How Top Restaurants Are Adapting to Rising Costs Without Cutting Corners

Each year, the prestigious James Beard Foundation releases what it calls the Independent Restaurant Industry Report. This report is a compilation of data gathered by the Foundation and self-reported by over 350 restaurant leaders. The report provides insight into trends and makes recommendations for how restaurant leaders can best adapt. It’s absolutely essential reading for anyone serious about taking their restaurant to the next level.

This year’s theme is “Resilience and Reinvention”

They’ve broken the report into four sections. This week we’ll be diving into the fourth: Increased Urgency to Test New Business Models

This section goes deep on some data and has a lot of great ideas for expanding your business model, and we’ll get into those, but I want to make sure we talk about something far more important first.

In the Menu Monsters guide we talk about monsters like the Patchwork and the Behemoth: creatures that are born of a continual adding on of fun, exciting, new (and often half-executed) ideas without ever fully melding them into the whole.

In that guide I encourage you to experiment with your menu. To get creative. To be bold. But to do this well, you need a special ingredient. Most people fall into these Behemoth and Patchwork-like traps for a simple, tragic reason:

They don’t know what their restaurant’s heart is.

Or worse, their restaurant never had a heart to begin with. Do you know your restaurant’s heart? Really know it? Feel it in every dish, every font choice, every event planning? If you’re not sure, you need to spend some time and work that out before you ever touch any of this. Without the heart there to guide you, this experimentation can and will lead to ruin.

As you’re considering each of these new business models, consider your restaurant’s heart. Which of these make sense for you? Which ones would never work? Which ones could work, if done with your particular flavor? None of these are one-size-fits-all. Let’s dive into a few ideas:

1. A great way to introduce new items to your menu is to use your existing customers as a test bed. Offer “tasting menus” during certain times of the week. Flatter regulars by bringing them something free “the chef just put together” and get their feedback. Post on social media that a certain day will feature a limited experimental menu (only for people who see this post—password “science”!). Makes your menu fun, exciting, dangerous, dynamic, but keeps it low-stakes for you.

2. Take your brand to the next level. If you have a strong brand that customers love and identify with, let it evolve past your front door and the top of your menu. The obvious answer is t-shirts and stickers, and that can be a piece, but it shouldn’t be all of it. Do you offer a unique or specialized cuisine? Consider a cookbook. Do you have a unique ambiance? Consider selling pieces that let guests recreate a small piece of it in their homes. Do you have a key signature dish that goes fast and gets rave reviews? Consider a home kit for fans to take home with them and order online. A word of warning about this one: creating, storing, and shipping inventory can get expensive fast. Make sure there’s a demand for this before you put too much into it.

3. Reach new demographics and explore a side away from your core offerings with a pop-up. Pop-ups bring your offerings to a physical location they otherwise couldn’t be had. Simple, obvious, but impossible to overstate in terms of value. No matter how good your marketing and word of mouth is, there are people you just won’t reach until you’re right in front of their faces. And while you’re away from home, use the opportunity to play. If you’re a steakhouse, break out some new specialty burgers. If you’re a burger bar, bring some loaded fry options out for people to try. It gives you a chance to flex your skill, get in front of new eyes, and even get feedback on experiments in a very low-pressure environment. One more thing: if you’re considering a second location, there’s no reason at all to not try a pop up in that area first.

Adding things is fun, but removing is just as, if not more important. As Bruce Lee said: “It is not daily increase but daily decrease, hack away the unessential. The closer to the source, the less wastage there is.” Let’s talk about 2 ways the James Beard report recommends to get closer to that source, that heart:

1. Take a hard, critical look at your menu. This is going to be painful. There’s going to be at least one dish on there you know has to go, but you love it too much. Now’s the time. Do all of these dishes still speak to your restaurant’s heart? Are there dishes that create prep work that isn’t used anywhere else in the restaurant? Is there something that isn’t selling enough to justify its place, but you keep it on because you’re afraid of what a few regulars will say? Almost everyone has at least one of these. I know it can be painful, but in 2025, we can’t afford to carry the dead weight.

2. Outsource things that aren’t key to your business. The report talks about website development and social media. If there are non-restaurant-operating items like this you want to outsource and you’re sure you can do it cheaper, by all means do. I, however, am of the opinion this can actually become much more expensive in the long run (or even in the short run!) I’ve seen it happen many times. Instead, I’d recommend you insource these things. Consider what we talked about last week regarding ownership. Have someone young in the restaurant who loves social media? Give them the reins for a week, see how they do. Make sure you’re using what you already have to the fullest, that includes your people.

That’s it for the 2025 James Beard Report. Drop me a line at Kris@GetAFrespective.com and let me know what you’ll be adding AND taking away from your restaurant in 2025.