Restaurant Metrics: The Complete Glossary

Average cover

Average cover measures the dollar amount an average customer spends at your restaurant. The metric is calculated by dividing the total sales by the number of covers and gives you a good indication of how well your servers are at maximizing sales, no matter their section size or customer turnover.

Example: Server Shauna made $700 in sales and served 18 guests. $700 (sales) / 18 (guests) =  $38.88 average cover.

Average order value

Average order value (AOV) measures the amount of money each customer spends with your restaurant in one transaction and is an indicator of consumer purchasing habits. Analyzing this metric will help you strategize upselling and cross-selling. Calculate AOV by dividing your total revenue by number of orders.

Example: In one week, Pizza-a-Go-Go made $19,000 in revenue from 500 orders. $19,000 (revenue) / 500 (orders) = $47.50 AOV.

Break-even point

Break-even point tells you how much revenue you need to make to cover your costs before you start making a profit. Calculate break-even point by analyzing total costs (fixed and variable) and compare this to your total revenue.

Example: Pizza-a-Go-Go’s total costs are $750,000 and revenue is $900,000. The company has broken even and passed its break-even point ($750,000), netting $150,000 in profit.

Contribution margin

Contribution margin shows you how much profit you make on one individual menu item, helps you understand the amount each dish contributes to restaurant revenue (minus the costs of ingredients) and price menu items. Calculate contribution margin by subtracting the cost of ingredients from your selling price.

Example: Pizza-a-Go-Go sells a pepperoni pizza for $20, and each pizza costs $7 to produce. $20 (selling price) – $7 (costs of ingredients) = $13 contribution margin to support overhead costs (rent, labor, etc.)

Customer acquisition costs

Customer acquisition costs (CAC) measure how much you’re spending to gain a new customer, telling you whether your marketing campaigns are cost-effective, and helping you strategically understand the campaigns that generate the greatest return on investment (ROI). Calculate CAC by dividing your marketing costs by the total number of new customers.

Example: You run a paid advertising campaign with a coupon code on social media that costs you $500. A total of 30 people used the coupon. $500 (marketing expense) / 30 (new customers) = $16.66 CAC.

Customer retention rate

Customer retention rate measures whether customers retain their business with your restaurant and is calculated by subtracting total customers from total new customers, then dividing that number by your total customers and multiplying it by 100.

Example: In June, you had 2,345 total customers, and 876 were new customers. 2,345 (total customers) – 929 (new customers) = 1,416 / 2,345 (total customers) = 0.60 * 100 = 60% customer retention rate (which is super high, so that’s great!)

Cost of goods sold (COGS)

Cost of goods sold measures the total cost of the ingredients and products that go toward making items on a menu, including condiments and garnishes. One-third of a restaurant’s gross revenue will go toward COGS, and COGS is subtracted from your gross revenue to calculate your net profit.

Employee turnover rate

Employee turnover rate measures how often employees leave employment with your restaurant. The metric takes into account resignations, dismissals, layoffs, and retirement and is an indicator of how well your restaurant is at retaining employees. Often, a high employee turnover rate is indicative of internal issues such as poor workplace culture. Calculate employee turnover by dividing the number of employees departed by the number of current employees and multiply that number by 100. 

Example: In 2022, Pizza-a-Go-Go lost 5 employees leaving the team total to 32. 5 / 32 = 0.15 * 100 = 15% employee turnover rate.

(On Point surveyed 91 pizzerias from across North America and found that 38% of pizzerias reported employee turnover rates of 10-25%; 29% of pizzerias reported rates between 25-50%, and only 19% of respondents reported a turnover rate of less than 10%.)

Fixed costs

Fixed costs refer to the costs and expenses your business incurs during its operation. Fixed costs include things such as rent, mortgage repayments, salaries, license fees, and insurance, i.e., costs that are typically fixed or have little to no fluctuation.

Food cost percentage

Food cost percentage shows the difference between how much it costs to produce a menu item and its actual price on the menu. Calculate food cost percentage by dividing the item cost by selling price multiplied by 100.

Example: Pizza-a-Go-Go’s mushroom pizza costs $6 to make and is on their menu for $18. $6 (item cost) / 18 (selling price) = 0.33 * 100 = 33%.

Gross profit / gross profit margin

Gross profit tells you the total amount of money your restaurant makes minus cost of goods sold (COGS) and is represented by a number or a percentage (gross profit margin). Calculating gross profit tells you how much money you have to pay for fixed costs and other overheads. Calculate gross profit by subtracting your COGS from your restaurant revenue.

Example: In September, Pizza-a-Go-Go made $50,000 in revenue and spent $20,000 on COGS. $50,000 (total revenue) – $20,000 (COGS) = $30,000 (gross profit). To calculate gross profit margin, divide gross profit ($30,000) by total revenue ($50,000) and multiply by 100 = 60% gross profit margin.

Labor cost percentage

Labor cost is the total dollar amount your restaurant spends on labor or labor-related items. This includes salaries, hourly employee wages, taxes, employee benefits, bonuses, sick and vacation days, and healthcare. When expressed as a percentage, labor cost is one of your prime costs (the other being COGS, cost of goods sold). Calculate labor cost percentage by adding together your labor costs, dividing them by sales, and multiplying the amount by 100.

Example: In one week, Pizza-a-Go-Go paid $7,500 in labor costs and generated $17,850 in revenue. $4,500 (labor costs) / $17,850 (revenue) = 0.25 * 100 = 25% labor cost percentage.

Menu item profitability

Menu item profitability indicates the items on your menu that generate high profits vs. those that aren’t. Understanding menu item profitability helps you see the performance of individual items on your menu. Calculate menu item profitability by adding the number of items sold multiplied by the menu price and then subtracting the number of items sold multiplied by the item portion cost.

Example: Pizza-a-Go-Go sold 37 meat feast pizzas on a Saturday night for $22, with each pizza costing $10 to make. 37 (number of items sold) x $22 (item menu price) = $814 minus 37 (number of items sold) x $10 (item portion cost) = $444 menu item profitability.

Net profit / net profit margin

Net profit is the amount of money your business makes after subtracting all operating costs (fixed and variable). Net profit is an indicator of whether your restaurant is profitable or not. Calculate net profit by subtracting your operating expenses from your total revenue. Calculate net profit margin by dividing your net profit by total revenue and multiplying that number by 100.

