Back to Blog

How Virtual Restaurants Use Ingredient Data for Optimizing Digital & Physical Menus?

---

Digital transformation, customer behaviors, and preferences are driving significant change in the restaurant industry. Virtual restaurants, also known as ghost kitchens or cloud kitchens, operate without a traditional brick-and-mortar space. These types of food businesses primarily use online ordering and delivery platforms for sales. One of the key components of success for these digital-native businesses is the established use of data around their ingredients to shape a flexible, data-driven menu that can be enhanced for digital formats and physical offerings when applicable.

This blog outlines the incredible power of ingredient data, harnessed through tech ecosystems, to enable a menu that is useful, powerful, and adaptable to changing consumer trends, while maximizing margins in the world of virtual restaurants.

Is Dining Being Transformed by the Rise of Digital Menus?

Technology and changing consumer behaviors have transformed the entire dining landscape. Traditional restaurants typically use paper menus, but now need to adopt technology. You can find digital menus on websites, apps, or scanned via QR codes. They provide customers with a flexible and engaging way of exploring a restaurant's menu.

What is a digital menu?

A digital menu, or virtual menu, is an electronic version of a restaurant menu or dining experience that customers can access on their devices (for example, smartphones, tablets, etc). Guests can easily swipe and click through food items, menus, descriptions, prices, and even submit their order or request modifications.

Traditional Menus vs. Digital Menus

Traditional Menu: A physical, printed document with limited options for refreshes and changes (must be reprinted entirely).

Digital Menu: An electronic, dynamic document that can provide updates in real-time, provide interactive features, and provide multiple options for customization on orders.

What Is the Value of Ingredient Data for Virtual Restaurants?

In regular restaurants, chefs and managers often rely on experience, intuition, and anecdotal evidence to inform their decisions. With virtual restaurants, however, they exist in a digitized form that creates data at every touchpoint. When ingredient data is gathered and combined with other key metrics, such as sales and customer experiences, virtual restaurants can make more informed decisions about menu offerings.

Ingredient data consists of an extensive data set of information about the components involved in every dish, including:

• Cost and availability: Offers real-time ingredient costs and stock levels with suppliers.
• Nutrition data: Includes calories, macronutrients, and allergen information.
• Popularity and usage: Ingredient insights that are part of best-selling dishes versus not-so-popular dishes.
• Supplier Information: Supply Chain Source, Quality, and Delivery.

How Can Data-Driven Insights Improve Menu Planning and Optimization?

Virtual restaurants harness ingredient data in several key areas:

Optimizing for Cost and Profit

• Real-time ingredient cost tracking: When menu items utilize ingredient data linked to inventory and POS systems, virtual restaurants can monitor ingredient costs in real time. As a result, this allows virtual restaurants to raise prices, change dishes, or modify menu items to recover lost profits.
• Keeping Track of Profit Margins: By taking ingredient costs and selling prices, virtual restaurants can identify ingredient profit margins. Virtual restaurants can highlight dishes with higher profit margins in their menus by placing eye-catching photos of the dishes and strategically including them on the menu.
• Minimizing Waste: By utilizing ingredient data and focusing on sales forecasting, virtual restaurants can more accurately anticipate demand, leading to more precise ingredient purchasing, reduced spoilage, and waste.

Catering to Customer Preferences and Dietary Needs

• Tracking ingredient popularity: After scraping the delivery app data and customer reviews, virtual restaurants can understand the trends with ingredients or flavor profiles and deliver new dishes that incorporate popular ingredients or alter existing recipes to accommodate local palate preferences.
• Dietary needs: Virtual menu items can now be identified as vegetarian, vegan, gluten-free, or allergen-free due to the extensive ingredient data available. It provides customers with more explicit labeling to manage their dietary consumption and will help them make more intentional ingredient decisions.
• Personalized recommended items: By leveraging AI-based menu optimization that utilizes customers' previous ordering habits and ingredient data, virtual restaurants can make customized recommendations to maximize customer satisfaction.

Increasing Operational Efficiency

• Inventory management: Using automated on-demand systems is easy to implement. From here, it enables ingredient data to automatically determine inventory levels, reorder as needed, and monitor and inform staff of inventory deficits, helping to avoid both excesses and deficits.
• Kitchen Layout: By analyzing ingredients commonly used together in popular dishes, virtual kitchens can enhance their layouts, organize workstations efficiently, and streamline preparation processes to minimize unnecessary prep time and reduce labor costs.
• Supplier performance monitoring: Ingredient data enables the virtual restaurant operation to monitor and evaluate supplier reliability and performance, negotiate prices, and maintain continuous operating diversification across multiple suppliers, in case a supplier is unable to fulfill an order.

Is the Digital-Physical Menu the Next Frontier?

While virtual restaurants primarily exist on online platforms, the concept of a "digital-physical menu" purposefully addresses the relationship between digital interfaces and physical touchpoints, as well as the obligation to present ingredient information consistently across all channels.

