Restaurant Operations-Interesting Topics: Pop-up Restaurants

Pop-up Restaurants
Pop-up restaurants are becoming more popular in the fine-dining sector and could spread to the quick-service segment.

Description

Pop-up restaurants are mini-restaurants that temporarily operate in parks, plazas, galleries, warehouses, event centers and larger restaurants. Some announce dining events just hours before they take place, and they often sell out.

Opportunity
1. Easy to enter and exit to the market, making it Affordable. As the name implies, pop-ups don’t require long-term investments. Operators pay rent only as long as they occupy the space. A restaurateur might spend only a few thousand dollars a week to maintain a mini-restaurant. Small loss potential. If a concept fails in one spot, it can be packed up and closed as swiftly as it started.

2. Take advantage of underused spaces and kitchens to introduce concepts without great expense.

3. Attract investors who want to transform an idea into a full operation or another dining possibility. If the concept continues to grow, it could grow to a stand-alone operation or one that distributes packaged food.

4. Guest appeal. The millennial generation likes the novelty and creativity. With increasingly curious consumers, pop-up concepts will take flight.

5. Variety. Pop-ups are opportunities for operators to offer quick-hit innovations with frequently changing menus. A chef can operate a new pop-up for a weekend, close and open another one the following weekend.

6. Higher check averages. Because pop-ups often are exclusive, and their food often is rare or unusual, customers will pay a premium for the experience.

Challenges
1. Limited time for advertising.

2. Limited time for arrangement of seating, labor and menu design.

3. Keep it mysterious and new to customers.

4. Selling different types of food requires different type of licenses, given that pop-up restaurants keep changing the menu.

Business Strategies
1.Pop-up restaurateurs and their followers use blogs, Twitter and other social networks to inform people about the pop-ups. Some announce dining events just hours before they take place, and they often sell out.

2. Consider planning a limited-seating event in a designated area of your establishment. The event could feature your latest menu items or a special presentation by one of your chefs. Create new promotional material and signage.

3. Plan weekly or bi-weekly pop-ups in your restaurant based on what’s available at local farms or famers markets. That inspires creativity and spontaneity and keeps guests guessing what comes next.

4. Prepare a theatrical pop-up. Create an area or room in your restaurant unlike anything guests have ever seen. Take them to a different place and time, such as a foreign locale with exotic flavors.

5. Connect with a cause. For example, San Francisco’s Mission Chinese Food donates a portion of food sales to a local food bank.

6. Use your restaurant as a pop-up for others, especially when you’re closed. If your restaurant serves only lunch and dinner, offer it as a pop-up for breakfast. Someone else runs it, and you receive part of the profit.

Real Life Example
1. One of the best-known  pop-up restaurateurs is Ludo Lefebvre. A native of France, Lefebvre was the mind behind LudoBites, temporary restaurants that appeared around Los Angeles for limited times. LudoBites became a smashing success that made Lefebvre a household name and proved the potential of the pop-up concept.

2. McDonald’s built its biggest and busiest restaurant ever as a pop-up for the London 2012 Olympic Games. Located in Stratford, east London, about 300 meters from the Olympic Stadium, the two-story chalet-style building was constructed to seat up to 1,500 customers and serve as many as 1,000 an hour. It stood for six weeks, and 75% of its construction materials were to be reused or recycled after dismantling.

An exterior view of the world's largest McDonald's restaurant, their flagship outlet in the Olympic Park

Read more: http://www.dailymail.co.uk/news/article-2164517/Worlds-biggest-McDonalds-First-pictures-inside-Olympic-Stadium-fast-food-restaurant.html#ixzz3IHZqKONY
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3. Starbucks opened its first-ever pop-up in Tokyo in September 2012. The pop-up serves nine coffee choices from rented event space on a small street in the city’s trendy Omotesando district.

The space was designed to reflect a library setting

Reference: http://warestaurant.org/blog/create-buzz-test-new-ideas-with-pop-up-restaurants/

Restaurant Operations-How Restaurants do their Forecasting and Food Cost Control Process

If restaurants can forecast well to their business, it can help maximize the probability of the restaurant, not only retain loyal customers, but also attract new customers, optimize processes for the future operation as well as identify emerging business trends by taking advantages of those new business.