Example: In February, Pizza-a-Go-Go made $44,500 in total revenue and spent $16,000 on operating expenses. $44,500 (total revenue) – $16,000 (operating expenses) = $28,500 net profit. To calculate net profit margin: $28,500 (net profit) / $44,500 total revenue) = 64%.

Overhead rate

Overhead rate measures the amount of money that you’re paying for fixed costs over a specific time period. Calculate overhead rate by dividing total fixed costs by the number of hours open.

Example: Throughout May, Pizza-a-Go-Go spent $22,000 on fixed costs and was open 288 hours. $22,000 (fixed costs) / 288 (hours open) = $76.38 (overhead rate).

Prime cost

Prime cost is calculated by adding together the total sum of your labor costs and cost of goods sold (COGS) and is a key performance indicator for your restaurant. Prime costs include inventory (food and liquor), labor, taxes, medical insurance, employee benefits, and worker’s compensation. Measuring prime cost helps you understand how much you need to charge to make a profit and how much you can spend.

Example: Your new restaurant’s COGS is $18,000 and labor costs equal $7,500. $18,000 (COGS) + $7,500 (labor) = $25,500 prime costs.

Revenue per square foot

Revenue per square foot tells you how quickly you’re making sales and is a key performance indicator to assess your restaurant’s ability to scale. Calculate revenue per square foot by dividing annual sales by square footage. 

Example: Pizza-a-Go-Go’s primary location occupies 2,000 square feet, and in 2022, they sold $650,000 worth of pizzas. $650,000 (sales) / 2,000 (square feet) = $325 revenue per square foot.

Seating capacity

Seating capacity measures the number of customers that can be seated in your restaurant at any one time and is used as an indicator of the maximum revenue your restaurant can generate in a specific period. Calculate seating capacity by measuring the total square footage of your front-of-house areas, then subtract the total non-dining space square footage, and multiply that by 15 (assuming 15 square feet per customer). 

Example: Pizza-a-Go-Go’s front-of-house area is 1,500 square feet and the non-dining area (waiting area, cash register, bar, etc.) is 500 square feet. 1,500 – 500 = 1,000 / 15 = 66 seating capacity.

Table turnover rate

Table turnover rate measures how many customers and tables you serve in a specific period and is used to indicate the number of servers or staff you’ll need during certain hours. Calculator table turnover rate by dividing the number of parties seated by the number of available tables.

Example: Pizza-a-Go-Go has 23 tables and seated 100 parties during dinner service. 100 (parties) / 23 (tables) = 4.34 table turnover rate.

Variable costs

Variable costs measure the amount of money spent on costs that vary from month to month. For example, wages, utilities, and cost of goods.

Thriving on Community: Meet Software Engineer Maria Loza

Maria Loza didn’t always want to become a hot-shot engineer for one of Seattle’s coolest startups. Originally, she planned to continue her education and focus on becoming a pediatric cardiologist: a career that saw her study and almost graduate from a program to achieve her dream. But one year away from completing her prerequisites, she realized that something was amiss.

“The closer I got to finishing, I realized I wasn’t feeling that excitement. I really enjoy learning, but how am I supposed to help people if I can’t find that sparkle?” she says earnestly.

Dropping a medical career and taking a chance on computers is a bold and daring move and one that paid off immediately. “I’d always liked computers, so I thought I might like programming. On the spot, I went to my counselor and completely changed majors”, she says with a grin.

“This was a huge deal for me. But the more classes I took, the more I realized that this is a topic I can study in my own time, which was a complete 360 from medicine, and I could tell I was on the right path.”

From medicine to machines

Maria’s thirst for learning and knowledge made her the perfect candidate for a profession that requires you to constantly grow and adapt. She decided to focus on JavaScript, specifically React. “With JavaScript, it’s interesting to see how the components come to life at a very quick pace. There’s always something to add, some improvement to be made,” she says.

Community is important to Maria, and she quickly became part of a group that comes together to “help each other solve problems and have discussions of what the next version will be or help fix a current bug.” She says, “I think it’s important when working in a world of constant movement for it to be community focused. I like to be part of a community that’s very open, especially when it comes to new developers.”

Addressing the tech industry’s biggest problem: sexism

Unfortunately, being a female developer in a highly male-dominated industry hasn’t always been an easy ride. “Sexism is a major thing. Personally, I’ve known women who have felt it happen in a company, and they’ve had to leave because they didn’t feel welcomed, or it was a pretty blatant scenario of sexism happening. Sadly, it’s a rarity to find a company that’s open and welcoming,” she says.

“I feel like we’ve made so much progress, but there are still companies that don’t welcome women, and it goes back to ‘oh you’re a woman, you don’t know what to do,’ or ‘you should be focusing on the front end and styling’ instead of the more technical backend. For me, that’s not fun. We should be helping each other out.”

As mentioned earlier, community is at the heart of Maria’s passion for her profession, and she says, “luckily, there are some communities out there for women developers who come together, share stories, share knowledge, and red flags. It’s amazing that we can look out for each other and find each other better places to work.”

“I feel like whatever you say is important. If you have recommendations or improvements for projects, you should feel heard. I feel like Picnic does this very well.

“The company is always open to suggestions, and there’s never been a moment where being a woman or young in my career is a negative thing”.

I never feel like my voice isn’t heard, and I don’t feel uncomfortable voicing my opinions. They seem well received, and we end up making those changes, so something is going well!”

Life at Picnic

Maria was drawn to life in the Picnic basket because “I enjoy technology or anything new and creative when it comes to food, and there’s a cool machine out there that makes your pizza from start to finish! I felt it would be awesome to see how that would work, what software it needs, and just be part of that community.”

Having not previously worked at a startup, Maria was keen to explore what this looks like in practice. “I’ve had lots of interactions with different teams, and that’s really helped me grow as a professional,” she says. “There are so many experiences here that I can learn from as both a person and a developer.”

On an average day, Maria spends her time collaborating in meetings, ensuring that projects are running smoothly, and working on code. “I’m currently focused on the kitchen management system for our customers that helps them look at their orders more easily and understand how the station is working each day. I love making life easier for the customer to manage their kitchen.”

