Ghost kitchens, alcohol delivery part of new normal: Restaurants Canada’s Foodservice Facts Report

Toronto – The future of Canada’s restaurant industry seems likely to include ghost kitchens, meal kits, alcohol delivery and the adoption of new technologies, according to the 2020 Foodservice Facts Report released by Restaurants Canada.

“The greatest challenge our industry will face is the uncertainty that this crisis will have on restaurant businesses and how long the effects will last,” says Chris Elliott, senior economist at Restaurants Canada, in a news release. “The food-service industry will change from what we’ve known and continue to pivot and adapt its business model to survive.”

Nearly one in five restaurants have diversified and will continue to sell meal kits going forward.

In 2019, food service generated over $93 billion in sales and was on track to surpass $100 billion in sales in 2021. Due to the pandemic, however, the restaurant industry could now lose between $21.7 billion and $44.8 billion in annual sales this year, according to Restaurants Canada.

“The range in the forecast reflects tremendous uncertainty as the industry heads into fall and winter,” Elliott said. “Restaurants are likely to see a further erosion in sales in the coming months with patio season ending and possible consumer trepidation about indoor dining. A second wave of confirmed COVID-19 cases would potentially lead to sharply lower sales.”

While all of this will lead to further permanent restaurant closures, pre-COVID trends were accelerated and may present opportunities to restaurants who have the ability to pivot their business as we move forward in the new normal.

Findings from the report offer insights and results from these trends:

• At the height of the crisis in April 2020, on-location orders accounted for a mere four per cent of sales compared to more than 50 per cent in 2019.
• “Ghost kitchens” present an opportunity for brands to operate with no storefront and focus entirely on delivery through mobile and online platforms: 60 per cent of customers surveyed show interest in ordering delivery from a ghost kitchen.
• Nearly one in five restaurants have diversified and will continue to sell meal kits going forward.
• More than half of restaurants are offering contactless payment options and contactless pickup/curbside pickup.

“The strength of Canada’s restaurant industry is its creativity and sheer determination. While restaurant sales will one day return to pre-COVID-19 levels, the industry will be vastly different from before,” Elliott said. “In the coming years, we will see the acceleration of many trends, such as the rise in ghost kitchens, alcohol delivery and the adoption of technology as restaurants focus on raising productivity.”

Foodservice Facts can be accessed by Restaurants Canada members through its Member Portal.