involves churning out ‘concepts’ from a single, sprawling mega kitchen. Not convinced? Ask Salted, the virtual restaurant Group. Operating across Los Angeles, San Francisco, Chicago, Columbus, Houston, Austin, Atlanta, Philadelphia, and Tempe, Salted is a platform for scaling better-for-you restaurant brands, without the overhead of actual restaurants
The future of food is unlike anything seen or experienced before. And as Meredith Sandland, Technical Advisor to Butterfly with subject matter expertise in digital disruption and off-premise foodservice distribution, along with Carl Orsbourn, Consultant, Author, Business Executive at the Convergence of Dark Retail, Food, Cannabis Delivery Innovation, phenomenally illustrate, only the intrepid, intrigued and innovative will best the challenges that would be posed while the laggards fall by the wayside.
Delivering The Digital Restaurant: Your Roadmap to the Future of Food by Meredith Sandland & Carl Orsbourn will be published by Mascot Books, an imprint of Amplify Publishing and will be available from the 12th of October 2021.
Thank You Net Galley for the Advance Reviewer Copy!
<i>Delivering the Digital Restaurant</i> does an admirable job of getting across the necessity of delivery and other off-prem dining options for the future of dining. It's chock-full of interesting statistics, case studies, and new business models that kept me, as someone who doesn't know much about the area, engaged. I very much enjoyed learning about US consumer habits and trends, how cultural differences contribute to different off-prem eating habits in other countries (e.g. the dabbawala system in India), and about the various platform services that are emerging.
This book contains a lot of great information for restauranteurs looking to learn about different delivery models and platforms, or looking to improve on their current implementation. It covers everything from the importance of branding in packaging, to what's important in an online restaurant and menu listing, to the pros and cons of various types of platforms and what options there are for both small restaurants and large chains.
I would have liked to see a bit more substantive reasoning about the future: platforms have been taking losses with VC money buffers, but that can't be sustainable, right? How can restauranteurs trust these business models to be stable? One chapter mentions that only a few platforms are actually profitable and only in high-density areas around the world, so is a long-term delivery solution tenable in most of the US? It'd be great to have some numbers or studies about population density and feasibility of profitable delivery networks.
Similarly with ghost kitchens; there's mention that rent is heavily subsidized by VC funds and that things will change. If rents or fees go up to cover the deficit, will it still be cheaper than opening a new location? And in either case, if the fees for delivery end up on the consumer side, are there any studies that estimate how much of more they're willing to pay? The text assumes that people will be willing to pay for convenience, but how much before a significant amount of the consumer base loses interest?
But these are minor quibbles, and probably questions that would be very difficult to answer given the current state of the world and given how new these developments are. Overall, I learned a lot reading this book, and it was a fascinating peek into the industry.
This book is ideal for restaurant owners, so in the interest of full disclosure, I am not one. The topic, though, is of great interest to me as a former newspaper business writer/editor, restaurant reviewer and blogger and, maybe more importantly, half of a couple who visited a restaurant at least four times a week throughout most of our empty nest years.
It wasn't always that way. When I was a teenager, the only dining out I did happened when a friend had a sleepover (back in the '50s, we called them slumber parties) and we all ate what our host's mom cooked. Contrast that to today, when there's a Starbucks on every corner - unless, of course, a Dunkin' Donuts got there first. Want Chinese? Check. Ribs? Check. How about pasta, burgers or chicken wings? Check, check and check. We can eat inside, pick it up at a drive-thru window or have it delivered. Throughout it all, though, restaurant margins have remained razor thin. And then came the unthinkable: Total shutdown for nearly a year in our state and others, thanks to a killer virus that as I write this still threatens lives around the world and prompts us to avoid going inside anything.
Moving forward, what can, should or will happen to the industry remains unclear, but one thing is certain: It ain't gonna return to the good old days. So it is that I wanted to find out what experts have to say. And what they say in this book should be a wake-up call for restaurants that aren't willing to shift gears. A digital divide is already here, and it's growing fast; those who don't get on board most likely will fall between the cracks never to be seen again. Quality food and customer relationships are here to stay, but from now on customers will expect both to happen through digital channels.
Among the eye-opening statistics is this: At the start of 2020, there were 600,000+ restaurants in this country; in the short space of six months, that number was down by 100,000 - and the industry as a whole lost a quarter of a billion dollars during the year. Besides the pandemic (and at least partly because of), what happened? "We are going from an era in which people go to food to an era in which food goes to people," the authors explain in this book. Blame it also on a drop in nuclear family eating - heck, it's hard to even find a nuclear family these days. And no whether you're in a family or not, few among us have much discretionary time - at least none that we want to spend cooking. Couple that with pandemic restrictions and it's no wonder that 70% of restaurant business today happens at the drive-thru window. As the economy zooms in on the IWWIWWIWI concept - "I want What I Want When I Want It" - the authors emphasize that delivery will be the driving factor for success (inside dining, in fact, may well drop to as low as 25% of a restaurant's total business). But, they add, the bulk of success won't come primarily by way of delivery services like DoorDash and GrubHub - which charge restaurants a substantial percentage of each order and slice already thin profit margins to the bone. And that brings us to (ahem!) Delivering the Digital Restaurant.
This is only the tip of the iceberg; the book is filled with timely, well-researched facts and figures as well as examples of how restaurants can make technology work for them, from concepts like "ghost restaurants" to shared restaurants to no restaurant at all. It also speaks to the need to tempt customers with individualized food choices, loyalty programs and enticingly branded, environment-friendly packaging. And it looks at what evolving technology could mean for the future - some of which is already being tested - such as drones that drop appropriate temperature foods on your doorstep, picnic table or, (gasp!) your dining room table. All this will be made possible, the authors say, by digital platforms that eliminate the guesswork and hone the processes down to an error-free fare-thee-well.
My take[out] on this book which, notably, was delivered to me digitally right to my e-reader, is this: For current and wannabe restaurant owners who want their establishments to be around for the next few decades, it's a must-read. For those like me, it's a deliciously enlightening and easy-to-understand look into the here-and-now and tomorrows of the industry. Many thanks to the publisher, via NetGalley, for allowing me to read and review it.
The convergence of computer technology with drastically changing consumption behavior has huge implications for the food industry. Consumers have gotten nutrition from either grocery stores or food service establishments forever since the rise of business. Amazon started to put this on its head when we stopped going to stores and having the goods come to our places of residence.
Most recently, accelerated by the covid Pandemic, the same thing occurred within the food service industry. Instead of going to grocery stores and restaurants, we can now have the restaurant bring the food to us. In a world where we need nutrition to fuel our lifestyles, this is not only a matter of convenience, it is a matter of freeing up more time to do things we like to do without much interruption.
All this has massive consequences to restaurants and food service organizations. Meredith Sandland and Carl Orsbourn do an excellent job looking at these from all angles, show avenues for restaurant owners to address the challenges that lie ahead and fantasize at times about what the future may behold for all of us.
A must=read for the food industry professional.