The food and beverage sector hasn’t always been a tech-driven industry, but that’s starting to change. Mounting competition and recent disruptions have driven food and beverage companies to innovate, pushing the industry to rely on new digital technologies. Software-as-a-service (SaaS) solutions have led this innovation.
Food and beverage businesses have traditionally lagged behind others in tech adoption, but SaaS provides a way forward. These solutions can help restaurants and other companies capitalize on rapidly advancing technology without significant upfront investment or disruption. As the industry grows increasingly competitive, that advantage is hard to overlook.
SaaS adoption in the food and beverage industry may still be unimpressive compared to other sectors, but it’s gaining traction. Here are 10 ways that these tools are helping businesses in this sector become more efficient, profitable, and competitive today.
1. POS Solutions
Point of sale (POS) systems are an indispensable part of running a restaurant, and SaaS is quickly becoming the POS standard. As of 2018, at least 90% of food trucks used a cloud POS solution, along with a third of full-service restaurants. As more restaurants realize SaaS’s benefits in POS, this trend will only continue.
Any disruptions in a POS system can have a substantial impact on customer service. Slow service, dropped connections, glitches, and other errors can overcharge guests, hold up lines, and more, driving customers away. SaaS’s automatic updates and fast deployment speed helps prevent these software-related issues.
SaaS enables a POS system to always have the latest features and bug fixes. As a result, they keep these solutions running in optimal condition at all times. With more reliable POS interactions, restaurants can offer more consistent customer service, building consumer loyalty.
Another advantage of SaaS in POS systems is that they let restaurants incorporate other services. Some cloud POS solutions also include features like reservation management, streamlining the guest experience. Bundling these features into a single service also keeps costs to a minimum.
2. Menu Cost Optimization
Some restaurant SaaS tools, like EagleOwl, can analyze operating costs to optimize menu prices. This practice, called menu engineering, calculates the cost of a recipe based on ingredient prices. It then makes suggestions about changing ingredients, updating item prices, revising portion sizes, and more to create price-optimized menus.
Restaurants have cut ingredient costs by as much as 30% thanks to menu engineering SaaS tools. By reducing these expenses and adjusting the prices of popular items, restaurant owners can further expand their profit margins. Since many of these price changes seem small to customers, they won’t drive away guests, either, maintaining business while raising individual sale profits.
Menu engineering is possible without SaaS solutions but to a far lesser extent. Using spreadsheets or other manual processes in this practice takes a considerable amount of time and introduces the risk of human error. Automating it through SaaS solutions like EagleOwl eliminates these mistakes and streamlines the process, further decreasing related expenses.
3. Scheduling In Restaurants
Employee schedules in the food and beverage industry, especially in restaurants, typically change from week to week. This fluidity makes scheduling a crucial but often time-consuming and challenging task with frequent conflicts. SaaS scheduling software offers a solution, making it easier for both employees and employers to manage their schedules.
SaaS scheduling software provides a centralized platform for workers to update their schedules. Using a single stream where employees can input data themselves can eliminate conflicts that arise from miscommunication. Similarly, many of these tools also let workers message managers and swap shifts, resolving any conflicts that do arise quickly.
Studies show that 62% of surveyed managers have had employees quit over scheduling conflicts. Relatedly, 63% say that reducing turnover by one employee per month could lift monthly revenue by at least 6%. Consequently, by reducing conflict through SaaS scheduling, restaurant managers can reduce turnover and improve profits.
The scalability of SaaS solutions also makes it easier to incorporate new workers into existing schedules. As restaurants open new locations or otherwise expand, SaaS scheduling software grows with them, minimizing disruptions.
4. Accounting
Another critical point of consideration for food and beverage companies is accounting. Businesses in this industry expand and shrink quickly, as they rely heavily on consumer demand, which is notoriously fickle. Since growth and shrinkage can happen so rapidly, food and beverage companies need quickly scalable accounting solutions. SaaS is the answer.
The COVID-19 pandemic is an excellent example of how quickly fortunes can change in this industry. Restaurant and foodservice industry sales fell by $240 billion in 2020 alone. All of those shrinking businesses ’ accounting needs changed so rapidly that traditional solutions may have been unable to keep up.
SaaS solutions give accounting software the scalability that food and beverage businesses need. When these companies downsize, downsizing their accounting infrastructure is just a matter of paying for a lower tier. The reverse is true when they upsize.
Since SaaS accounting software can integrate with other software solutions, it’s easier to account for growth and shrinkage across departments. When all of a company’s services work on interconnected software, it’s easy to quantify how much they expanded or declined.
5. Supply Chain Visibility for F&B
Supply chain management is crucial in many industries, but especially in food and beverages. Delays and disruptions can lead to spoilage, potentially jeopardizing people’s health on top of wasting money. Roughly 14% of the global food supply goes to waste after production but before the retail level, casting doubt over the food supply chain.
SaaS supply chain tracking solutions can help prevent this loss by improving visibility. With these technologies, supply chain managers can track shipments remotely in real-time. They can ensure refrigeration systems are working or redirect trucks to deliver to a closer location if something goes wrong.
Another issue in the food supply chain that SaaS tracking solutions fix is counterfeit goods. Counterfeiting is a grave issue with food products like baby formula, honey, coffee, and extra virgin olive oil. SaaS tracking tools provide a way to authenticate genuine goods and verify their origin, fighting counterfeits.
