Off-Premise Dining is Here to Stay. Are You Ready For It?
Of all the potential industry-wide disruptors on the horizon, none seems destined to make a greater impact on all restaurants than a sustained surge in off-premise dining.
Major shifts have already begun with the advent of mobile-friendly online-ordering platforms, takeout-only concepts and new restaurant delivery services. Why eat at a sit-down restaurant, the digital natives wonder, when you can surf for a meal online and have it delivered whenever and wherever your stomach demands.
The question for operators is whether they want to react to this evolution in dining preferences or leverage it to their full advantage. After all, the ease of ordering food online is making the act of phoning in an order—even from your mobile device—feel antiquated and inefficient, which should further fuel off-premise dining. The National Restaurant Association predicts that 70 percent of meals will be takeout by 2020.
In addition, a 2018 study by Morgan Stanley, found that 43 percent of consumers who ordered delivery said takeout replaced a meal at a restaurant. In fact, takeout and remote dining is leading to an “incremental cannibalization of dine-in meals,” the report said.
Forward-thinking operators are already meeting the challenge by establishing new standards for off-premise dining. They’re tailoring menus to boost off-site dining sales, creating delivery-only kitchens and rethinking packaging so that hot and cold foods can retain their proper temperatures. Although pizza and fast food drive-thru windows once dominated the space, today just about any food—from croquembouche and king crab legs to prime steak and cavatelli with duck confit—can be dispatched with speed and precision.
And while implementing both takeout and delivery options isn’t always necessary, considering the merits of each operation can be advantageous. “When I first moved to Portland, nobody ordered anything,” says Carol Wakerhauser, owner of Pix Patisserrie and Bar Vivant, sister operations under the same roof in Portland, Oregon, which traffic in French pastry and Spanish tapas, respectively. “It’s a total 180 now.”
Check the attitude
All too often, operators think that adding off-premise dining is just a matter of stocking to-go containers and carryout bags. But the most successful restaurateurs devote the same amount of care to off-premise as dine-in sales.
Multi-concept operator DineAmic Group, which phased in carryout or delivery at all nine of its Chicago concepts, is meeting its own success metrics with such a simple approach.
“It’s just making things systematic,” says David Rekhson, a partner at BomboBar, a DineAmic casual concept. “We have to make sure that we have all the steps down: ordering, packaging and what the guest experience is like when they pick it up. Making sure the quality is the same. If you can approach that aspect of the business with the same amount of detail and thought, then you should be OK.”
Know how your food behaves
When delivery services started moving into Portland, Wakerhauser knew her 30 different housemade Spanish and Portuguese seafood conservas were not only shelf stable but could easily be tucked into a takeaway bag with some bread and lemon. Her pastries also kept well in her eco-conscious recycled paper boxes.
Today’s wide array of packaging choices makes temperature control easier while meeting operator price points and sustainability preferences. But certain foods need specific considerations. Joe’s Seafood, Prime Steak and Stone Crab, which has locations in Chicago and Washington, D.C., knew that re-creating the Joe’s experience was chiefly predicated on protecting the integrity of the food.
The restaurants ran trials, delivering to people they knew. “That really helped us understand what items were best and what items weren’t,” says partner Dave Quillen.
Steaks are pulled from the broiler slightly under the desired temperature because they continue to cook in the container. At BomboBar, the bombolini fillings are packaged in playful squeeze bottles so they won’t cool the doughnuts during transport.
Adding delivery doesn’t necessarily mean you even have to change your menu. “We’ve discovered we can pretty much deliver anything,” says Quillen. “And when somebody has that weird special request ... we have to tell them, ‘Hey we’re not 100 percent comfortable how this is gonna be delivered, but we’ll be happy to do it.’”
At Bar Fiori in Manhattan, the delivery adjunct to the Altamrea Group’s Ai Fiori, management found that short pastas work well for delivery, but long ones dried out. If a dish loses too much moisture in transit, it’s a no-go for delivery, which is why its crudo is reserved for in-house diners only.
Maintain your brand
Packaging has a dual purpose. It helps ensure food reaches its destination looking and tasting as close as possible to what you’d receive in the dining room. But it also conveys a brand identity. Good packaging can communicate value and quality.
Stone crab legs from Joe’s sit atop packed ice so the meat stays moist and cool. But the black tray has a copper-colored interlay, conveying an elegance that matches the seafood’s $42 menu price.
The lesson? While most takeout orders are casual, don’t sacrifice solid packaging to save a few cents.
Start a ghost restaurant
Operators already enjoying success with a dine-in concept are leveraging their brand’s reputation by opening up “ghost restaurants,” storefront-free “virtual eateries” that focus on delivery.
That’s the setup behind Chef-owner Will Gilson’s carryout/delivery-only spot in the storage space next door to his restaurant, Puritan & Company in Cambridge, Massachusetts. Gilson and his team focused on creating dishes prepared from the kitchen’s existing mise en place. It took little effort for a roasted carrots with chicken and duck fat potatoes entree to be repurposed into a mobile-friendly red curry heirloom carrots offing with coconut, sultanas, pearl onions and harissa, which couriers could pick up next door at Puritan Trading Company.
