By 2030, our human population will be smaller and older.
According to the recently released National Restaurant Association “Restaurant Industry 2030” report, from 2000–2010, Bureau of Labor Statistics (BLS) data reports that the U.S. population grew at a rate of 0.9 percent. From 2018–2030, the BLS and NRA project that annual figure to be 0.7 percent.
Furthermore, in 2010, only about 13 percent of the population was aged 65 and older. In 2020, the BLS and NRA project that same group will make up about 17 percent. By 2030, it will figure 21 percent. In 10 years’ time, the slices of the population occupied by those under 25 and those aged 25-44 will drop one full percentage point, from 31 to 30 percent and 27 to 26 percent, respectively.
A shrinking, aging population of American people will lead to a 2030 foodservice workforce that’s feeling the same effects.
Ten years will have the opposite effect on tech, however.
The NRA’s report used the Delphi method—a forecasting approach based on the results of rounds of questionnaires sent to a panel of experts—to predict the most likely developments for the foodservice industry by 2030. Out of the top five forecasted developments, three center around updated and increasing technology: Commonplace acceptance of mobile payment; widespread handheld payment terminals that allow for payment at table; and a majority of takeout and delivery orders placed digitally. Out of the 25 total top NRA forecasts, close to 50 percent (12) have a tech focus.
This combination of workforce and tech projections has some interesting implications for the foodservice industry, to put it lightly. Automation could make up for less-available human labor. Employees (older as whole in 2030) will more than likely need to bolster up tech skills to handle operational changes that rely heavily on digital literacy. A handful of other probable shifts and possible disruptors is also waiting down the pipeline, leaving the years between today and 2030 as a blank canvas ready for the foodservice industry to grapple with a slimmer workforce, wider base of technology, and bevvy of other changing circumstances.
A shifting workforce
At the top of the NRA list of most likely industry structure developments is the prediction of upped competition for customers. Competition for good labor on the part of operators is bound to intensify as well.
Per BLS data, as of September 2019, the U.S. was in the longest uninterrupted streak of job growth on record, looking back on a consecutive 108 months of increase. Yet, while growth has occurred for the U.S. job market, the amount of that growth has been minimal. Even with this streak, the decade stretching from 2010 to 2020 is on pace to be the second-weakest for job expansion since the 1930s.
The NRA expects job growth to slow even more over the next decade. From 2010–2018, the BLS reports that employment grew at 1.7 percent annually; from 2018–2030, the NRA projects this to fall one percentage point to 0.7 percent. Per that rate of growth, about 17.2 million restaurant and foodservice jobs are expected to exist in 2030.
Tight workforce expansion is a harbinger of a negatively growing economy, and it could be difficult for operators to provide workers with higher wages and enough hours during these periods. But higher wages, better working conditions, and more developed internal career ladders will be necessary for attracting 2030’s talent.
“To reach its 2030 potential, the restaurant industry needs to enhance its status as a good career choice,” an anonymous Delphi panelist said.
Thanks to the potential upcoming slow in population growth and change in age demographics, the workforce will grow modestly over the next 12 years (the NRA projects a rate of 0.5 percent). A demographic shift in the ages of laborers—the BLS predicts that employees 65 and older will be at a record high with 16.1 million of them in the workforce, with teenage employees at the lowest since 1963, with 5.1 million in the workforce—will mean that available employees will be searching for more careers, and for less part-time high school or college jobs.
The NRA’s Delphi panel predicts an increase in total employee compensation costs by 2030. As of July 1, 2019, the U.S. Department of Labor reports 30 states with minimum wage requirements higher than the federal per-hour standard of $7.25, and this group of states could increase by 2030. It almost surely will. The NRA report forecasts that labor levels in the foodservice industry will remain intensive, even with increased automation and tech, meaning pay will have to account for this intensity.
Some good news for operators: The NRA’s Delphi panel predicts an overall decrease of the average number of employees per unit, meaning that, while wage costs will most likely be higher, there will be less team members in need of a paycheck.
“Employers are likely to use compensation and benefits to attract new talent. Technology skills will be needed to ensure the staff is able to deal with automation and robotics, data analytics, and more,” the NRA report said.
The association’s Delphi panel expects a rise in fresh formats like virtual restaurants and ghost kitchens, and predicts that off-premises traffic will post stronger growth in 2030 than on-premises dining.
Other labor force changes coming up in 2030 include increased diversity. The restaurant industry already performs well when it comes to employing women and minority managers, but NRA’s Delphi panel expects to see both women and minorities in a larger proportion of upper management positions in 10 years’ time.
