June 23, 2017

Roundtable chews on opportunities, trends in the food business

Susan Guerin
Dave Burbank/University Photography
Susan Guerin ’83, CEO of World Finer Foods, leads the roundtable session on the latest developments in food retailing.

The business of food was on the table recently at a conference of food industry leaders hosted by the School of Hotel Administration. Topics ranged from the intersection of technology and restaurants to trends in food retailing and the movement to eliminate tipping.

“The idea of the roundtable was to get people together from different parts of the food chain to identify, discuss and analyze challenges and opportunities,” said roundtable chair and organizer Alex Susskind, associate professor of food and beverage management. “Having leaders from the restaurant, supply chain and retail parts of the food industry, along with faculty and students, set the stage.”

“The Food Chain: Paths for Entrepreneurs,” held May 10, was hosted by the Leland C. and Mary M. Pillsbury Institute for Hospitality Entrepreneurship. A full report can be found here.

The conference was also an early effort to showcase the Cornell SC Johnson College of Business’ new Business of Food theme, headed by Susskind and Miguel Gómez, associate professor in the Charles H. Dyson School of Applied Economics and Management. The college’s multidisciplinary themes offer faculty members in the college’s three schools a forum in which to collaborate in shared areas of interest.

A wide-ranging discussion about technology and restaurants dominated the roundtable.

Charles Bililies ’06, founder and CEO of Souvla, a modern Greek sandwich shop and wine bar in San Francisco, said he uses his smartphone to remotely manage his point of sale system, labor schedule and expenses, guest ordering and delivery processes. He even has an app that allows him to adjust the lighting in his restaurants. Although these automated systems ramp up efficiencies, he and other participants agreed smartphone apps can’t replace a smart on-site manager.

Systems that encourage guests to order and pay for their meals without the help of staff are gaining ground in quick-service and fast-casual restaurants. But restaurants still need people, especially to troubleshoot problems with automation and, more critically, deliver hospitality to guests.

“We have not programmed a machine to do that convincingly – yet,” Susskind said.

Technology that analyzes big data can help restaurants improve sales and profits, participants said. For example, OpenTable, a real-time online reservation network, tracks where and when a restaurant’s guests eat. Restaurant operators can use this type of data to better inform their strategic decisions and anticipate their guests’ needs, the participants said.

“Remember, [as millennials] we still value service, and we expect restaurants to advocate for themselves and convince us to spend our money with them over their competitors,” said Julie Mercado ’17.

In the area of guest-facing apps, participants had good things to say about Panera’s system, which allows customers to order online or on a smartphone before arriving at the restaurant, or with in-store kiosks. This technology can help operators reduce service labor, improve order accuracy and service time, and reduce the need for staff to handle cash. But, participants said, full-service restaurants still require the human touch.

“It will take some time for guest-facing technology in upscale restaurants to take root, beyond having menus on tablets,” Susskind said.

In food retailing, “organic” is still a hot term, as are “non-GMO,” “kosher,” “low sugar,” “traceable” and “gluten free,” said Susan Guerin ’83, CEO of World Finer Foods.

She also noted that the way consumers use grocery stores is shifting toward meal replacement. Stores including Whole Foods and Wegmans have developed notable business from their prepared foods sections and cafés. Consumers want fresh preparation, and the use of meal kits is rising; one in four U.S. adults bought a meal kit delivered to their home in 2016, she said.

Given these changes, Guerin noted a brand’s attributes are the first thing her firm analyzes when it considers adding a product to its portfolio. And a brand aiming to attract millennials must present an identity they can relate to, said Julie Berman ’17. “It is important that we know the story behind the product and the brand before we commit to it,” she said.

Other trends include a movement to end tipping and compensate staff directly. Opinions on the movement were mixed. But all agreed if servers’ wages take a dive for lack of tips, restaurateurs may not be able to attract talented staff. “This is a debate that will continue for some time,” Susskind said.