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Artificial Intelligence Forecasting Reinventing How Restaurants Plan

Coral Drake | February 23, 2023 |

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Artificial Intelligence Forecasting Reinventing How Restaurants Plan

Artificial intelligence forecasting for restaurants can alleviate the unpredictability that has long challenged the industry. Machine learning can tell you more than you could have learned before about when customers are most likely to come to your restaurant, how much of each ingredient you need to meet demand without spoilage, how to market effectively for the future, and much more. 

There are all kinds of ways to implement artificial intelligence forecasting, so it's worth looking into for restaurants of any size and type. 

What is Artificial Intelligence Forecasting?

Artificial intelligence (sometimes abbreviated to AI) is any computer program that behaves like a human in a particular way. For example, when you ask Apple’s Siri or Amazon’s Alexa a question, the Internet-generated reply is AI at work. Machine learning takes AI further, enabling computers to look at what's happened in the past to make predictions about the future. 

Artificial intelligence forecasting takes in a variety of data points, analyzes them, and predicts what's likely to happen next. Artificial intelligence in restaurants can predict traffic flow, what customers are likely to purchase at particular times, what ingredients may be required depending on the likely demand, and much more.

Can Restaurant Forecasting be Done Without Artificial Intelligence?

In short, yes, but it takes much longer. Traditionally, restaurant forecasting was done manually with a system of guesses and by-hand calculations. Restaurant owners relied on memory and hunches to tell them when to anticipate a rush or a lull. 

A manual system for restaurant forecasting depends on restaurant owners or managers knowing everything that's happening nearby, from a convention or concert to road closures, not to mention keeping accurate and consistent records of details like top selling menu items and typical traffic patterns for rushes and lulls. 

While it's possible to make some forecasts this way, this method is bound to result in more errors and waste than you would experience if utilizing artificial intelligence. Furthermore, it takes up time better spent on other ventures. 

Why Is Artificial Intelligence Forecasting for Restaurants Important?

Historically, the restaurant industry has been notoriously unpredictable. Other than the expected surges for breakfast, lunch, or dinner and seasonal swings for restaurants that have fluctuating regional populations, restaurant owners have had a hard time anticipating several factors that routinely impact business.

Here are some common questions that long term patterns help decipher: 

  • What are customers likely to order, and when? 
  • How many ingredients are required to meet consumer demand without risking spoilage? 
  • What are my profit leaders and losers within specific service timeframes? 

When these questions go unanswered, restaurants tend to have high overhead and a lot of waste, both in food and paid staff hours. Artificial intelligence can't completely eliminate the unknowns in the restaurant industry, but it can definitely help. Here are a few ways that artificial intelligence forecasting may benefit your restaurant:

AI for Restaurants Helps You Staff Better

Staffing is one of the greatest challenges facing the restaurant industry today. The 2020 pandemic left the restaurant industry down 750,000 jobs compared to pre-pandemic levels, and recovery is not going quickly. Chronic short staffing leaves remaining employees stressed and prone to making mistakes. 

AI restaurant forecasting can tell you what kind of traffic fluctuations you're likely to have so you can staff exactly the number of workers you need, but not more. This saves you money by eliminating unnecessary bodies in your building during a shift, and it keeps your workforce from being overworked.

With assistance from AI forecasting, your team is unlikely to be left scrambling to meet customer demand without enough help, but they also won't find themselves stuck at the restaurant unnecessarily when they could be home. You may already know when you're usually busiest, but artificial intelligence forecasting for restaurants can examine trends over years and seasons, as well as look at regional information, analyzing the data for unexpected lulls and surges. 

Automate and Save with AI Forecasting

AI forecasting can anticipate the ingredients you'll need depending on historical data about your restaurant and deduct ingredients from inventory as they’re ordered. By integrating inventory and purchasing, you can cut out a significant part of the labor involved in running your restaurant and make mistakes less likely. 

Since food waste is such a critical part of restaurant overhead and an ethical dilemma for many restaurant owners, this kind of precise inventory calculating can make a tremendous difference. 

Knowing that you will always have the supplies you need while simultaneously watching food waste drop is reason enough for most restaurant owners to be very happy they invested in restaurant artificial intelligence forecasting. Artificial intelligence can even order for you so you're never left short on essential ingredients. 

