Food Industry Trends 2023: How Restaurants’ Business Models Need to Change to Succeed

Whereas we previously focused on trending restaurant tech and upcoming food trends in 2023, this post will discuss how restaurants’ business models need to change moving forward. 

How can F&B operators meet the ever-increasing demand for sustainability, transparency, and convenience? How can you secure customers’ loyalty during high inflation and economic uncertainty? In other words, what will it take for your restaurant to thrive?

In 2023, flexibility and adaptability to evolving consumer behavior will continue to be crucial to your restaurant’s success. With some business models more fit for today’s consumer needs than others, you have to be open to rethinking your restaurant format.

Here are some of the most significant shifts in future restaurant business models we’ll see going forward.

Hybrid models are on the rise

A hybrid restaurant model combines elements of multiple restaurant segments in a smaller, highly efficient footprint. Hybrid concepts cater to various revenue streams with customer experience, convenience, and multi-functionality in mind. 

Hybrid restaurants and dark kitchens are increasingly popular because they better accommodate today’s consumer needs. At the same time, hybrid concepts allow restaurateurs to be more versatile and maximize their kitchen and dining spaces to meet operational requirements. 

Let’s look at the hybrid models we expect to see more of in the year ahead. 

Hybrid restaurants

Restaurants operating a hybrid model can combine a fine dining experience with a fast-casual one, for instance, or even a food truck or street food model.

Offering multiple formats means customers can choose which experience they’d like to enjoy, helping you reach more segments and unlock different day parts. 

Examples of hybrid restaurant models include:

• Restaurants offering counter service during the day and full service in the evening;

• Restaurants with a dine-in section and an in-store market where customers can pick up food products, meal components, or even kitchen equipment to prepare their own restaurant-quality meals;

• Restaurants that combine a (small) dine-in section with order-ahead and pick-up areas for customers and couriers;

• Restaurants with a dining area and an outdoor (pop-up) food truck offering exclusive food items.

While none of these models are new, more and more restaurants are rethinking their design to settle into the new normal and give their customers ample possibilities to have their meals wherever and whenever they want.

Last year, McDonald’s decided to go even further as they started testing with a new restaurant format for on-the-go customers. Their design features an order-ahead lane and a drive-thru with a conveyor belt to pick up food. It also has self-service kiosks, customer pick-up shelves, and a dedicated pick-up area for delivery couriers.

That begs the question: can you still call the new McDonald’s design a restaurant, or is it a hybrid dark kitchen?

Hybrid dark kitchens

That brings us to another emerging business model: the hybrid dark kitchen. 

A hybrid dark kitchen offers ordering options beyond delivery and takeout. Like hybrid restaurants, they consolidate multiple segments into one multi-purpose space to provide an omnichannel experience.

Ghost kitchen operators using a hybrid model mainly want to drive more traffic to their kitchens and build a personal connection with customers. In essence, the hybrid dark kitchen eliminates the lack of direct customer interaction, solving ghost kitchens’ biggest challenge.   

Some examples of what a hybrid ghost kitchen can look like include:

• Ghost kitchens with self-order kiosks and a waiting room for customers;

• Ghost kitchens coming together with other operators in a multi-brand food hall to find their place in the local community;

• Ghost kitchens that create a pop-up brick-and-mortar restaurant or a food truck;

• Ghost kitchens teaming up with restaurant brands to expand both brands’ visibility and enter new markets.

Because these hybrid dark kitchen concepts rely less on delivery, they allow you to be more cost-efficient and optimize the customer experience. 

Dynamic pricing is on its way up.

Hotels, airline companies, and major e-commerce retailers have been using dynamic prices to optimize revenue for decades. But up until now, dynamic pricing was much less common in the restaurant industry.

However, restaurateurs are beginning to explore dynamic pricing to cope with labor shortages, supply chain issues, and rising commodity prices. As a result, this practice looks set to become more widespread in 2023. 

If you’re open to implementing dynamic prices to your menu, the most important thing to consider is that it’s not just about increasing prices when demand is high. Dynamic pricing also means reducing prices during off-peak times. 

More importantly, you don’t want to alienate your customers by ramping up prices like there’s no tomorrow (you may know this practice as surge pricing). Instead, use your regular prices as your reference during peak times and go from there to make small incremental changes based on demand or even weather conditions. 

Finally, you can use dynamic pricing creatively to charge less to loyal regulars or customers who pre-order, potentially helping you spread demand. Or you could feature surplus stock in your off-peak menu, prompting customers to order those items and helping you fight food waste.

Sustainability is back on the menu

Restaurant business models that answer consumers’ increased demand for sustainability are more likely to have a good brand reputation, widen their customer base, and increase profits.

Deliverect’s recent survey of 7,000 global consumers showed 43% are willing to pay more for takeaways from restaurants with visible sustainability practices. The National Restaurant Association also polled consumers in 2022, demonstrating that 38% are likelier to pick a restaurant offering locally-sourced foods over one that doesn’t. 

In other words, it’s more crucial now than ever to be truly invested in sustainability and the community you serve. If you’re unsure how to improve sustainability in your restaurant, here are some small steps you can start with to get the ball rolling.

• Be conscious about food packaging. For example, you can ask your suppliers to reduce packaging or replace their packaging materials with eco-friendly alternatives.

• Work exclusively with sustainable suppliers, such as local food producers, vertical farms, and organic suppliers and distributors.

• Reduce food waste by improving inventory management and order accuracy.

It’s equally important to communicate your sustainability efforts with guests. For instance, you can share your story and sustainable practices on your restaurant’s website and social media or donate to charities for climate change or sustainable development goals. 

Data-driven technology has become indispensable. 

2022 was the year technology really took off in the food-service industry. Operators learned that the secret of new and returning customers lies in data – and, more importantly, using that data to improve your menu and adopt new trends and consumer behavior.

This year will be about making all the different technologies and data points work together to improve operational efficiency and enhance the guest experience. These aspects will become critical differentiators as more restaurants strengthen their online presence.

Trending restaurant tech solutions to watch in 2023 include contactless payment and ordering systems, automation, AI and robotics, online order aggregators, digital loyalty programs, and virtual brand marketplaces. These technologies help you meet current consumer needs, build a customer relationship, and streamline operational efficiency, allowing you to collect big data and choose the best strategies for your brand.

2023 is shaping up to be an exciting year for restaurants.

This year, F&B operators will evolve to meet consumers’ high standards of sustainability, convenience, and service. That’s why many restaurants and dark kitchens will explore new, hybrid business models that allow them to be more versatile and efficient while providing guests with sustainable and unique dining experiences.

At the same time, restaurants, ghost kitchens, and other food-service companies are trying to ramp up efficiency and improve revenue by exploring dynamic pricing strategies and leveraging innovative restaurant technologies.

But whatever the future holds, customer experience will be at the heart of every innovation. So, leverage new business models and sustainable practices that fit your brand and create a great dining experience.

Do you want to explore how Deliverect Restaurants can help boost your operational efficiency, product consistency, and revenue? Schedule a call with one of our food industry experts today.