The most critical question is how can restaurant forecast demand. The most commonly conventional method is by using some calculations in an Excel spreadsheet.





Regards to the output, most restaurants would either manually eater data into a spreadsheet based on historical sales and inventory levels or they might export some information into Excel and then create a series of formulas linking to the worksheet and perhaps a few statistical charts to help them predict their upcoming inventory requirements.





This method can work and usually does in the short term in volumes are low. However, it is also an extremely manual process which usually requires constant attention to details and it can have a tendency to break down if its formulas change and cell reference relates break. What's more, the spreadsheet usually only accommodates single forecasting method which does not allow your reference past performance based on many forecasting methods compared to actual sales for historical periods.

Forecasting elements

1. Occupancy Statistics
Number of turns= Number of customers/ number of seats

2. Average check= Sales of Food and Beverage / Number of customers
Forecasting Methods
Moving Average


The moving averages method of forecasting is especially useful for businesses wanting to make predictions in industries that are rapidly changing. Instead of looking at the average in a set period, the moving average looks at interval of time of which “moves” each week or month. A common approach of using this method is by taking the average of the previous three weeks to forecast the upcoming week. It can also be done for monthly or quarterly as well.






1. Itemize all of your businesses' food and beverage sales data by total annual sales and per month total sales. For instance, if your food products include wraps, soups, fruits, and vegetables and your beverage products include coffee, water, tea, and soft drinks you will want to show the total sales for each of these products individually as well as the grand sum total of all sales for each month and for the entire year. Use this information to calculate the percentage of total annual sales that each month contributes to total sales for the year.

2. Calculate the monthly food and beverage sales forecast based on historical sales data. To calculate the monthly forecast, take the prior month's total food and beverage sales data and divide by that month's average percentage of total annual sales and than multiply this product by the upcoming month's average percentage of total annual sales. For example, if you wanted to forecast December's food and beverage sales, which averages 12 percent of total sales per year, you would need to know November's total sales--$100,000, and the average percentage of total sales for November--8 percent. Proceed to divide 100,000 by 8 percent to arrive at $1,250,000 million, which you will than multiply by 12 to arrive at December's food and sales forecast of $150,000. The equation would be: [100,000 / .08] X .12 = 150,000.

3. Calculate the annual food and beverage sales forecast based on historical sales data. To calculate the annual food and beverage sales forecast identify last year's total sales and add to it any predetermined food and beverage sales expected to be received in the upcoming year. Multiply the sum of these two sales figures by one plus the historical average growth rate of annual food and beverage sales data for your business. For example, if last year's total sales were $100 million and your business anticipated additional food and beverage sales of $200,000 from contractual agreements that were entered into but not yet fulfilled and your annual sales average growth rate was 6 percent, you would add 1 million to 200,000 and multiply by 1.06 to arrive at $1,272,000 million in food and beverage sales forecast for the upcoming year. The equation would be: 1,200,000 X 1.06 = 1,272,000.

Food cost control process
(1) Menu PlanningA well-planned menu should offer sufficient and a wide variety of choices at the right price with neat style and format which allows customer easy reading. Also, items in the menu should promote restaurants' strengths of your kitchen staff and selling points which are superior and well differentiated from its competitors while at the same time try hiding its weaknesses and limitations.

(2) ForecastingForecasting application helps estimate and predict the desirable level of production and available sales volume based on restaurants' historical data and environmental factors.

(3) PurchasingProcurement of the raw materials and ingredients that restaurants need to serve the customers involved in this section. It is essential for purchasing personnel to communication and interact with the chef. Afterwards, purchasing staff will take all considerations and concerns into account and make decision on how much to order and when to place order. In addition, a list of all food items, including product specifications, preferred vendors and pricing history should be written. Also the par stock, purchase reorder point are needed to know in this section. Once you determine your specifications it’s time to compare and negotiate with suppliers.Your purchasing system will also require that a “Par” or “Build To” system with an actual inventory used to control the amount of food purchased. Purchasing is vital and must be done by management or a senior level staff member. Improper purchasing can cause serious issues from product shortages to excessive waste.

