In 2021, we watched the food industry begin to recover from the existential shock of the coronavirus pandemic. Labor shortages forced us to simplify and streamline operations to handle growth with fewer hands. The industry continued its transformation to create the most competitive return to order volume the market has ever witnessed.
As the food data platform standard for many fast growing emerging food brands, to prepared food stars, national foodservice providers, and worldwide restaurant multi-units, we've had a backstage pass to the rapid transformation of this year—and we’re sharing what we've learned with you .
In this article, we'll review the trends and lessons that are unmistakable from the data, including:
- The markers of agile food businesses that can handle any operational challenge
- What it takes for old guard restaurants to compete with savvy data driven food brands
- Why food businesses of all types are making a mad dash to own their food data
When you look at what we learned in 2021, it's clear who the winners will be in 2022 (and how to be one of them). Let's get into it.
The Neverending Puzzle of Vendor Data
Messy vendor data has been the industry standard for so long that it’s difficult to imagine it any other way. Spending precious time inputting costs and prices into a spreadsheet is just part of the process, and the bigger you grow, the more complicated (and sluggish) the practice becomes.
The problem is simple. Your produce supplier might send you a weekly excel sheet, or pdf with prices…. The broadliner supplier might have an online portal or electronic data interface (EDI). And the local dairy? They mail you classic paper invoices. What if you have more than those?
When you have several suppliers, the time it takes to standardize pricing in a single spreadsheet—among all the other administrative duties—means you’re calculating past food costs. As a result, costing is always months… or years out-of-date, and using that data to inform recipe changes or menu rollouts is reactive, rather than proactive.
It’s not uncommon for culinary teams to plan recipes and or menus focused on food costs, only to constantly feel like those margins are not accurate, with something always being off, especially with the rapidly changing market.
It’s not your fault—it’s the reality of manual data normalization—but the end result is a traffic jam for data-driven decision-making. We’ve seen the real-world impact this has on business leaders:
- P&Ls that are three months behind, because the food costs are not up-to-date yet
- Tension between culinary, operations, and finance teams about big decisions
Slow decision making because of slow reporting
The vendor pricing struggle can be big enough to slow down and overwhelm food and beverage leaders who need access to their data quickly. When you add another calculation , one that’s intrinsically linked, you’ve got a major bottleneck in the making.
Also Read: Here’s Why Food Software Integrations Are Liabilities
Control Over Food Data Leading to Success
We spoke to thousands of food industry leaders this year, and there’s one struggle almost every business has in common: ingredient, recipe, vendor, and menu pricing is spread out across dozens or hundreds of locations (binders, spreadsheets, ERPs, legacy software, invoice scanners, nutrition tools, etc).
One 700-location chain told us they send their new and updated recipes to restaurants in powerpoint and excel (that frequently got lost in a flood of emails).
When we examined the food businesses that traversed this rocky year with relative ease, they all had one thing in common: all their food data is accessible via one central hub.
Lesson Learned: It’s nearly impossible to draw insights and make smart decisions from data that’s disjointed, spread out, fragmented, messy and not easily accessed viewed or analyzed. 2021 revealed just how high the cost of disorganization could be.
Granular Food Data is Valuable Food Data
There are a handful of food data critical reports that are hard to capture (and even harder to maintain access to) in our industry. Among them are…
- Actual vs Theoretical reporting
- Accurate, real-time COGS
- Waste and trim yield tracking
- Prep and production plans
- Demand based needs lists
The barrier to measuring and tracking these once impractical metrics was lowered this year, especially for food brands that took the time to organize and structure their food data. What once felt like capturing lightning in a bottle is becoming a normal part of decision-making for businesses who have all their food, recipe, and vendor data in one place.
Lesson Learned: The estimations that food brands have always used to measure inventory usage, waste, and margin can't stand up to the efficiency that's required to be a top performer in our increasingly optimized and now data driven industry.
Also Read: The Food Data Mastery Checklist
Welcome to the Era of Endless Brands
Third-party delivery platforms have given consumers access to more restaurants and food options than ever before in recent years. But before the pandemic, nearly all the restaurants had brick-and-mortar locations.
With the ghost kitchen era in full-swing, there is no natural barrier of real estate keeping back the tide of new brands and food concepts from washing over the marketplace.
Established chains and scrappy startups can now spin up a dozen brands from a single kitchen to test new concepts, recipes, and markets—and create many brands they did.
Chick-fil-a’s Little Blue Menu is one of three virtual brands undergoing testing in Nashville that operates out of existing Chick-fil-a locations. Chilis and Maggianos launched a virtual brand Just Wings in over 1,000 locations within a couple of months. Red Robin, Boston Market, Cracker Barrel, Outback Steakhouse—everyone’s getting in on the brand expansion game.
Creating sub-brands is also an exercise in micro-fulfillment and operational efficiency for pioneering restaurants. It takes clean data and operational finesse to work supply chains, recipe catalogs, and prep task lists for multiple brands out of a single kitchen—another reason so many are rushing to master their food data.
Lesson Learned: Now that anyone can launch a brand and compete on geography and cuisine, the innovation and go-to-market cycle is much shorter than it’s ever been. The agile and adaptable brand will eat the slower-moving brand’s lunch.
Omnichannel is the Leading Customer Sales Experience
Though 2020 was the year of third-party delivery—largely out of urgent necessity—the narrow focus on margin-eating platforms was never long for this world. 2021 marked a definitive shift toward a refocus on creating incredible first-party ordering experiences, no matter where they happen.
