Americans spend more at restaurants than at grocery stores; use restaurants in new ways

Spending data from the Census shows that for the first time Americans spent more at restaurants than on buying food at grocery stores:

More than two decades ago, Americans spent $162 in groceries for every $100 they spent in restaurants. But this past January, they spent nearly equal amounts of money in both places: $50.475 billion in restaurants and bars, and $50.466 billion in grocery stores.

There are several social changes behind this:

Perry attributes the numbers to dropping gas prices, which have left many people with more disposable income. But it’s unlikely that a single factor is to thank for the trend. “I think it’s a combination of a recovering economy and changing eating habits,” he said, extrapolating that “the millennial generation [may be] more likely to eat out than cook at home.” Perry also noted that dining in restaurants simply isn’t the once-in-a-blue-moon event it used to be…

Martha Hoover, the founder of sprawling Indianapolis restaurant empire Patachou, goes one step further: Restaurants have earned a role in society that is equal to “work” or “home.”…

“We’ve seen a huge shift in San Francisco,” she told Yahoo Food. “I’ve seen people who treat restaurants like they do in New York City: as their kitchens.” Weinberg attributes the change to people working longer hours, leaving them with little time to prepare their own meals. Grocery shopping, too, can be a pricey proposition if one develops a predilection for organic and local fare.

In other words, home and family life has changed alongside different economic options. We might also see restaurants more as “third places” between work and home where people can socialize and pay for their meals in a comfortable in between space.

Seeing the effects of globalization in Mumbai’s suburban restaurants

A historian looks at the changing suburban dining patterns in Mumbai’s suburbs:

“Globalization has brought in a consumerist culture and the socio-cultural category that we broadly label as middle class is growing in importance. The movement of people, culture goods and ideas from one part of the world to another has forged new links between diverse cultures and peoples.

“In India, the food service industry is a very old business. Such service evolved from early khanavals and small restaurants in Bombay. While taverns and inns typically provided food and lodging, the food service industry as a whole has been continually growing throughout the last two decades. The industry has seen one of the strongest continuous growth periods in the mid to later part of 1990’s. While much of the growth has occurred in restaurant and catering, institutional food service has also shown steady growth. The restaurant industry has strongly established itself as an essential part of urban India’s lifestyle. Consumers continue to look for convenience, value and an entertaining environment away from the stresses of daily life, and restaurateurs are filling those needs. In recent years, the number of alternatives available to consumers for purchasing food prepared away from home has increased dramatically…

“The study is also important because restaurants are evolving from just places to eat to an entire experience. While we have in Mumbai and its suburbs, full-service restaurants, hotel-restaurants, fast-food restaurants, buffets, food courts, tea & coffee parlors, fine dine restaurants, messes, canteens, khanavals, there are no full-fledged studies, neither sociological, nor anthropological nor historical, either on their popularity or clientele. Such a study will discuss their growth, strengths, and will naturally be a record of the eating out behavior of the Mumbaikar…

“I hypothesize that: There has been a mushrooming of restaurants in suburban Mumbai in the post-globalization period; Consumption patterns have undergone a drastic change during the period under study; The attitude towards public dining in the suburbs has undergone a change; The growing middle class is the clientele at places of public dining; Double incomes, travel abroad and cookery shows are greatly responsible for the change in the attitude towards food and dining; Food consumption patterns in restaurants can shape and influence the social history of suburban Mumbai.

Sounds like it could be quite interesting on multiple levels. The study of food seems to be growing in importance among academics as it involves looking at common practices and it is relatively easy to make comparisons. Yet, I’m most intrigued by this idea of a suburban restaurant culture developing outside Mumbai. It isn’t just about what food is ordered, prepared, and ends up on plates – it is also about a way of life around suburban restaurants. If I had to describe this in the United States, it would likely involve lots of chain restaurants surrounded by parking lots and populated by relatively middle-class individuals looking to enjoy food outside the home. Perhaps one could focus on the restaurant: it often is in an outlot of a larger shopping center, it has some sort of kitschy Americana decor, tends to have some televisions showing sports, and patrons don’t stay too long. Or focus on how Americans budget money for eating out as a regular part of their entertainment and/or food spending. All of this looks different than urban eating which may focus on smaller restaurants, hipper and more cutting-edge places, and a different feel.

Why is Midway nowhere close to the food options of O’Hare?

Eater rates the restaurants at O’Hare and Midway Airports and it isn’t even close: O’Hare is a lot better. Here is the top 8 at O’Hare:

1. Tortas Frontera;  2. Wicker Park Sushi Bar; 3. Wolfgang Puck Cafe; 4. Berghoff Cafe; 5. La Tapenade; 6. Big Bowl; 7. Beaudevin; 8. Garrett Popcorn.

