Restaurants continue to be one of the most popular small businesses to open in the U.S. As of Spring 2018, there are a whopping 600,000 restaurants currently operating in the United States, many of which are ran by small business owners and their families.
If you are someone who is passionate about food, you likely have thought about opening your own restaurant someday. In this article, we are going to dive into the most popular types of restaurants that Americans eat at, and will also discuss some rising trends and open markets that you can use to open your own successful restaurant or change the style of your current restaurant.
Most Popular Restaurant Types in The U.S. By State
When talking about the food industry it is not enough to simply look at a list of restaurant types and deciding which one is the best. Restaurant popularity is very dependent on location, as can be seen from this map provided by Thrillist:
In the Midwest, for example, pizza chains are by far the most visited restaurants. However, in certain places like California or Texas, pizza chains are not nearly as popular, and instead, they are being overtaken by Mexican restaurants. A lot of these results are logical: if a region is near the Mexican border, the more likely Mexican food is more popular.
Another example is that coastal cities are almost always better places to set up seafood restaurants (mostly due to fresh products, which in turn inspires more visitors). The above map gives a pretty good idea of general regional tendencies in terms of restaurant popularity.
Most Popular Ethnic Cuisines in the U.S.
As of today, it has become increasingly popular to have restaurants based on specific ethnic cuisines instead of something specific like opening a burger joint or pizza parlor. Many times when you want to go out to eat, you say something along the lines of “Let’s get some Mexican/Italian/Chinese”. When a consumer is looking for new restaurants to try, they are very likely to think in terms of the ethnic cuisine they want to eat and go from there.
Just like types of restaurants, the types of ethnic cuisines that are most popular also tend to depend a lot on location. Here is a great map provided by HuffPost that shows the most popular type of ethnic cuisine by state:
Notice how much variety of cuisines there are across the U.S. Of course, some things are not surprising (like southern food dominating most of the south) but there are plenty of really specific cuisines, and also tendencies that go beyond mere ethnicity: Gluten-Free, Hawaiian, Cajun, Gastropubs, Food stands, Filipino, Cuban, and of course Mexican cuisine.
Have in mind that this map only tells part of the story. There are a few ethnic cuisines that are popular with consumers all across the country. Here is a great graphic from Statista showing the results of a survey asking consumers what they eat at least once a month (light blue) and what they eat once a year (dark blue):
Unsurprisingly, the big three that Americans gravitate towards at least once a month are Italian (61%), Mexican (50%), and Chinese (36%).
New Restaurant Trends to Watch
If you are looking to dip your feet into the world of restaurants, or if you are seeking ways to spice up your restaurant offering a wider variety in your menu, you would do well to learn about the rising trends affecting the industry today. Below are just a few examples:
1. Food Delivery Apps
Many consumers want to eat the great food of going out while staying in. That is one of the reasons the food delivery app game is booming. Apps like Grubhub, Doordash, Uber Eats, allow users to order food from their favorite restaurants and have them delivered right to their home. Partnering with food delivery apps can be very lucrative for a new business, as it opens up a growing market of Americans who want to eat high-quality food in the comfort of their own home.
2. Online Ordering and Food to Go
Playing off of the previous example, online shopping has ballooned in the past few years, and that has carried over to the food industry. Investing in a good website or phone app has become the standard for many restaurants in order to make it easier (and more enticing) to order food from your restaurant. Once your customer orders their food online it is useful to have a separate pickup line to allow customers the option of dining out or grabbing their food and go.
3. Fine Casual Dining
Fine dining restaurants seem to be a bit on the decline as of late, as some younger customers tend to stray away from overly expensive or fancy menus. However, there is still space in the food industry for unique offerings and high-quality ingredients. While it is possible to offer a traditional fine dining experience, many consumers are gravitating more towards fine casual dining, which combines the higher quality of fine dining with the more laid-back and welcoming atmosphere of casual restaurants.
4. Vegetarian/Vegan Options
Many restaurant-goers are trying to reduce their meat consumption or forego meat altogether. This is why most restaurants now have some form of vegetarian or vegan menu items and including these items on your menu can prevent alienating a large customer base and can give non-meat eating customers options while allowing their meat-eating friends to enjoy their meal as well. When you are first designing your menu, adding two or three vegetarian options will go a long way in growing your customer base down the roads.
5. Food Trucks
Food trucks irrupted in the food industry a few years ago and, while many thought it was just a temporary trend, their popularity has only increased over the years, especially among young customers. For entrepreneurs, food trucks offer lower overhead expenses than a brick and mortar restaurant, while for consumers, they offer convenience, a cheaper dining option, and overall a fun and different experience.
A food truck can be a great opportunity to start small with a profitable business that can be converted over time in a more traditional establishment. If you already run a restaurant, opening an additional food truck will give you the chance to explore new markets and even attract your customers to your current restaurant.
So What Type of Restaurant Is Right for You?
The ultimate goal of this article is inspiring you to run a restaurant that will thrive. Opening up a restaurant is not an easy task, and about 60% of new restaurants end up closing within their first year. This is why it is so important to do proper research and make the best preparations you can for opening your restaurant.
When deciding what type of restaurant you want to open, ask yourself the following questions:
1. What is your local market like?
If you ask anyone what the most important thing is for any business, it’s location, location, location. Obviously choosing an appropriate location is crucial, but what can be just as important is knowing your local market and your market share.
For example, let’s say you want to open a Mexican restaurant. However, there are 20 different Mexican restaurants in your area. This will make it very hard for you to stand out (unless you bring a localized flavor or unique approach). On the flip side, if you notice that there are no Mexican restaurants near you, it might be a great opportunity to fulfill a niche in that market.
Keep reading: What is Market Share and How to Calculate It
2. What are you passionate about?
Even if it might seem that opening a burger joint is the most profitable option, if you know nothing about burgers (or just don’t like them) then a burger joint is probably a bad idea. Opening a restaurant takes a ton of work, and customers will gravitate towards restaurants that represent your passion and love for your food. While you do need to consider what type of food will do well in your market, make sure you avoid trying to do something you know nothing about or don’t care about.
3. What Will Make You Stand Out?
There are thousands of restaurants out there right now, so no matter what type of restaurant you open there will likely be fierce competition. You need to really think about how your restaurant will stand out. The first thing to think about is what experience you are trying to provide. Are you looking to recreate homey family dinner comfort foods, or are you trying to bring an air of sophistication to the fine-dining world?
The next thing to think about is what is different about your restaurant when compared to similar restaurants. Whether that is using exotic ingredients, using family recipes and techniques that represent your heritage, or creating a unique dining experience using alternate serving methods (family-style, counter service, etc.)
4. How Will You Make Money?
You’ve probably heard the phrase “money talks”, and that is especially true in the restaurant industry. Running a restaurant takes a lot of money between renting or buying a space, paying servers and staff, buying fresh ingredients, buying the necessary appliances, etc. The most important thing to prevent closing your doors too soon is to have a good business plan. It’s all in the numbers, and even the greatest concepts can fail if your profit margins are low. You need to make sure that you know your costs and projected profits to make sure your business will be sustainable in the long run.
You can learn here more about the average profit margins in restaurants.
We hope that this post has been helpful in giving you lots to think about before opening your restaurant, or if you simply want to update your current menu, adapting it to the preferences of the market. For more helpful articles and guidance, be sure to join our Camino Financial Newsletter.
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