Even if a restaurant doesn’t allow dedicated space for a ghost restaurant, a smaller version of more easily executed dishes can work as long as it’s adequately staffed.
Get buy-in from staff
Adding 14 new dishes to the workload at Puritan’s kitchen caused some initial resistance, but Gilson hired a worker solely for prepping and packaging the carryout dishes and stationed him in the new space. He also detailed the benefits to the staff.
“This is a way for us to increase revenue and to be able to increase wages,” he says. “I don’t want to be the guy sitting here a year or two from now going, ‘We could’ve made a move here or there and we would’ve have been able to keep revenue coming, hire more, and keep the core staff.’”
Dropping direct phone orders for online ordering is one way to stay ahead of the digital curve. When Red Farm, a popular Manhattan dine-in concept with two locations, began offering takeout, the switch entailed far more than just ordering boxes. “It changed our business pattern because guests willing to come at 5 o’clock to eat could get it delivered at 7 when they wanted it,” says partner Ed Schoenfeld.
Adding take-out underscored the importance of maximizing existing labor to accommodate an efficient intake system. Between greeting and seating guests, a host transfers incoming orders from Red Farm’s two delivery services from tablets into the restaurant’s POS system. When pickup couriers arrive, the host hands over the orders that are hung in numbered bags from hooks on the wall.
If carryout and delivery become brisk enough to impact dine-in business, Red Farm turns off its website for an hour or two. “There’s no substitute for taking good care of the customers you have in your dining room,” says Schoenfeld.
Staff right from the start
Sometimes staffing up early saves headaches later. New York’s Altamarea Packaging can make all the difference in maintaining the integrity of the food. Group offers carryout and delivery at nine of its 10 concepts, including Costata Steak and Chef Michael White’s Pasta on Demand. To save space, each operates out of the kitchens of existing restaurants.
“We ended up adding an additional eight menu items to both of those menus,” says Jonna Gerlich, managing director, of marketing, events, partnerships and promotions. “We brought in an additional line cook in the beginning as we started getting used to the volume that was pretty fast and furious for a while. And then everybody started getting a groove.”
Test drive delivery services
The explosion of online delivery services means restaurants now have many options that require research and questions to find the best fit. Get feedback from other restaurants and don’t hesitate to negotiate costs. When in doubt, test drive a few.
Big Bowl, a Chicago-based pan Asian concept, offered Postmates, Doordash and Grubhub at the same time, but dropped one after complaints about incorrect orders. Red Farm offers two.
The biggest selling point of third-party services is their reach. Their databases are being checked by tons of customers who might not have even known you existed.
“It’s not just the benefit of not having the labor (drivers),” Schoenfeld says. “It’s the additional benefit of having this exponentially added traffic.”
Which service is best for you?
TRY: ChowNow if you want a customized online ordering app or system built into your own website for a flat fee, regardless of order volume. Allows restaurants to deal directly with customers.
THINK AGAIN: Does not integrate with your POS system.
TRY: DoorDash if you want to allow diners to customize their orders.
THINK AGAIN: Markups can come as a shock to customers.
TRY: Uber Eats if you want to capitalize on a vast network of drivers, decreasing overall delivery time.
THINK AGAIN: Requires customers to meet the driver curbside. Also might be hard to ignore the army of dissatisfied drivers on Glassdoor.com reviews.
TRY: OrderUp to reach customers in smaller cities.
THINK AGAIN: No discounts for regular customers.
TRY: Grubhub if you want to set your own delivery fees.
THINK AGAIN: You need your own drivers. The website can also direct traffic away from your restaurant.
TRY: Caviar for the most complex menu. It’s a favorite among higher-priced, chef-driven restaurants.
THINK AGAIN: Delivery radius can dramatically shrink during inclement weather, just when customers need it most.
TRY: Postmates to reach a broad range of customers interested in goods besides food.
THINK AGAIN: Drivers will pick up anything, even if not appropriate, for delivery.
TRY: Eat24 to leverage good Yelp reviews.
THINK AGAIN: Most restaurants supply their own drivers.
Is Takeout Worth the Effort?
Does off-premise income offset the potential loss of alcohol sales and added labor? Most operators say yes, but the cost of online delivery platforms must be factored into the profitability.
“Delivery does offset the draw from beer, wine, etc., since it is incremental sales,” says Dave Quillen of Joe’s Seafood, Prime Steak and Stone Crab. “You don’t have a table, a tablecloth, silverware, glassware and all of that. And you don’t have to employ drivers (or) have to worry about insurance and cars.”
Third-party online aggregators, such as Grubhub and Doordash, take a cut of the sales but the site allows upselling by recommending additional items and dessert. There’s also an inherent soft upsell hidden in ordering online.
“Customers tend to order more online than they really need,” Quillen says. “The idea of, ‘Do you want dessert?’ becomes, ‘Let’s get something for dessert. We can eat it later.’ Then one piece of pie becomes two.”