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Corporate foresight, an emerging area of expertise, is a mix of processes, tools and methods company leaders can use to understand drivers of change, predictions about the future and the implications of each for their businesses.

Forecasting the Future of Restaurant Industry HR and Tech

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Can you imagine the restaurant, retail, and hospitality industries in 2040?
By Jamie Griffin February 2019 Expert Insights

The future of restaurants is on display at the Austin-Bergstrom Airport where travelers-in-transit can grab a fully customized cup of hot or iced gourmet coffee, all prepared by a robot barista. Briggo, the company behind the robotic coffee houses, builds 40-square-foot craft coffee dispensaries and relies on humans only for re-stocking and maintenance.

Watching a robot make a stevia-sweetened cappuccino with an extra shot of espresso might cause a stir of anxiety about the future of any industry. And, for good reason. Automation is not the only trend on the horizon poised to radically change the future of the restaurant business. Today’s managers are facing an array of transformations that will impact how they do business, spanning from shifting labor patterns to new complexities introduced by third-party delivery.

Industry leaders seeking to ease their forward-looking apprehensions should shift their eyes off the rearview mirror and give focus to what lies ahead. The pace and sequence of evolving trends in front of the food service marketplace requires leaders to go beyond vision to develop the skills and capabilities to conceptualize the future. Can you imagine the restaurant, retail, and hospitality industries in 2040?

Corporate foresight, an emerging area of expertise, is a mix of processes, tools and methods company leaders can use to understand drivers of change, predictions about the future and the implications of each for their businesses. A widely used corporate foresight tool called the STEEP trend analysis framework can provide a way to break down future trends by category for any business or industry. These include:

  • Social
  • Technological
  • Economic
  • Ecological
  • Political

To put corporate foresight and the STEEP trend analysis framework into action; look back and consider the large number of women entering the workforce since 1945 and their impact on business in the United States ever since. What trends led to rising rates of women entering the workforce and what impact has that had on the restaurant industry?

World War II labor shortages (political & economic), the rise of the feminist movement (social), rising costs of living caused economic necessity for two income households (economic), passage of equal rights acts (political) and the rise of the service sector and decline of the manufacturing sector (economic & technological) are all trends credited with contributing to the rapid increase of women entering the workforce, according to research done by Forbes.

As women entered the workforce, the eating habits for Americans evolved, creating an increased demand for packaged foods, dinning out, and take away and pre-prepared meals across all income segments. Rising rates of women in the workforce also had a positive impact on the U.S. gross domestic product and is correlated to the increased number of restaurants, convenience stores and new channels of delivery from retailers, grocers and restaurants.   

Now, with the STEEP framework defined and illustrated, think ahead about the trends and  emerging technologies, as well as their implications, in terms of how restaurants will do business in 20 years.

Social Trends

By 2050, the global population is predicted to be roughly 10 billion people. Populations in western countries and China are expected to stabilize. Booming populations and rapid urbanization across the rest of Asia and Africa will translate into the growth of megacities, holding as many as 50 million residents according to the Global Cities Institute.

Just when you started connecting with millennials on social media, you will have to start thinking about Gen Z, which will be the largest group of consumers worldwide by 2020. 

Technological Trends

McKinsey and Co. estimates that 73 percent of the activities workers perform in food service and accommodations have the potential for automation. The industry is already implementing lite automation with online ordering and self-service kiosks.

Digital orders are predicted to represent 30 percent of all US restaurant sales by 2025 with 4 in 10 restaurant visits currently influenced by guest’s mobile phone, according to Incisiv.

Uber contracted with Volvo to buy a fleet of 24,000 self-driving SUV’s between 2019 and 2021 and plans to launch food-delivery drones by 2021. Consider the logistics for restaurant operators to run food to a self-driving car or establish delivery-only kitchens.

Economic Trends

The worlds debt is on the rise at about $247 trillion, this includes about $63 trillion held by central governments who have opted to create currency following the 2008 financial crisis.  Meanwhile, you can create your own currency with blockchain technology.

Data and technology are becoming more valuable than physical, tangible things. Companies like Apple, Google and Amazon have replaced companies like Exxon, Berkshire Hathaway and Walmart as the most valuable. These same data-driven technology companies are beginning to make investments that will shape the future of industries like health care and restaurants. 

Ecological Trends

Expect the demand for organic and natural food to continue to rise based on research conducted by the Organic Trade Association. The demand has largely been driven by millennials who will represent 80 precent of parents in 10 to 15 years that are making buying decisions for themselves and their children. 

The National Restaurant Association’s research shows restaurateurs will continue to integrate sustainability practices into their daily operations based on consumer demand and to increase margins. Current efforts are focused on recycling, packaging and food waste. 

Political Trends

Global trade barriers have generally decreased since the early 1800’s based, in part, on the idea that countries who rationally trade together are less likely to go to war with each other. This and other long-held free trade benefits are currently facing political headwind as illustrated by the UK’s Brexit negotiations and the U.S.’s trade war with China. Time will tell if the current sentiment is temporary or the start of a trend reversal. 

The rate of technological change is exponentially bringing advancements at breakneck speed. Rapid changes in technology and resulting shifts in marketplaces are outpacing the ability of government to manage and respond to digital disruptions. Expect debates and rulemaking around automation, climate change, hacking and data usage, plant-based foods, and more.

The forward-looking implications of the few trends noted above illuminates the road ahead for an industry filled with twists and turns. The fabric of our country and world is continually changing. As humans change, so does the way people offer and receive hospitality. 

Industry executives who want their businesses to take flight would be well served remembering that both hindsight and foresight should be excellent teachers in making choices today that innovate and create opportunity for businesses and their workforce tomorrow.  Those who do not might be destined to the next Kodak or Blockbuster business case study. 

What trends or predictions do you believe will shape the future of the restaurant industry and its workforce?

Jamie Griffin is the Founder & Principal of Good Workforce. He has nearly 20 years of experience in restaurants working in multiple facets of a high-growth quick service restaurant chains. He is the founder and principal at Good Workforce. He and his firm specialize in helping restaurant chains improve, scale, and grow their businesses through better strategy, people, systems and processes.