Maria is enthusiastic when asked about what it’s like to work at Picnic. “I have to make sure that my tasks are managed correctly when it comes to time. We’re not handheld at Picnic. We’re treated like adults. If you’re working on something, we’re expected to be focusing on that. No one bugs you or micromanages. We work as a team and support each other.”

With community being so close to Maria’s heart, it’s clear to see why she’s thrived at Picnic.

If you want to join a supportive environment and work on exciting new technologies, check out our open roles.

How The Global Pandemic Shaped the Future of Fast-Casual Restaurants

The COVID-19 global pandemic changed the face of the fast-casual restaurant industry and propelled businesses into uncharted waters. Due to ongoing restrictions and regulations surrounding in-person capacity and social distancing, many fast-casual restaurants were forced to pivot to takeout, delivery, and curbside collection.

Yet almost 40% of fast-casual business owners say it will be until at least 2023 before businesses return to normal. But what does normalcy mean in a post-pandemic world? How has the global pandemic changed the fast-casual industry, and how will technology play a role in shaping the “new normal”?

The post-pandemic landscape for fast-casual restaurants

The future looks bright for the fast-casual sector, which was valued at $125.6 billion in 2019, and is expected to reach $209.1 billion in 2027—a growth increase of 66%.

Whether you’re a small business just starting out or an established fast-casual veteran, we predict that increased reliance on new technologies will help you scale and reach these growth levels over the coming years.

QR codes are here to stay

Who would have predicted that QR codes would make the comeback of the decade? The Japanese invention allows users to scan the barcode and open a URL straight from the built-in QR scanner on their camera and mobile device, making the format ideal for creating low-touch menu browsing.

Other benefits of QR codes include gathering first-party information about your diners, managing waitlists, and gaining feedback from customers.

Having the ability to browse a menu on your phone is a gateway to the Next Big Thing: using technology to fulfill orders and pay bills. While this might sound like a futuristic idea, 52% of Gen-Z adults aged 18-25 prefer this method of ordering and billing, combined with 45% of Millennial adults aged 26-41.

Source: National Restaurant Association, Restaurant Trends Survey, ’21

In addition, more than half (52%) of all adults say they would like to see even more tech implemented to make ordering and paying easier, ensuring that QR codes have a place at the table for years to come.

Drive-thru is the new dining in

The drive-thru isn’t just for fast food locations. More and more fast-casual restaurants are introducing drive-thrus as consumers become more reluctant to dine in and businesses struggle to adhere to additional cleaning measures and safety protocols. Additionally, drive-thru ordering ensures that humans limit face-to-face contact and potential exposure to the coronavirus as customers use digital boards to order food.

One fast-casual restaurant that’s adopted drive-thru and contactless pick up as part of a growth and expansion plan is Chipotle. The Tex-Mexican restaurant opened its first digital-only restaurant during the pandemic and saw a 133.9% growth in digital sales during Q1 2021, accounting for over 50% of the company’s sales.

Given Chipotle’s success, it’s unsurprising that other fast-casual restaurants have followed suit, including Pizza Hut and Shake Shack, and added technology-driven drive-thrus to their location roster.

Source: Shake Shack

Automation will become the norm

The global food automation market is expected to reach $29.4 billion by 2027, signaling that businesses will turn to technology companies to automate different stages of the fast-casual food cycle.

The benefits of food automation include improved quality control, accurate portion sizes, more job creation and opportunities, increased efficiency, and a reduction in food waste.

One company quick to hop on the automation wagon is DoorDash. While it recently closed its salad-making robot startup Chowbotics, it continues to make investments in robot delivery technology. The move will help DoorDash merchants expand their current offering and help DoorDash achieve higher-revenue streams with add-ons.

And it’s not just food delivery companies turning to technological advances in automation.

The boom of ghost kitchens

Ghost kitchens help businesses reduce capital expenditures and support the growth of the fast-casual economy. If you think ghost kitchens are a fad, think again—ghost kitchens are predicted to become a $1 trillion industry by 2030.

A ghost kitchen provides fast-casual restaurants with an opportunity to launch a digital-only food business out of a local commissary or shared kitchen. Food is prepared, boxed up, and distributed using local delivery apps.

The benefits of a ghost kitchen include lower start-up costs and lower overheads. They give operators an opportunity to introduce and test food automation, trial new ideas and menus, and test new concepts before launching to a wider audience.

Ghost kitchens rely on technology—specifically food delivery systems and apps to help merchants get food from point A to point B.

Increase reliance on apps

Everyone knows that food delivery apps did very well during the pandemic as consumers turned to technology to get their fill of local grub. And the trend doesn’t show any signs of slowing down.

In Q1 2022, DoorDash reported revenue of $1.4 billion, an increase of 35% compared to Q1 2021, and UberEats is on a similar page, with bookings on the platform increasing by 12% YOY to $13.9 billion in Q1 2022.

Source: DoorDash

This reliance on technology to order food has allowed UberEats to broaden its appeal by creating product bundles and introducing family meals. Steps like these will only solidify delivery apps as a main channel consumers use to order fast-casual food and groceries.

Key fast-casual trends to look out for in 2022 and 2023

Technology has clearly played a role in the stability and growth of the fast-casual food industry. Here are a few other trends that we predict will shape the industry in a post-pandemic world.

The future of the fast-casual restaurant industry is technology-driven and technology forward. Delivery apps, automation, QR codes… they’re all here to stay, and fast-casual restaurants need to onboard these technologies to scale and stay ahead of the curve.

10 Minutes with Kevin “Cubby” Konn: America’s Pizza King

It’s not every day that you get to sit down with one of the most talented pizzamakers in America, so chatting with Kevin “Cubby” Konn was a special moment. Calling in from his cellphone, Kevin was laid back, feverishly passionate, and effortlessly cool—the kind of guy you’d happily share a six-pack and a few slices with any day of the week.

It didn’t take long for Kevin to namedrop everyone’s favorite maverick chef Anthony Bourdain, and it’s easy to see the comparison. “I dropped out of college and went to culinary school. At the time, I was reading Kitchen Confidential. I wanted to be one of those pirate chefs,” he says, grinning, before explaining, “in culinary school, you have to take an internship, and I went to work at a place that made Neapolitan pizza… and I just got hooked.”