Interactive visualizations

• Augmented Reality (AR): AR applications can overlay 3D representations of dishes on top of the user's environment on their smartphone to visualize food before being ordered, which provides them with a presentation, portion sizes, and visualization of most of the ingredients.
• Virtual Reality (VR): VR applications can offer immersive experiences and allow customers to virtually visit a restaurant and show a visual, in-depth representation of all menu items.
• AR QR Codes: A QR code printed on a menu can link a user to an interactive 3D model of a dish that highlights all of the ingredients and provides the user insight into the presentation.

Enhanced information and personalization

• Ingredients List: Online menus have the potential for detailed lists of ingredients with some nutritional value components (if they have it) and sourcing information.
• Customization Options: Online menus empower customers to adjust every dish, based on dietary needs and preferences, on a main dish, cooking method, and toppings. It helps improve consumer experiences.
• Personalized Suggestions: By applying data on past orders and preferences, across platforms, restaurants can recommend relevant food items to order, which empowers the discovery of new dishes and meals unique to them.

Operational utility

• Inventory and Waste Management: Digital menus, especially at scale, build a level of transparency to track ingredient use, which restaurants can use to manage inventory control and minimize waste.
• Pricing: Pricing each dish by ingredients can dynamically adjust prices depending on availability and market conditions, and allow for profit optimization.
• Training: Staff training can leverage either interactive menus or AR or VR simulations to prepare staff on menu items, implied ingredients, and preparation methods for dishes. The views provide an experience that demonstrates standards to achieve consistency and quality in cooking and service.

Marketing and upselling

• Promotions: A restaurant's sourcing and ingredient data can be broken down to a more granular level, to provide targeted promotions for specific food items or differentiating ingredients with the goal of increased sales and customer engagement.
• Upselling Opportunities: Digital menus can provide suggestions based on what items are ordered, or suggest complementary items or add-ons by way of online suggestion, and hope to increase average order size through upselling.

What Is the Role of Technology in Data-Driven Menus?

To utilize ingredient data to build menus dynamically, you require an infrastructure and technology stack that supports this process.

• The first step in collecting data is to integrate your POS/inventory system to track sales and inventory levels in real-time, including ingredient usage.
• AI and machine learning tools analyze ingredient data in conjunction with sales trends, social media activity, and competitor information to predict demand, prices, and menu recommendations.
• Data analytics dashboards and reporting provide actionable insights to identify best-selling packaged meals and dishes, as well as underperforming products and opportunities for cost savings.
• There are digital menu platforms available to provide for quick updates, clear visuals, and allow you to incorporate online ordering and delivery, which will reduce customer stress and create more functionality.

What Are the Key Challenges and Considerations?

While using ingredient data has many benefits, virtual restaurants should remain cognizant of the following challenges:

• Data quality and accuracy are crucial for making informed decisions that yield reliable outcomes. Incomplete or incorrect data can result in flawed decisions.
• The technology costs, including software, tools, and system integration for the virtualization process, will incur significant initial expenses followed by long-term, ongoing maintenance costs.
• Data privacy and data management security will always play a role, especially when using ingredients data or customer data. In general, it is essential to have robust protocols and safeguards in place to protect and manage data, including ensuring adherence to relevant regulations.

What Are The Perspectives Of Data-Driven Menus In Virtual Restaurants?

The data-driven menu trend is expected to accelerate further as AI and machine learning capabilities continue to improve. Virtual restaurants utilizing data-driven menus, in addition to these capabilities, will be able not only to meet the increasing demand and desires of today's consumers but will also use less labor, making for easier management of their operations, which can allow them to maximize their profitability in an industry that will continue to evolve and change.

The future of menus in virtual restaurants is likely to resemble the following:

• Hyper-personalization: AI-driven systems analyze past orders, dietary restrictions, taste preferences, and even real-time considerations to offer highly designed menu recommendations.
• Predictive analytics: AI algorithms to help forecast future demand, along with AI-based forecasting and automatic optimization of both inventory stock and prices.
• Dynamic pricing: Adjust pricing in real-time based on demand, ingredient expenses, and competitor activity.
• Improved supply chain traceability: Blockchain solutions to track the ingredients from farm to table for ethical sourcing and food safety.

By implementing higher efficiencies in ingredient data and developing visionary technological applications, virtual restaurants are truly innovating more than just menu design; they are redefining the modern dining experience.

Conclusion

Virtual restaurants are revolutionizing the food industry by leveraging food ingredient data and advanced technology to create innovative, data-driven menus. In addition to optimizing costs and profitability by tracking real-time ingredient prices and focusing on high-margin items, we also help improve customer satisfaction by using personalized recommendations, fulfilling dietary restrictions, and providing creative interactive visualizations using AR and VR. Our experts also help to enhance operational efficiencies through streamlined inventory management, optimized kitchen operations, and data-driven marketing, including targeted promotions and upsell options.

With continually improved utilization of AI and machine learning, hyper-personalization, predictive analytics, and dynamic pricing will continue to gain prominence with virtual restaurants. Scraping Intelligence can help businesses leverage advanced data extraction services for accurate restaurant data scraping, enabling menu optimization. Our industry expertise enables us to ensure that data extraction is conducted by legal methods, providing structured data ready for analysis.

Through the effective use of ingredient data, top-notch technologies, and a focus on specialized services, the future of the virtual restaurant and modern dining experience is taking a new direction, while gaining competitive advantages in the evolving food industry landscape.

---