For many of our restaurant customers, the Pandemic forced them to either grow or begin takeout and delivery offerings to survive and, in many cases, develop a new source of revenue that will become a permanent addition to their business model.
With that new strategy has come a new understanding and approach to the role of packaging in the marketplace. What used to be an occasional doggie-bag for your patrons or random carryout order has evolved into a full off-premise dining program.
Now, with so much dependence on packaging, you may find yourself struggling to source everything you need to operate a successful takeout and delivery operation. Meanwhile you’re also focusing on ensuring what you sell replicates what your loyal customers have come to expect from you when they eat in your dining room. That means everything from a crispy French fry to piping hot paella cooked to order.
My goal is to help you navigate how to accomplish that. First, it is important to consider how this part of your business fits from a P&L standpoint. We suggest that operators plan about 5% of their revenue for their packaging and non-food supply budget. This is an industry average and a good place to start.
The next decision is where are you going to source these products. Consider how the importance of takeout and delivery has evolved through the Pandemic. Before COVID shutdowns, packaging may not have been top of mind for most full-service restaurants. With so much at stake now, you need options that are well-suited to your menu and operation. When a soggy French fry can lead to devastating social media reviews, you need the right packaging. Work with a distributer that specialized in these product lines. One with experienced product consultants that will share their expertise and develop a program fit for your needs today.
It’s been interesting over the last year, to watch our team work virtually with their restaurant and foodservice customers. They embraced technology and, when in person visits were not feasible, used FaceTime or other apps to preform virtual sales calls and develop packaging strategies. We are all looking forward to getting back to visiting our customers in person on a regular basis. This will always be a hands-on industry.
We have long term relationships with a wide variety of operators including fast casual chains. We leverage the experience we have from developing packaging programs for those customers to help full-service restaurants who are now focusing on off-premise sales. In fast casual, almost every menu item required packaging. Often those containers, cups, and bags are part of a branding strategy. Those operators also understand that their food may travel in a package for 30 minutes or more before being consumed. By borrowing the packaging playbook from the fast casual segment, other operators can successfully develop their off-premise packaging program.
During the Pandemic, operators have come to understand the value of leakproof and tamper-evident containers. Features including tight lid closures, temperature and humidity control, along with grease resistance are critical. Another element of a successful program is the carryout bag. We’ve seen restaurateurs design and purchase a great looking, branded bag without considering the shape and size of the containers that need to stack neatly inside.
All of this only works if the restaurateur pays attention to the flow of their operation. When takeout and delivery grows from 10% to 90%, your business has changed and you need redesign procedures. Determine who will pack up the food and train them to do it correctly. Pay attention to things like separating cold and hot items. If you place a salad on top of a hot entrée in the same bag, you’re going to end up with a wilted mess and an unhappy customer. You also need to address how to manage customer curbside pick-up and third-party delivery personnel and what supplies you’ll need to help identify orders, such as labels.
Over the last several months, packaging costs have become challenging. Pricing for plastic products, notably polypropylene, has soared not only as the result of increased demand but a combination of other factors. The perfect storm started earlier in Spring of 2020 when manufacturing and production facilities in Asia and the Middle East were shut down due to COVID. This was followed by escalating base raw material costs coupled with skyrocketing energy and transportation costs. Then, speaking of the perfect storm, extreme winter weather pummeled the country last month and shut down refineries and petrochemical plants in Texas, an area that accounts for about 80 to 85% of US polypropylene production.
These price increases are impacting operators because polypropylene or PP, resin ID code 5, is a very popular material for hot food containers. The containers are available in a wide variety of shapes and sizes and are heat resistant, microwavable and top-rack dishwasher safe.
Of course, there are a variety of other raw material options beyond polypropylene that food service operators can choose from today including several types of plastic, paperboard, foil, and even plant-based materials. Each type of material has unique properties and are suited for specific applications.
- Polyethylene terephthalate or PET, resin ID code 1, is typically used for cold cups and cold food containers and has excellent clarity. It is the most recycled type of resin and is familiar as it is used to make water bottles. CPET, or crystalized PET, can be used for hot foods and is microwavable.
- Polystyrene or PS, resin ID code 6 is another material that is ideal for containers used for cold food. Modified polystyrene or PM can used for hot applications and is microwavable and top-rack dishwasher safe.
- Most operators are very familiar with expanded polystyrene aka foam. It’s extremely economical and good at maintaining temperatures both hot and cold. Foam cups don’t condense like paper or plastic cups can in warm weather. When it comes to hinged-lid containers, foam is best for drier items due to the lack of a tight lid fit. Operators do need to keep in mind that many municipalities have banned foam packaging for environmental reasons.
- A popular option for those who prefer more sustainable options is polylactic acid or PLA, resin code 7. PLA looks and feels like PET and is great for cold applications. It is usually made from corn starch and it is compostable.
- Paperboard packaging used to manufacture folded takeout boxes is an economical option and appeals to those wanting to reduce single-use plastics. It lacks some features, including a tight lid fit and temperature control, but can be good for certain items.
- Molded fiber pulp packaging has grown popularity. It was gaining traction prior to COVID as operators were looking for environmentally friendly solutions. It’s made from renewable fibers such as bamboo or bagasse, a bi-product of sugar cane. Many of these pulp items are certified compostable. This material is best suited for food that will be consumed quickly. After about 30 minutes, the packaging tends to become soggy. So, it’s not an ideal choice for a wet, hot meal like spaghetti and meatballs.
- Finally, we have seen the return of foil, which has been around for a long time. We all know the traditional foil rounds with the cardboard tops. There are also upscale options in a variety of shapes with black and gold bases and clear lids. These work great for hot foods such as lasagna and you can remove the top and pop into the oven to reheat.
With so many packaging options it can be overwhelming to decide what items are best for your operation and budget. You can make it simpler by working with your distributor.
Start by reviewing all your packaging and non-food supplies. Maybe that brand of container you’ve been using for years can be replaced by something new on the market that will perform equally and have a 30% cost savings. It is likely you have alternatives!
Also, look at the sizes of products you use for each menu item. You may find that you are using too large a container and can save money by right-sizing. A few cents here and there can add up very quickly when your takeout volume is large. There may also be savings hiding in supplies like napkins or cleaning chemicals. Be open to alternative products, ask your distributor sales representative for options. Cost savings can also come from offering some items on demand. When customers eat your food at home, they may not need wrapped cutlery and napkins.
Finally, there are strategies and marketing concepts you can borrow from supermarkets and c-stores. Consider creating meal kit options and turning them into interactive opportunities with branded recipe cards or YouTube instructional videos created by your chef. Offer special deals for customers to purchase multiple meal kits or ready-to-heat family-size meals. If you have specialty sauces, barbecue rubs, or salad dressings, bottle them and merchandise them. Don’t forget to use that legislation that enables restaurant to sell cocktails to go. There are handy carafes available to make your margaritas or sangria easy to transport.
As you go through the process of developing a packaging and supply program, allocate your spend carefully ensuring a quality experience at home for your patrons. Think in terms of good, better, best. With a $35 lamb chop dinner, invest in that top-quality meal container with compartments for sides. Then use the good to better level products for your basic staples such as films, foils, napkins, straws, cutlery, portion cups, etc. so you can stay within that industry benchmark of 5% of revenue for packaging and related items.
The foodservice experts at Imperial Dade are available to help! Call us today and we’ll set up an in person or virtual packaging and supplies review.