I like the idea of automating pizza, especially taking on tasks of positions that are in demand but no one wants to fill. If you’re not gonna fill the job with a human, find a way to fill it with automation.”

A self-confessed pizza geek

Kevin went on to travel across Italy and undertook training in Rome and Naples. “I learned technique from the masters of pizza,” he says with an assuring and respectful nod. “I worked for the owners and pizza makers who really cared about the science, mathematics, and biology of fermentation. Everything I do now is completely driven by biology and math. I’m a pizza geek!” he says with a healthy slice of laughter and enthusiasm.

Fast-forward to the present day, and Kevin now consults different pizza restaurants on everything there is to know about running a successful pizza business. From advising on hydration ratios to food costing, Kevin prides himself on utilizing his extensive experience in all aspects of pizza to help others scale and grow.

And that’s not all. Kevin is also launching a new cooking school in Atlanta, working with a celebrity chef to co-launch The American Academy of Pizza Making. Currently undergoing renovations, the academy will offer classes for beginners and advanced students. All classes will be module-based, where students can learn Kevin’s tried and tested formulas for making different types of pizza, alongside accessing training on FOH, BOH, bartending, and chef skills to help attendees get a holistic experience in running a pizza business.

Technology and the pizza industry

Not content with running a one-man pizza consulting business and launching a cooking academy, Kevin is also building an app. “It’s taken me 20 years to get to this point. With the software, it’s going to take people 20 minutes,” he says, referring to the skills and knowledge he’ll be sharing when the app eventually launches.

“Technology has changed the game for me,” he says. “I went from 100% Neapolitan wood-fired oven to three-deck electric, Italian ovens that are all digital. Baking is all about the control of energy. Dough is energy, heat is energy… so if I’m trying to control energy with wood, I’m going to have less success and less control than pressing a digital button.”

Kevin is quick to point out that he has a “huge respect for the old-school way” but is passionate about using electric mixers and ovens, not to mention creating his own trailblazing pizza technology with the upcoming app. “At some point on my app, you’re gonna be able to take a picture of a pizza, and using facial recognition, it’s gonna identify what they think that pizza is based on formulas and percentages. You can’t do that without technology.”

 Does this modern approach get pushback from the industry? He hesitates before saying, “Maybe a few years ago… but now I see everybody adopting electricity for heat. Getting a woodfire brick oven in America means jumping through so many hoops just to get a meeting with an inspector. Nobody is doing it anymore.”

Kevin ties the modernization of the pizzeria with the decline in people rejoining the workforce after the pandemic. “Every one of my friends that owns a pizzeria is making more pizzas than they should right now because nobody wants to work. They’re having trouble finding people, and when they do, people are expecting a lot of money for not doing too much.

 “I think that if they don’t wanna work, then replace ’em with something that can do the work. Maybe five or ten years ago, I was all about the art and craft before getting into the more technical parts of pizza. I was totally old-school, but now, there needs to be some sort of technology automation to keep up. Every other part of the industry is doing it,” he says.

This is exactly why the Picnic Pizza Station caught Kevin’s eye at Pizza Expo ‘22. “I saw the robot pizza maker and was like, ‘oh my God, they created pizza Terminator, this is the coolest thing ever,” he says, laughing. “I just kept on coming back. I thought it was that awesome.

The future of pizza

Kevin is more than upbeat about the future of pizza. “You’re always going to have your mom-and-pop shops and the Italian pizza makers. But I like the idea that automation bridges the gap. Sometimes people want pizza, and they want something that’ll come out quickly and the exact same way every time.

People who own these [Picnic Pizza Station] can focus more on customer service, marketing, and keeping a closer eye on different trends. If you’re in the back slinging pies all night, you’re not gonna have a birds-eye view of your operation.”

Kevin’s vision for the future of pizzerias is that eventually, “you can have a fully automated pizzeria kitchen that’s gonna pump out pizzas, and do you know what? People are gonna be none the wiser…. The whole dynamic of the restaurant and food service and hospitality industry has changed completely post-pandemic. And I don’t think it’s gonna go back to the way it was and I don’t think it should.”

If there’s one guy to take pizza advice from, it’s Kevin. We’re booking a flight to Rome and re-reading Kitchen Confidential as we speak.

What is a Ghost Kitchen or Virtual Restaurant?

A whole lot changed in the food industry during the COVID-19 global pandemic. Businesses were forced to continually pivot operating procedures to comply with ever-changing government guidelines to help protect the general public and employees. This led to a rise in takeout options and food delivery companies benefiting from an unprecedented uptick in orders.

In 2021, DoorDash reported revenue growth of $4.89 billion, an increase of 69% from 2020, and went public on the New York Stock Exchange at a $72 billion valuation. Part of its success came from a turning point in how the public engages with and uses food delivery services.

Unsurprisingly, innovation in the food industry has followed with the growth of ghost kitchens.

What is a ghost kitchen?

A ghost kitchen, also known as a dark kitchen, virtual kitchen, cloud kitchen, or shadow kitchen, is a professional kitchen that allows chefs and restaurateurs to operate a digital-only food business, usually out of a local commissary or shared kitchen. A ghost kitchen has no indoor dining or space for patrons to visit. Instead, they operate solely via food delivery apps or their own delivery systems.

You might be reading this and thinking, “that’s a fad!” but ghost kitchens are predicted to become a $1 trillion industry by 2030. In addition, by 2025, the European market for online food delivery is expected to exceed $60 billion. If you’re in the anti-food delivery app camp, be warned: 59 million people are predicted to use food delivery apps in 2023.

With so much buzz and excitement about ghost kitchens, they’re hard to ignore—even for the most traditional chef and restaurateurs.

Source: Unsplash, Francisco Suarez

What are the benefits of a ghost kitchen?

Lower start-up costs

We’ll make no bones about it: starting a restaurant is hard work and expensive, with start-up costs coming in at $275,000 on average. In contrast, according to Seattle’s Kitchen Sisters, renting a space in a commissary to launch a ghost kitchen can cost as low as $1550 per month.