One solution uses unique codes delivered via the cloud to give products a traceable but secure identifier. Brands can then use these codes to ensure authentic goods get to their intended buyer. Without the cloud advantage of SaaS, companies would have to rely on a more simplistic, easier-to-fool system.
6. Cybersecurity
As the food and beverage sector implements more digital technology, cybersecurity has become a more prominent concern. Since these businesses are new to these technologies, they’re often unfamiliar with proper cybersecurity measures, leaving them vulnerable. This vulnerability became painfully apparent when a ransomware attack on meat processor JBS shut down one-fifth of the nation’s meat supply until they paid an $11 million ransom.
Food and beverage companies need better security, but on-premises tools aren’t ideal. Since these businesses are new to cybersecurity, they may lack the sufficient resources or expertise to install and run them. SaaS provides a helpful alternative by letting these companies outsource their cybersecurity to experts.
Many SaaS solutions include state-of-the-art security solutions, letting the industry modernize while minimizing risks. Food and beverage companies can also buy SaaS security tools to secure their other operations. With these cloud-based solutions, businesses will always have the latest defenses without needing any expertise of their own to run them.
7. Food Delivery and Cloud Kitchens
The restaurant industry is becoming more agile, requiring new, similarly agile software solutions. More specifically, delivery services and cloud kitchens, which focus exclusively on take-out and delivery, are outpacing traditional establishments. Online ordering and delivery services have been growing 300% faster than dine-in restaurants since 2014.
This rise of delivery and cloud kitchens creates a growing demand for digital ordering software. The most successful delivery operations will integrate with multiple ordering services that consumers may use, which can quickly create problems with traditional software. SaaS kitchen management simplifies this growth by providing a single point for all of these integrations.
Tools like EagleOwl integrate multiple third-party services to consolidate these orders, letting workers fulfill them quickly. Similarly, by managing these services from a centralized point, cloud kitchens and other delivery operations can keep better track of their stock, avoiding over-selling.
With this efficiency and ease of use, cloud kitchens can deliver faster, more reliable customer service. Any establishment that offers delivery services can take advantage of growing online ordering trends by becoming more digital-friendly and agile.
8. Rollout of New Services
SaaS’s support of multiple delivery services highlights another advantage it can bring food and beverage companies. By using SaaS solutions, these businesses have access to the latest, most innovative tools and features. Staying on the cutting edge of technology helps them continually improve operations and appeal to digital native consumers.
While businesses within the sector have traditionally been slow to adopt new technologies, that’s not true of their customers. Consumers embrace new technologies and services as quickly as they come out, creating a growing need for companies to support them. SaaS enables traditionally non-tech-centric food and beverage businesses to do this, offering the latest features to consumers who want them.
Implementing new technologies the traditional way is slow, expensive, and often difficult for companies without dedicated IT teams. Since SaaS models are usage-based, on the cloud, and outsource IT specialization, they provide a more accessible option. Food and beverage companies can then roll out new services faster, staying competitive in an increasingly digital landscape.
9. IT Support
As many of these use cases highlight, one of the food and beverage industry’s largest obstacles in tech adoption is a lack of expertise. Since this sector is so new to digital technologies, any technical issues can create significant disruptions. Many of these companies, especially smaller businesses, may not have dedicated IT departments, making it difficult to solve software issues.
SaaS provides a solution by placing the burden of technical problems on an outsourced service. The people who are most familiar with the software’s inner workings are the ones who manage any issues that arise. On top of improving system uptime, this lowers or even eliminates IT infrastructure requirements, reducing the cost of implementation.
When businesses expand, which happens quickly in this industry, they won’t have to worry about the technical considerations of upscaling. If they have any questions about potential future features or new applications, most SaaS providers offer 24/7 support.
As traditionally non-tech-centric businesses, food and beverage companies need reliable IT support. Without the availability and convenience of SaaS, achieving that would be far more challenging and costly.
10. Precise Budgeting
Staying afloat in the hyper-competitive food and beverage industry is often a challenge. Data shows that 60% of new restaurants go out of business within a year, and 80% do so within five. Embracing new tools can help businesses keep up with the competition and attract customers, but doing so is often expensive with traditional solutions.
Traditional software models often result in food and beverage businesses paying for multiple features they don’t use. This excess hinders growth, as companies end up funneling money into solutions that won’t offer them a positive ROI. If they’re only using a fraction of the services they pay for, budgeting for success is a challenge. SaaS provides a solution.
In a SaaS model, companies only pay for what they use. On top of raising the chances of a positive ROI, this makes budgets more predictable. SaaS’s more precise pricing models make it easier for new businesses to understand their expenses and ROI, leading to more precise budgets.
With more precise budgets, food and beverage companies can make more informed business decisions. They can then expand faster and minimize unnecessary costs, staying competitive in a crowded market.
Food and Beverage Companies Need SaaS Solutions
In today’s fast-moving market, food and beverage companies must capitalize on digital technologies to stay competitive. SaaS solutions unlock these tools’ full potential, letting companies implement them faster, at smaller costs, with less disruption and more agility.
As food and beverage businesses embrace digital transformation, SaaS is the ideal way forward. These tools can help cut costs, work past the industry’s long-standing challenges, and accelerate growth. With consumers demanding more digital features and the industry growing more competitive, these benefits will soon become a necessity.
Learn how to grow with EagleOwl. Our restaurant management system can help optimize your finances and increase your restaurant’s net profit by at least 25%. Contact us now to schedule a free demo!