In the food industry, everything is connected. For example, restaurants can get their food from a farmer or a manufacturer while a supermarket can get their products from the same farmer or same manufacturer. It’s an endless, beneficial cycle.
Abasto sat down with Sharokina Shams, Vice President of Public Affairs for the California Restaurant Association, during the Western Foodservice & Hospitality Expo held at the end of August, to talk about restaurants’ role in the food industry and how the world’s changing trends affect that.
Abasto: Where do restaurants get their products from? Distribution companies, suppliers, farmers, etc.?
Shams: “Restaurants get their products from all those places that you mentioned. There are really well-known distributors and manufacturers in California that I think always comes to mind for people. One that we have a great relationship with at the California Restaurant Association is Sysco. Who doesn’t know the name Sysco?
The truth is that there are many, many sources and one thing I’m sure you noticed that has become more popular on restaurants and restaurant menu’s is the promotion of fresh produce, often even organic ingredients. That’s coming from farms all over California and what it has done is it has led many California cities to recognize that we have a treasure in our state. We have the jewel of farms that are relatively local, not too far away and we have access to fresh produce that sometimes people in other states don’t always have. So yes, they come from all of those places.”
Abasto: As the food industry expands, so does the rise of technology. As delivery apps like Groupon and skip-a-line apps are growing in popularity, what are restaurants’ points of view on technology in the food industry?
Shams: “This is such a good question. So, it might surprise you to hear this, it’s a double-edged sword. There’s a lot of good news in this world of the merging of technology and food, but there’s at the same time also some pitfalls, maybe obstacles that have to be overcome.
For example, one thing that restaurants do today, that was not as much of an option in the past, is they deliver through apps like Uber EATS, Postmates, Foodjets, etcetera, etcetera. You look at that and think, this is a brand-new opportunity for me to get my product out there, it’s a brand-new way for me to reach a consumer who maybe does not want to leave the office or leave the house that day to get a meal. It’s a great way to maybe get a sale that you otherwise would not have been able to get.
But, here’s the other side of that, those services are often charging restaurateurs as much as 30 percent of the amount of profit on the back end or 30 percent of the sale of the total sale. So, I’m sure, as the restaurants here will tell you, in an industry where the national average profit margin is about 5 percent, it’s tough to just let go of 30 percent of something and sometimes restaurants are asking themselves, by doing this, am I making money or not? Should I continue to do this or not? I think that they will see that they will continue to do it because consumer habits are changing, your habits and mine are changing. You may decide you want to eat at home and order a meal to be delivered instead of going out, but the main point I’m making, is that I think it’s going to take time for these two worlds-for restaurants and the delivery services-to come up with some sort of arrangement that really works for everybody. It’s new.
So, that’s one thing about technology, but technology is a big question, it’s not just about delivery apps right? Restaurants, not all restaurants, but some types of restaurants, are also using more automation. Have you been to a Chili’s lately? They’ve done this for the last couple of years, where when you walk in and the hostess seats you at your table, you can order your dessert and appetizers on a little touch pad at the table and in fact you can pay from there, so you’re not necessarily waiting on your server to come around. So, you’re using technology more in those ways. Other restaurant chains that are heavily using those touch pads are specialties cafes as well as Panera Bread, so just some examples of how technology is working in the industry now.”
How do Millenials’ food trends affect restaurants?
Abasto: As technology spreads, so do constant food trends for millennials. How are restaurants having to incorporate healthy and organic foods into their menu’s?
Shams: “One of the things I was amazed to learn last year when I was at the Western Foodservice & Hospitality Expo, is that some restaurants are moving more and more towards the use of herbal teas in their menu’s. They’re offering more herbal teas than they ever have before.
And you know, here’s what I think is interesting, I don’t think consumers ever give themselves credit for the amount of power that they have in this conversation. That’s not a restaurant owner saying ‘Oh I like herbal tea, let me look at some herbal tea.’ That’s consumers’ saying this is what I want so I’m only going to give my business to a restaurant that has what I want. What you see is restaurants adapt to that.”
Abasto: How are restaurants having to keep up with the American demand for Latino food?
Shams: “This is an excellent question. It used to be that you could only get Latino inspired foods in California, for example, at a restaurant that calls itself a Mexican restaurant. Today, you can get Latino-inspired foods at Chili’s, at Applebees, at so many quick service restaurants. When you go into Cheesecake Factory, on nearly every page of the menu there is something that has at least ingredients in it that are Latino inspired.
So, what this tells us is those restaurants that are forward thinking, those restaurants that are paying attention to what the consumer likes and wants, have already done a very good job of keeping up with this trend. By simply walking the floor, you’ll kind of know what’s available and what’s here; if I’m a restaurant owner, maybe what would work or wouldn’t work in my restaurant. If you’re a restaurant that is only serving vegetarian cuisine and you see somebody over here trying to sell carnitas, that’s not going to work for you. But, chips and salsa, if it’s new kinds of salsa, new flavors, new combinations that you have not tried before, is worth a look.”