Commissaries typically come fully stocked with commercial kitchen equipment, and you’re welcome to bring any specialist items you need. Depending on your location, you may need to obtain the following:

The next step is to make sure you have a product or concept that is easily mass-producible and travels well, and after partnering with a delivery company whose margins work for you, you’re off to the races.

Lower overheads

Once you start working through a ghost kitchen, you may never look back to the more traditional method of running a food business. This is because your overheads are generally lower than running a full-scale, indoor dining operation, therefore putting more money in your back pocket.

We mentioned the cost of rent above, but you also avoid paying for front-of-house and back-of-house staff, seating, and tables, and there’s no extensive menu to iterate and update constantly.

Less food waste

Restaurants across the US lose $162 billion annually in unused or spoiled food, and for every $1,000 of revenue, a restaurant wastes approximately 33 lbs of food.

Food waste in restaurants is a huge problem that impacts a business’s bottom line and harms the environment and the future of our planet.

Ghost kitchens easily minimize food waste as they’re in a collaborative environment with multiple brands from the same restaurateur operating in the same space. For example, in Vancouver, BC, food brand Frankie started selling Indian street wraps and now operates four different brands under one roof, allowing them to strategically craft menus to minimize food waste.

Source: Unsplash, Max Saeling

Test customer demand

Opening a restaurant is a big deal, so why not test consumer demand first by launching and operating as a ghost kitchen? Then, you’ll be in the driving seat to assess how your concept, produce and dishes land with the public before committing to a long-term lease on a restaurant space.

Additionally, ghost kitchens allow you to test new markets. For example, let’s say you have a buzzing pizza restaurant in Brooklyn with a delivery radius of 10km. Opening a ghost kitchen in Queens will give you a solid opportunity to test the market in a different district before committing to open a full-scale restaurant.

Create flexibility

Maybe you’re a professional 9-5 worker who long dreams of owning their own restaurant one day? Or a stay-at-home mom with grand ambitions on how you’ll return to the workforce? Either way, launching a ghost kitchen gives you flexibility on how and when you work—which is hugely beneficial for people with other commitments or who are just starting out.

For example, you could launch a kebab ghost kitchen that only operates on Friday and Saturday nights for the post-pub crowd or a bento box concept that only operates on Monday to Friday lunch hours to capitalize on hungry workers. Having this level of flexible working doesn’t come easily and certainly doesn’t come with opening a full-scale restaurant.

Ghost kitchen tech stack

Inventory and planning

Operating procedures either make or break a restaurant. Without understanding how much stock you have, when you need to fulfill an order with your supplier or having a strategic way to manage your ghost kitchen menu, you’ll quickly feel out of control. Invest in software such as xtraChef or hardware such as the Picnic Pizza Station  to help streamline your operations and drive more revenue.

First-party ordering

If your budget allows, create a mobile app that allows you to manage and distribute all your orders. Not only does this mean that third-party companies (DoorDash, UberEats, GrubHub, and Postmates) don’t take a large percentage of your margins, but you’ll also give your customers an opportunity to form a habit by ordering from your app directly.

Third-party ordering

You know them off by heart, and the likelihood is that you’ve used them to call in delivery orders for yourself. The common go-to’s for third-party delivery include UberEats, DoorDash, Grubhub, and Postmates. However, these companies take a hefty percentage for every order, as much as 20%, leaving you with smaller profit margins to contend with.

Source: Unsplash, Erik Mclean

Fleet management

You’ll need support on getting your food from point A to point B. Enlisting the help of fleet management systems such as Vromo go a long way in ensuring a smooth operation.

Owning and operating a ghost kitchen is a fantastic way to launch a new food business and provides a gateway for growth due to consumer demand for tasty food delivered within minutes from a local kitchen that contributes to the local economy.

Customer-focused Engineering: Meet Director of Hardware Nick Spada

Ever wondered about the cross-section of mechanical engineering and pizza production? Nick Spada has.

As Picnic’s Director of Hardware, Nick’s responsibilities are a particularly unique combination of electro-mechanical engineering, dealing with mechanical systems, and designing the hardware for the Picnic Pizza Station. No two days are the same for Nick, and as one of Picnic’s longest-standing employees, he’s seen his fair share of exciting engineering.

“The first thing I designed at Picnic was a linear actuator, which was a system that moves back and forth with sensors and motors”, Nick shared, smiling. He’s come a long way since joining the company in 2018. “My role now is more focused on designing all the hardware and managing the core building blocks and functions. We design every physical component you see on the system.”

Engineering for supply chain efficiency

2022 is an exciting and busy time forNick and his team. “We’ve reached the point where we’re mass producing our commercially available product. The team is focusing on drawings for production to allow our supply chain to function more efficiently. We’re also building up a solid research and development practice based on previous learning to expand our ingredient capabilities,” he says.

But it hasn’t always been pizza and leading teams for Nick.

“After getting my BS in MechanicalEngineering at Seattle University, my career started in the aerospace industry.I worked my way up over eight years to become the lead support manager on-site at Boeing, working on hundred million dollar projects and doing 24/7 support.”

It wasn’t long before the 2am phone calls from VPs asking him to drive onsite grew tiresome. Nick says, “I started to feel like the aerospace industry had mostly been designed already, and a lot of what we were doing was making things more precise or shrinking things down.After eight years, I kinda lost interest, and that’s why I joined Picnic, where it’s more undefined, creative, and inventive.”

Nick says, “After I joined Picnic, I was immediately asked, “Hey, we need you to design a food mechanism that handles olives, green peppers, and onions.” You don’t get requests like that at large-scale manufacturing sites.”

Nick swiftly moved through the ranks atPicnic, starting as an individual contributor and mechanical engineer to leading a team of five mechanical engineers and an electrical engineer. “A year ago, we were a team of 15, and now we’re over 50 people,” Nick says. “Picnic has evolved from everybody wearing lots of different hats to more defined roles and sharing the load.”

It’s the collaboration at Picnic that gets Nick excited about the future. “We’re so customer-focused, and there’s a lot of cross-functional collaboration. We have customer success, marketing, design, and product at our engineering meetings to get different voices and opinions into the mix, which I really enjoy.”