(4) Receiving
It is to confirm and make sure that the quantity, intended quality, price and suppliers are exactly as ordered.Time and date delivery is also to be made.It’s critical when deliveries arrive that a manager or senior level staff member check the deliver for accuracy. Each case must be counted and spot checked for proper weight and quality. Believe me when I say the suppliers know whose checking and who’s not. If you do not check consistently you will undoubtedly receive inferior quality or shortages on occasion.
(5) StoringAreas for storing dry foods should be well ventilated and pest-free with sufficient space and light or even air-conditioning. Storage facilities like refrigerators and freezers should be checked regularly in order to keep track of the performance of temperatures and cleanliness. Moreover, it is vital to keep those storage areas clean and neat. Also, storage areas should also be monitored and checked with CCTV or staff in order to enhance security while minimizing lost and theft.

(6) IssuingThe products are taken from the storage area to kitchen for cooking.

(7) ProductionThe food is cooked for the ingredients. In this section, cleanliness is important. So the hands of person who handle the food should be clean. The production process requires the use of a system to track what has been ordered and delivered. In most restaurants that will be a POS system. If no POS system is used an order pad will be used. Each order pad must be accounted for and allocated to your food servers. Missing order copies are clear indication of theft. Another key to control and tracking of expenses is to document remakes, waste, promotions, employee food and other items that are not served to the customer. These can add up to a significant expense if not controlled. Following recipes and the use of portioning tools such as scoops and scales will also help deliver consistency for the customer and control costs.

(8) ServiceThe cooked food is delivered to customers for service.

(9) SalesThe sales generated for food sold.

Food Cost AnalysisFixed costs and variable costs are determined. Fixed cost is constant no matter how much food is produced. Variable costs is varied base on the volume of business. After collect the sales and cost, balance sheet and income statement are made in order to reflect the assets and liabilities relate to owners’ equity and see the sales budgeted.A physical inventory count weekly or monthly is needed to determine actual food used during the timeframe. In many cases you may decide to count expensive items daily or even by shift. Whatever your frequency of inventory it’s absolutely critical to take an accurate inventory to produce the cost of sales numbers that are derived from it.Accounting & ReportsThe previous steps will go for naught if you are not producing food cost restaurant financial reports. The processes above with a proper accounting process will generate the reports needed to determine if expenses are in line, and if they are not where to look to fix the problem.Small amounts of waste and or theft on a daily basis add up to significant dollars over time. That’s why it’s critical to have a system in place for management to execute.

Restaurant Operations-The Updated Trends about Restaurant Operations

Technology at the restaurant


1.Tablets are used


Some restaurants start to use tablet replace the order paper or reduce the labour in order part. The customers can look and see everything they want, instead of written descriptions.























In Hong Kong, there are some restaurants using the tablet to replace the order paper.


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2. Mobile payment


Restaurant guests are ready to embrace the idea of mobile payments, according to a Cornell study.


In a survey of nearly 1,300 consumers, paying with their cell phones or tabletop tablets rated higher than the traditional practice of settling bills with a credit credit. Some customers thought that the payment technology would encourage the customers spend more money in the restaurant.


The reason of the customers have enough confident in using this payment technology because Apple Pay promises better security, something on the minds of many consumers following credit card data breaches at Target, Home Depot and other major retailers. Users must register a credit card (and only certain cards are eligible) and read their own fingerprint through the phone’s scanner to authorize purchases, and Apple Pay encrypts each transaction to protect consumers’ personal data.
3.Social Media for Restaurants


Using the Social media to do the advertisement and promotion are much cheaper than the traditional method along with a better way to attract more people's attention.


Traditional methods of advertising, such as TV, radio commercials and newspaper ads can be very expensive and may not reach your target audience. No matter if you are getting ready to open a new restaurant or if you are looking for a way to promote your existing restaurant, there are several ways to advertise on a budget, including taking advantage of social media sites like Facebook and Twitter.


estaurant promotions are great because they can run daily or weekly, all year long. They offer the perfect opportunity to show customer appreciation and bring in some extra business at the same time. Restaurant promotions can range for a nightly happy hour to an annual customer appreciation day, with drink and dinner specials. Promotions can be traditional, such as two-for-one dinner specials or out of the ordinary, such as a name-the-microbrew beer contest. Use social networking, such as Facebook and Twitter as a free way to tell customers about your restaurant promotions.




