2019 Restaurant Trends

2018 was another solid year for restaurants, continuing a trend of mild yet steady growth. Using data from the National Restaurant Association (NRA), we will review the past year’s trends and surprises as well as forecast trends for 2019. For further insight into craft beer-focused establishments, and the state of restaurants in general, The Beer Connoisseur spoke with Flying Saucer Draught Emporium co-founder Keith Schlabs. Before we hear from Schlabs, let’s dive into the numbers to see what defined the past year.

At year’s end, 2018 restaurant sales are expected to have hit $825 billion, according to the NRA. This marks growth of 1.4 percent. This positive trend represents nearly a decade of growth for the restaurant industry.

“2018 is the ninth consecutive year of sales growth for the restaurant industry,” said Hudson Riehle, Senior VP of Research and Knowledge at the NRA. “Not surprisingly, it’s another year characterized by moderate growth.”

There are many parallels that can be drawn between the restaurant industry and the craft beer landscape, including that of growth driven by the sheer volume of establishments open to the public.

While there are over 7,000 breweries open in the U.S., 2018 saw the number of restaurants rise to over 660,000, and first and foremost, that means a highly competitive environment where the difference between success and failure is razor thin.

In a survival of the fittest environment, the most surefire means of surviving is to have a robust, capable workforce. The hiring environment is incredibly competitive, with cost of training talent and retention being cited as two of the year’s biggest challenges for restaurateurs.

According to Riehle, “roughly one out of every two restaurant operators reports their top challenge is labor-related.”

Keith Schlabs, co-founder of the pioneering craft beer restaurant chain Flying Saucer Draught Emporium, echoed this sentiment:

“Hiring talent is the hardest thing in the restaurant business right now. Restaurants open every day, and the hiring climate is super-competitive. Even the price for a line cook has risen dramatically over the last five years. Hiring service staff and sending them through our week-long training program, then making them practice with a human being is difficult when they could go down the street and work at a shot bar and make money tomorrow.”

Whether a taproom or restaurant, an establishment is only as good as the people running it. So how can restaurateurs ensure employees convey the image of the brand and provide excellent service in such a competitive hiring environment?

“Hiring is key, especially when managers don’t have the luxury of hiring based on specific personality traits,” Schlabs said. “Does a prospective employee seemingly have good energy, integrity, solid work experience, and can we make them understand what we need and how to execute? The leadership we have at each location is a priority, because people are our most important element – good people give good guidance, recommending the right beer to the customer and keeping them excited and interested.”

In summation, successful restaurants, like breweries, will be the ones that build themselves up from the inside-out, ensuring quality is never sacrificed for the sake of growth.

As for restaurant-wide trends, 2018 was the year of locally sourced food and drink choices. These options lend immediate authenticity to an establishment and preserve the all-important human element that today’s consumers crave.

With the amount of artisanal food and drink being produced, it is now possible to create a menu that relies heavily on local products, even for regional and national chain establishments like Flying Saucer or California-based Yard House. This tailored experience can serve as a huge differentiating factor, but again, what it requires is a trustworthy, highly attuned staff that cares enough to execute.

“We let each establishment have autonomy,” said Schlabs. “There are parameters that must be adhered to within, but our Charlotte location, for example, is a different experience than San Antonio, and that’s fun to see.”

Successful restaurants, like breweries, will be the ones that build themselves up from the inside-out, ensuring quality is never sacrificed for the sake of growth.

Beer-Related Restaurant Trends
So, when it comes to beer, what’s selling, and how is it selling?

You can probably guess some of the year’s big winners: Hazy IPAs and single-hopped brews, neither of which should come as a surprise. In 2019, we can expect consumers to return to more palatable, sessionable ale. There are a couple obvious reasons why.

First, the craft beer honeymoon phase is past, and people are learning how to drink and still go about their days. Rather than drinking less, consumers are opting for more subtle, lower-ABV beers.