City institutions plus big names at O’Hare. In contrast, the top 8 at Midway seem like what you would find at a shopping mall food court:

1. Manny’s; 2. Potbelly; 3. Pegasus on the Fly; 4. Harry Caray’s Seventh Inning Stretch; 5. Lalo’s; 6. Gold Coast Dogs; 7. Reilly’s Daughter

Perhaps there are some good reasons for this like more passengers at O’Hare (the 6th most passengers in the world), more space at O’Hare (more and bigger terminals plus more passengers provides more room for restaurants while Midway has one food court and then some scattered small options), and a wider range of passengers at O’Hare (Southwest dominates Midway, more first-class and international passengers at O’Hare). One way to boost Midway’s profile would be to improve these food options. It is the smaller airport and has more budget flight options but it was the first passenger airport in Chicago and has a unique place as such an urban airport in a global city.

But, knowing that this is Chicago, I wonder how much food contracts differ between the two airports. Even as O’Hare is more lucrative, why doesn’t Midway have any major name or food choice? Harry Carey’s might have the biggest name recognition (ironic it is located in the South Side airport) but it isn’t exactly known in the restaurant world for great food. Is there something odd about how restaurants at these airports are chosen?

Millennials eat out 199 times a year on average

A larger article about new trends in eating in America includes these figures about how much millennials eat out:

Disproportionately affected by the recession, the average millennial is expected to make 199 visits this year, down from 250 in 2008. But the restaurants they frequent are some of the fastest-growing chains.

This seems really high to me but it also fits with being in a certain stage in life. People eat roughly 1,000 times a year (give or take some meals) so eating out 199 times is roughly one-fifth. I have never gotten anywhere near these kinds of numbers myself but I could understand why it happens. It takes a lot of time to cook from planning out meals to buying groceries to cooking to cleaning up. Especially if millennials are consumed by their career, all of this business about food may just be too much. Eating can often be a social event, whether with co-workers or friends or family. On the other hand, eating out is often way more expensive – so perhaps it is a trade-off of time versus money. Also, many restaurants of today lack character or give you much of a reason to want to stick around outside of the immediate people you are with. And, maybe this isn’t just about millennials: I’ve seen figures in recent years that suggest 1/4 of American adults eat fast food every day.

All of this reminds me of Michael Pollan’s writings about how we treat food in the United States. Instead of eating natural food in relaxed and sociable settings (that can take hours – so perhaps you lose the time advantage), we tend to eat to be filled up or too have the proper amount of nutrients.

So how do restaurants try to appeal to millennials? Here is how one restaurant does it: by appealing to customization.

To appeal to millennials, Harald Herrmann, CEO of Yard House, a 42-unit chain focused on American fare and a vast beer selection, said customization is key.

“They don’t want to be confined to anything,” Herrmann said. “If you can put an offering out there that allows four to five millennials the opportunity to behave any way that they want and make decisions on the fly in an environment that’s casual and fun in a way that they can be expressive, then you’re onto something.”

At Yard House, Herrmann said, 30 entrees can be made vegetarian. He added that many groups of young customers eat their meals family style, ordering a number of dishes to pass around.

The ability for self-expression has also proved crucial in keeping millennial employees happy.

The chain, which works hard to include employee feedback, recently made visible tattoos acceptable for employees.

One other thought: I’ve seen a number of articles lately about the potential purchasing power of millennials. But, without good jobs and perhaps more stable situations, this spending is not going to happen at the levels it could. So…why don’t many politicians talk about this?

“Eating plays a central role in both civility and civilization” vs. a fast food society

According to this argument, perhaps we should worry less about addiction to smartphones and more about how we eat:

There are four clear threats to the modern family and possibly civilization at large; cell phones, video games, the internet, and junk food. We allow the first three because they are cheaper than tutors, private schools, and nannies. Indeed, games and gadgets support a kind of electronic autism where neither parent nor child speaks to each other until the latter is old enough to drive. With junk food the threat is more complicated; a fusion of chemistry and culture. In combination, internet social networks and poor diets seem to be conspiring to produce a generation of pudgy, lazy mutes with short attention spans.

Culture begins and ends on a plate. A proper wake is followed by good food and drink for good reason; a testament to life even without the guest of honor. We eat to live and then we live to eat. From the earliest times, food played a key role in the spiritual and literal growth of families and a larger society. An infant bonds with its mother while nursing; families bond when they share food. We define hospitality with friends by inviting them to break bread – or share a refreshing adult beverage. Alas, eating plays a central role in both civility and civilization.

Contrast this elevated role for food versus the fast food approach common in the United States. I recently led a discussion in my introduction to sociology class about the social forces that lead to having a fast food society where around one-quarter of American adults eat fast food each day. Here are some of the ideas we came up with:

-Americans don’t have time for food preparation and eating as we are too busy doing/prioritizing other things.

-Fast food is cheap (particularly in the short-term) and convenient.

-Food is the United States is more about finding sustenance or nutritional content as opposed to sociability. (I’m thinking of Michael Pollan’s work here.)

-Americans love cars and driving and what could be better than going to a restaurant without ever having to get of the car? (Imagine the outcry if more communities like this one in South Dakota bans eating while driving.)

