Before COVID-19, restaurants catered to their customers’ needs by designing spaces and crafting menus that showcased their unique abilities. However, the pandemic forced restaurants to rethink their offerings and delivery systems to target a new audience, such as those who couldn’t dine indoors or could only do so in limited numbers. Some restaurants closed their doors while others held on, hoping that the pandemic would soon pass. Full-service restaurants were hit particularly hard because they were designed to serve customers in a dining room. They had to balance throughput models that factored in fill rate, station load, salesmanship, use occasions, and efficiency. Fast casual restaurants were better equipped to handle the situation since they could switch to pickup-only with a corresponding reduction in labor costs. However, full-service restaurants continued to suffer, with many struggling to keep up with wage increases and service workers leaving the industry in search of better opportunities.
There is one thing, however, that many full-service restaurants have that smaller footprint fast-casual concepts don’t – production capacity! Full service restaurants often have larger kitchens with greater storage capacity, some of which sits idle for different parts of the day depending on what is happening there. These restaurants can explore several alternative revenue streams to maximize their resources and generate additional income. Here are some options:
- Meal Prep and Delivery Services: Utilize excess kitchen capacity to prepare pre-packaged meals or meal kits for delivery or pickup. These can cater to busy individuals or families looking for convenient and healthy meal options.
- Catering Services: Offer catering services for events, parties, corporate meetings, and other occasions. Utilize excess kitchen capacity to prepare large quantities of food for off-site events, thereby generating additional revenue streams.
- Ghost Kitchen or Virtual Brands: Launch ghost kitchen concepts or virtual restaurant brands that operate solely for delivery or pickup orders. These concepts can target specific cuisines or niche markets, leveraging excess production capacity to meet demand without the need for a physical dining space.
- Food Trucks or Pop-up Events: Invest in a food truck or participate in pop-up events to bring your restaurant’s cuisine to different locations. This allows you to tap into new markets and generate revenue while utilizing excess kitchen capacity during off-peak hours.
- Retail Product Lines: Develop and sell retail products such as sauces, marinades, spice blends, or baked goods featuring your restaurant’s signature flavors. This not only generates additional revenue but also promotes brand awareness and loyalty among customers.
- Cooking Classes or Culinary Workshops: Offer cooking classes, culinary workshops, or chef-led experiences where customers can learn to prepare dishes from your restaurant’s menu. This not only generates revenue but also fosters customer engagement and loyalty.
- Subscription Meal Plans: Create subscription-based meal plans where customers can sign up to receive weekly or monthly deliveries of pre-prepared meals or meal kits. This provides a consistent revenue stream while utilizing excess kitchen capacity efficiently.
- Collaborations and Partnerships: Collaborate with other businesses, such as local farms, breweries, or wineries, to create unique dining experiences, tasting events, or food and beverage pairings. These partnerships can help attract new customers and generate additional revenue through joint promotions.
- Event Hosting and Venue Rentals: Utilize restaurant space for private events, such as weddings, receptions, or corporate gatherings. Offer catering services along with venue rentals to maximize revenue from event hosting.
- Meal Donation Programs: Partner with local food banks, shelters, or community organizations to donate excess food to those in need. While not a revenue-generating stream, it’s a meaningful way to minimize food waste and give back to the community, potentially leading to positive brand exposure and customer loyalty.
By diversifying revenue streams and creatively utilizing excess food production capacity, restaurants can optimize their operations, minimize waste, and maximize profitability …even with their old concepts that were not primarily configured this way.