When you think of the cities that attract countless flocks of foodies, eager to visit hot new restaurants so they can Instagram every tantalizing morsel, it’s New York, Los Angeles or Chicago that probably come to mind, right?
Think again. A 2016 JPMorgan Chase Institute study found that the cities with the fastest-growing restaurant scenes are far from what you’d expect, and include Atlanta, Denver and Portland, Oregon, all of which experienced a higher percentage of spending growth than the usual suspects. Of course, the strong economic growth of the past few years has also brought a rising tide to overall restaurant spending. For the 15 metropolitan areas included, there was an average annual increase of 7.8 percent.
The city leading the pack? Detroit. Yes, that Detroit, where the spending jumped by a whopping 10.5 percent.
Dustin Walker, food and beverage manager at Red Dunn Kitchen, inside the Trumbull & Porter Hotel owned by Leo Lee in Detroit’s hopping Corktown district, for one, isn’t the least bit surprised.
After decades of population loss, Detroit has stabilized, and new residents are moving into formerly derelict neighborhoods. Plus, it’s simply cheaper to launch a restaurant in Motor City: Business owners have a great deal of flexibility in negotiating land deals, leases and terms with suppliers.
The city’s progress has attracted attention from the James Beard Foundation, and international travelers are putting Detroit on their must-visit lists. National Geographic even named Detroit as one of its top six surprising cities for foodies, calling Corktown the “best neighborhood for a food frenzy.”
Miami came in fourth place on the list, showing a year-over-year growth rate of 8.9 percent. To lifestyle writer Liana Lozada, who’s covered the Miami food scene since 2009, it makes sense.
Which brings us to perhaps the most influential trend in the restaurant world today: Customers — especially millennials — want eating out to nourish both body and soul. In other words, they want an experience. A recent study from AlixPartners, a global business-advisory firm, found that while both millennials and baby boomers are cutting back on eating at restaurants to save money, there’s an interesting dichotomy that separates them: While 47 percent of baby boomers plan to earmark the saved funds for retirement accounts, 46 percent of millennials intend to spend the money on experiences, from travel and mani-pedis to housecleaning services. So for millennials, dining out has to follow suit and provide an experience, not just refuel the tank.
This explains why sales at casual-dining chain restaurants — like Chili’s and Applebee’s — have decreased over the previous year. According to TDn2K, a restaurant industry analysis firm, revenue at these restaurants dropped almost 4 percent between 2015 and 2016. A plethora of other meal options — grocery-store takeout departments, home delivery services, even food trucks — further cuts into the casual-dining business, since people simply have more choices than just a few years ago.
Kurt Schnaubelt, managing director at AlixPartners and co-leader of its restaurant, hospitality and leisure practice in North America, expects revenue growth at restaurants in these and other smaller cities to continue, partly fueled by an influx of college-educated millennials who are attracted to these cities due to their lower cost of living and plentiful jobs.
In Detroit, Walker says there’s no end in sight to the city’s burgeoning culinary scene. A recent study by the Urban Institute backs him up, projecting that the city will add 60,000 residents by the year 2040.
Looks like people over in those cities are going to be spoilt for foodie choices. I can hear the stomachs growling in concurrence!
Happy new year!