These future hiring patterns reflect an increasingly diversified U.S. population in 2030. According to U.S. Census Bureau predictions, white populations are expected to decrease from 59.7 percent of 2020’s population to 55.8 percent in 2030; African-American populations are expected to rise from 13.4 percent (2020) to 13.8 percent (2030); Asian populations will increase from 6 percent (2020) to 6.9 percent (2030); and Latinos will represent 21.1 percent of the population in 2030, up from 18.7 percent in 2020.
Amped-up tech
In 2019, the foodservice industry is in the process of widening its digital footprint and technological capabilities. In 2030, it will still be growing, but the technological moves made will have already changed the landscape of the industry significantly.
Tech is projected to alter the very core of the business, playing with the structure in ways that will require operators to be more agile than ever before. “As restaurants shift away from the traditional, operators must be nimble. Constant innovation and speed-to-market will help restaurants thrive as they serve guests where and when they want to be served,” the NRA’s report said.
The association’s Delphi panel expects a rise in fresh formats like virtual restaurants and ghost kitchens, and predicts that off-premises traffic will post stronger growth in 2030 than on-premises dining. These developments will bring with them a new, hybrid restaurant model, one that mixes full-service, fast-casual, and quick-serve styles with ultimate carryout and delivery convenience, with more restaurants dedicating specific areas to delivery and takeout.
“Restaurant physical spaces will be smaller, requiring less square footage due to the increase in delivery and takeout,” an anonymous Delphi panelist said.
Supply chain operations will most likely rely on machines over people, with most cases of ingredients shipped equipped with a barcode for easy monitoring, and food safety will be increasingly monitored by technology as well. Computerized cooking equipment is forecast to play a larger role in kitchens, leading to back-of-house operations that are more heavily automated (resulting in that decreased number of average employees per location). This will not only change the layout and labor elements of a concept, but could also lead to faster prep times.
And automation won’t be reserved for back-of-house only. In addition to increased mobile payments, handheld payment terminals, and digital orders, 2030 should see a boost in kiosks and video menuboards in limited-service spaces, and more training is likely to take place through smartphones and the Internet. With operators seeking tech-savvy employees in 2030, it only makes sense that new training methods will be set in place that help bulk up that digital skillset as well as teach basic operational and customer service knowledge.
In terms of customer interface, the foodservice industry is expected to work to keep up with 2030’s consumers as new, better technology emerges on both sides of the restaurant counter, for employee and guest. The NRA Delphi panel predicts that brands will be more likely to use videos frequently to market their restaurants to customers, and also points ahead to increased availability of customer loyalty programs and frequent-diner databases, used as online advertising and brand promotion. And these tech updates won’t only benefit the consumer—brands are expected to leverage customer databases and point-of-sale data into actionable knowledge to improve margins and better target guests.
“Data budgets will likely surpass today’s marketing budgets for most restaurants,” an unnamed Delphi participant added.
There’s another side to this digital customer-engagement coin, however. Delphi experts find it less likely that customers will embrace data collection in everyday restaurant experiences, predicting that only a modest group of consumers will give permission for brands to gather information. Furthermore, the federal government is predicted to enact a new crop of data-privacy rules that will further regulate how businesses can handle gathered consumer data.
The NRA panel also projects that restaurants will be more susceptible to negative social media as digital footprints begin to replace physical footprints entirely.
Other industry updates
There’s a catalogue of other developments collected by the NRA’s Delphi panel for 2030, with most touching on menu- and sustainability-related categories, and all reflecting an industry that’s transforming at lightning speed.
“Restaurants have become a now industry,” the NRA report said. “The only constant as we look toward 2030 will be the speed of change and the hyper-competition the restaurant and foodservice industry will face.”
Facing ever-tighter margins and intense competition for a shrinking customer base, operators in 2030 will be searching for ways to up efficiency in all categories, and this includes what’s on the menu. While tech will be implemented in various areas of the back- and front-of-house to simplify operations, a cleaner, leaner index of ingredients will be put in place to streamline food and beverage.
In 2030, the NRA and BLS estimate that customers will spend around $1.2 trillion on the restaurant industry in total, up from $833 billion in 2018.
Comfort foods will likely still be in demand regardless of nutritional information, but the Delphi panel expects restaurants to offer more healthy options, clean ingredients such as fresh produce, and locally sourced foods. Customers will increasingly ask for allergen and sourcing information, while sporting more sophisticated palates, and plant-based alternatives are expected to reach new popularity.
