The loss of more than 100,000 restaurants ended an era that arguably began with another, albeit very different, crisis. A dozen years ago, the housing market crash and subsequent recession gave rise to the food truck boom and later a new generation of elevated fast casuals.

“Normally, change happens in an economic shock. … This one just looks different. It came in the form of a pandemic instead of a housing crisis,” says consultant Ryan Gromfin, whose company, The Restaurant Boss, helps brands optimize and grow their businesses. “There wasn’t a return to normal after ’08–’09. Sure, people went back to restaurants. They started making more money. Their bank accounts got bigger. But the way that we ate changed forever.”

Gromfin points to food trucks as a natural byproduct of the Great Recession; consumers wanted quality food at a lower cost and without the pretension that had been affiliated with chef-led concepts. Elevated fast casuals and fine casuals became an extension of this movement, and for the past decade, traditional fast-casual and casual-dining brands have fought to reclaim lost ground.

Now, as the world anticipates the pandemic’s end, restaurants of all categories and segments are left wondering how business will be forever changed.

Restaurant service 2.0

In a simple apples-to-apples comparison, the food-truck equivalent of COVID-19 (i.e. a new segment spurred by a crisis) would be ghost kitchens. In just a year, hundreds of ghost kitchens have cropped up either through existing restaurant brands or as standalone entities. Euromonitor even estimates that ghost kitchens will represent a $1 trillion business opportunity by 2030.

Nevertheless, the most dramatic effect of the coronavirus may be the shift in services offered by existing operators, rather than the emergence of a new business model.

“We’ve seen an increase within the delivery and takeout space. There were a lot of restaurants that didn’t offer those services, specifically delivery, at the beginning of the pandemic,” says Trevor Shimizu, cofounder of Brizo FoodMetrics, a foodservice analytics and insights firm that tracks types of restaurants but also services rendered.

Shimizu says online-ordering platforms have watched demand for their services increase 10-fold since the start of the pandemic. As of mid-January, 89.6 percent of U.S. restaurants offered takeout, and 81.9 percent had delivery as an option, a third of which used three or more delivery apps. Fast-service restaurants were more likely to offer both takeout and delivery compared to their table-service counterparts, but the difference came down to a mere 2 percentage points for takeout and roughly 7 percentage points for delivery.

Traditional quick-service brands were best prepared for this reality, as exemplified by the most ubiquitous chain of all. Last year, Subway doubled down on its existing off-premises channels and watched business soar.

“Third-party delivery sales have continued to climb even during the summer months when restrictions were relaxed or removed,” says Renee Hourigan, senior director of off-premises innovation for Subway. “Based on that, I expect all of our convenience channels will continue to grow even when the pandemic has passed.”

Curbside service, which launched in November, has already boosted business. In addition to ticket sales that are approximately 50 percent higher than dine-in orders, curbside has also increased order volume throughout the day. Prior to having the platform, lunchtime was the biggest rush, with traffic ebbing afterward.

But few restaurants have enjoyed such results. Across the limited- and full-service spectrum, operators are eagerly awaiting a return to dine-in business. Even concepts that put a strong emphasis on in-person experiences, though, acknowledge that consumer demand for off-premises service will endure far beyond COVID-19.

“The thing that I hear from many of the people I know is that this pandemic has forced much-needed family time… time that we didn’t know that we needed until we were forced to quarantine,” says Sherri Landry, chief marketing officer of Chuck E. Cheese Entertainment. “If these feelings [and] lessons aren’t lost, then the role of delivery and carryout will be forever larger and the driving occasion for new concepts.”

Digital identity

While takeout and delivery have dominated the spotlight over the past year, digital engagement has been nearly as important, albeit less glitzy. Per Brizo, about 78 percent of U.S. restaurants offer some kind of online ordering. But digital engagement goes beyond redirecting customers to an online POS. It’s also about getting in front of consumers, building a reputation, and cultivating relationships, but without the benefit of in-person interactions.

