Winning Through the Great Profit Squeeze
12 Learnings from the Nutritics x Leanpath webinar, March 2026
Panellists:
- Billy Brewer, COO, Sonny’s BBQ
- Chris Greve, Senior VP, Forefront Health
- Stephen Nolan, CEO, Nutritics
- Andrew Shakman, CEO, Leanpath
Executive Summary
US restaurant operators are entering a fundamentally different operating environment. Margins have always been tight, but what has changed is the intensity, breadth and persistence of the pressure. Costs are rising across every major line item, from food and labor to energy and supply chain, while regulatory requirements and customer expectations are both increasing at pace.
This is not a temporary cycle. It is a structural reset.
For multi-unit operators, this changes the playbook. Traditional levers such as price increases, labor adjustments, and supplier renegotiation are no longer sufficient on their own. The operators who will outperform in 2026 and beyond will be those who:
- Embed operational discipline at scale
- Systematically reduce inefficiencies, especially waste and complexity
- Treat compliance and transparency as commercial drivers
- Equip frontline teams with the systems, data, and clarity to execute consistently
This recap explores the forces behind the “Great Profit Squeeze” and how leading operators are responding.
12 Key Learnings
1. The Great Profit Squeeze Is Structural
Margin pressure is not new in foodservice. What is new is that every pressure point is intensifying at the same time, creating a structurally higher cost base.
Operators are now dealing with a combination of pressures that would previously have been manageable in isolation:
- Food cost inflation outpacing menu price increases
- Record-high labor costs combined with persistent turnover
- Ongoing supply chain volatility driven by global disruption and input cost increases
- Rising energy costs that are increasingly material at scale
Together, these forces redefine the baseline for operating costs. Many of the underlying drivers,such as labor structures, climate volatility, and supply chain fragmentation, are long-term. This is not inflation that will simply normalize.
“The key shift here is moving from static cost management to really dynamic cost control – it’s at the core of everything” Stephen Nolan, CEO, Nutritics
2. Regulation and Expectations are Converging
Alongside cost pressure, operators are navigating a more complex regulatory landscape. Requirements around allergen disclosure, menu labeling, and traceability are tightening, often with variation at the state level. California’s ADDE SB 68 is a clear signal of where the industry is heading, with structured allergen disclosure becoming a likely standard.
At the same time, customer expectations have shifted significantly. Guests expect:
- Accurate allergen information
- Transparent nutritional data
- Consistency across locations and channels
The tolerance for ambiguity has effectively disappeared.
“There’s a market of folks who need transparency around allergens and in their food, for their health …we felt it was our duty to get ahead of it. It’s much easier to be in front of it”. Billy Brewer, COO, Sonny’s BBQ
Compliance is no longer back-of-house, it is visible, customer-facing, and directly linked to trust and revenue.
“Those operators who move early and turn regulation into an advantage can build out the systems and processes ahead the curve and avoid the traditional last minute scramble of the deadline and the associated cost. And, importantly, they can extract commercial benefits and earn guest trust, because transparency and accurate, reliable information becomes a differentiator” Stephen Nolan, CEO, Nutritics
3. Operators Must Adapt to a New Operating Reality
Operators are not simply experiencing more pressure; they are adapting to a fundamentally different operating model. Historically, challenges could be absorbed through flexibility, like adding labor, overproducing, or holding buffer stock. That approach is no longer viable. Margins are too tight, waste is too costly, and inconsistency is too risky.
“We used to solve problems by throwing food and labor at them. You can’t do that anymore.” Billy Brewer
Operational discipline is no longer a best practice, it’s the business model.
4. Resilience = the Ability to Absorb Ongoing Cost and Regulatory Pressure without Compromising the Guest Experience
This creates a non-negotiable constraint. Operators cannot reduce quality, degrade the experience or increase inconsistency, even as costs rise.
Resilient operators deliver the same experience across all locations, regardless of what is changing behind the scenes. Achieving this requires faster decision-making, tighter integration across functions, and a high degree of standardisation. It also requires equipping frontline teams to execute consistently.
Resilience is not defensive. It is operational control at scale.
5. Operators Must Move from Cost Control to Cost Precision
Traditional cost management approaches like periodic reviews, static menus and high-level reporting are no longer sufficient. Leading operators are shifting toward continuous monitoring, dynamic menu management, and granular, actionable data.
Food waste is one of the clearest examples of this shift. It is no longer treated simply as a cost, but as a signal of operational breakdown. Waste reflects issues in forecasting, preparation, training, and menu design, and it is both measurable and actionable.
