Few companies got hit harder by the pandemic than restaurants and bars.
No indoor dining.
Curfews that changed operating hours.
Wonky supply chains and late deliveries.
Rising food costs.
The list goes on, making it all too easy to see why so many restaurants and bars struggled during the pandemic.
In fact, approximately 80,000 establishments have temporarily or permanently closed since the start of the pandemic.
For those companies that did stay open, they did so by playing from a different playbook—they had to if they wanted to meet the new demands of consumers and society.
One part of the playbook that didn’t change, however, was the page that told them how many Facebook ads to buy.
Let’s explore how restaurants & bars spent on Facebook in 2021, why it might surprise you and what it can tell us about the future.
The State of the Restaurant & Bar Industry in 2021
Before we dive into how restaurants and bars spent on Facebook advertising in 2021, it’s important to understand the economic and market conditions in which they did so.
Understandably, there’s a lot that goes into this, but we can pull out a few key points:
1. Not Enough Workers
Although there may have been a period when restaurants and bars had to shut down completely, most could technically remain in operation, albeit in a reduced capacity.
Unfortunately, many restaurants and bars struggled to find enough workers even to maintain this level of function.
A study showed that seven out of 10 operators didn’t have enough employees to meet demand.
Even worse, most of them didn’t think the labor situation would improve this year.
Labor shortages linked to deliveries and other logistical components also had a negative impact.
A study found that 96% of operators experienced supply delays or shortages of food or beverage items in 2021.
2. Higher Prices
Between March 2021 and March 2022, average wholesale food prices increased by 17.1%, representing the largest annual increase in almost five decades.
In addition to that, labor costs increased by 8.6% in 2021.
The only way for restaurants and bars to combat these increases was to raise prices.
While the move was certainly out of necessity and a last-ditched effort to stay in the green, it came when consumers were already dealing with record-breaking inflation. In 2021, a $20 hamburger just wasn’t in the cards for most people.
3. Lots of Restrictions
This is a catch-all to include a seemingly endless list of restrictions that played a role in a difficult 2021 for restaurants and bars.
Whether we’re talking about mask policies, indoor dining restrictions or something in between, these restrictions combined to deal an unimaginable blow to the bottom lines of millions of bars and restaurants.
In fact, the National Restaurant Association’s sales projection is $110 billion lower than it was in 2020 before the COVID-19 pandemic.
That said, food and beverage sales are trending up—food and beverage sales were projected to increase by nearly 20% in 2021.
Unfortunately, that’s still not enough to offset the previous year’s losses.
Why does all this matter?
Because it paints a clear picture: Restaurants and bars have experienced unprecedented challenges.
So much so, that you’d think many of them would adopt more reserved ad spending habits to make up for losses elsewhere.
That didn’t happen.
How Restaurants & Bars Spent Their Facebook Ad Dollars in 2021
Restaurant and bar advertisers increased their Facebook ad buys by 38% YoY in 2021, while the number of companies advertising increased by 261%.
Similarly, the number of brands advertising on the platform jumped by more than 4.5k or 250% YoY.
Like other industries, the majority of these buys came from a handful of advertisers.
In 2021, 54 companies invested more than $1mm in Facebook, accounting for 60% of total spending.
If we go a level down the spending spectrum, we see that 510 companies spent more than $100k, totaling nearly $450mm or 81% of all spending.
Quick Service Restaurants (QSRs) drove much of this growth and have made up the largest share of Facebook advertisers since 2020.
In 2021, these companies increased their investment in Facebook ads by 20% YoY, thanks mainly to sizable increases from industry powerhouses like Jack in the Box, Wendy’s, Chick-fil-A, McDonald’s and Papa John’s.
For example, McDonald’s increased its Facebook ad spend by 17x in 2021, while Papa John’s increased it by 385%.
Outside of QSRs, Casual Dining companies increased their ad buys by 67% YoY, primarily driven by Carry the Curry, which spent nearly 130x more than last year.
Finally, Dave & Buster’s spent 643% more than in 2020, while Toppers Pizza saw a 327% YoY increase.
Tropical Smoothie Cafe spent 50x more in 2021, helping propel the Fast Casual category up by 27% YoY.
While the increasing ad buys in the face of so much uncertainty may be surprising, the continued surge this year is not.
So far in 2022 (January and February), more than 1.6k companies have advertised over 1.7k brands on Facebook, which already exceeds 2020 totals.
Combined, these companies have invested nearly $70mm in Facebook advertising.
What 2021 Spending Levels Tell Us About the Future of Restaurant & Bar Advertising on Facebook
They say the past is the best predictor of the future—but is this the case with Facebook ad buys from restaurants and bars?
It very well could be.
The fact that so many restaurants and bars not only bought Facebook ads in 2021 but increased how many they bought, despite so many unknowns, shows their resiliency and trust in Facebook as a revenue driver.
For those new to Facebook advertising, their behavior during 2021 shows a willingness to think outside the box and experiment with different tactics.
The fact that almost 49% of the brands that advertised on Facebook in 2020 came back for another helping in 2021 means that many now see the value of the world’s biggest social media platform.
When you take all of this into consideration, there’s no question that 2022 will be a big year for restaurant and bar advertisers on Facebook as they try to make up for the lost time.
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