For eatertainment concepts, taking those signature experiences off-site was especially tricky. In addition to safety and health-related tweaks, Chuck E. Cheese built new platforms for customers (and more specifically, their children) to get a taste of the in-store experience. Along with daily online activities, the company instituted special programs like Winter Winner-Land, in which children received gold tickets that hold prizes for every store visit or off-premises order.

A restaurant’s service model can shape the way it approaches a digital presence and guest engagement. According to Brizo, a greater portion of table-service restaurants have official websites compared to fast-service operators, but more fast-service establishments are on the three major social media platforms (Facebook, Instagram, and Twitter). However, the gap becomes even more pronounced when filtering through ambiance rather than service. Just over 18,000 upscale restaurants are on Facebook, compared with more than 300,000 casual restaurants.

Operators with the resources and knowledge to promote their businesses had an inherent advantage during the pandemic when regulations and conditions changed on a near-weekly basis.

“I’m encouraging my friends and family not to overlook the spot on the corner that may not have PR or Instagram,” says Irene Li, cofounder and owner of Boston foodservice concept Mei Mei.

She adds that mom-and-pops, especially those owned by immigrants and non-native English speakers, may be more vulnerable, and not just in terms of getting the word out; many have also struggled to find resources—like PPP loans—that could have helped them.

There’s a certain charm to local, no-frills, family-owned restaurants whose menus are written on chalkboards or in paper takeout menus. While the coronavirus has not extinguished all these establishments, it has made their old-school methods a serious liability if not altogether obsolete.

“As we’re moving into what appears to be a new era of convenience, … the online presence of these restaurants is going to be the most important piece for them,” Shimizu says. “People rely more on reviews and ratings on these sites and feedback from other consumers. Just maintaining that brand presence is going to be a big part of the industry going forward.”

Helicopter rides

Shimizu is quick to qualify that the rise of digital as a business requisite does not diminish the importance of high-quality food. An engaging Instagram account will do little if the presentation, taste, and overall experience aren’t on par.

On the other hand, Gromfin does not believe that food quality—even at the fine-dining level—will be the main differentiator for restaurants. He predicts that the industry will become even more polarized with more laidback concepts (both quick or full service) specializing in niche offerings, while pricier restaurants lean into attributes that make them special—and worth the splurge.

“I’m a guy that preaches distinction, uniqueness. So I do think there is a place for [upscale restaurants]. I think there’s a place for everything. The challenge for me is going to be: What are they serving that’s unique enough for me to spend that $50–$60 a person on food?” Gromfin says. “I see a meal at Per Se with my wife as no different from her and I taking a helicopter ride in Hawaii. It’s an experience. It’s something that you do once in your life. You take a bunch of pictures; you open a bottle of wine.”

With the coronavirus curtailing those once-in-a-lifetime experiences, restaurants of all stripes are offering some kind of off-premises option. So how one talks about the different types of restaurants within the industry may soon have less to do with operations and more to do with cultivating a certain vibe and brand identity.

“I think that we need to break down what fine dining really is, which is an acute attention to a guest’s needs and the ability to have whatever their heart desires, whenever they desire it,” says Aaron Bludorn, chef and owner of Bludorn in Houston, who previously worked at Café Boulud in New York.

His general manager and fellow Boulud alum, Cherif Mbodji, echoes the sentiment. “My focus on Bludorn was never really about making it a fine-dining restaurant versus something not fine dining. It was always about being the best version of ourselves as a restaurant that we can be despite the circumstances,” Mbodji says.

It was perhaps this mindset that allowed Bludorn to open last August in spite of the pandemic. The restaurant opted to cut its capacity in half and made other adjustments such as changing the layout and building dividers between tables. Its summer debut also worked in Bludorn’s favor, with expanded patio seating featuring fans for the dog days of August and heaters for cooler months.

Even if Bludorn and Mbodji aren’t attached to the fine-dining label, they have remained faithful to its spirit. The two had worked together under revered chef Daniel Boulud’s Dinex Group in New York before relocating to Houston. The menu reflects this sensibility, with locally sourced ingredients prepared using classical techniques. COVID-era modifications, like toppers on wine glasses and hand sanitizer upon arrival, may not be the typical mise en place, but even these safety measures are tempered by elevated elements, like oshibori towel service.

