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10 Ways Data Analytics is Revolutionizing Restaurant Industry

Data analytics in the food and beverage industry is revamping how restaurants, diners, food courts, etc., provide services to their customers. Many problems in the sector can be solved using AI and ML technology. Here, we’ll discuss how data analytics and advanced technologies are revolutionizing the restaurant industry. 

The restaurant industry is among the most competitive markets around the world. Food is a part of our lives, and so is community living. Restaurants bring both aspects together with ease. Despite the competition, the restaurant industry is not with its issues. Like every other niche, it had to adapt and change to stay relevant in the global market. 

For example, the lockdowns during the Covid-19 pandemic resulted in a multitude of problems for restaurants. According to National Restaurant Association, 92% of restaurant operators said that the increasing cost of food is a major issue. However, many operators are optimistic and aim to establish positive growth in 2023. The food industry is expected to reach $997 billion, mainly due to the increase in food prices. Furthermore, close to 50% of restaurant owners predict fierce competition in 2023 and the coming year. 

Technology plays a major role in giving restaurants a definite edge over competitors. The global restaurant POS market size is estimated to grow at a CAGR (compound annual growth rate) of 6.4% from 2021 to 2028. Many small and large restaurants rely on data analytics service providers to plan and implement a data-driven model to make the most of analytics and insights to increase profits and customer base. 

In this blog, we’ll read about the role of data analytics for restaurants and how it can solve various problems in the food industry. 

How Can Data Science Help Restaurants?

Data science can help restaurants make use of their raw data and derive actionable insights. These insights can be used to make faster and more effective decisions at different levels. Many restaurant operators hesitate to invest in data science as they don’t know where to start. Data science can help with the following:

  • Understanding customers 
  • Segmenting target market 
  • Managing employee performance 
  • Automating inventory 
  • Managing orders and deliveries 
  • Implementing customer loyalty programs, etc. 

Ways Restaurant Analytics is Transforming the Industry 

1. Greater Efficiency 

The AI and ML tools used to derive analytics for restaurants help the operators to increase the overall efficiency of the place. From identifying the right sources of ingredients to increasing transparency in the supply chain and identifying ways to minimize costs without compromising quality, data analytics can help restaurants in becoming more efficient and thus enhance customer experience. For example, automating reservations allows the staff to pay more attention to improving the diner’s service. Using AI devices to take orders will minimize the risk of human error and even help the staff recommend dishes based on what the customers order.

2. Streamline Marketing 

Restaurant data analytics is incomplete without focusing on marketing strategies. Every business needs a strong marketing plan to attract new customers and retain existing ones. A restaurant business has to understand what the customers want and establish communication channels to reach out to a wider audience. Special offers, discounts, suggestions based on previous orders, etc., can be set up based on insights provided by data analytics. 

3. Quality Control 

Big data analytics helps restaurants ensure that they maintain quality standards at all stages. This includes the procurement of raw ingredients, kitchen cleanliness and maintenance, cooking, packaging, delivery, dining services in the restaurant, staff behavior, etc. Food has a short shelf life which affects the quality. This can be prevented or minimized by monitoring the supply chain movement, storage, and production quantity. 

4. Supply Chain Management 

More customers are paying attention to how and where the ingredients are being sourced by restaurants. This is especially true for vegan consumers who prefer a transparent supply chain and want the restaurant to explicitly mention the sources. Similarly, diners and food courts that rely on local and international products can use data analytics for supply chain and inventory management to ensure there are no delays or issues with stock quantities. 

5. Customer Sentiment Analysis 

Sentiment analysis is the process of identifying the various emotions customers feel when they interact with the restaurant business. From the ‘like’ on a social media post to online reservations, dining experience, communicating with the staff, response to food served, reactions about pricing, etc., are all factored in this analysis. It helps restaurants understand the strengths and weaknesses of the business from the customer’s point of view. The best way to derive customer sentiment analytical reports would be to hire a company offering customized data analytics solutions in the industry.

6. Demand Forecasting 

Restaurant predictive analytics helps the chefs finalize the menu based on customer preferences. If a restaurant gets more customers in the evening and has a maximum number of orders for pasta, it’s an indication that the dish is popular and should be definitely available during rush hour. This will help chefs plan the day’s work and adjust the meals cooked for other times. Even the portion of each serving can be decided based on this. It also minimizes food wastage by the restaurant. 

7. Predicting Product Shelf Life 

Food products are perishables. While some taste good only for a few hours, other items can last a week or more. For example, cookies last longer than cooked risotto. Data analytics assists restaurants in correctly determining the shelf life of each product and also lists the guidelines for consumers to prevent health issues (or lawsuits). 

