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I placed my first bet on the restaurant industry years ago. I was
a young army non-commissioned officer with a promising military career
for the taking. The only problem was, I wanted to return to the civilian
world and build a career in the restaurant industry.
Just
three days before my discharge date my unit's Sergeant Major, who had
been both a supporter and mentor, dropped by the dining facility. In a
comical attempt to encourage me to re-enlist he said "Wallace, it's not
too late to change your mind and save yourself. I hear that in the
civilian world, the lines for soup in New York stretch all the way to
California". I smiled and replied, "With all do respect Sergeant Major, I
guess that means the civilian world is in need of some well trained
foodservice people". I noticed him chuckle and shake his head as he
walked away. A few months later I was in college pursuing my degree in
Hotel & Restaurant Management.
Since then the industry has
grown in ways that few could have predicted. My initial bet on the
industry has paid off in spades. As a hospitality student, classically
trained chef, restaurateur, and corporate executive, I have been
privileged to experience the restaurant industry from several
perspectives. Personal bias aside, I can say with certainty that there
are many good reasons to know that the restaurant industry is still a
great bet, in spite of our current economic storm. Here are seven
reasons worth considering:
1. Needs Based - Restaurants serve
two basic needs that are not going away any time soon. I am talking
about the need to eat and the need to connect with others. When it comes
to eating options, the industry has gone to great lengths to provide
convenience. You can walk up, sit down, take it out, drive-through, and
even drive up for curb-side services. When I travel outside of America, I
am always amazed at how common it is for people to gather in town
centers and open air cafes in the evenings to connect. Here at home,
operations like Starbucks and casual bars have become our necessary
"Third Place" for connecting away from home and work.
2.
Lifestyle Driven - Generations "X" and "Y" have grown up eating meals
prepared away from home. For them it is as common and expected as
electric washers and dryers became for the previous generation. For
these Americans, I don't envision a massive or permanent return to
cooking any more than I envision a return to scrubbing boards and
clotheslines.
3. Decentralized - Unlike some industries that
have suffered the most recently, the restaurant industry has remained
decentralized with resources and assets dispersed across the country. In
the case of some of the biggest industry players, use of a franchise
business model, has also provided dispersing of capital investment and
risk. What this means is that the industry is not subject to a massive
implosion like the automobile or banking industries have experienced.
4.
Massive Scale - With more than a half trillion dollars in annual U.S.
Sales and nearly a million restaurants nation wide, the restaurant
industry's size attracts support from a wide range of industries. From
back office technology to cooking equipment, companies across the globe
invest heavily in research and development with the understanding that
there will be a market for their best innovations.
5. Developed
Infrastructure - Over the past few decades the restaurant industry has
amassed an enviable infrastructure. From state-of-the-art distribution
and logistics to national online reservations and employee training
systems the industry has moved closer to being "Plug-and-Play" for even
the smallest operators.
6. Entrepreneurial - In spite of the
industry's size, according to national restaurant association
statistics, 7 out of 10 restaurants are single unit operations.
Fortunately, the barriers to entry into the industry have remained
relatively low. As a result the industry enjoys constant bottom up
innovation. The next trend is as likely to come from a small Cuban Diner
in Miami as a heavily staffed test kitchen in Dallas.
7. An
Affordable Luxury - Now once the economy begins to recover there will be
some industries that will come back slower than others. One of the
reasons restaurants in general have not fallen as sharply as others
sectors, is that, eating out is still an affordable luxury even in
difficult times. Most consumers don't have to take out a loan to enjoy a
meal out. For this same reason pinned-up demand should drive strong
growth as things recover.
For all the reasons listed the
restaurant industry is an exceptional source of opportunity for millions
of Americans, who own, manage, and work in the industry across the
nation. It stands and will continue to stand as an excellent example of
sustainable healthy capitalism at its best. You can bet on it!
Shed Wallace is the founder of [http://www.EateryCoach.com] and
the [http://www.EateryTribe.com] blog. His career highlights include
culinary and food & beverage director roles with leading hospitality
companies like Darden Restaurants and Royal Caribbean Cruise Line.
