The Paradigm Shift in the Restaurant Industry

So Hospitality Group Shows Leadership in Transforming Food Service Model

By Olivia Orman

Over the last year, the restaurant industry has had to pivot to continue doing business amid dining restrictions.  Restaurants have taken many different approaches to reconfigure their processes and revenue streams, and many of these establishments are still determining what business model changes they are going to implement long-term for financially sustainable operations, along with their required resources.

MM&E interviewed Munsok So, President and CEO of So Hospitality Group, to see just how his St. Louis and Kansas City restaurants have adapted to these challenges and found success along the way. So Hospitality Group’s dining concepts, which includes multiple Drunken Fish sushi restaurants, Kimchi Guys, Miss Java, and 612North Event Space + Catering, adapted a new food service model that enabled the company’s operations to become more efficient and cost-effective, even in one of the most testing times for the restaurant industry. Continue reading to see what So Hospitality Group changed to impressively work around the situation at hand.

Disclaimer: interviews have been lightly edited for length and clarity.

Question:

“What are the largest adaptations restaurants have made over the last year, and how have consumers responded to these modifications?”

Munsok:

“We have made a conscious decision to go digitally within our company, giving our customers the ability to order on their phones for contactless ordering. We reached out to Toast, which is our POS-partner, to integrate a touchless ordering and payment process, which significantly benefited our company in terms of saving money on labor as well as creating efficiency around our operations. By this one change, we were able to save probably 7-10% in operational costs.  I think that made a significant difference in the way we operated our restaurants because we had such a dip in sales initially, and we were trying to figure out a creative way to control our expenses. This turned out to be a great way to offset some of our expenses and help us sustain our business this last year.”

Question:

“With the food ordering process being less person-to-person over the last year, what do you project the “traditional” hospitality experience will look like going forward?”

Munsok:

“The service aspect doesn’t really change other than that our customers are taking control of their ordering process. So we still have servers rotating through the dining rooms and providing a great experience. It’s just that servers are not parked there at the tables, taking orders that might initially take a long time, as well as reorders. One of the benefits for the customer is control over the ordering process. Guests can order and reorder when they want, and pay and leave when they want.

I really think this is the new age of ordering and that this is a better system. We’ve been implementing it for almost a year now. This decision was really difficult for me at the time, but it has worked out tremendously. Our guests are in line with using it because pretty much everyone has a phone on them these days. And if you have a small group of people that don’t have phones, we’re able to take cash transactions for those customers. The majority of our guests are able to order easily, quickly, and efficiently through this contactless order and pay process, which ultimately saves on labor for the company. The tips generated are also very similar to, and maybe even more, than pre-pandemic. So our team ends up making a little bit more money. I think it’s a win-win-win situation.”

Question:

“What does all of this mean as far as competition in the restaurant industry?”

Munsok:

“The restaurant industry is more competitive than ever. If you’re a restaurant owner who is stubborn in your ways, you’re going to miss out on that competitive edge. I think the ability to forecast, maneuver, adapt, etc. is extremely important to sustain a business.”

Question:

“Which adaptions over the last year do you think will be here to stay, and what other methods can restaurants implement into their digital model to diversify and safeguard their revenue?

Munsok:

“I thought the ordering process was going to change within the next five to eight years, and I think the pandemic has accelerated this process. I truly do believe that after the pandemic, this whole process of contactless ordering and paying is going to stay, especially since restaurant operations are becoming leaner right now. One of the distinct advantages of going towards this digital process is the ability to update menus instantaneously as needed.  This also synergistically helps with our third-party delivery services. Once our Toast online menus are live, for both dine-in and take-out, this menu can automatically sync with our delivery service partners, like Postmates, DoorDash, etc. This helps increase takeout capacity, which is, in many ways, easier to operate than dine-in business. That’s another way to be a little bit ahead of the game. My major takeaway points are to make sure you’re online, make sure you’re digital, and make sure people can order your products in a direct and easy way.”

Question:

“Evidently, consumer business will be the first to pick back up under this paradigm shift. What differences are you projecting for restaurant group functions when they become prevalent again?”

Munsok:

“In the future, let’s say 15 to 20 people come in to eat at a Drunken Fish. This table will now have an opportunity to order as a group on our digital platform, or order separately and pay separately. Before COVID, separating checks at large tables was both time-consuming and oftentimes confusing. That confusion has been eliminated now. My team and I are constantly asking ourselves how we can make experiences better for our guests. How do we make things more convenient? How do we create processes that work seamlessly? We actively provide feedback to our partners, especially Toast. At the end of the day, we want to ensure the guest experience is excellent and memorable.”

Whether it is the restaurant or the meetings and events industry, organizations may find that they need to readjust their business models to continue operating in a feasible and supportive way for all professionals involved. This may mean implementing a whole new systematic process with a similar leadership mentality as So Hospitality Group. It is critical that our business models are equipped for the unforeseeable circumstances that may throw a curveball at our organization otherwise. After all, who would have predicted that almost all industries would be faced with the exact same operational predicaments at the same exact time?

MM&E

Olivia Orman is a contributing writer from St. Louis.

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