4 Ways to Pivot Your Restaurant’s Business Model During COVID-19

4 Ways to Pivot Your Restaurant’s Business Model During COVID-19
Dew Smith

By Dew Smith

Table of Contents

    It’s no surprise that restaurants have been hit hard during the COVID-19 health crisis. However, pivoting your business model to takeout and delivery is not always the best—or only—option your restaurant has to boost sales during this time.

    With dine-in officially off the menu, we’re sharing a few options for restaurants to consider to pivot their business model during COVID-19.

    1. Offer meal kits 🥘

    If you have many groceries, inventory, or portioned goods, consider offering meal kits to diners to cook at home. The meal kit industry, which has been around since 2007, hit $5 billion in annual revenue in 2019—but growth in the industry was slow pre-COVID-19. Now with many stuck at home, bored diners are looking for new and exciting meals to bring into their daily routine. This is where you can get involved—by offering versions of your classic dishes to customers to heat and prepare at their leisure.    

     

    Here are a few things to consider when building your meal kits:

    • Time to build: recipes should take 30 minutes to 1 hour to make—this may take some trial and error on your part to figure out
    • Ingredients needed: what do you have, and what will you need to purchase? Give special consideration to perishable items, as these can create unique liability issues for your restaurant.
    • Dishes: stick to your restaurant’s theme with the meals—if you’re an italian restaurant, offer homemade pasta dishes. 🍝 Mexican? Taco meal kits! 🌮
    • Delivery: employ FOH staff to deliver the meal kits to your diners
    • Frequency: will you offer a one-time meal kit designed to last a few meals? A weekly meal kit subscription?
    • Marketing: Consider posting DIY videos on how to assemble & prepare your meal kits, and be sure to attach a link for diners to order their own! Ensure you include instructions for use-by date and ingredient storage to avoid items from spoiling

    2. Alcohol delivery 🍻

    If you’re a licensed restaurant with a wide selection of wine, beer, and spirits, then you’re in luck—alcohol sales are booming since COVID-19, which gives you an opportunity to boost your revenue through alcohol delivery.

    You don’t have to be a brewery or bar to get into the delivery game either. Many states and provinces have expanded their rules to allow restaurants to sell alcohol for takeout and delivery. Make sure you research the laws in your state to see if alcohol delivery is an option for your business.

    Pros of alcohol delivery

    • You can capitalize on the boost in alcohol sales since quarantine began to supplement your revenue from food takeout & delivery
    • Introduce new food & drink “combos” to increase revenue through your dine-out channels (e.g date night combo that includes a starter, entree, and wine, or a game day combo that includes appies and beers)
    • You can keep your FOH staff employed to handle alcohol packaging and deliveries
    • Unload your excess alcohol inventory to recoup lost costs rather than selling back to distributors

    Cons of alcohol delivery 🚫

    • Alcohol consumption can be dangerous—and it’s hard to monitor the age of your diners, so it’s possible you could be delivering to those underage
    • Alcohol consumption is strongly discouraged for those who are sick, and the increase in alcohol sales during quarantine is worrying many health officials
    • More inventory to manage
    • Order management may be difficult to organize if you’re not already offering dine-out food. Consider having diners call or email to make orders in advance rather than pay exorbitant commission fees through third-party platforms.

    3. Pop-up grocery store 🛒

    Some restaurants are leveraging their relationship with distributors to set-up pop-up grocery stores in their dining areas while customers wait for food orders—or to pick up some essential goods. Offering groceries can also be done through your takeout and delivery platforms—offering additional essential goods to clients if they’re avoiding grocery stores.

    For example, Una Pizza & Wine in Saskatoon is offering delivery through their website that isn’t just limited to their pizzas. You can order groceries and emergency supply items like toilet paper, eggs, flour, and more with (or even without) the pizza pie on the side.

    Diners can order other essentials through Una

    While offering groceries in-store or online may not replace traditional restaurant revenue, it will not only help supplement your sales but also establish your restaurant as a helpful, supportive part of the community.

    Other restaurants, like Guerilla Tacos, are adding essential goods to food orders for deluxe packages for diners. Their Emergency Taco Kits include not only taco ingredients, but also things like toilet paper and eggs.

    4. Takeout, delivery, and curbside pickup 🥡

    Starting out with the obvious, takeout, delivery, and curbside pickup for your restaurant is an easy way to keep revenue flowing without having to make drastic changes.

    Most restaurants—from cafes to full-service restaurants—have pivoted to takeout and delivery as their main source of revenue in order to supply their diners with a variety of delicious options during quarantine. While takeout and delivery traditionally accounted for only roughly 30% of restaurant sales, it’s now grown to become the largest—and in most cases, only—revenue channel for restaurants across the globe.

    Pros of takeout and delivery:

    • As a delivering restaurant, your food is accessible to those who are unable to leave their homes, leave their offices, or travel to your restaurant
    • You’ll reach a wider network of diners through third-party delivery apps
    • Your kitchen’s efficiency will be optimized, since you’ll be increasing output without seating additional guests
    • UberEats, DoorDash, and Grubhub have temporarily waived or reduced delivery fees for all independently owned restaurants
    • If you do direct delivery, you can employ your FOH staff as delivery drivers

    Cons of takeout and delivery: 🚫

    • Many third-party delivery apps take a 15-30% commission
    • Setting up direct delivery for your restaurant may be difficult, and you would have to rely on your own marketing to diners
    • You’ll need to optimize your menu for travel-friendly and profitable menu items
    • Costs will increase as you need to factor in commission and delivery fees into each dish
    • Delivery & takeout offer smaller profit margins than traditional dine-in

    Resources:

    Conclusion

    No matter what way you decide to take your business, remember to keep customers informed through your social media channels.

    • Let them know what you’re offering and how they can take advantage of it (where to order, how to pick-up, etc.).
    • Use platforms like Instagram and Facebook to post “reveals” of your new packages or services
    • use the Story feature to create short video explainers of why and how you’re offering your new service
    • Update your website with whatever new information diners need about your services
    • Encourage your diners to post pictures of your deliveries or goods on their social feeds and to tag you—an easy, free way for them to share their support and love!

    How are you marketing your business during COVID-19? We’d love to feature you on our Instagram page—message us to learn more!

    Need more ideas about pivoting your restaurant business during COVID-19? Join our webinar: Staying open During COVID-19 to hear from restaurateurs across the US and Canada about what they’re doing.

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    Dew Smith
    Dew Smith

    Hey! I'm Dew, the Brand Strategist at 7shifts. I cultivate 7shifts' social and content garden, and I'm always looking for ways to grow our network of restaurateurs, local talent, and tech companies.