Bludorn says that many of the safety protocols the restaurant has adopted because of the pandemic will continue once business returns to normal. He also plans to continue the restaurant’s strong focus on outdoor dining and possibly expand it. As for other changes, those are yet to be seen.

“Every challenge also offers an opportunity, and we have already seen how resilient and creative the hospitality industry is,” Mbodji says. “For me, the question hasn’t been if restaurants were going to come back, but how restaurants were going to come back—and that, I cannot wait to see.”

Evolution, not extinction

For as much attention that has been paid to the struggles of upscale and fine dining, other categories are hardly immune. For some restaurants, the ramifications of COVID-19 are more delayed. Because foodservice is inexorably tied to so many other industries, its fate depends on any number of impossible-to-predict factors.

Over the past year, trendy fast casuals with pre-existing off-site operations have fared better than many sit-down restaurants. At the same time, locations that were once fertile ground for business have dried up, with no guarantee that the end of the pandemic will bring any relief.

“I have concerns that some of the fast casuals—whether corporate or independent—in downtown, office worker–dense areas will potentially be changing permanently. … That would be the same for food trucks that rely on those super-high-traffic areas,” Mei Mei’s Li says. “We’re getting the sense that a lot of office jobs are going to remain at least somewhat remote in the future just because the pandemic has shown that it’s possible.”

She sees catering taking a hard hit for the same reason; fewer office workers on-site translates to fewer in-person professional gatherings and thus lower catering volumes. For Mei Mei, 35 percent of its overall business had come from catering. In light of fewer workers commuting into the office and fewer offices hosting events, Li elected to shut down Mei Mei’s restaurant side and instead rebrand as a dumpling company late last year. It marks the third major format shift for the brand, which Li, along with siblings Andrew and Margaret, originally launched as a food truck.

“We are basically closing down the restaurant side of the operation in favor of starting a packaged product company—that is our pivot,” Li says. “We are hoping to leverage the brand that we’ve built and the following that we’ve established and create a dumpling company.”

Although Mei Mei did capture lunchtime business from Boston office workers and college students, it performed even better in the evenings; Li told QSR in 2018 that, thanks in part to its alcohol program, the lunch/dinner split was around 45/55. In its new iteration, Mei Mei will focus exclusively on dumplings that are packaged and refrigerated or frozen. At present, Li is pushing direct-to-consumer sales at local farmers markets, but she hopes to enter the wholesale sector and sell through distributors and grocery stores.

Li’s CPG pivot has not been the industry norm; instead, the vast majority of restaurants have opted to tweak their service model or add a ghost kitchen element. Brinker, parent of Chili’s and Maggiano’s, launched It’s Just Wings; Bloomin’ Brands piloted Tender Shack in its home market; and Chuck E. Cheese added Pasqually’s Pizza & Wings to its operation.

Last spring, Applebee’s launched Neighborhood Wings to bolster its off-premises business, which already included Applebee’s To Go car-side and pickup services. Available through nearly 750 locations across the country, the virtual brand utilized the company’s existing kitchens and resources. Amid the relaxation of off-premises alcohol laws, Applebee’s also took its Mucho Cocktails off-site in about 30 states. Although the family-casual giant is eager to welcome guests back on-site, it plans to continue with these new offerings.

“Restaurants will need to be able to cater to guests both in-restaurant and in their home to be successful as we move forward,” says Applebee’s chief marketing officer Joel Yashinsky. “We are always learning, and we have learned a lot because of the pandemic.”

The pandemic isn’t over yet, and if the past year has proved anything, it’s that all the planning in the world cannot control what’s to come. It’s too soon to say what the foodservice sector will look like, how restaurants will define—and differentiate themselves—and what consumers will seek from them. But come what may, the industry will rise again with a full kaleidoscope of cuisines, styles, service models, and hospitality. It’s this variety and adaptability that, time after time, crisis after crisis, ensure the sector’s permanence.

“At the end of the day, any of the predictions that I make or anyone else makes, there’s room for everybody out there,” Gromfin says. “I still believe [the future] is going to be the restaurants that do it the best. It always has and it always will come down to fundamentals.”