Photo courtesy of Taste of Texas
This year’s list of the 100 Best Independent Restaurants in Restaurants reflects what’s happening in restaurants across the United States in 2021.
Yelp’s 2022 State of the Industry Report describes 2021 as a transition period for the restaurant industry. Restaurants have experienced rapid change after 2020, digging themselves out of one of the worst financial times in history. Today, many restaurant operators are finding that the work they put in has helped them exceed their own expectations.
South Beach, Miami’s MILA (No. 5 on this year’s list), which completed its first full year of business in 2021, was originally designed for $9 million, according to Greg Galy, founder and CEO of Riviera Dining Group. The restaurant more than tripled its revenue in 2021, reaching $27 million in gross food and beverage sales.
Similar stories emerged from the southern region, where pandemics were less restrictive at the start of 2021, leading many restaurants to report their best sales year ever. “Compared to 2019, we’re up 7% in guests and up 23% in sales,” says Tim Fulton, manager of the Old Mill restaurant in Pigeon Forge, Tenn. (No. 50 on the list with gross sales up from 13,726 $748 in 2019 to $16,702,024 in 2021). “The sales increase was driven by a required menu price increase driven by rising food prices.”
Notably absent from the list this year are more than a dozen well-known East Coast restaurants, usually featured due to closings in early 2021 and lower-than-usual sales.
Some areas of the country have benefited unequally from the mandates, according to Robin Gagnon, CEO and co-founder of We Sell Restaurants. “By 2021, we started to see an aggressive movement south and into the Sun Belt, whether it was because of foreclosures, crime, school closings, or because people are choosing to live elsewhere,” says Gagnon. “But overall, people have made some lifestyle choices and that’s affecting our restaurant industry.”
Data from BizBuySell’s Insights Report shows that restaurant sales picked up in 2021, but skewed more toward certain regions of the country, namely southern states like Florida, Texas and Tennessee.
“We’ve seen a huge influx of domestic travelers coming to Miami, which has had fewer restrictions than most other parts of the country,” says Chris Cuomo, CEO and partner at Groot Hospitality, which has three restaurants on the list (Komodo at No. 1, Swan at No. 3 and Papi Steak at No. 18). “We also had new businesses and people moving into the city from all over, especially the West Coast, New York and Chicago, who obviously had more disposable income, so as a result we saw higher check averages across the board.”
By mid-2021, most capacity and masking mandates had been eliminated or reduced, and restaurants were mostly in the same position. Consumers were more willing than ever to return to restaurants. Despite restaurant labor shortages and economic inflation, consumers still craved new experiences, dining opportunities (both indoors and outdoors) and were willing to spend more to get more.
This year’s list of the top 100 independents illustrates how being open to big changes and being prepared to take a hit can pay off big.
Making dining an experience
Two of the most common traits shared by this year’s top earners are tiered design and engaging guest experiences. In fact, the three newcomers to the list (MILA at No. 5 at $27,350,000; Papi Steak at No. 18 at $22,000,000; and Hampton Social at No. 75 at $13,430,746) all stand out for their unique offerings.
“The core of our work is to create an exceptional guest experience that engages all the senses, from state-of-the-art sound systems to lighting, plates and interior design,” says Cuomo of Groot Hospitality. “Everything works together to create a special moment.” One of the restaurant group’s most talked-about offerings is Papi Steak’s $1,000 beef crate, in which the tomahawk steak is delivered to guests in a jewel-encrusted gold briefcase and then tagged at the table.
MILA’s Galy says it was important for the restaurant to stand out when it entered the Miami market as a newcomer in 2020. “It starts with the culinary experience and the service, but beyond the restaurant, it’s about the entertainment,” says Galy. “We added fire shows that happen nightly in the water feature outside the restaurant.” This year, with the help of its growing VIP database, MILA will open a dedicated members-only area below.