Food ordering technology is quickly evolving beyond the silo sales channels of the retail POS terminal, online ordering platform, and third-party marketplace. We’re watching brands across the industry create ordering and loyalty experiences that weave together disparate sales channels—including in-person channels, like self-serve kiosks and drive-thru—into one cohesive customer experience.
From tech leaders like Panera Bread and Chipotle to established chains under Yum! Brands to rising stars like C3, it’s no longer about digital. It’s about omnichannel.
Lesson Learned: Raging competition means the fight has largely moved away from culinary concepts and the next big battleground is the customer experience. And customers are clear in what they want: seamless ordering and loyalty experiences that are predictable and available on any and every channel.
Smarter Operations Can Handle Lower Headcounts
The labor challenges of 2021 threw the broader food industry for a new loop. Everyone we’ve spoken to—fast-scaling ghost kitchens, contract foodservice providers, prepared food giants—has struggled to meet their staffing needs.
Not everyone suffered to the same degree because of the labor shortage, however.
One painful trend to see was the skyrocketing stress levels of company leaders who relied on highly manual processes to complete operational tasks like inventory, menu planning, procurement, and food prep. Without clean data that integrates from one step to the next, these workflows are ripe for errors and inefficiencies—especially for kitchen workers—and come in all shapes and sizes. For example…
- Kitchen teams scaling up prep for a large order using napkin math, or worse, manual unit of measure conversions and dry erase boards
- Ordering enough ingredients to make one set of subrecipes, but then realizing you need more last-minute because of missed demand or other subrecipe requirements.
- Production guides that do not appropriately or accurately plan prep and cooking tasks, leading to time waste and unnecessarily low output
On the other hand, we’ve seen culinary teams equipped with recipe software to handle scaling and unit conversions, inventory that is driven off needs, consumption compared to anticipated sales volume, and production guides that automatically order tasks according to the required scale, cross utilizing ingredients, subrecipes and procedures to reduce prep time.
You can imagine which type of team felt greater disruption from the staffing crisis.
Lesson Learned: Operational inefficiencies are everywhere in the food world, and they add up quickly. Food companies that invest in technology built for kitchen teams—not just back-office workers—are finding themselves resilient against labor shortages.
Also Read: An Introduction To Efficient Food Systems: Rethinking Operational Chaos In The Food Industry
The Universal Language for Food is Gaining Momentum
Software integrations really took a beating starting in 2020. As the urgent need for technology grew, so did the troubles around integrations. For larger operations, it became more and more clear that integrations are liabilities:
- Limited data paths from one software to another disincentivizes platform switching (even when it’s desperately needed) because you must re-jig all the connections
- Integrations break constantly, especially for larger companies that have created custom connections
- As the number of integrations increases, so do the headaches, thanks to the frequent disruption from breakages and engineer costs to fix them
We confidently predict that the 2020s will be the decade of the Food API. Open APIs create a standardized language that every tool or app can read, given they understand the language. Rather than creating a limited integration between two tools (or complicated custom one), the Open API means any tool can access and manipulate individual bits of data as-needed.
The most obvious use case is normalizing ingredients and units of measurement so that they easily flow from inventory to purchasing to recipe planning and production tools. Even things like the equipment you use in your commercial kitchen and the time it takes to complete a task can be tokenized for use by an API.
Lesson Learned: Classic integrations are becoming bottlenecks as food tech becomes more complex and granular, especially for the large established businesses among us. The Open API is the undisputed next step in creating a universal language around food data with unlimited flexibility and granularity.
Also Read: How Galley Integrates With Every Food Software Out There Via Open API
Mega ERPs Are Finally On Their Way Out
The emerging trends we’ve just covered all contribute to a larger macro-trend we’re seeing unfold rather quickly in the food industry and beyond: the legacy “all-in-one” ERP is quickly giving way to the more precise tool that’s limited in scope.
Buying software has long been an exercise in confirming necessary integrations or defaulting to an “all-in-one” when picking software—often picking a tool that’s not the best-fit, but works technically with all the other software being used.
Fueled especially by the quick adoption of Open API, food businesses now have the freedom to choose software that’s the best-fit for their specific use case.
Thanks to the universal language, the best tools and processes aren’t dropped from consideration because they’re missing a key integration or function. Businesses can connect virtually any tool with an OpenAPI to create a custom ERP that’s built just for their operation and business model.
Lesson Learned: Large businesses that had to default to the legacy ERP tools to organize their data and operation are beginning to have the flexibility they need to choose best-fit tools for individual teams and use cases, not the ones that’ll work out technically.
The Markers of a Thriving Food Business in 2022
When we zoom out and take the long view, 2021’s impact on the food industry cannot be understated. This was the year that the operational challenges that were magnificent in 2020 met real solutions that’ll become staples over the next few decades.
When we imagine who will have the ability to win big in 2022, it’s clear they’ll share some common qualities:
- Real-time vendor, costing, and operational data that enables rapid decision-making
- Leadership teams able to run concept, menu, and operational experiments and analyze the results within weeks—not years
- Unmistakable focus on creating smooth customer experiences with solid design
- A food data ecosystem that all tools and systems can access immediately and granularly
- Tech stacks that give individual team superpowers, rather than all-in-one tools everyone dreads using
At Galley, we’re aligning with the momentum in the industry, by creating the universal food language Food API for our food data platform. This indisputable push across the industry to leverage more detailed and flexible data, is the best direction food brands can choose
Food businesses that collect, organize, and learn to command their data have a bright future ahead—we’d love to help show you how
Get in touch to see how Galley can help you control your food data.