A s we get set to turn the calendar to 2025, it should come as no surprise that labor challenges continue to be a top-of-mind concern for foodservice operators. Changing workforce dynamics, evolving employee expectations, and a growing reliance on technology are just some of the factors that are forcing operators to rethink their staffing strategies in order to stay competitive in the marketplace.
The good news overall? The labor market remains strong nearing the end of 2024.1 And the not-so-good news? The labor market remains strong. Yes, it’s a bit of a double-edged sword when you consider all of the ramifications.
The positive aspect of a robust workforce is that consumers have more discretionary income—and they have shown a willingness to spend it on dining out despite inflation and rising menu prices. But the downside is the fact that a strong labor market gives potential employees a wider range of options, making it more challenging for operators to attract and retain qualified workers.
Many operators are increasing wages, benefits, and other employee perks in the effort to stand out. However, the reality is that some foodservice locations still struggle to find enough workers (or the right kind of workers) to be open the hours they want or to offer the service patrons expect.1
Labor issues by the numbers:
- More than a third (36%) of operators say improving their labor/staffing situation is a top priority goal.2
- 58% of operators say they raised menu prices to counteract higher labor costs in the past year.3
Managing labor shortages
So the natural question becomes, what steps can operators take to tackle the labor shortage head on? Here are a few of the tactics that have proven effective—and will continue to be relied upon moving forward.
Streamlined, labor-saving menus
More operators have reduced the size of their menu (28%) vs. increased it (13%) in the last year.3 Additionally, 40% of operators say they added menu items that require less prep/labor in the past year.3 Half (51%) of operators say reducing back-of-house labor needs drives their menu updates.3
Labor-saving products
While scratch-prep is attractive for its freshness and cost savings, it simply isn’t realistic for many operations. Due to the tight labor market, operators are now more open to trying new products (i.e. premade offerings) that help address their labor concerns.4 In fact, 58% say low-labor/labor-saving is an important or appealing product attribute when considering what products or brands to purchase.5
Labor-saving technology and equipment
Some operators are turning to a new generation of “cobots” (collaborative robots) designed to work alongside humans. Cobots assist in various tasks within shared workspaces while ensuring safety and efficiency through advanced automation and interaction capabilities.6
Chipotle has embraced this technology with its Autocado—an avocado-processing cobot that cuts, cores, and peels avocados for use in the restaurant’s signature guacamole. The company has also automated aspects of its makeline to assist in the assembly of bowls and salads.7
What else lies ahead in 2025?
In addition to continued labor/staffing challenges, here are a few of the other key factors sure to impact the foodservice industry moving forward.
Decreasing Inflation rates
Food-away-from-home inflation is expected to ease. Datassential projects 2.0% food-away-from-home inflation in 2025 vs. 3.8% in 2024. While still higher than food-at-home inflation rates (which continue to fall as well), this bodes well for restaurant traffic in the coming year.1
The “treat mentality” will prevail
Consumers view dining out as a deserved treat and are still likely to want to treat themselves.2 Many consumers also believe that they are doing relatively better financially than the country overall, which helps them justify spending a little extra money.2
Restaurants that focus on snacking and smaller/indulgent occasions are poised to win the “treat yourself” occasion.2 PepsiCo’s portfolio of beverage options can help by enabling you to create high-margin, treat-yourself-worthy offerings such as customizable soft drinks and flavored lemonades and teas.
Brands still matter
Brands need a strong sense of identity to win in 2025. Operators should take note and have a clear sense of identity in order to connect with today’s consumers. Focusing on what you do best will foster authenticity that’s sure to resonate with customers.2
With an extensive portfolio of brands, PepsiCo Partners can help you curate the perfect beverage selection to not only meet your customers’ desire for flavorful refreshment, but also connect with them on a higher emotional level.
Whatever 2025 holds in store, you can count on PepsiCo Partners to continue offering solutions that help ease your labor concerns and add more refreshing beverage options.
Sources
1 Datassential Table Stakes Tracker: September 2024
2 Datassential 2025 Industry Forecast (August 2024)
3 Datassential Menu Development (April 2024)
4 Datassential 2024 PULSE Industry Overview: Segment
5 Datassential PULSE Purchasing Perceptions (November 2023)
6 Datassential 2024 Trends Report (December 2023)
7 Chipotle Newsroom, Chipotle Debuts Autocado and the Augmented Makeline by Hyphen in Restaurants (September 2024)
