Restaurant Trends 2016

Even during the recent economic turbulence, dining out continues to rise in the Napa Valley and beyond.

In 2014, restaurants in the Napa Valley brought an estimated $367 million into the local economy, according to the Napa Visitor Industry Economic Impact Report. According to the report, restaurants are the third-largest driver of revenue to the region, right behind lodging and retail sales. The same report estimates that restaurants are the largest employers in the valley, making up 4,567 of the estimated 11,766 workers.

At present, there are roughly 200 eating establishments (restaurants, cafes, coffeehouses and other places to get a meal) throughout the valley, and more are being opened almost monthly, with three or four new restaurants slated for Calistoga, at least three in St. Helena and as many as eight coming to Napa in the coming year or two.

Nationally, according to a Bloomberg Business report, 2015 was the first year that spending on dining out at restaurants and bars outpaced spending on groceries, indicating that Americans are cooking less at home.

This trend is likely to continue as older generations are replaced by the younger “Millennials,” who are more likely to eat out than cook at home, according to a Pew Research report. And according to population projections released by the U.S. Census Bureau, 2015 marked the year when Millennials (defined as being between ages 19 and 35) surpassed the Baby Boomers (ages 52 to 70) as the nation’s largest living generation. The Gen X population (ages 36 to 51) is projected to outnumber the boomers by 2028.

“Our generation sees dining out as part functional and part social,” said AnnaSara Purcell from San Francisco, who was visiting Napa Valley with her friend. “I probably spend five times as much money going out than I do on buying groceries. Many Millennials work a lot, so they don’t have much time to cook. A lot of companies will pay for dinner to be delivered to the office, so we’ve gotten out of the habit of buying groceries and if you’re not working late, then you want to have fun and go out. There have so many options here that it makes it especially easy. Of course, it has to be a great experience, too.”

To understand what it takes to make such a great experience, restaurateurs and food-service professionals are faced with the daunting task of providing their customers with high-quality food and service, while at the same time looking for ways to innovate, all within what can be a hyper-competitive environment.

“The valley can be brutal when it comes to maintaining a successful restaurant. You’ve got to nail the food product, but you also can’t have any negative points,” said Fred Hipp of St. Helena. Hipp is a former CEO of many popular chain restaurants such as Houlihan’s and California Pizza Kitchen. “Other musts include cleanliness and a friendly staff. And here you have to do this with lots of competition, restricted traffic access to Upvalley, difficulty finding and keeping staff, all while maintaining a price point that locals can keep supporting through the off-season.”

Hipp is not the only one highlighting these concerns. Flavor! Napa Valley is an annual five-day food and wine festival which showcases world-class wines and culinary talent. One of this year’s sessions focused on restaurant trends.

According to the experts, staffing restaurants will continue to be a challenge.

“Napa Valley has always been a great place for food and wine, and I feel that ours has never been better, but one of our biggest challenges is staffing,” said Michael Gyetvan, owner of the Norman Rose, Atlas Social and Azzuro Pizzeria restaurants in Napa.

Joel Riddell, host of “Dining Around With Joel Riddell” at radio station KKSF in San Francisco, echoed his sentiment.

“We are seeing the same thing in the Bay Area -- restaurants are working hard to get and then retain top talent.”

“Building a working environment that is healthy and supports our staff is more important than ever,” said Ryan Cole, partner and general manager of Hi Neighbor Hospitality Group, which owns four restaurants in San Francisco. “We give our staff a lot of perks, including trips to wineries so that they can get time away and learn about wine. It’s critical to build a strong culture of community.”

“Whatever you’re doing, you must create an environment that people want to return to and where people want to send their friends to,” said Riddell. “This is especially true here where a lot of the recommendations on where to eat come from the folks at hotels and tasting rooms.”

Other topics discussed included the trend toward restaurants becoming non-tipping establishments, with the service included in the cost of the meal or in a service fee.

“As a diner, I love no tipping,” said Paolo Lucchesi, food editor at the San Francisco Chronicle. “That said, I know it’s a dicey topic and can be a challenge to make work.”

“I’m waiting to see a non-tipping model that actually works before I decide if we’ll change,” said Gyetvan.

Other trends discussed included “fast casual” dining, where food is ordered at a counter and then picked it up, thereby reducing the need for staff. Examples include Heritage Eats in Napa and Whole Food Market.

As special dietary needs or desires become increasingly common, fast casual may also address another trend: diners’ desire to custom-build their meals. Even higher-end restaurants are designing what they call “flexible menus” that can accommodate special requests such as gluten-free, vegan and other special preferences.

“It’s a challenge, but it’s a reality,” explained Gyetvan. “We design our menus so that we can easily modify most dishes; allowing them to be made without dairy, gluten free or vegetarian is just the way it is now.”

“Diners, in some ways, are writing the menus,” added Riddell.

Beyond special menus, social media has become a normal and important element of the restaurant business.

“There are some places that have special lighting that is designed for better Instagram photos,” said Andrew Freeman, president at Andrew Freeman & Company Hospitality PR and Marketing Group.

“If we don’t put a picture of our daily specials on social media every day we’re going to hear about it from our customers,” said Gyetvan. “My wife spends much of her time each day managing social media for our restaurants -- it’s important.”

Customers also want locally sourced and sustainable farmed food.

“It’s what people expect now,” said Riddell. “Besides, it’s the right thing to do.”

“We’re surrounded by some of the most amazing products on earth,” added Gyetvan. “Why not use them?”

Beyond food, beverages continue to be an important draw for guests, and the prediction is that wines on tap and craft beer will continue to grow.

“Beer is super hot,” said Cole. “It’s crazy how fast we sell out of beer. It’s hard to even keep it on the menu sometimes.”

“Wine on tap just makes sense,” said Marcus Marquez, general manager of St. Helena’s new Brasswood Bar and Kitchen in a conversation outside of the event. “The wine is kept in pristine condition without the risks associated with open bottles. The cost is cheaper to produce so we can keep the price down, and for us we source our wines on tap directly from our own winery.”

Food-related technology will continue to evolve.

“In San Francisco there are lots of apps now that allow customers to order food directly from my restaurants’ menus and have it delivered to them within minutes,” said Cole. “The new Uber Eats app allows food to be delivered really fast. Sometimes I have to admit that when I’m at home I’ll order food from a restaurant that’s just right down my street when I want to just stay home and relax.”

Delivering food is one way to lessen the need for restaurant staff, but it could have an impact on traffic. Uber Eats is not yet available in the Napa Valley.

Chefs are also exploring ways to reduce the need for staff in the kitchen. A chef friend not at the event brags about cooking hamburgers using the “sous-vide” method (“precooked food kept in airtight plastic bags and placed in a water bath or in a temperature-controlled steam and then flashed on the grill when needed). According to this chef, the product can actually be safer and produce more tender food than when cooked using the normal method.

No matter what trends come and go, the quality of the food will always remain central to a restaurant’s success.

“Here’s the thing,” said Hipp after the event. “You can spend a lot of money on your design and make your space look like it’s right out of Vegas. You can even have all the fancy bells and whistles, but if you don’t produce food that people dream about when they’re back at home, then you will probably fail. Especially here in Napa Valley.”

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Originally published in the Napa Register, March 2016