Introduction to types of restaurants
The pandemic caused a major slump for the restaurant industry. If you are already a part of it, you would have witnessed the industry going through some significant turbulence in the last year. If you dream to own or be a part of a food service business, it is very important for your success that you make well-informed decisions.
There are many new types of restaurants and business models propping up every now and then. It can be overwhelming to choose the right type of restaurant you can start with, from the plethora of options available.
The sole purpose of any food and beverage business is to serve the best food to their customers. But, they are different from each other in other ways such as
- Target audience,
- Menu engineering,
- Service style,
- Type of operations, and
- Space required to function.
Now that we know, the food and beverage sector is very diverse, from the local snack bar to the fancy restaurant that serves culinary delights. This broad and varied landscape can be broken down into more homogeneous categories. Chief among the distinctions is the split between commercial food services and non-commercial food services. But what is the difference? And which is the more dominant sector?
The commercial sector accounts for around 80% of the Industry and Non-commercial for the remaining 20%.
Avenues in Commercial Sector
The commercial sector also referred to as “market oriented food services” includes the food outlets or services which are independently set up for one single purpose that is for serving food and earning money.
It is responsible for the majority of the profits in the food & beverage industry and includes some of the most popular types of restaurants.
These types of food businesses include QSRs, Family Restaurant chains, Fine-Dining restaurants, Casual Dining Restaurants, Cafes, cloud kitchens, and Food trucks
1. Quick Service Restaurants (QSRs)
Quick service restaurants are very popular. They are known for serving fast food i.e, food that is quick to prepare is filling, and affordable. The visitors have an option of limited seating or takeaways. The target audience for QSRs are teenagers, students, and working professionals but families enjoy them as well. These kinds of setups are located in areas of high foot-fall and places where a lot of people can locate them easily.
This type of investment comes in Independent and Franchise forms. Independent QSRs are owned and operated by a single person which is the owner himself. QSR Franchise is the kind of business that a person (the franchisee) buys from a famous QSR chain (franchisor), an example of a franchise would be the famous McDonalds or Burger King.
2. Full-service Restaurants
These types of restaurants are known for accommodating families and serving full-service meals on the premises. They have ample seating space, variety of cuisines to offer, the food is prepared with caution and served with expertise. This is the second most common type of restaurant after QSRs. These restaurants usually require more space and investment to set up than a QSR.
3. Casual Dining Restaurants
These are the “best of both worlds” of Fine dining restaurants and casual restaurants. These are different from fine-dining restaurants in their pricing, food preparation, and service style. These restaurants focus on affordability and cater to a varied segment. The customers can enjoy a low-key atmosphere, interesting decor, and moderately priced food.
4. Fine Dining Restaurants
These types of restaurants are known for creating a memorable experience for their customers. They focus on the impeccable service of highly crafted food preparations by trained chefs.
Their selling point is the food itself which is made in-house and is of the highest quality.
The target market is very niche, less than 1% of the total. But, they are known to earn maximum profits compared to any other type of restaurant. They surely do require lots of expertise and investment. Some examples include Michelin starred restaurants around the world.
5. Food trucks
These are great when you don’t want to invest a lot in buying the perfect location for your food business and are looking to experiment by going around on the wheels. They are unique modern businesses that usually specialize in a single type of food. Food trucks have become increasingly popular in India and were common in places like the US from long back. They are known to serve a variety of people from teens to working class to families. Seating options may be sparse or even non-existent.
6. Cloud Kitchens
These are hidden food serving establishments also known as Virtual kitchens or dark kitchens which provide only food delivery options.
They tie up with food delivery services to reach their online customers and deliver the orders. Cloud kitchens are easy to start and operate as they require less investment and are easily scalable. With the increase in people ordering food online, this concept will continue to become popular.
7. Catering services
Catering services are independent businesses that provide food services on demand. The setup, food menu, location, and pricing are agreed upon by the one buying the catering services. These services are popular in events such as marriages and banquet events. The investment is not very high in such services, a major factor of success is hiring trained staff.
8. Nightclubs, Pubs
These establishments include Bars and pubs that give a casual food experience with the added option of alcohol. The target market is usually the young urban population and people who are socially active and enjoy drinking. They require good investment considering the kind of services they provide.
Avenues in the Non-Commercial sector
Non-commercial food service establishments serve F&B products, but either as an addition to other services or for non-profit reasons.
For instance, it is hard to imagine a fully functional hospital without meals being delivered to the patients. And how could you possibly sell long-haul flight tickets without the option to feed your travelers on the route? These are very few of the settings in which you are probably going to discover non-business food services. They representing a far more modest piece of the pie than commercial endeavors.
These establishments are specific to certain target markets based on the occupation or location. This allows them to cater to a niche that is ready to buy their services at a higher price. Thus, increasing their profits.
9. Corporate catering services
Corporate catering services are provided for people in hospitals, institutions, employee cafeterias, and transportation.
These are mostly outsourced.
10. Hotel Restaurants
Hotel restaurants and bars, room service, and Coffee shops inside the Hotel premises cater to in-house guests and are open to the public as well.
These rely upon the in-hotel customers for the majority of their business and the high emphasis is on providing excellent food and service.
For example – ITC hotels in India have their own in-house fine-dining restaurants while hotel chains like The Oberoi outsource some of their restaurants to popular restaurant chains.
In sum, the Food & Beverage landscape comprises a vast array of business models and segments. Each has its own characterizing facets, whether the indirect pursuit of profits or otherwise, they offer consumers a diversity of choice.
Non-commercial food services enable businesses, hospitals, and more to pursue their operations rest assured their guests’ culinary necessities are tended to.
From a variety of F&B Businesses to choose from, one can decide which would satisfy their needs based on the current market situation, the demand, their ideas, and how much you are willing to invest.