Restaurants and The Great Diversity Divide

For years, diversity has been both a point of pride and a source of frustration for the restaurant industry. According to 2015 data from the National Restaurant Association, people of color held 47 percent of all restaurant jobs, compared with the overall U.S. workforce in which minorities accounted for only 36 percent of jobs. Four out of 10 managers and supervisors and nearly six out of 10 chefs are people of color. Minorities also own about 40 percent of all restaurants. Despite these encouraging numbers, senior leadership at multiunit chains is still largely homogenous.

And if anything, it seems that major brands have backslid in recent years. As of 2014, the industry had six Black CEOs (all men) at the largest chains including McDonald’s, Darden, Jack in the Box, Bob Evans, Potbelly, and Jamba Juice. At present, there’s one—Damola Adamolekun at P.F. Chang’s—though it should be noted that more women, as well as Latinos and other people of color, now hold top positions at brands like BurgerFi, RBI, Panera, and Bojangles.

But recent events have shifted the conversation around diversity, equity, and inclusion (dei) and brought new urgency. The murder of George Floyd sparked protests across the country while anti-Asian hate crimes demonstrated how deeply rooted—and potentially violent—prejudices can be. Amid the reckoning, many restaurants spoke out in support of these communities, and some even put their money where their mouth is, including two of the biggest brands in quick service.

“The cultural shifts and injustices of 2020 encouraged a more open dialogue about sharing our internal and external inclusion efforts. Our employees value seeing concrete examples of how the company is evolving, and actively have a voice impacting those changes,” says Marissa Andrada, chief diversity, inclusion, and people officer for Chipotle.

In 2018, under then-newly minted CEO Brian Niccol, Chipotle began a top-down transformation; revamping both its internal culture and how the company managed and invested in its workforce was a top priority. This past March, Chipotle finally shined the spotlight on these employee-related initiatives and also upped the ante by yoking 10 percent of executives’ annual incentives to environmental, social, and corporate governance metrics. Under the social umbrella are concrete goals like maintaining racial and gender pay equity, as well as accelerating the development of Chipotle’s field and support center employees for promotion beyond the store level. And with 90 percent of the company’s management roles coming through internal promotions, the company has already laid some of the groundwork.

“The goal is for our team members to see leaders at all levels of the organization who look like them, in essence envisioning themselves at every level of Chipotle, and we are laser-focused on our efforts to achieve this,” Andrada says.

On the fast-food side, McDonald’s is taking a similar approach. In February, the quick-service titan announced two key benchmarks it would pursue over the next decade. First up, it’s aiming for people of color from historically underrepresented groups to make up more than a third of its senior-director and higher leadership roles (35 percent) by 2025, representing a 6 percent increase from 2020 levels. It also set its sights on total gender parity by 2030.

While setting these sorts of goals is hardly a new practice in the corporate world, the financial incentives are. Beginning this year, 15 percent of executive bonuses will be determined by hitting targets related to its workforce. It’s also extending the push toward greater diversity beyond McDonald’s proper. The company pledged to increase its purchases of goods and services from minority and women-owned suppliers by 10 percent by 2025 (compared to 2020 levels).

These bold plans and announcements come at a time when society is grappling with issues of race and gender. Despite inclusive rhetoric, many sectors still fall short in terms of actual diversity, whether at all levels or specifically at the top, as with foodservice. The question now is why diversity bottlenecks within the restaurant sector—and whether corporate initiatives are enough to change the dynamic.

BurgerFi

Four out of the five CEOs of the largest quick-service brands in the U.S. built careers in various business sectors ranging from pharmaceuticals and tech to apparel and consumer packaged goods.

Pitfalls and misperceptions

Part of overcoming the diversity gap lies in changing how the restaurant industry is viewed. Foodservice is rarely seen as a long-term, viable career; instead, it’s a means to an end or a temporary holdover. And this perspective is often reinforced by very real factors, like low wages and high turnover.