Overall, a dual focus on high nutritional value and simple, straightforward foods is expected to emerge. “Tighter margins are the new norm. How do we run even leaner? Simple, good menus are the future,” an anonymous Delphi expert says.
Another key area of concern for foodservice brands 10 years from now? Sustainability. As the environment becomes a priority for more customers, the Delphi experts predict that sustainability will be integrated into every aspect of restaurant operations in 2030, from the widespread addition of energy-efficient equipment to sustainably-sourced menu items to eco-friendly restaurant designs and the implementation of recycling programs in-unit. More restaurants are expected to do away with single-use packaging, and it will be commonplace for restaurant operators to promote their sustainability practices and efforts in marketing to consumers.
A shift to energy- and water-saving, waste-minimizing construction is also expected. This shift will be aided by the lessened footprint of most restaurants that the increase in off-premises dining will likely cause—the hybrid model many brands will be experimenting with in 2020 will require less physical space, pushing into a virtual landscape instead.
Disruptors
The changes in workforce, tech, menu, sustainability, and other areas that the Delphi panel experts named most likely to occur over the next 10 years are not the only industrial shifts on the docket. A set of potential developments also hangs in the divide between 2020 and 2030, and though these disruptors are less certain, if brought to fruition they could levy seismic shifts on the industry as a whole.
The NRA partnered with a team of futurists from Foresight Alliance, a forward-focused consulting firm, to outline 10 prospective disruptors for the next decade—some of which are already growing legs in 2019.
Intelligent restaurants arise, featuring full integration with a network of apps, services, and personal AI assistants that enables real-time interaction.
Relying on an already-present, near-universal adoption of smartphones, integration of AI interactions between brand and customers, spread of physical objects embedded with tech, and growth of voice search, personalized diets, and consumer choices as an expression of values, intelligent restaurants would reimagine the brand-customer experience as one more heavily reliant on tech.
Intelligent units would feature up-to-the-minute, changing menuboards and prices, voice demand ordering through AI assistants, and increased consumer data for brands collected during the ordering process. These restaurants are more than an outlandish imagining; McDonald’s doubled down on AI twice in 2019 with the purchases of both AI personalization company Dynamic Yield and voice-based tech company Apprente, suggesting a sooner-rather-than-later arrival date for this model with a potential extension into drive thru as well.
Virtual restaurants and cloud-based kitchens take off, giving “placeless” brands a spot in the industry.
In 2030, the NRA and BLS estimate that customers will spend around $1.2 trillion on the restaurant industry in total, up from $833 billion in 2018. With heightened demand and a smaller workforce, ghost or cloud kitchens—commercial kitchens without dine-in spaces that allow various brands to prep delivery orders without the interruption of a regular unit’s operations.
Some existing brands are already implementing ghost kitchens into their models, but other concepts exist only through cloud kitchens, and this is what futurists are calling out as a could-be disruptor for the next decade. New brands could pop up swiftly and simply with the one-fold construction of a single kitchen and all branding, marketing, and menus built through websites and social media. Furthermore, surprise pop-up versions of future online-only kitchens could generate new revenues for these virtual restaurants as well as provide digital natives with a special dining experience.
Third-party delivery apps challenge customer loyalty for individual brands, allowing off-premises digital ordering to eclipse customer interface with restaurants.
Third-party delivery is booming—online data portal Statista estimates that revenues from online food delivery total more than $107, 400 million in 2019, and expect an annual growth rate for online ordering of 9.9 percent from now through 2023.
Purchasing meals via app offers customers frictionless ordering and payment options, and the NRA and Foresight futurists recommend that brands look for creative ways to either partner with or compete with third-party channels in the next decade.
“Start-up independent restaurants could find opportunities in wholesaling to delivery apps,” the NRA report says. “An industry-financed delivery app could preserve restaurants’ direct brand relationships with customers.”
Autonomous vehicles change how people receive their food, and how they eat on-the-go.
While full integration of driverless vehicles could take more than one decade, the rumblings of driverless robot delivery vehicles are already being heard in foodservice. Domino’s Pizza is testing out self-driving robot delivery vehicles in Houston this year, with the brand looking ahead to a full incorporation of the driverless tech in the near future, and Uber Eats tested food delivery via drone in San Diego this summer and also announced a partnership with Volvo that will power a self-driving SUV.
A full rollout of autonomous vehicles will also impact the way drivers eat—with more time on their hands for eating (quite literally) that used to be occupied with a steering wheel, consumers could increase their on-the-go food and beverage orders.