After debuting in November 2019 and generating $344,000 in gross annual sales that year, Nashville’s The Hampton Social (No. 75) bounced back from the pandemic to post $13,430,746 in gross sales in 2021. The trendy restaurant has three levels of experiential dining: a first-floor “Rosé all day” lounge, a second-floor dining room and a rooftop terrace with indoor/outdoor seating and weekly events such as live music, pizza parties and brunch.
Events are a creative way to attract locals to restaurants that traditionally cater to tourists or travelers. “Events like our Cars & Coffee, sip & The Savor and Winemaker Dinner help create synergy and help people learn about our property,” says Brad Reynolds, General Manager of Harris Ranch Inn & Restaurant (No. 33 on this year’s list, growing from $17,599,468 in 2019 to $18,848,657 in 2021).
In 2021, operators and consumers were re-introduced to a suite of technologies designed to make ordering and preparation easier and dining more enjoyable. Whether it was handheld POS devices for servers; kitchen screens for chefs; or enhanced reservation systems, QR code menus and pay-at-the-table technology for guests, the restaurant tech that rules 2021.
“In 2021, we launched Toast’s handheld POS system, which allows our guests to pay checks at the table,” says Cuomo. “It has had a huge impact on our staff and has led to operational improvements such as fast service, faster conversion rates with tables and, as guests get their drinks faster and order more drinks, it leads to a higher check average.”
“We’re always looking for better ways to interact with our guests,” says Al Zehnder, CEO of Zehnder’s of Frankenmuth (#46) in Frankenmuth, Michigan. “We have full-time IT staff who are on it every day and very focused on all of our social media platforms. We have an email list of 250,000 guests and we send regular emails to make it easy for guests to include us in their experiences or family vacations.”
Harris Ranch’s prime location along Interstate 5 in Coalinga, California recently attracted the attention of a different kind of tech company. “Tesla was persuading us to build the largest Tesla charging station in the world,” says Reynolds. “Tesla just installed 80 new charging ports, which means we have 98, plus we have six Electrify America charging units.”
Getting creative with staffing
Restaurants large and small have faced labor shortages long before 2020, but recent events have caused many to explore new recruiting and hiring techniques and alternative employee incentives such as tuition programs, career advancement and 401k.
Zehnder’s of Frankenmuth, one of the largest (1,500 seats with 908,951 meals in 2021) and oldest (open since 1928) restaurants on the list, cut its workforce from 925 to 80 in one week in 2020, according to Zehnder. » I had a weekly video that went out to our employees so they stayed in touch and connected,” says Zehnder. “I wanted to keep them engaged because I felt it would be easier to get them back if they felt connected.”
When it reopened in 2021, Zehnder’s hired more people than needed, bringing the workforce back up to 900 by the time the busy season rolled around. The company culture embraces work-life balance, with no one working more than 40 hours a week and enjoying a turnover rate below 10%. “Even though we were closed for the first 30 days of 2021, it was the year with the highest sales in our company’s history,” says Zehnder. “I’m proud that we haven’t lost any key people and that we’ve got most of our general staff back.”
According to Galy, MILA currently employs about 230 staff members, thanks in part to internal and external hiring to handle the restaurant’s growing staffing needs. “Before the pandemic, it was difficult to find staff, especially for backgrounds, but post-pandemic and post-pandemic it was more difficult because so many people moved away from the food and beverage industry to explore other avenues and industries,” Galy says. “We even work with agencies to provide temporary work when we can’t find anyone.”
At the height of the pandemic, Harris Ranch was down from 500 employees to 90, according to Reynolds. To help with staffing, the restaurant took two kitchens designed for three restaurants and combined them into one. “Going forward, we’ve split the restaurants again, but we’ve simplified our menus to create a universal cuisine,” says Reynolds. “We also strategically moved our hostess podium so that now we only need one instead of three.” The restaurant is back to full staff, but cross-training and streamlining have helped overall operational efficiency.
