By Alexia Elejalde-Ruiz
Chicago Tribune
WWR Article Summary (tl;dr) As Alexia Elejalde-Ruiz reports, many “restaurants streamlined menus to focus on dishes that travel well, added little gifts to make meals more memorable, and bundled ingredients together to function more like premium grocery stores.”
Chicago
It didn’t take long for Pete Ternes to learn that a good restaurant does not automatically make for a good takeout operation.
His brewpub in Chicago’s Logan Square neighborhood, the Bungalow by Middle Brow, tried valiantly to keep churning out its signature thin-crust pizzas for a to-go audience during the first week of the state’s stay-at-home order in March.
But the demand overwhelmed the kitchen, which wasn’t used to 300 orders coming in at the same time. Wait times stretched to 90 minutes.
“Our customers were angry and gathering into a nice friendly mob outside,” Ternes said.
He paused, regrouped, and soon Bungalow shifted to selling pizza kits, gourmet pantry goods, homemade bread and fresh produce from local farmers.
Ternes plans to maintain that grocery model even as restaurants are allowed to reopen, and in the next week or two he plans to fire up the ovens again for a takeout program with a limited number of pizza slots that people can reserve in advance.
“The new norm will be highly dependent on takeout still,” Ternes said. “It will be a while, we presume, before people jam restaurants again.”
Restaurants built around the bustle of communal dining had to embrace takeout when the COVID-19 pandemic forced them to close their dining rooms. They streamlined menus to focus on dishes that travel well, added little gifts to make meals more memorable, and bundled ingredients together to function more like premium grocery stores.
Many of those changes are expected to stick even as restaurants start to welcome customers back to patios and eventually, to dining rooms in limited numbers.
Consumers had been gravitating toward more takeout before the pandemic, and the health crisis has left restaurants with little choice but to get creative to replicate the restaurant experience at home.
“I think what’s going to come out of this is that takeout is going to be better,” said Kevin Boehm, co-owner of Boka Group, whose slate of acclaimed restaurants include Girl & the Goat and Swift & Sons in Chicago’s Fulton Market district. “What is the Michelin star version of the way we package our stuff?”
Boehm is confident the spectacle and human interaction that attracted him to the restaurant business will return. But long-term, he expects takeout to generate more revenues than before “now that we’ve learned to do it well.”
At Girl and the Goat-ceries, customers can preorder meal kit packages and watch virtual cooking videos with Chef Stephanie Izard. GT Prime, a steakhouse, has been converted to an Italian concept temporarily because Italian food is more of an everyday choice. The brasserie Bellemore has added takeout choices that include a family style jerk chicken feast. Handwritten thank-you notes, signed by staff, are included in each order.
Though the high-end meals come without the high-end ambience, takeout pricing is the same as dining in because rent and bills haven’t changed and sales are just 20% of what they normally are, Boehm said.
Takeout pricing is even higher at some restaurants because of the additional costs of packaging and third-party delivery platforms, a premium that customers for now, at least, may be willing to pay for the safety of eating from home, said Doug Roth, CEO of Playground Hospitality, a consulting firm.
Restaurants are unlikely to recover their dine-in revenues anytime soon as people remain wary of congregating, and in-dining experiences will have capacity limits in phase four of the state’s reopening plan.
According to a Zagat survey of nearly 7,000 people, just a third of respondents said they plan to return to restaurants the week they reopen, and among those staying away, 20% said they plan to wait three months.
Bars and restaurants pushed to sell cocktails-to-go to help them stay afloat.
Illinois Gov. J.B. Pritzker this month signed a law that allows pickup and delivery of cocktails in sealed containers, but it is subject to local approval.
The Chicago City Council license committee has approved the change but the full council has yet to vote.
“This is another revenue stream that we’ve never had the opportunity for, and that will be a game-changer,” said Julia Momose, creative director at Kumiko. “In a year from now, I think it’s going to be so much a part of our business model that it will be built into future business models. This is just something that can help us all so much.”
Takeout had been growing fast long before the pandemic, as technology enabled more working and shopping from home, said David Portalatin, a restaurant analyst at market research firm NPD Group.
In January, carryout visits grew nearly 3% compared with a year earlier, drive-thru grew 4% and delivery grew 1%, while on-premise dining was flat, he said.
Stay-at-home orders “probably fast-forwarded where the trend was already going,” Portalatin said.
In April, delivery was up 115% from the prior year and drive-thru was up 19%. Traditional carryout fell 21% as people opted for takeout options with less interaction.
Interest in takeout is expected to persist as people cocoon, like they did in the comfort-seeking years after 9/11, Portalatin said.