Other trend in Restaurant Operations


Restaurant Food Truck Businesses


he number one hottest operational trend for 2011, according the NRA, is mobile food trucks and pop-up restaurants. A food truck business offers low start-up costs over a brick and mortar restaurant, ideal for someone looking to open their own restaurant.


A food truck is like restaurant on wheels. It has several distinct advantages over a traditional eat-in restaurant. A food truck can go to where the customers are. It has pretty low overhead, compared to a restaurant, and requires far less staff. However a food truck is still a business that requires a lot of work and attention- especially in the first couple of years. Food truck owners put in long days and have similar problems as restaurant owners, such as slow seasons, bad weather, and sluggish economy.


Sustainability and Local Foods


Buying local and growing your own foods peppered the top ten trends of What’s Hot in 2011. Consumers are increasingly aware of where their food is coming from and featuring local foods on your menu is a great way to capitalize on the current trend as well as help out your local farmers. Many restaurants are going beyond buying local to growing their own. Restaurants with gardens (on the rooftop, communal, etc…) was cited by 18% of chefs as the hottest operational trend in 2011.



More and restaurants are turning to their local neighbors for fresh, flavorful foods. Local foods are finding their way to all kinds of different restaurants, from fine diningto casual sandwich shops. Here are ten reasons your restaurant can benefit from buying local foods.


a.) Local foods are fresh. According toLocalHarvest.org, the average commute for fruit and vegetables in the United States is 1500 miles. Yikes! For that reason commercially grown fruit and veggies are engineered to withstand travel over long distances. Local foods travel a fraction of that distance and still maintain their appearance, taste and nutrients, without any bioengineering. And good looking food is a good thing, since customers eat with their eyes first.



b.) Local foods taste better. Anyone with a garden can attest to this fact. Just like homemade bread beats the store bought variety, wholesale vegetables and fruits just don’t compare to local garden goods.


c.) Local foods support local economies. As a restaurant owner, it never hurts to support your local economy. You not only keep your money local, you also foster relationships with other business people in your neighborhood. Never a bad a idea.


d.) Local foods are great for restaurant marketing. Add terms like farm-fresh or locally grown to a menu description and watch the items fly out of the kitchen. I’ve never heard a customer complain about eating food from local farms or gardens. Using local foods can be a major selling point for restaurants.


e.) Local foods let you be creative with your menu. Because local foods are based on the seasons, restaurants need to rotate their menu items, based on availability. And that can be a good thing. What better way to come up with daily specials, than looking at the ingredients at the local farmers market?



f.) Local foods aren’t as expensive as you think. While few small farms can compete with wholesale food distributors for steep discounts, their prices aren’t always that much higher. And when you take in consideration the higher quality of produce, you are really getting more bang for your restaurant food cost buck. Some areas offer Restaurant Supported Agriculture (RSAs) which are similar to a CSA (community supported agriculture) offering buying discounts and other tangible benefits for restaurants.


g.) Local foods don’t stop with fruits and vegetables. Long after the growing season is finished you can still find plenty of local foods to add to your restaurant menu. Poultry, beef and pork are available year round, as is honey and dairy products. Even baked goods, like breads and desserts, can be showcased as local foods.


h.) Local foods protect the environment. Tree hugging aside, local foods are generally easier on the environment than large-scale farms. They use less energy for harvesting and transportation and many small farms are organic (but not all) and don’t use pesticides, hormones or other chemicals. Buying local foods is just one way that restaurants can go green.


i.) Local foods preserve the countryside. Small farms, once a trademark of the United States, are a dying breed. Too many farmers are forced out of farming and their fields are chopped up into housing subdivisions or strip malls. Supporting local farmers helps keep them in business, which in turns keeps the countryside intact, preventing your town from becoming Anytown, USA.


j.) Local foods offer more variety. Small farms offer unique produce that are often unsuited for commercial food growing. Restaurants can choose from hundreds of heirloom varieties of fruits and vegetables, adding more flavors and colors to their restaurant menu.


Public Health Concerns


Now more than ever, restaurants are being pressured to create healthier meals with smaller portions. Americans are overweight and plagued by chronic disease such as diabetes. In response to public demand, many restaurants now offer smaller portion sizes and healthier food options on their regular menu. Children’s menus too, are getting a healthy make-over.


Reference: http://restaurants.about.com/od/menu/a/local_Foods.htm