Artificial Intelligence Forecasting for Restaurants Can Improve Delivery

If you use a rideshare program like Uber Eats, your restaurant is already relying on artificial intelligence forecasting for your delivery system. Uber leverages artificial intelligent marketplace forecasting to deliver drivers to high demand areas before the demand develops. They also use this kind of programming to adjust prices depending on order volume, enabling more drivers to be on the road when there's higher demand. 

If you have your own delivery service, you can also utilize artificial intelligence to plan and optimize driver routes depending on traffic and how many deliveries they need to make. Artificial intelligence can raise prices for delivery to reduce demand when your drivers are stretched thin and reduce prices or offer free delivery as a promotion when the restaurant is slow. 

Meet Customer Demand Better with AI

Artificial intelligence forecasting for restaurants can predict when customers are most likely to order which foods. For instance, knowing that hamburger sales spike at lunch and dip for dinner (and by how much) ensures that patties are thawed and ready to cook for the lunch rush. 

Conversely, this information ensures you don’t over prepare and thaw too many patties for a different meal time. If your restaurant relies on fast service, having some of the most commonly ordered foods ready to fire can improve customer satisfaction and bring more money in faster.

Market More Effectively with Restaurant AI Forecasting Data

With the data generated by AI forecasting, you can invest in marketing campaigns at the times and to the audiences most likely to respond well to them. AI forecasting can look at how marketing campaigns have functioned in the past and where they've been most successful to help you design new outreach content.

It can also identify failed incentives that didn't yield the desired result so the mistake won't be repeated. AI for restaurants can predict the promotional deals most likely to resonate with customers at given times. It can easily send out marketing emails, media posts, and ads at the time and to the customers most likely to respond well to them. 

What Variables Does AI Forecasting in the Restaurant Industry Consider?

The Weather

Incredibly, AI restaurant forecasting can go so far as to take the weather into account when making predictions and recommendations. The Chinese company Moji is one remarkable example

This weather artificial intelligence program partnered with a large food delivery company in China to predict rain, adjust pricing for delivery accordingly, and change delivery routes so as to avoid the worst of the weather. 

Seasonal Surges

Artificial intelligence can look at how traffic at your restaurant has fluctuated during previous seasons to not only anticipate a general spike or lull but offer you precise figures on what to expect. By comparing all kinds of variables at different seasons, AI can anticipate which of the past seasons this one is most likely to replicate. 

Sure, there is going to be a surge. But exactly when will it start and end, and how big will it be? AI restaurant forecasting can tell you the answers to these questions better than any kind of manual forecasting, enabling you time to hire more seasonal workers and letting you know how many you need.

Customer Spending Habits

Restaurant AI forecasting data can inform all kinds of decisions, such as when customers spend more or less, what things they tend to buy together, and how they’ve been incentivized to spend more in the past. 

Perhaps you'll learn that Friday nights are the times when customers are most willing to spend, so you can time an expensive special offer for that evening. Maybe you'll find out that customers are unwilling to spend much during weekday lunch or happy hour, so you can make small portions or reasonably priced options available at these times.

Employee Behavior

Staffing is one of the biggest problems facing the restaurant industry, so the capacity of artificial intelligence to forecast how staff might behave is extremely valuable. For instance, a system for restaurant forecasting can look back at hiring and employment termination records and see that employees tend to leave your restaurant before the summer. 

You may notice that many of your employees are high school or college students, resulting in the summer exodus of workers. Understanding this information can help you to staff non-students who are unlikely to leave in the summer or anticipate the need to hire additional staff in the summer.

Regional Events

All kinds of factors can affect why a restaurant experiences more or less business. Construction in the area, road closures, local events, etc. can all significantly impact your restaurant traffic. 

Artificial intelligence has the capacity to consider all of these events constantly, in real time, and compare them to previous events to show you how they corresponded with traffic at your restaurant. 

Artificial intelligence forecasting for restaurants can tell you that a nearby road closure means that you'll likely experience a 10% decrease in traffic or that you can expect a 20% spike in business on a weekend when there is a concert nearby.

Plan Better With Restaurant Artificial Intelligence Forecasting

AI restaurant forecasting is a powerful way to change everything about how you plan, from how many employees are scheduled, to who you hire, to what you charge, to how you market and what menu items you offer. Artificial intelligence makes restaurant forecasting less prone to human error and takes the stress of planning off of restaurant management so that they can focus their energy on other things. 

If you haven't already looked into utilizing artificial intelligence for restaurant forecasting, it's time to take the leap into AI. You're likely to find yourself behind the competition if you don't.