An essential piece of the puzzle

A typical day for Nick involves working on new product initiatives, hosting cross-departmental kickoff meetings, drawing, and visualizing the future product. “We want to automate the more burdensome tasks for the customer so that they can focus on other areas of their business.” And that’s another part of his role that Nick loves the most.“When people see our tech, a lightbulb moment happens when they realize what the pizza station is and what it can do for them. That’s always such an interesting moment to watch.”

Nick wraps up our conversation by saying, “At Picnic, we’re all in this together, none of us has the whole solution, and we can’t solve problems alone. We need all of the puzzle pieces to create our functional company.”

Looking for an opportunity to take food automation to the next level and join a whip-smart team of cool pizza lovers? Have a look at our open roles.

Slices of Insight: Is Automation the Future of Pizza?

Scott Erickson, Chief Marketing Officer, Picnic

When I tell people that I work with robotic pizza automation, the conversation usually weaves its way into their waxing poetically about a future world where co-bots and AI helpers are as common as drive-throughs and delivery apps. But the world of kitchen automation is already here.

I think a lot about the role of kitchen automation. At Picnic, we study the economic benefits, the ROI via throughput analyses, and how new technologies are shaping kitchens. One of the most important factors we look at is the perception people have about robots helping make their meals.

Through a partnership with leading business and hospitality researchers Dina Marie Zemke, PhD from Ball State University and Carola Raab, PhD from the University of Nevada, Las Vegas, we surveyed 1000 Americans in early 2022 to understand exactly what they thought about pizza automation.

In my first article about this study, I shared that consistency was the #1 thing people wanted in their pizza. But how do you ensure consistency when you’re constantly training new staff, when you’re struggling with profitability from rising food costs, and trying to maintain a consistent brand image?  The answer is already here, and the respondents agree. Americans feel that pizza automation will increase consistency and order accuracy while reducing price and wait times.

The restaurant industry is no stranger to labor shortages. Prior to COVID, industry reports showed roughly 800,000 open positions in U.S. food service and hospitality. Post-pandemic, that ballooned to over 1.4 million open jobs. And with the rise of virtual kitchens, increased delivery apps, and 24/7 food delivery, the demand for making food is at an all-time high. The only solution for a restaurant to meet demand without labor is to add automation into the kitchen.

Does automation turn off customers?

But does adding automation compromise quality, hurt brand perception, or turn away customers? In a word: no. Two-thirds of Americans believe automation will help ensure pizza consistency and a third feel that pizza quality would increase with automation.

Consumers are also aware of the impacts of labor shortages. They feel it every day in many areas of their lives. Our study asked people how they would react to their favorite pizza restaurants adding robotic technologies to offset open jobs and their responses were overall favorable. Two-thirds of Americans surveyed feel that filling open jobs with technology is acceptable and necessary. When we asked how they think about the kitchens of tomorrow, 80% of Americans believe that kitchen automation is the wave of the future.

How can automation help make kitchens more successful?

At Picnic, we make automated pizza assembly stations that save labor, time, and money. The Picnic Pizza Station is a modular makeline that can assemble up to 100 pizzas per hour with one operator and creates less than 2% food waste. The station is designed to automate the repetitive tasks of pizza making to free up employees to do other high-value jobs.

Real world in-kitchen results speak for themselves. Chartwells Higher Education (a division of the Compass Group) manages food service at Texas A&M University where the Picnic Pizza Station has been in use for many months. Immediately, the team saw a 66% reduction in labor, higher customer satisfaction in a blind taste test, and increased employee efficiencies.

Americans are ready for kitchen automation to help ensure consistency, low prices, and high quality of their favorite foods. Customers like Chartwells are demonstrating that adding automated pizza makelines to their existing operations can save time, money, and labor without compromising quality or guest satisfaction.

Three Pillars of Growing and Scaling a Food Business

Scaling a food business is tricky when you only have a small number of free hours per week to commit to growth. How do you know where to focus your time and resources with only minimal spare time? And with labor costs increasing, many food establishments have little choice but to strategically juggle increasing menu prices and still attract and retain customers.

In this article, we look at the three core pillars of successfully scaling a food operation, give you strategies to implement in your business, and provide you with a road map for growth.

1. Technology

‍Use online reservations and booking systems

Online reservations and booking systems aren’t the new kid on the block, but some establishments still rely on old-school telephone bookings and walk-ins.

Unless vintage is your style, there are significant benefits to implementing online reservations, including an opportunity to maximize your capacity, create personalized experiences for dine-in customers (who doesn’t love a surprise dessert on their birthday?), and give you valuable insights into customer behavior.

Partner with food delivery companies to expand your reach

We’ll level with you here. Food delivery companies aren’t always the greatest move for a food business due to high commission rates on orders and a general concern that consumers are becoming overly reliant on GrubHub, DoorDash,UberEats, and Post mate instead of visiting restaurants and food businesses in person.

However, if you’re looking for a short-term solution to expanding your reach and increasing consumer awareness, partnering with one of the apps mentioned above could give you a much-needed boost.‍

Upgrade POS

Upgrading your POS system to a modern-day solution helps drive revenue growth by allowing you to accept new payment methods (Apple Wallet, for example), access robust analysis of customer behavior, and take payments faster and easier with no maintenance costs.‍

Upgrade inventory management

How well you handle your inventory will reflect on your business’s success. If you’re looking to grow, assess your inventory management system and consider whether an upgrade is needed to help you better manage your stock and reduce costs.‍

Continue curbside collection and takeout options

During the COVID-19pandemic, many businesses pivoted to click and collect, takeout only, or delivery options to comply with government restrictions regarding in-person dining. And the trend caught on. 53% of consumers now say that ordering takeout is “essential” to their lifestyle. To compete in crowded markets, food businesses need to continue offering curbside collection and takeout options to help them drive revenue and consumer happiness.

Source: Unsplash,Rowan Freeman

Introduce automation

Restaurant automation helps you speed up the production process and streamline your BOH operations, giving your employees more time to focus on the customer. Automation also saves you money, cuts down on food waste, and improves quality control.‍

2. Marketing‍

Figure out your ideal customer

Before you consider launching any marketing campaigns, you must understand who you’re marketing to. Start by surveying your current customers to learn more about them. Where do they live? What’s their profession? What’s their household income? Where else do they like to eat? Questions like these will allow you to build out customer profiles, and help you understand precisely where your target audience hangs out, how they engage with restaurants, and what types of marketing they’re most receptive to.

