The year is almost over, and it’s time to tally up the scores and determine who in the restaurant industry is ending 2021 in the win column.
Pandemic tailwinds played a big role in determining this year’s winners. So did changes in the regulatory and political landscape. Here are six groups that reaped the benefits.
Steak chains
Higher-ticket places that serve food alongside an experience were among the hardest hit when dining rooms were forced to shut down in March 2020. But those same restaurants bounced back the strongest when things started to open up again as cooped-up customers got out and celebrated over a nice meal for the first time in a long time.
The Capital Grille and LongHorn Steakhouse have been the recent studs in Darden’s stable of restaurants, while Texas Roadhouse and Ruth’s Chris have also done well. Heck, Fogo de Chao’s sales are so spectacular that it just filed to go public (again).
Soaring beef prices in the latter part of the year have tempered this win a bit by pinching steakhouse margins and forcing price increases. But most of the above chains expressed confidence that the inflation won’t affect their customers too much.
College athletes
The NCAA’s decision to allow student athletes to make money off of their likenesses proved to be an impactful one for restaurant marketing departments.
Just weeks after the rule was changed in June, no less than four chains had unveiled sponsorship deals with various athletes, and that list has only grown longer since.
Many Southern-based chains like Raising Cane’s, Bojangles and Zaxby’s teamed up with college football stars from their home markets, where people are fanatical for the sport. But Louisiana-based Walk-On’s took perhaps the most creative approach: Through its Walk-On of the Week program, the sports bar chain has signed agreements with dozens of athletes who made their respective teams without a scholarship—aka “walked on”—including a 63-year-old golfer from Reinhardt University.
Tech companies
Technology in restaurants began as a ripple several years ago that abruptly became a wave in 2020—mostly out of necessity. That wave roared right into 2021 and appears poised to keep building as restaurants lean further in technology for all manner of reasons: to reach more customers, to learn more about their customers, and, more recently, to help battle a devastating staffing crisis.
Investors saw all of this happening and have started pouring money into tech suppliers as a result. As of Thanksgiving, more than $5 billion had entered the restaurant tech industry via investments, IPOs or acquisitions—some of it from big names outside the industry, like IBM, Oracle, Squarespace and even the Jonas Brothers.
In another sign of tech’s dominance, two major providers—Olo and Toast—went public this year, citing restaurants’ ongoing transformation into a digital-first industry. A third, Presto, planned to do so.
Unions
2021 could go down as a banner year for unions writ large, and especially in the restaurant industry, which has been famously resistant to organized labor.
As the year came to an end, unions had notched a handful of small but notable victories in restaurants. The biggest came in December, when the employees of a Starbucks unit in Buffalo, N.Y., voted to be represented by a union. (As of this writing, staff at six other Starbucks were awaiting permission from the National Labor Relations Board to hold a union vote, and a seventh was awaiting the board's decision on a contested vote.)
Elsewhere, workers at 21-unit Colectivo and four-unit Darwin’s voted to unionize, while the regional chain Burgerville hammered out its first contract with workers after 3.5 years of negotiations.
This new wave of organizing has a more social justice-driven bent than in the past, and is being spurred on by the Biden administration, which has explicitly welcomed the activity.
Chipotle shareholders
“Wall Street’s favorite restaurant” saw share prices continue to swell in 2021 as it posted quarter after quarter of eye-popping results.
Chipotle was by far the most expensive restaurant stock, with shares peaking at $1,958 in September. Its price has increased more than 3,900% since it debuted in 2006 at $42 per share, and as much as 40% over the past year.
The burrito chain has done this with a strong emphasis on digital sales through its mobile app, loyalty program and “Chipotlane” drive-thrus. It’s also been actively developing new limited-time menu items— including the hugely popular smoked brisket—a hallmark of the chain under CEO Brian Niccol. The challenge for Chipotle going forward will be outdoing its record-breaking results from this year.
Chicken wing lovers
More selection is typically seen as a good thing for consumers. But how many more chicken wing concepts can Americans realistically take?
The popular poultry part is no longer reserved to the usual suspects like Wingstop and Buffalo Wild Wings. You can now get them at Fazoli’s, for instance.
The item’s growth has been fueled in part by the explosion of delivery-only virtual brands. Wings travel well and are good for delivery occasions like sporting events and parties, so they’ve become a popular vehicle for these concepts. Here’s a list of just some of the virtual wing brands that launched this year: Cosmic Wings (Applebee’s), Wings of New York (Nathan’s Famous), Jailbird (Dog Haus), Toss ‘Em Wing Factory (Bubbakoo’s Burritos), Another Wing (DJ Khaled), UD Wings (Udonis Haslem), and so on.
Chicken wing chains have also been popular acquisition targets. WingZone, Native Grill & Wings and Anthony’s Coal Fired Pizza & Wings were all snapped up in 2021.
(All of this happened, by the way, as wing prices were rising to levels about 50% higher than last year.)
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