Secondly, the average American drinker is becoming more attuned to the nuances of beer, which means that flavors that once had to be spelled out in all-caps can now be gently painted onto the palate.

“Flying Saucer is a community place, built for camaraderie,” said Schlabs. “People do tend to drink more in this environment, but they don’t want to get wasted, so they’re gravitating towards more palatable, sessionable beers. Even within the industry, when I have drinks with our managers for instance, they’re all drinking sessionable ales or lagers because they want to feel good about themselves the next day.”

The past year’s focus on IPA experimentation led to some exciting new stylistic subsets. If the same level of experimentation is applied to lager and other sessionable styles, 2019 should promise to be an exciting and relatively healthy year.

As American drinkers learn to incorporate healthy amounts of drinking into their lives, different glassware options like nooners take on an added value. If you only offer pint glasses, consider branching out to glassware that enhances the drinking experience or provides multiple options.

Though subtlety in beer is on the rise, Schlabs does note a few past beer trends that are becoming tough sells in a crowded market.

“It’s very difficult selling real ale in any of our establishments,” he said. “There’s an occasional market where it will succeed, but we have more or less had to eliminate it. Sad to see it go, but more often than not we ended up pouring partial kegs down the drain. We just couldn’t go through it quickly enough.”

“I don’t know where this evolution is taking us, but we’re losing some things that are important,” Schlabs continued. “Even overseas, people are pounding bizarre beers, or even Smirnoff Ice. It’s not universal, but I’ve certainly seen the younger generation drifting from tradition.”

Another tradition falling by the wayside is the mega-hype beer release, likely because there are just too many to be excited about.

“Whale hunter events are not what they used to be,” said Schlabs. “If you remember Founders CBS, that beer used to have a line out the door for an event. Now it’s just on the shelf in Whole Foods.”

Lastly, while Schlabs pinpoints the perennial value of tastings, pairings and flights, he cites glassware giveaways as an ineffective means of promotion, simply because it has been done so much.

Finding What Works
Though it is a national chain, Yard House still tailors its menus per location, and since 2016, it has solicited feedback directly from the consumer in the form of surveys.

According to Gregory Howard, director of Beverage Strategy for Yard House, the company’s annual beer review takes “three to six months to complete” and includes “beers, brands and styles they’d like to see at their local Yard House.”

“We will ultimately select from 20 to 30 new beers to replace the least-popular beers at each restaurant,” said Howard. “That equates to nearly 1,600 tap handles company-wide. And, of course, each Yard House will have at least a few taps that are exclusive… Each Yard House location has its own individual beer menu and no two are exactly alike.”

No matter the size of your business, feedback from both the consumer and staff are crucial amidst a constantly evolving market.

The average drinker is becoming more attuned to the nuances of beer, which means that flavors that once had to be spelled out in all-caps can now be gently painted onto the palate.

Takeaways
If you are considering opening a restaurant, build from the inside out. Pay employees fairly and treat them humanely and they will breathe life into your establishment and build your customer base. They will also be your ear to the ground, liaising with the consumer and helping you stay a step ahead.

Restaurants now compete with taprooms, but they will always win on the service end. Those establishments willing to “wine and dine” the customer will keep the line of demarcation between taprooms and full-service establishments firm.

At any stage of business, stay in touch with the customer, and let them dictate what you sell as much as you can. Know them, and you will know what sells.

Not only is knowing what sells important, but knowing what environment and mindset the product is being sold in. For Schlabs and Flying Saucer, this means being willing to experiment with the standard model.

Two new Flying Saucers are slated to open in 2019. One will be a condensed model in the international terminal of the Dallas/Fort Worth airport, and the other will be a “modified Saucer, smaller, different service style, more focused on the to-go option,” said Schlabs. “It’s near an amphitheater and campus, with a bunch of residential housing around. It’s exciting and has the potential to grow into something special.”

Lastly, know when to separate personal preferences from business decisions, like Keith Schlabs with Hazy IPAs:

“I like to see through my beer occasionally, but our customers want Hazy IPA, so we supply it.”