US Foods, a restaurant distributor based in Rosemont, has been helping restaurants move takeout from a sideshow to center stage. Early on, many restaurants that were proud of their in-restaurant brand and plating “felt like they were sending leftovers to people’s home,” said Jim Osborne, senior vice president of customer strategy and innovation.
Restaurants have rethought menus, optimized online ordering and invested in better packaging. US Foods has seen a 25% jump in orders for takeout containers, from basic foam to eco-friendly containers. Specialty vented containers for french fries are up 40% and containers for cakes and desserts are up 80%. There has been particular interest in tamper-evident labels, which are up 160%.
Takeout also has presented a different cash flow reality, as high-margin items like iced tea are generally not ordered to-go, Osborne said.
Restaurants can make up for it by charging for extras, like adding bacon or avocado to a burger, or replacing a cooked rib-eye with a steak kit, with all the ingredients for a DIY grilling session, but charging the same.
Some restaurants have been better equipped than others to handle the shift.
The Lou Malnati’s pizza chain adopted curbside pickup at its 60 restaurants to keep people out of its lobbies during the pandemic, and it has been such a hit among customers that the plan is to keep it for good.
“They love being able to stay in their car and listen to the radio station while they wait for the pizza to come out,” said Marc Malnati, chairman of the chain and son of its founder.
Though the chain’s takeout business is booming, overall revenue is still down because of the closed dining rooms, which normally provide half of sales, Malnati said. Restaurants will have to up their takeout game if they want to survive limited-capacity dining rooms until there is a vaccine, he said.
“At 50%, dining rooms don’t make it,” he said. “They just do not make it. They have to have other ways.”
At the Bungalow by Middle Brow, Ternes is counting on a hybrid model to provide financial stability, so that “at any moment we can push more on the restaurant lever, the grocery lever or delivery lever.” It is acquiring more refrigerator space and reconfiguring its dining room to accommodate the grocery items and improve the speed with which those orders can be filled.
The hybrid model could become more lucrative than the original business model, Ternes said. Groceries provide bigger profit margins that can help subsidize the restaurant side of the business.
“What’s cool about having the slate wiped clean is that we can slowly put the pieces together,” Ternes said.
Roth, of Playground Hospitality, said the moment will favor smart restaurateurs who can adapt quickly. But there is a learning curve with doing takeout well.
They have to figure out what travels well, the packaging to put it in and instruct customers on how to reheat the foodproperly to maintain the quality, Roth said. There is, as far as he knows, no good solution for keeping french fries crisp on their journey to people’s homes.
Most importantly, he said, restaurants have to figure out how to take their brand to go and create an experience that makes the price tag worth it.
“How do you put the concept in the bag?” Roth said.
Dineamic Hospitality, whose restaurants include Siena Tavern and Barrio in River North, spent hours figuring out how to “make our delivery food look as beautiful as our dine-in food,” with nicer plastic cutlery and packaging and numerous other touches, said co-owner Luke Stoioff.
When the company realized pizzas travel better uncut, it included a branded pizza cutter. Pastas come with a branded cheese grater. All orders come with a free cookie and a card that says “You’re a smart cookie for ordering from us.”
Some of those touches will be permanent legacies of the pandemic, Stoioff said.
While takeout, which comprised just 5% to 7% of Dineamic’s sales pre-pandemic, helped keep people employed the last couple of months, the company’s large dining rooms need to be open to make the business model work, Stoioff said. Sales are down 90% from normal, though the recent reopening of its patios should help.
Amaru, a Latin American restaurant in the Wicker Park neighborhood, had been open only eight months when the state’s stay-at-home order began. As it shifted its focus to takeout, it created family dinners at much lower prices than its usual menu, $30 for four hefty servings of pollo al carbon with rice, beans and kale salad, to keep employees working and help customers eat well during the pandemic.
“That was our way to support our neighborhood and the people around us,” said chef-owner Rodolfo Cuadros. “We’re trying to feed people healthy stuff they wouldn’t normally eat, garbanzos, vegetables, rice.”
The restaurant is breaking even on the family dinners, with any potential profits eaten up by third-party delivery platforms that take big commissions, Cuadros said. Still, the dinners have been so popular that he plans to keep them on the menu, at the same price point, for the foreseeable future.
He is also preparing his small restaurant to reopen its dining room, which used to get jam-packed on Friday and Saturday nights with people who squeezed into rows of two-top tables. Now he is building booths, separated by wipeable curtains, to comply with social distancing requirements, and is getting rid of bar seating. He will be able to seat less than half as many people as he could before.
“We hope to get people back into our place,” he said. “There’s nothing better than talking to people, the feel of the restaurant when it’s full of people and you have music playing, it’s hard to duplicate with anything else. It would be a shame if I couldn’t feel that again.”
(Adam Lukach contributed.)
___
Distributed by Tribune Content Agency, LLC.