At Groot’s, Cuomo says everyone who works in the restaurant has room for a career if they want it. “Some employees are here for an end goal, like working at the school; for those employees, we’re still supporting them on their journey,” says Cuomo. “We also offer consistent employee recognition, celebrating birthdays and anniversaries, providing bonuses, and a new 401k program coming soon.”
Catering to new customer demands
While the hospitality industry was busy transitioning in 2021, so were restaurant customers.
Restaurant guests today expect more: better quality food, superior service and a superior experience. They expect to have a choice of indoor or outdoor seating when they come to dine, and they want the same level of service and consistency when ordering food for delivery online. Perks like online reservations, special events and VIP dining access are add-ons that many consumers are actively seeking.
Restaurants may look different than they did five years ago, but ultimately the hallmarks of a great restaurant will always be the same: a warm, quality experience that leaves guests feeling like their expectations have been exceeded and they can’t wait. to return.
Members help make our journalism possible. Become a member of Restaurant Business today and unlock exclusive benefits, including unlimited access to all our content. Apply here.
What are the five things a company should do before investing in a loyalty program?
Loyalty Program Strategy: 5 Best Practices to Align with Your Business Strategy
- Insight into data to better understand your existing customer base.
- Openness to make your rewards program stand out from the crowd.
- Modularity to improve customer service.
- Relationship management to quickly reward loyal customers.
What does a loyalty program need to be successful? In addition to offering specific incentives, the best loyalty strategy is one that can reward customers for various actions as they mature with your brand. Controlling when a customer receives a reward is just as important as what they receive.
What percentage of loyalty programs fail?
Loyalty Program Design (7 Customer Loyalty Statistics) 77% of transactional loyalty programs fail within the first two years. Only 11% of loyalty programs offer personalized rewards. Only a quarter of loyalty programs reward customers for some type of engagement.
Why Loyalty Programs Fail? Usually, a loyalty program fails because of a lack of awareness. If customers don’t know about the program, how will they decide to buy? Informing your audience about upcoming loyalty programs for them is a must.
Do loyalty programs keep statistics? 62% of consumers spend more money on a brand after signing up for a paid loyalty program (McKinsey). Paid loyalty programs encourage customers to stay loyal to brands. 59% of paid loyalty members are more likely to choose this brand than competitors and 43% more likely to make weekly purchases.
How successful are loyalty programs? As one of the most important tools in a marketer’s toolbox, loyalty programs can bring a variety of benefits. In one of the studies we conducted, we found that loyalty programs can generate as much as 20% of a company’s profits—if they’re executed well, of course.
Why do loyalty programs backfire?
When loyal members experience service failures—shipping issues, return issues, out-of-stock issues, and the like—they are more upset than non-member customers.
What is the psychology behind loyalty programs? Positive reinforcement is at the heart of any loyalty program. When your business offers exclusive rewards in exchange for profitable customer behavior (i.e. purchase, refer a friend), your users quickly understand how their actions relate to the benefits they receive.
What are the 6 stages of customer loyalty?
These are: suspect, potential client, first client, repeat client, client and defense counsel.
What is the psychology behind loyalty programs?
Positive reinforcement is at the heart of any loyalty program. When your business offers exclusive rewards in exchange for profitable customer behavior (i.e. purchase, refer a friend), your users quickly understand how their actions relate to the benefits they receive.
What is the real purpose of loyalty programs? Loyalty programs sponsored by retailers and other companies offer rewards, discounts and other special incentives as a way to attract and retain customers. They are designed to encourage repeat business and offer people a reward for store/brand loyalty (hence the name).
What are the 3 main components of loyalty? Emotional loyalty is built from three components: affinity, attachment and trust.
What conditioning are loyalty cards? B. F. Skinner developed the concept of operant conditioning. The basic idea is that a behavior that is followed by a reward (positive reinforcement) is more likely to be repeated.