-Fast food is made possible by changes in the industry where it is now easier to draw upon food sources from all over the world. (The book Fast Food Nation does a nice job describing some of this process.)

-Fast food places offer a homogenized and familiar experience.

-There is a lot of money to be made in fast food.

In other words, there are a variety of social factors that influence why and how we eat. There are not easy fixes to changing a fast food society.

Illustrating the issues of food, technology, and human interaction at Chipotle

Chipotle has clearly staked its place as a progressive fast food restaurant (though they would claim they are between fast food and sit-down restaurants) with no antibiotic meat and organic fillings but it too struggles with some basic issues present in today’s economy: how much should companies rely on human employees versus using cheaper technology?

Like others in similar positions, he’s got a wide palette of gee-whiz technologies at his disposal — tablets for ordering, mobile payment systems, in-store ATM-like machines for ordering that replace cashiers. Yet he eschews most of them. He’s in no rush for tech to dramatically change the Chipotle experience at its more than 1,300 stores worldwide.

He hasn’t found the perfect solution yet. And, besides, he likes the human interaction.

That said, Chipotle, based here, happens to have a wildly popular app, a free tool that shows you where the nearest location is and lets you order and pay on the iPhone, iPad or iPod Touch. Nearly 5 million customers have signed up since 2010 and use the app to go straight to the front of the line to pick up their orders…

But that’s about as far as he wants to go. A future where all orders are made digitally?

“I hope not,” Crumpacker says. “I hope the experience of coming into Chipotle and ordering on the line is substantially superior to ordering on the phone. There’s all this communication as you watch what’s being made.”…

Meanwhile, Crumpacker hopes his next in-store tech play is a mobile payment system so customers can shave a few seconds off the checkout process by paying for menu items on smartphones. He’d like to see a standard on all phones that would support his in-store system…

“Consumers go to restaurants to be served,” she says. “The human element is part of the restaurant experience.”

This is an interesting explanation of the restaurant experience: people like the human element of service (though they are clearly paying for it). I suspect this may not really be the human element that people enjoy about restaurants. How many people really enjoy interacting with the waitstaff and other employees versus the opportunity the setting provides to interact with those at the table and to be part of and observe the social scene taking place around them. This could be a big difference between the Chipotle experience and eating at an urban cafe: Chipotles are often located in suburban settings where one may be able to sit outside or look outside but the primary view is of parking lots and speeding cars. In contrast, a full service restaurant offers more of a scene, particularly if located in a more urban setting where there is a mix of activities. Perhaps we need a sociological experiment to tease this out. Such an experiment could be based on a three by two table: fully mechanical food delivery versus human preparation (Chipotle) versus full service and then placed in a more dull setting versus a more happening location.

The article makes mention of Chipotle’s dropping stock price since mid-summer and I wonder if this is what will ultimately force the chain’s hand: if they need to demonstrate higher earnings and labor costs are too high, technology might be the way to close this gap. Or what might happen if Chipotle employees start demanding higher wages and/or more benefits? At that point, perhaps human interaction simply becomes too expensive, a luxury, as consumers might miss being served but would also not like to pay higher prices.

Economist argues best restaurants often in “dumpier locales”

Over at the Atlantic, George Mason University economist Tyler Cowen explains why excellent restaurants consistently appear in the “cultural wasteland” of suburbs:

Low-rent restaurants can experiment at relatively low risk. If a food idea does not work out, the proprietor is not left with an expensive lease. As a result, a strip-mall restaurant is more likely to try daring ideas than is a restaurant in, say, a large shopping mall. The people with the best, most creative, most innovative cooking ideas are not always the people with the most money. Many of them end up in dumpier locales, where they gradually improve real-estate values…..

I love exploring the suburbs for first-rate ethnic food. Many people consider suburbs a cultural wasteland, but I am very happy searching for food in Orange County, California; the area near San Jose; Northern Virginia, near D.C.; Somerville, Massachusetts; and so on….It is especially common to see good ethnic restaurants grouped with mid-level or junky retail outlets. When it comes to a restaurant run by immigrants, look around at the street scene. Do you see something ugly? Poor construction? Broken plastic signage? A five-and-dime store? Maybe an abandoned car? If so, crack a quiet smile, walk through the door, and order. Welcome to the glamorous world of good food.

Cowen’s argument about restaurants reminds me of another Atlantic piece celebrating “low road” buildings which Brian previously discussed.  It’s not surprising that great work–and great food–often happens in low rent locales like “junky” suburban strip malls and office parks given their lower (financial) barriers to entry and lower operating expenses that free up more cash to flow each month into improving their tenants’ business.

Still, it strikes me that the financial health of restaurants is more location-dependent than for many of the business populating “low road” office parks.  Whereas many office-based business are not dependent on high volumes of foot traffic for survival, restaurants almost invariably are.  (Unless, of course, that particular restaurant focuses primarily on a delivery and/or catering business model.)  A less prestigious restaurant location is a good value for the owner (and likely to survive long term) only if the drop-off in foot traffic/customers due to the “bad” location is more than outweighed by lower rent.