Analogue or Digital – How Are Things Running in The Food Service Industry?

Mr Schumacher, you have a deep knowledge of the hospitality industry. How do you assess current developments in the independent restaurant industry in particular?

A huge amount has happened in recent years – and the sector continues to change very rapidly. Start-ups and entrepreneurs from other industries are discovering the food service sector and bringing in innovative concepts and ideas. A new generation of restaurateurs has also come of age who approach the business very differently than was the case just a few years ago. At the same time, the pressure has increased – partly because chain restaurant operations are pushing their way into the market with their own new approaches. Competition is growing, and independent restaurateurs are feeling it.

Even though digital solutions are available on the market, restaurateurs still have difficulty using them in their everyday operations. How do you explain that?

You have to take a more differentiated look at that – because the chain restaurant business is actually one of the more forward-thinking areas when it comes to digitisation. They’ve been using tools for accounting and yield management, for example, for over 10 years already …

… unlike the independent food service industry?

Exactly. Unfortunately, many applications aren’t yet conceived so that smaller businesses, too, can use them efficiently and profitably. But things are starting to happen here as well. A lot of start-ups are recognising the potential and putting good solutions on the market – for example, in the areas of order management, the cash register and product information. That said, it’s still early days.

Is the hospitality industry a digital late bloomer?

For independent restaurants in Western Europe, that’s certainly true. Up to now, entrepreneurs in this sector have done fine without having to go digital – but the landscape is changing. For one, because legislation is forcing increasing digitisation, in the area of cash management, for instance. And also because competitive pressure is driving it, and the potential is enormous. Especially with regard to the digitally savvy coming generation, it’s only a matter of time until digitisation has taken hold in independent restaurants as well.

Thus far, independent restaurateurs have used digital applications particularly in the areas of communication, finances and payment. Warehousing and purchasing, on the other hand, are still largely run on an analogue basis.

That isn’t surprising, because even with advanced professional software, processes like digital volume calculations and inventory take a huge amount of discipline. Those kinds of applications don’t allow rule-of-thumb management – they demand constant attention and they’re absolutely management-intensive. Especially in smaller businesses that don’t have many personnel, this can quickly become an obstacle. And that’s exactly our starting point in our work with a number of different start-ups: we’re focusing on solutions that make everyday restaurant operations easier.

What does that look like in practice?

For example, at Hospitality Digital, we’re developing applications in close cooperation with restaurant owners. These include the Cockpit management tool as well as Menukit, a software program that lets restaurateurs enter their recipes quickly and easily and calculate their cost of goods sold. The cost of goods sold is one of the most important key figures in the food service business, and with this tool, we help restaurant owners to keep an eye on it. And because the conception and the further, agile development of the solutions are done entirely by us and our cooperation partners, we can incorporate our cumulative experience on an ongoing basis. This is an unbeatable advantage.