Obviously, there are still legal- and safety-centric wrinkles to be ironed out in within the realm of driverless cars, but the NRA suggests that brands that get involved in the movement early will be ahead of the game when driver-free vehicles eventually hit the roads.
Non-food, big tech companies begin selling food and prepared meals.
Increased online retail options, added low-friction buying options (like Amazon’s One-Click), and new expectations from 2030’s crop of digital native consumers are some of the ingredients that could bring about a new stake in the foodservice industry occupied by non-food companies.
It’s already possible to order groceries from Amazon, but the brand and others like it could add prepared meals to its offerings by 2030. The NRA report predicts the potential involvement of streaming services as well—these services could partner with delivery companies already in existence to offer all-encompassing, entertainment-and-dining subscriptions.
Restaurants could capitalize on this innovation, too, looking for new ways to partner with bigger companies pushing into the food space. “Restaurants could move beyond current loyalty or rewards programs and offer flat-rate monthly subscription plans to customers,” the report says.
Foodservice integrates robots and automation into all areas of food prep and kitchen lines, creating the “bionic restaurant.”
In keeping with evolving front-of-house automation like order kiosks, the Foresight futurists see a possible largescale shift to automation and robots in back-of-house operations, too.
Some restaurants are already using robots for food prep in 2019, but, by 2030, technology could progress to a point where even motion-capture replication of the movements of chefs is on the table for machinery.
One variable in the totally-automated kitchens of the future? Human staff. Chefs and other kitchen employees will need to develop the skills and comfort level necessary to deal with automation and robots in the back of a unit, and with 2030’s expected smaller, older workforce, large groups of tech-savvy employees could be hard to come by.
A decline of shopping malls and brick-and-mortar retail shops leads to restaurants as the centers of socialization, creating an influx of food halls and food markets.
Statista expects retail e-commerce sales worldwide to double between 2018 and 2023, with total sales surpassing $6.5 trillion in 2023. As online shopping skyrockets and, subsequently, shopping malls and brick-and-mortar stores close their doors, and as off-premises dining grows, consumers could be searching for different social spaces to connect with others or work remotely. Food halls and street-food-style markets could fill this need.
“Growth in takeout and food delivery will increase the importance of the face-to-face restaurant experience,” the NRA report projects. Furthermore, the format of food halls and markets caters to culinary diversity and exploration, an element that will become more important in future years as foodie culture becomes mainstream.
Unpredictable, volatile weather drives up food costs and interrupts agriculture and food distribution.
One of the most foreboding forecasts for the next 10 years in foodservice is also a circumstance that’s more difficult to control. As the global temperatures and weather become more volatile, and as the availability of water potentially shifts, too, growing patterns of staple and specialty crops could be disturbed, driving up food costs and possibly adding new taxes on energy used or carbon emitted during production methods and transportation.
While these unpredictable weather-related shifts could change the very fabric of the industry, one possible partial remedy could be the perfection of plant-based and lab-grown meats, as well as increased consumer enthusiasm for these alternatives.
AI pushes into the culinary space, bringing about unexpected food and beverage experiences generated by a tech knowledge of cooking techniques, food chemistry, ingredients, and recipes.
An even more sophisticated technological iteration than back-of-house robotics, culinary AI has the potential to not only simplify operations and cut down on staff needed, but also to add a new wing of taste exploration to everyday restaurant operations.
The NRA predicts that specific AI’s could become as well-known as famed human chefs or bartenders, with restaurants able to leverage these AI assistants 24/7 availability and endless energy to offer up new, exploratory recipes in food and beverage.
In addition to creating entirely new categories of cuisine, these non-human chefs would have the ability to run at multiple locations simultaneously, allowing any number of restaurants with the necessary software capabilities to utilize their in-human amounts of kitchen knowledge.
Medical meals are embraced by an aging population, creating a new emphasis on functional foods.
The NRA’s final disruptor of note deals directly with the rising number of people 65 and older in the U.S. population; as Americans age, food could become a weapon against lifestyle diseases like obesity and diabetes. And with the foodservice industry already moving into healthier, fresher menu trends, functional food could be a more widespread way of dealing with ailments in 2030.
In some cases, meals may even be prescribed by doctors, featuring ingredients personalized for individual states of health, diets, and outcomes. “Prescription meals will be more precisely targetable with a growing understanding of how food can impact gut microbes or activate gene traits,” the NRA report reads.
