Prognosticators have already weighed in on the tastes and trends that will prevail throughout 2014—here’s a comprehensive list in case you missed any of them. But now Restaurant Finance Monitor has provided a big-picture perspective that tells operators what they really want to know: Will their restaurants make money next year? The short answer: Yes. Sales are headed up and, more importantly, food costs are trending down.
“Many franchisees we spoke with recently are somewhat bullish heading into 2014 in part because they fully expect food costs will ease this year, which should enable them to be more profitable,” the publication reports.
One caveat, and it’s a big one: Beef prices will remain high. It’s a key factor in an industry where burger chains have been coining money of late and steakhouses remain a can’t-miss format for many industry players.
There’s still plenty of action in the better burger segment. Operators ranging from Shake Shack to Smashburger are still opening units in new markets at a rapid clip, soaring ground beef prices or no. And the big-ticket steakhouse remains the go-to option for multiconcept operators ranging from celebrity chef Tom Colicchio to dozens of savvy local and regional players.
Keeping food costs in line at beef palaces like these will continue to be a challenge this year. But consumers are increasingly willing to embrace non-beef-centric options. Those who collect data that document long-term consumption patterns put out an eye-opening report in early 2014: Chicken has overtaken beef as the most popular animal protein source for U.S. consumers. As food trend predictors have noted, U.S. restaurant patrons are more than ready to embrace a dazzling array of new foods and cuisines and their protein choices have become more eclectic.
Operators like Chipotle and Del Taco have dealt with this demand by rolling out imaginative new menu items that, coincidentally, are food-cost friendly. Chipotle is introducing its tofu-based Sofritas offering in many of its markets. Mexican chain Del Taco has launched two items—Turkey Tacos and Turkey Tostadas—that feed into key consumer trends while avoiding the cost implications of red meat.
The upshot for operators: in 2014, food trends can dovetail neatly with less costly proteins. You may wish to adjust your menu accordingly—just don’t get caught behind when cattle herd sizes return to normal, beef prices drop and consumers taste sentiment swings back to ever-popular burgers and steaks.