A decade ago, you wouldn’t have associated James Beard Award winners like Paul Qui or celebrity chefs like Matthew Kenney with food halls. In recent years, the category has experienced a renaissance of sorts, thanks to media and pop culture’s newfound obsession with street food and the big name chefs who wholeheartedly embrace it (think David Chang of Ugly Delicious on Netflix). This shift in focus has taken the conversation back to food halls, which not only serve as customer-friendly smorgasbords, but culinary think tanks and incubators for burgeoning chefs and business owners. Couple that energy with shared operational costs and lower overhead, and you have a recipe for profitability whether you’re a seasoned chef or an industry newbie.
Technavio recently predicted that the ready-to-eat food market will grow globally by $71.69 billion between 2021 and 2026, largely due to a restored appetite for in-person activities, a surplus of commercial real estate, and generous funding. Alongside this momentum comes a heightened level of expectation. Guests want a higher caliber of culinary talent, quality, and service while keeping their experience quick and convenient. As the convenience of delivery apps and ghost kitchens continues to drive consumer habits–despite an uncertain future for the latter–the bar has been raised for in-person dining.
Key considerations for food hall operators include the obvious: higher quality product, a great location, and a sense of community. On a more granular level, operators are also expected to facilitate a highly streamlined experience with convenience and tech at its core. It’s the little luxuries that guests remember and that drive repeat attendance. Flexibility in ordering via app or text, QR code menus, linebusting with handhelds, shorter wait times, and tableside tech are just a few examples that food halls need to stay competitive.
For the vendors, the food hall model offers a myriad of benefits strung together by the common thread of lower risk when compared to a traditional standalone restaurant. Small-to-midsize business owners can rely on operators to shoulder much of the overhead weight. A food hall partnership also comes with the benefit of a built-in marketing machine, ensuring foot traffic without the need to pound the digital pavement quite as aggressively. The sum of these perks make the food hall model a dream for small-midsize restaurant groups and food business owners in need of exposure or a testing ground for new product.
Tech optimization is mutually advantageous for all three parties involved: the operators, the vendors, and the end users. It allows customers to receive from the conveniences they expect, while vendors and operators benefit from a faster chain of communication and, more importantly, consolidated data that can be used to course correct and make adjustments to staffing and operations, thereby optimizing profitability. SpotOn released its Maximizing Profits white paper and revenue calculator earlier this year to provide business owners with a guidebook for reaching double-digit profit margins, a feasible goal even within the notoriously low-profit restaurant industry.
Services and integrations around Google My Business, review management, and tableside or customer-facing tech are a few innovations used by restaurants, but there are strategies especially beneficial to multi-vendor food halls. From the basics like online and QR ordering to integrated reporting across vendors and seamless revenue sharing models, these advancements help tremendously amidst an industrywide labor shortage. They make food halls an attractive option for investors and a plug-and-play solution for restaurant start-ups.
When Plant City launched in Providence, they partnered with internationally-acclaimed chef Matthew Kenney to become the world’s first plant-based vegan food hall and marketplace. Owners Frohman and Kim Anderson understood that the level of service needed to match the quality of cuisine being offered, so they adopted an enterprise solution with 10 point-of-sale terminals, 15 serve handhelds, and 2 Kitchen Display Screens, in addition to a commission-free online ordering platform with pacing and text messaging capability. Tied together with real-time insights, reporting allows their vendors’ management to improve operational efficiency for faster turnarounds and, ultimately, higher profit.
As we continue to witness exponential growth among the delivery giants, the in-person, quick service dining establishments we know and love can either adapt or fall behind. With the help of smart tech integration, they’re better poised to compete and win.
Kevin Bryla is the Head of Customer Experience at SpotOn where he focuses on ensuring that restaurants and local businesses have an exceptional, personalized experience when they work with SpotOn. His passion for restaurants began at age 14, bussing tables in his native New Jersey and continues today at SpotOn where he works alongside restaurant owners to help them streamline operations, drive revenue and improve their guest experience.