For example, if you’re an old-fashioned steakhouse with a high-end clientele, don’t waste time creating Instagram Reels. This isn’t the marketing channel where your boomer generation audience typically hangs out, and your marketing efforts will go to waste.‍

Create thumb-stopping images for social

Everyone with an iPhone thinks they’re the next Annie Leibovitz, but the reality is that they’re really not. Photography is an art form, so treat it as such. Hire an experienced photographer from a site like Meero or ask around in your network for a recommended food stylist to create images that stop prospective customers from scrolling past your content on social media.‍

Source: Unsplash, Peter Bravo de los Rias

Upgrade your website

Firstly, if you don’t have a website for your food business, build one.

Secondly, if your website is a few years old or was created in a rush, it might be time for are fresh. Look for things like is it simple for the customer to find the information they’re looking for and make a reservation? Is your location and address found easily? Is the website optimized for mobile browsing? Is it optimized for organic search? Does it provide a good user experience? Small tweaks like these can quickly and easily impact your business’s growth trajectory.‍

Create a Google Business Profile

A Google Business Profile is a free directory listing run by Google but managed by you. Creating a profile allows you to enter essential information for customers to access, including website, phone number, and address. So when customers or potential customers are looking for information about your business, they’ll locate everything they need quickly and easily.‍

Sign up to Yelp

We know that review sites have a questionable reputation. There are negative reviews to manage from disgruntled customers, and ad spend to contend with to ensure your restaurant gets seen. However, a 2016 study by Harvard University Professor Michael Luca found that an increase of one star on a Yelp rating leads to a 5-9% increase in revenue, so it might be worth spending some time navigating the Yelp waters to encourage growth.‍

Create a newsletter

Newsletters are a low-cost way to keep customers and prospective customers informed about your food business and encourage them to visit your establishment. Newsletters are one of the best marketing strategies you can use because, unlike social media, where you’re constantly at the mercy of the algorithm, newsletters are an audience that you own. Unless someone unsubscribes, you have a direct channel to communicate with people who are actively interested in your business.

3. Customers‍

Customer retention is queen

Yes, cash flow is king, but customer retention is the golden ticket to sustainable growth. Food businesses need to keep customers coming back for more, and you can do this by providing an above and beyond in-house experience, serving high-quality food in good time, and always putting the customer first. Remember, it’s pretty much always more expensive to acquire a new customer than it is to retain an existing customer, so focus on retaining your current customer base.‍

Focus on the customer experience

To help frame this, Deloitte broke the customer experience down into five categories:

  1. Engage: The restaurant engages with the customer in a polite, positive, and friendly manner.
  2. Empower: The restaurant provides real-time information to help customers make informed decisions.
  3. Hear: The restaurant listens to and understands the customer’s situation and needs.
  4. Delight: The restaurant creates moments that surprise customers and exceed expectations.
  5. Know: The restaurant remembers the customer’s preferences and needs.

Following this blueprint will help create a memorable experience for the customer and leave a lasting impression that ensures repeat business.

Audit and update your menu

Keeping your menu fresh and exciting is a surefire way to encourage customers to visit your establishment. However, you don’t need to create an entirely new menu every time you want to update. Consider adding in new items alongside current favorites and high profit margin dishes to engage new customers and reengage existing loyal patrons.‍

Implement a loyalty program

Loyalty programs area fantastic way to encourage repeat customers due to the incentive for them to keep coming back to your business. Additionally, loyalty schemes encourage upsells and cross-sells, making them a significant driver to increase average order value (AOV).‍

By following the three pillars of technology, marketing, and customers, food businesses across the U.S can scale and grow, while retaining customers, driving new business, and build long-term sustainable success.

5 Customer Service Tips to Retain Customers and Increase Revenue

Everyone has their favorite spot where they love to grab a slice. Maybe it’s Delancey in Seattle, Emily in Brooklyn, or even Side Pie in LA. With over 75,000 pizza spots dotted across the U.S., as customers, there’s something about our favorites that keep us comin’ back for more.

For business owners, repeat customers are a goldmine. You’ve heard it a million times before: it’s cheaper to keep your current customer base and get them to make repeat purchases rather than spending money to get brand new bodies through the door.

In the food service and restaurant industries, customer retention is key to sustainable growth and revenue. But how do you get people to return? Yes, food quality and consistency are important, and customer loyalty schemes play their part, but exceptional customer service and a delightful customer experience are crucial to repeat business.

5 customer-focused tips for retaining customers

1.  Start with the behind the scenes

Providing a next-level customer experience starts with your back-of-house operation.Ensure that the logistics of getting food from a distributor to the fridge, to the prep station, onto the plate, and out for service is seamless and as stress-free as you can. A calm kitchen will reflect on the front-of-house staff and impact the customer experience.

You’ll also need to ensure that your business is always fully operational from a tech perspective. For example, using systems and POS with minimal downtime.

According to Harvard Business Review, happy employees equate to happy customers, and their research found that this is especially true in the food service industry. For business owners, this means that you need your employees to feel valued and appreciated. Here are a few strategies you can use to help make this happen.

Make yourself available

Go for a one-on-one coffee with all of your employees and get to know them on amore personal level. People love to be heard, so ask for feedback about what it’s truly like to work in your business and be open to what they share.

Everyone is equal

Treat every employee as an equal. From the busboy to the head chef, all employees are part of the same team, so treat them with the same levels of respect.

Reward employees

Employee of the month is outdated, but the idea of rewarding hard work can go a long way to keep morale high and motivate employees. Simple tokens of appreciation could include gift certificates, experiences, or organizing an off-site group outing paid for by the business.

By focusing on what goes on behind the scenes, you’re creating a positive environment for customers to step into, which will go a long way in promoting retention and repeat business.

2.  Step up communication

Consistent and clear communication is needed from all team members to ensure a good experience for the customer.

Internal communication

●     Hold regular team meetings.

●     Ask for feedback.

●     Provide training for FOH and BOH employees on what clear and empathetic communication looks like.

●     Set an example: communicate the way with the team you would like others to.

External communication

●     Greet all customers and acknowledge their presence.

●     Remember customer names.

●     Listen when customers speak.

●     Show compassion, honesty, and empathy.