“Foodservice has some of the lowest barriers to entry, … so naturally there’s a lot more access and open opportunities at the restaurant level. And in a lot of ways, foodservice is a stepping stone for people in a very wide range of circumstances,” says Christian Lee, head of business operations for Southern California–based Flame Broiler. “A lot of these employees get stuck in the cycle of these minimum-wage jobs with little to no upward mobility.” And because foodservice, particularly fast food, can be such a revolving door, leaders are less likely to invest in their employees, Lee adds. Like retail, restaurants are a job magnet for students and teens seeking part-time work or people in transitory stages. While the industry may pride itself on being the first job of so many people, it’s a bragging point that’s often at odds with long-term retention. Some on-the-ground employees may grow to be shift leaders, supervisors, or even store managers, but they rarely ascend to the corporate office. As Lee points out, that’s a separate entry point altogether.

“Traditionally the kind of leadership positions at these companies have been taken by people with a certain socioeconomic or educational background or privilege,” he says. “I think that causes a lot of inequity when it comes to diversity in the workforce versus the senior leadership.”

Indeed, four out of the five CEOs of the largest quick-service brands in the U.S. (per the QSR 50) built careers in various business sectors ranging from pharmaceuticals and tech to apparel and consumer packaged goods. The only one to have worked exclusively in foodservice is fresh-to-the-role Chick-fil-A CEO Andrew Cathy, grandson of the late founder Truett Cathy, who took over in November. Connecting the pipeline of talent from the stores to the corporate office could help foster diversity across all levels of a restaurant company. And while initiatives, like Chipotle’s, that encourage internal promotions are bridging the gap, part of the issue stems from much larger societal issues. It doesn’t absolve restaurant leaders of responsibility in changing their inner workings. If anything, it should embolden them to be part of the solution.

Florida-based chain BurgerFi is one company that’s leading by example when it comes to DEI at the top levels. Ever since the brand went public last December, it’s made a deliberate push to boost diversity across all teams.

Traci Copeland, former vice president of human resources for BurgerFi (she's now Director of Human Resources as Myles Restaurant Group), says previous leadership was not reflective of the rest of the company—but that has since changed. Now three women, one of whom is Hispanic, sit on the board of directors. On the executive team, both CEO Julio Ramirez and CMO Henry Gonzalez are Hispanic, and Copeland is a biracial woman. Women do not yet hold any of the “chief” titles, and, Copeland says, therein lies an opportunity to do more in the future. “Our guests and our society are increasingly diverse. It only makes sense that brands incorporate diversity into their leadership to effectively relate and engage with their consumers,” she says. “We’re proud to be on the forefront of the industry in terms of the diversity at our board of directors level and will continue to enhance diversity in our C-suite and in the field.”

Seeing leaders of different races and backgrounds goes a long way in making employees feel included and inspiring them to rise through the ranks. It can also galvanize fellow quick-service brands to follow suit and even open the door to discussions around best practices. The more leaders share their own experiences and insights, the more the industry as a whole can evolve.

“As leaders, we need to continue to share our stories to help educate each other and understand how different groups, whether regarding race, nationality, gender, or sexual orientation, can impact the success of our business,” Copeland says.

Flame Broiler

Flame Broiler leaders Christian and Daniel Lee have begun reintroducing some traditional Korean flavors (plus kimchi), and they want guests to know the brand’s origin story

Growing multicultural awareness

Beyond encouraging honest conversations around social and racial inequity, subtler cultural shifts have also come into play. Consumers have become savvier in their dining habits, and instead of avoiding so-called “ethnic foods,” many now seek out global cuisines and dishes that feature lesser-known ingredients and unexpected flavors.

That evolution is especially apparent at Flame Broiler. The menu is rooted in Korean cuisine, but the brand hasn’t always promoted that part of its identity. Back in the 1990s when Lee’s father, Young, opened the first restaurant, consumers were more reluctant to try authentic Korean foods like kimchi, which was removed from the menu for that very reason. Even the name, Flame Broiler, was neutral with no indication of its cultural heritage. “Currently we’re not really known as a Korean brand, and he did that on purpose. He did his best to remove as many Asian instances as he could back in the day. He called it Flame Broiler because he wanted a white-sounding name. It sounds like an American burger place,” Lee says. “In today’s world, it would actually be in our favor to be a Korean brand.”

