Jay, I'm truly grateful for the opportunity to meet with you today. It's wonderful to catch up again since our last meeting at the SPARK conference, where we discussed many aspects of food and beverage within the hospitality industry. For our listeners who don’t know you yet, could you tell us who you are and how long you’ve been working in the foodservice industry?
I'm the brand activation manager for Sysco Canada. I’ve been in the industry for almost 34 years. I ran restaurants. I've had a great, awesome opportunity to lead the resource side for Sysco for 14 years, creating resources for our customers. I started podcasting four years ago. Currently I run two podcasts, one with Sysco today and one with Restaurant Canada, on behalf of Sysco. I'm a marketing guy. I love helping our industry. I've been really fortunate to have such a great career in this industry. To really give me opportunities that are just, it blows my mind.
Even today to do a show, even with yourself, Ben, is just to be able to do all this and talk about our industry and to meet some most incredible chefs and restaurateurs. I just really love what I get to do every day, it's been a dream.
Amazing. No, that's great. I mean, it's so impressive to see how many years you've been working in the industry. Before we get into industry questions: what’s your favourite food?
I like just a basic hot dog on toasted bread, ketchup, butter.
Right now, one of the things that we are all experiencing is increasing food prices and any food business is impacted across the whole food supply chain. How has food inflation impacted restaurants?
In general, everything has increased. I think it's hard on restaurants. Bananas are the only one that is safe, but everywhere else we're seeing the increase. I think it's just how you work with it. There's nothing we can do to change it, right? It doesn't matter who you are, you're dealing with this. So I think it's really how you work with it. It’s going to be your goal moving forward.
We need restaurants to give us options so we can still afford it. I think that's going to be how we get through this. We can all talk about ingredients and this and that with increases, but at the end of the day, we can have the greatest food costs in the world and no traffic in our restaurant. So it's all about foot traffic moving forward. And I think David Hopkins from 15 Group has taught me as well as to really look at this in a positive notion and a positive lens. I think right now for us, it's really about getting people out there to support our industry, and to dine out again.
You’re famous for your speech around the impact of AI in the hospitality industry.
What do you think will change the most by 2030?
Great question. Automation will be the backbone in our industry. I think you'll have AI weaved into our industry everywhere. QSRs are going to go through more transformation than they are now. I think restaurants will mostly be robotic, like the 1 in the United States with McDonald's. You have to do that for profitability. I think it comes back to more innovation when it comes to products. You're speaking a lot around zero waste. I think zero waste is going to be critical. Sustainability. All these things are not even going to be a part that they're introduced to. This is just going to be the way of life. I think that's the way we're going to have to look at 2030. People still dine out. I think we'll dine out more even.
I remember you had some surprising statistics.
When do you think AI will be smarter than us?
Nine years from now, that's not far away, is it? It's coming fast. I'm going to say that you could probably cut that in half, based on the transformation we're seeing AI today. And AI last week was a big week for AI. Uh, they, you know, introduced GPTS or GPTs. And they introduced a new model. That's going to make it more accessible for people to use it. And that will probably cut those nine years, maybe in half, I guess.
For 2024, you forecasted an average profitability of 1% in the industry.
Yeah. So if you look at it today, we're running around 3 to 4% profit return on restaurants, which is really, really, really, really low. Now, if you factor in all these other factors of what we're looking at, and it's typically on your operational side. And that's going to be very difficult for businesses to generate the profit that they're looking for.
Every small inch of the business will have to be reviewed to make sure we're doing everything and anything possible and every inch of that business to get as much profitability out of it. It's going to be very, very critical as we move forward into the new year. Fast casual and family may have to adjust their strategies, those are going to take a lot of the hit right now. Unfortunately. So we need to get out there and support them.
That’s very insightful. And I also remember you saying that static pricing is a thing of the past. How fast do you think restaurants will embrace dynamic pricing on the menu?
I think it's going to take a couple larger models, like a large couple of franchises to do that. And then we're going to see everyone else do it overnight. But it'll take a little bit of time for the general public to get adjusted to that model. It'll take some time. It's not overnight, but a couple will lead the way. I believe in this, in this new way of looking at dynamic pricing. I think down in Texas they were starting to do it already.
On the sustainability front, you mentioned zero waste restaurants is a big trend. Can you tell us why? And how is the concept of zero waste impacting profitability in the restaurant industry as a whole?
Zero waste, it's going to be very critical because the consumers are going to want it. They're going to demand it. Waste is massive in restaurants. Huge amounts of waste happens in restaurants, especially independents. We see that within the waste of food because if you don't have a system, you will have a waste problem. So there is better technology. It's going to help us with that. We're going to have to order differently in a model using AI and those kinds of bots to help reduce those costs.
Your waste and sustainable practices will be a part of that restaurant model. It's been around for years, but it's still wrapping up now because the generation that is dining out is demanding us to move to a model. And I think from a profitability side, you have ways to probably generate a lot of extra profits because you're utilizing the products. There's always going to be some sort of waste until the packaging gets different. But ideally, we are going to definitely look at some sort of gain on your profitability for using all the products in a different recipe. I think we'll be a part of that whole model as we move forward. I think if you look at it as a way to increase your profit margin, I think that's a bonus. It will generate profit because you're going to be able to charge a little bit more for that practice that it may cost, like, if you balance of it costs you 25 cents more to do this program per hour, but you're generating this much more sales.
More and more F&B operations are using AI with cameras to track and report food waste. What do you think of such technology?
I've seen 1000 different systems as long as they're simple to use. Don't overcomplicate it. The people that run restaurants, hardworking individuals, and they get really confused when we introduce new things to them that I think we have to be very, very, very simple. Sometimes simple is more if that makes any sense.
That's to control your food waste and food costs in your operations.
Can you share your approach to reducing food waste in the supply chain? Buying imperfect produce, is that something that you see more options available for operators?
Not that I see enough of it. I think we're seeing that more in the retail space. For the food service space, We haven't really gone down that. It's not a bad idea.
What's your favorite food waste hack? Like a tip to fight food waste at home or in your restaurant?
Track all your waste that you pay for in your restaurant. Put your scraps and everything you have is your waste. Don't have black garbage bags in your kitchen, by the way, that's your, your trims. You know, your burnt bacon, everything goes into those white pails and takes those pails. At the end of the lunch rush, take a picture of them using AI and ask what kind of recipes that you could create off of those wasted items. And the next time you're doing prep or the next day, do it quicker and put those products in a food safe container and then make recipes using AI of those wasted products and use them for your feature menu, that will generate you profit, not just soups or stocks, but that will generate you profit and uniqueness.
AI and sustainability are growing trends. What other trends do you see in the hospitality and restaurant industry right now?
Building your brand is massive right now. But not the brand of yesterday. It's not the logos or the big. Wow. It's about the pure authentic positioning of our brands. Social was big over the last 10 years. I'm getting our communication out there of our industry and about our restaurants. And today that's not necessarily a place where people want to get that connection to the brand. So we're looking for new verticals and new ways to grow your brand.
