Out of Toilet Paper? Order Takeout!
April 2, 2020
(Industry Intelligence Inc.)
– Let’s be real: have you ever been out, maybe with your kid or on a long drive, and stopped by the nearest restaurant just to use the restroom? Sometimes your local fast food joint can be a savior when there’s nowhere else around that you can be sure has well-stocked facilities. Funnily enough, in these times of crisis, when people are emptying grocery store shelves of essentials like paper towels and toilet paper, restaurants are gearing up to save the day in an arguably similar way.
In my last blog, I detailed how Industry Intelligence’s IMPACT report tracked supply chain adaptation in the automotive industry as Italy and China began shutdowns to curb the coronavirus outbreak. That was only two weeks ago, but it feels like an entirely different world now. Production shutdowns have ballooned on a global scale as the coronavirus outbreak developed into a full-on pandemic.
In the restaurant industry, stores have been hard-hit by loss of traffic due to mandated closures of dine-in areas by state and local governments. Third-party marketplaces such as Postmates and GrubHub looked like they might be able to rescue the floundering industry, but the boost in those sectors is already showing signs of slowing down, falling from initial peaks of 25% growth to 11% with indications of further decline.
However, our IMPACT coverage has identified a new and different strategy that restaurant owners are using to create more revenue streams amid the current drop in demand – selling groceries.
Even as quick-service restaurant sales drop 12% and fast-casual sales drop 24% year-over-year, groceries are seeing a 34% boom. This discrepancy means that, while grocery store shelves are often barren and picked-over, restaurants and their supply chains are actually stuck wondering how to deal with an abundance of supply that they can’t turn a profit on.
Fast-casual chain Dickey’s Barbeque Pit answered this problem by turning their shipments of staples normally reserved for their dining rooms, including toilet paper, paper towels and boxes of gloves, into menu items that customers can order for pick-up or delivery. Of course, while customers are shopping for essentials, they can also order some of Dickey’s slow-smoked whole meats, now available in larger sizes for bulk orders.
Smaller, regional chains have also started to convert. Los Angeles-based fast-casual Dog Haus has recently launched Haus Markets, opening its pantry and offering hot dogs, burgers, sausages, rolls and tater tots, as well as staples such as milk, butter and toilet paper directly to customers. Midwest quick-service chain Frisch’s Big Boy similarly offers its usual stock of perishables along with Frisch’s house-made tuna salad and shelf-stable items such as bread, sugar and, you guessed it, toilet paper.
Even Yum China, China’s biggest fast-food chain operator and franchisor of global brands like KFC and Pizza Hut, has begun moving into catering and meal-kit services as restaurant demand stays low in the hard-hit region.
However, restaurant owners aren’t the only ones getting in on the grocery store trend. When McDonald’s shuttered all of its UK and Ireland stores in an effort to contain the virus, its egg supplier, Lakes Free Range Egg Company, suddenly lost their main client and was left with a surplus of product. However, Lakes quickly began a partnership with supermarket giants Tesco and Sainsbury's to fill shelves that had been emptied by panic-buyers.
That pivot, however, had some hiccups. According to CEO David Brass, despite there being plenty of eggs, a shortage of cartons across Europe slowed their supply to grocery stores. If more food and beverage suppliers follow Lakes’ example, it’s hard not to see a great opportunity for package printers to step in and offer their services to industries that normally ship in bulk to provide more consumer-friendly packaging.
Right now, it seems that no supply chain or industry is without its own unique challenges. Creative adaptations and coordination across multiple industries, such as what we’re seeing with restaurants, is proving to be crucial in keeping businesses afloat.
Though there seems to be a limited template from which to draw in these turbulent and unprecedented times, Industry Intelligence’s IMPACT report has been able to analyze and identify emerging trends and innovation across a wide range of industries when they first start to appear.
Industry Intelligence is here to help you
Since the COVID-19 situation changes daily and rapidly, the stability of the world economy hinges not only on swift action by governmental bodies, but also on smart decisions made by business executives. With Industry Intelligence’s coronavirus IMPACT daily report, we help you track how companies around the world and across sectors put their expertise to use in ways that meet critical demand.
Stephen is the editor for content in Automotive, Labeling & Printing and Restaurants at Industry Intelligence. We invite you to take a look at our online services. Please contact us at ClientCare@IndustryIntel.com and ask us about our coronavirus IMPACT report.
Let’s be real: have you ever been out, maybe with your kid or on a long drive, and stopped by the nearest restaurant just to use the restroom? Sometimes your local fast food joint can be a savior when there’s nowhere else around that you can be sure has well-stocked facilities. Funnily enough, in these times of crisis, when people are emptying grocery store shelves of essentials like paper towels and toilet paper, restaurants are gearing up to save the day in an arguably similar way.