“The waste bin isn’t just waste – it’s a list of problems waiting to be solved.” Andrew Shakman, CEO, Leanpath
Used effectively, waste data becomes a diagnostic tool that drives continuous improvement.
6. Turn Insight Into Effective Action
The difference between operators who reduce waste and those who do not lies in behaviour and measurement.
For example, Forefront Health achieved a 42% reduction in food waste in 2025, delivering approximately $70,000 in savings. The critical shift was embedding data into daily operations. Teams were given real-time visibility, supported with clear visual reporting, and encouraged to take ownership of improvements. This included:
- Sharing waste data daily with site teams
- Making impact tangible through visualisation
- Encouraging problem-solving rather than passive reporting
- Leveraging culinary creativity to reduce loss
The lesson is consistent: meaningful savings come from behaviour change, not just data collection
7. Managing Cost Dynamically is Non-Negotiable
Operators are also rethinking how they manage menus and ingredients. Static menus are increasingly untenable in volatile cost environments. Instead, leading operators are focusing on:
- Greater menu agility
- Ingredient-level cost visibility
- Tighter portion and yield control
- Faster decision cycles
Understanding true dish margin now requires continuous insight into cost movement, yield variation, and substitution impact. Even small inconsistencies can scale into significant losses across multiple locations.
This is not about cutting costs, it is about controlling them with precision, continuously and at scale.
8. Complexity is a Margin Risk
Operational complexity is one of the most underestimated drivers of margin erosion. It shows up in multiple forms like excess SKUs, supplier variation, inconsistent recipes, and disconnected systems. Each layer adds friction and the impact is cumulative:
- Slower execution
- Higher error rates
- Increased training burden
- Greater compliance risk
The more complex the operation, the harder it becomes to deliver the consistency which underpins resilience.
“Complexity is one of the most underestimated drivers of margin erosion. It’s effectively a hidden tax on businesses. There’s more moving parts, there’s more room for error, more opportunity for inconsistency, more operational friction at site level”. Stephen Nolan, CEO, Nutritics
Operators who win are responding by deliberately simplifying. This includes reducing low-performing menu items, standardizing recipes and processes, redesigning workflows and centralising data into a single source of truth.
9. Data is the Operating Backbone
Across cost, compliance, and execution, a single principle applies: operators cannot manage what they cannot see. Modern operations are increasingly built on connected systems that integrate menu management, waste tracking, procurement, and compliance. These systems enable real-time data flow, reduce manual input, and support automation. The result is:
- Lower cognitive load for operators
- Reduced risk of human error
- Faster, more confident decision-making
10. Support the Frontline
A consistent theme many operators recognise is the growing burden placed on frontline teams. The solution is not more training alone, but better systems and clearer visibility.
By automating routine tasks and centralising data, operators allow teams to focus on execution rather than administration of areas like waste tracking, recipe updates, and allergen management.
The goal is simple: enable teams to deliver a consistent guest experience without unnecessary complexity
11. Reframe Regulation
Regulation is often treated as a cost, but winning operators are reframing it as an opportunity.
Reactive organisations tend to respond late, treating compliance as a checkbox and absorbing cost without extracting value. Proactive operators take a different approach. They build systems early, standardise processes, and use compliance to strengthen trust and differentiate their brand.
Allergen transparency is a clear example. Operators who invest early in accurate, consistent allergen communication reduce risk while improving customer confidence. California’s ADDE SB 68 reinforces this direction. Operators who act now can avoid disruption, build scalable systems once and get early-mover advantage.
12. Culture is Where Resilience is Delivered
Technology and process are essential, but execution happens through people. Resilience is ultimately built at the frontline. The most effective operators reinforce this by:
- Sharing data openly with teams
- Making performance metrics tangible and relevant
- Encouraging ownership at site level
- Creating daily feedback loops rather than relying on periodic reporting
Leadership’s role is not to solve every problem, but to create clarity, provide tools, and remove friction.
“We can’t rely on superhero GMs. We need systems that make success repeatable,” Billy Brewer, COO, Sonn’s
Summary
Resilience is built by
- Standardising what can be controlled: recipes, data, processes and systems
- Reducing unnecessary complexity across menus, workflows and operations
- Increasing visibility across cost, waste, compliance and performance
- Enabling teams to act quickly and confidently with real-time data
- Shifting from reactive to proactive decision-making
Final Thought: Playing Offense
Operators face a choice. They can continue to absorb pressure, react to change, and protect margins incrementally. Or they can take a more proactive approach – building systems, enabling teams and turning complexity into control. In a more expensive and more complex environment, success will not come from simply surviving the pressure. It will come from operationalising control at scale and growing through it.
Compliance and consistency are no longer constraints. They are the foundation of resilience.