●     Be polite.

●     Offer any help or assistance where needed.

●     Speak clearly and project your voice.

Communication doesn’t always mean language and words. Non-verbal communication includes tone of voice, eye contact, body positioning, and body movement. So think about how you and your employees communicate with your whole body, not just the words you say.

3.  Ensure speedy service and accurate wait times

We order an item on Prime, and it’s delivered the same day. We order a bite on DoorDash, and it arrives in 20 minutes.Everything we want and need is accessible “on-demand,” and now consumers expect this type of ultra-fast service in every aspect of their lives. Businesses need to keep up with this customer expectation to retain their customers and create brand loyalists.

Just like nobody puts Baby in the corner, nobody likes waiting for pizza. So if your customers have to hang around for too long to order their first round of drinks, get the ‘za, or receive their bill, they’re not going to be happy about it–especially in a place where the expectation

Source: Unsplash, Pinar Kucuk

Ensure that you provide fast, friendly service to customers in your pizza establishment. For example, bringing in tools to help with prepping food can help to speed up the process of getting food out and ease bottlenecks in the kitchen.

Changing the mind of a disgruntled customer is a hefty challenge, so make sure that you set expectations when a customer walks through the door. For example, if there’s a 30-minute wait for a table, say so. Don’t leave anything up to the customer’s imagination and go with the mantra of “under-promise and over-deliver” to generate consumer delight.

4.  Level up your tech stack

Automation improves efficiency, so invest in tools that speed up the customer experience.

Online ordering

No, we’re not suggesting you partner with a food-delivery company. But opening up a channel for your customers to pre-order and dine in or takeout on your website is a simple way to make your business more accessible and improve customer experience.

Booking system

Suppose you’re a busy establishment finding that you’re regularly turning customers away due to limited seating. In that case, it might be time to invest in an online booking or reservation system to help handle some of the customer expectations.

Automate production

Automating parts of your food production system will free up employees to focus on the customer and other areas of the business. For example, the Picnic Pizza Station automates food prep and gives you an opportunity to save money by ensuring accurate portion sizes and minimizing food waste.

5.  Handle complaints like a pro

You can’t please everyone all the time, and sometimes, things simply don’t workout. For example, you’re a busboy down, the chef’s argued with the sous, and you’ve run out of bell peppers. Naturally, customers will complain, but how you handle the complaint will help retain a customer.

●     Respond ASAP. Don’t drag your heels on dealing with a customer complaint. Instead, respond to any complaint or issue pronto to help deescalate the situation as soon as you can.

●     Listen. Give the customer your undivided attention and space to air their grievances.

●     Ask the right questions. Dig deep to find out what the situation is and what the customer is unhappy with. Questions such as “what do you mean by…” and “can you tell me more about…” are good starting points to uncover insights.

●     Don’t make excuses. Acknowledge and take responsibility for the situation. Now is not the time to make excuses.

●     Communicate next steps. Once you’ve settled on an outcome, communicate this to all parties involved and explain the steps you’ll take to ensure the situation won’t happen again.

It’s not easy being an entrepreneur, but a small amount of attention to the customer experience will help you to retain your consumers, drive repeat business, and help you to build a sustainable, long-term business.

A Slice of Industrial Design: Meet Kyu Han

Kyu Han isn’t a run-of-the-mill Picnic employee. A self-confessed New York pizza lover, Kyu, our director of design, has been in the Picnic basket since graduating from the University of Washington with an undergrad in Industrial Design in 2016.

“Originally, I was moonlighting, helping the founders with renders and pitch decks. My other gig was at a kitchen goods company in Seattle called Chef’n as part of an internal design consultancy. We were doing drinkware and food-related products for companies, including Starbucks.”

As one of Picnic’s first employees, Kyu saw the company progress from Otto Robotics to Vivid Robotics before landing where we are today: Picnic Works.

“The vision was to create a fully automated pizza food truck. No people inside, you place an order, and it’s completely self-service for the customer. I was working on slide decks, concepts, and notional ideas of what the truck and customer experience might look like, and, most importantly, where people order pizzas from.”

From food truck automation to pizza sensation

Kyu’s involvement in the automated food truck didn’t stop there. As a multi-talented individual with a passion for how stuff works, Kyu contributed to “mechanical engineering efforts, prototyping, designing mechanisms, mechatronics…. cool stuff like that.”

Before long, Vivid rebranded to avoid a potential conflict with another company with the same name. This proved to be a pivotal moment. Not only did this change Kyu’s hand in the company, but it also influenced the business direction.

“We discovered that it’s a lot of work to create a full food truck automation, even just to top the pizzas. But by the time we had done the development of the topping part, we already had a product with a huge market. So we decided we didn’t need to build the whole truck. We just need to do the pizza topping.”

“I think pizza may have been invented in Italy, but it was perfected in New York.”

Today, Kyu leads a small design team at Picnic, and his typical working day is eclectic and exciting.

“On my team, we have two UX designers and an industrial designer, and I manage the design work. In the past, I’ve worn a lot of different hats. We’ve grown now to a point where a lot of these responsibilities have been offloaded to dedicated departments.”

No two days are the same

For Kyu, a typical day involves “shepherding projects through the design process: the typical research, ideation, prototyping, and then the actual product development work. That involves sketching, CAD, rendering, and creating presentation decks.” Luckily for Kyu (and all Picnic employees), “a typical day at Picnic also involves making pizzas and doing taste tests.”

It’s experiences like creating test pizzas that help Kyu with the creative process and understanding the challenges that industrial kitchens face.

“Kitchens are demanding environments. It’s loud, it’s hot, there are multitasking workers everywhere, and space constraints. There’s so much to handle, mentally and physically, and employee turnover is high. So we’ve designed a product that can be easily understood and used with minimal training.”

While working at Picnic is a challenge for Kyu, the end results make it all worthwhile.

“I spent ten years working in kitchens through high school and college. So I know firsthand how difficult a job it is. How hectic it can be. How easy it is to make mistakes. And that’s really my favorite part of working for Picnic: it’s being able to make workers’ lives easier and continually improve the product for the end customer.”

Looking for an opportunity to take food automation to the next level and join a whip-smart team of cool pizza lovers? Have a look at our open roles.