Lee along with his brother Daniel have begun reintroducing some traditional Korean flavors (plus kimchi), and they want guests to know the brand’s origin story. It’s a push that’s especially important now. Over the past year, anti-Asian hate crimes have been on the rise. The Lee brothers say they haven’t felt personally targeted, but the violence has led them to be even more communicative with their franchisees, half of whom are Asian American. At the same time, they’re inspired by how businesses, advocacy groups, and communities have rallied in solidarity.

“We’re proud to be Asian-American–founded and led but we were definitely part of that wave of culture that made Asian food more accessible. In my opinion, my dad was one of the first ones to bring Asian food into the mainstream,” Christian Lee says. “We’re proud to be part of the destigmatization of Asian culture. … It’s actually cool to be Korean.”

Another fast casual rooted in Asian cuisine, Curry Up Now, was branded in a very different way than Flame Broiler, which illustrates just how much changed in two decades. From the first store opening in 2009, founder Akash Kapoor has never tried to hide the concept’s Indian roots—if anything, he’s celebrated them through playfully named dishes like the Naughty Naan, Death by Tikka Masala, and Punjabi by Nature.

“I think in the last 10 years the American pantry has evolved. We’re using sauces and spices and things that we never did even five years ago, like sriracha, which has become a ketchup for everybody,” Kapoor says. “People are more open to eating things that they would have never thought about eating. I think those things have changed.” He sees a direct correlation between global foods and cultures becoming mainstream and increased diversity in restaurant leadership. But as an immigrant himself, Kapoor knows there are also internal barriers to overcome. Oftentimes, he says, immigrant populations feel pressured to pursue careers in medicine, law, engineering, and other fields that have traditionally been considered prestigious. Again, the bias around long-term restaurant work can be pervasive, but seeing founders and multiunit owners like Kapoor and the Lees helps dismantle those misperceptions.

A new playbook

Kapoor is optimistic that things are changing, even if the restaurant industry lags behind other sectors. “The restaurant business is many, many moons behind the tech industry. Now with tech you see a lot of diverse leadership, and I think that is exactly what’s going to happen to us. We’re just going through that phase of kind of growing up,” he says.

Christian and Daniel Lee are more reserved in their hopes for the future, at least with regard to the larger industry players. Making changes that can shift a whole business paradigm doesn’t come without a cost, and the Lees aren’t sure it’s one everyone is willing to pay. “Leaders need to be willing to sacrifice power and resources and profits to prioritize the thriving of their employees and to actually invite others in to increase diversity,” Christian Lee says.

At the very least, Daniel Lee adds, it takes the courage to break with tradition when it comes to hiring and advancement practices. “If you want to build up a [diverse] leadership in a company, the biggest thing you have to do is be willing to take a few steps that are unfamiliar and enter uncharted territory,” Daniel Lee says.

Only time will tell if the current fervor around diversity bears fruit. Real change requires decisive action, but subtler measures can also have a powerful impact. Chipotle’s Andrada says companies should never lose sight of the fact that people are their greatest asset. To that end, inviting them to join the discussion around DEI is paramount.

“Everyone wants to be seen and heard, so start by practicing stellar listening skills,” she says “Look to your employees to provide guidance on what support they need and build initiatives around the best means for serving them.”

Similarly, the Lees believe there is value in incorporating different cultural viewpoints into a business—and it goes beyond pure altruism. The most innovative companies, Christian Lee says, are the ones who go against the grain. Conformity is often the death of creativity, making it all the more imperative for new voices to rise in the industry and to stay true to their own values and experiences. That is how individual brands will differentiate themselves. “Something that’s so beautiful about different cultures is the differences in their strengths. … Instead of conforming to the majority culture, your own cultural values should shape your leadership playbook,” Christian Lee says.