The New Reality of the Foodservice Industry
November 2022
Foodservice leaders weather new challenges
The 2020's just might go down as the most difficult time period ever for the foodservice industry.
The worst of the pandemic woes may have passed, but a trio of new challenges are shifting how the industry operates. Labor shortages, supply chain disruption and inflation have forced foodservice leaders to make tough choices affecting employment, food quality and pricing.
But ingenuity is one of the hallmarks of the industry, and many are finding new and innovative ways to weather uncertain economic conditions. Read on for the latest data on what’s happening in the industry, how operators are tackling these changes and how Libbey is a partner through it all.
First, the good news: The industry is bouncing back, especially when compared to the uncertainty and chaos of 2020.
In fact, according to a recent Datassential survey, nearly half of operators say traffic in their bars or restaurants is higher than before Covid. Almost two-thirds say sales are at or above 2019 levels.
What’s more, the National Restaurant Association forecasts $898 billion in sales in 2022, with 400,000 new foodservice jobs by the end of the year.
And there’s no measuring the creativity, innovation and drive that has always set the foodservice industry apart. High-quality food and drink and great service will always be in demand.
Still, for many decision-makers, delivering those standout experiences has become a challenge.
Inflation is top of mind for many operators. On average, food, labor and packaging costs have risen 15 to 20 percent in the past six months, according to Datassential, with the biggest jumps in meat, dairy and to-go packaging.
Distributors have passed price increases to operators, who in turn have had to raise menu prices. Datassential’s survey reported more than three in four operators have done so this year. Overall, menu prices have increased about 5 percent year over year since 2021.
Supply chain issues have made sourcing ingredients, equipment and paper products difficult, and more than 70 percent of restaurants are also experiencing labor shortages. As a result, Datassential reports, 77 percent of operators – looking to save time, money and labor – have switched how they buy products in the past six months.
Some are thinking smaller by streamlining menus, reducing operating hours and cutting down on high-cost items like meats and dairy alternatives. Operators are rethinking menu development, focusing instead on value items and promotions.
Others facing product shortages have begun to rely on alternate sources. Fresh items have been replaced by lower-quality, convenient shelf-stable and frozen substitutions. Some operators report that they’ve begun shopping at club stores, relying on dual sourcing and exploring other alternative buying channels.
To combat labor shortages and attract new employees, owners and operators are reviewing their benefits and working conditions with fresh eyes. While some can offer higher wages and better benefits, others are turning to technologies like pay-by-QR-code or inventory management software to make up for gaps in labor.
As an industry leader for over 200 years, Libbey has not been immune to economic ups and downs – so we understand the hardships our foodservice partners are experiencing. Libbey remains committed to meeting operators’ ever-changing needs with a durable and innovative full tabletop assortment that leads the way in value.
Our goal has always been to empower foodservice makers to reach their creative and business goals, and while the industry may change, the drive to create moments that matter will always stay the same.