8. Personalized Customer Experience

Every customer wants a personalized experience from the businesses they interact with. From food portions to special requests to multiple payment options and so on, it’s vital to meet the customers’ expectations to ensure loyalty. This is possible by processing their information (previous orders, payments, recurring visits, feedback, etc.) to derive actionable insights. Customer data and feedback are a goldmine for restaurants. 

9. Restaurant Layout Optimization

How can the restaurant’s dining room be organized to increase capacity but also ensure privacy and prevent the room from appearing stuffed or suffocating? This is one of the biggest concerns for many restaurants, especially the ones with limited space availability. How many seats should each table have? How to allocate online reservations? Many other layout-based questions can be answered using data analytics. 

10. Identify Taste Clusters

Taste clusters are analyzed based on location and timings. These insights are useful for established restaurants and new entrepreneurs looking to open a business in a particular region. For example, if most people in a region prefer fast food, the new diner should cater to the target audience. Of course, the restaurant can also offer something different and exciting, but the decisions should be made based on accurate data analytics instead of guesswork. Existing food courts can revise their menus using analytical reports. 

What Technologies are Changing the Restaurant Industry?        

Restaurant operators from different countries are adopting the latest technologies to enhance customer service and sustain market competition. Whether it is to manage food sources, kitchen, staffing, or customer base, the restaurant can shift from traditional to modern processes through digital transformation. The following are some of the most beneficial technologies in the restaurant industry: 

Delivery Apps

The pandemic has resulted in an increasing demand for home delivery. Customers prefer to order food online and get it delivered to their doorstep. No-touch deliveries are still popular with many customers. Statista says that the global online food market is expected to grow from $130.2 billion to $223.7 billion by 2027. The restaurant’s website or app and third-party delivery apps are both famous with global customers. In fact, there is a greater preference to order directly from the restaurant, pushing more food places to invest in their own technology and apps. 

QR Codes 

QR codes help restaurants appeal to the mobile-first market where users want their smartphones for just about everything. Providing QR codes for menus, reservations, online orders, payments, etc., enhances customer experience with the restaurant and encourages loyalty. Furthermore, QR technology doesn’t require the customer to download an app (just for a single transaction). Statistics show that QR downloads have grown by 750% in just two years. 

Contactless Payment 

Contactless payments are also a trend since the pandemic days. Customers prefer to pay through mobile apps, online links, or touchless devices. There has been a great decline in cash payments due to hygiene concerns. The latest credit cards in the market allow users to make contactless payments by holding the card above the POS device. More restaurants are expected to invest in these POS devices and offer multiple payment options to ensure customer satisfaction. 

Digital Kitchen Boards

This technology is a game-changer in streamlining customer orders and kitchen services. The staff doesn’t have to rush to and fro, taking orders and relaying them to the chefs. The POS software is integrated with the digital kitchen board to display the order and special requests included with it. The orders are also prioritized based on different factors. The kitchen staff and chefs can follow the digital board to fulfill the orders. 

Online Table Reservation 

Booking a restaurant table through the phone is nothing new. However, customers want something better and more convenient, like online reservations where they don’t have to talk to another person. The online table reservation system will also provide customers with a layout of the restaurant and allow them to choose a table of their choice (based on availability). Platforms like Wisely, OpenTable, etc., help restaurants manage online table reservations, waiting lists, customer loyalty programs, etc. 

Cloud Kitchens 

Though cloud kitchens are a relatively new concept, reports predict they could become a major part of the global drive-thru and takeaway market. The customer places an order online, and the restaurant completes the order in a cloud kitchen (with no front office to directly interact with offline customers) and fulfills the delivery through a delivery person. Food delivery apps list many businesses with cloud kitchens to prepare and deliver food to customers in a short time. The entire process is streamlined using artificial intelligence-based systems. 

What is the Future of Advanced Data Analytics in Restaurants? 

Advanced analytics will continue to play a crucial role in the restaurant industry. Restaurant operators who wish to sustain and grow in competitive markets will depend on the latest technology and tools to understand their customers, employees, changing trends, and other aspects that affect the business. Investing in data analytics is a way to achieve the long-term goals of a restaurant business. 


A study report shows that 50% of restaurants will be adopting cloud POS by 2023. CRM, employee management, customer loyalty management, etc., are a few areas where data analytics is helping several restaurants streamline their services.

Talk to a data analytics company to initiate digital transformation and adopt advanced technologies in the restaurant business. Many offshore companies offer customized end-to-end data analytical services for small, medium, and large food centers in the industry. 

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