Dante led Snapchat’s global expansion, is an independent restaurateur, and founded Zitti to make the food supply chain work for everyone.

While the restaurant industry is one of the most resilient sectors in American business, there’s no denying the past few years have been challenging, particularly for independent establishments. Yet, faced with the tumult of the pandemic, the gutting of the Restaurant Revitalization Fund, inflation and supply chain issues, the foodservice business as a whole continues to defy impossible odds.

According to data compiled by OpenTable, 95% of restaurants open in 2019 are back to accepting reservations. By the third quarter of 2021, the number of restaurants in America surpassed pre-pandemic levels.

The sheer willpower of managers and staff is playing a large role in the comeback. But innovation in restaurant technology deserves a share of the credit, and it’s a prominent thread in these three reasons why savvy investors can bet on restaurants.

1. The restaurant industry has finally found a capacity for innovation and adaptability through quick adoption of consumer-facing (“front-of-house”) technology.

Restaurants that survived the pandemic did so by making quick and effective changes to how they interact with the consumer. From QR code menus and contactless ordering to robotic servers and ghost kitchens, the past few years have seen a flurry of business-saving innovations in the foodservice industry.

While smartphone food delivery apps existed before the pandemic, the elimination of indoor dining options for many restaurants during 2020 and 2021 brought about their meteoric rise. According to Statista.com data, the number of app users ordering food from their phone rose 25% from 2019 to 2020, and it is poised to rise almost another 9% between this year and next.

To be clear, delivery apps can cause issues to restaurants’ margins long-term, especially now that most restaurants are back to opening their doors to customers. But during the shutdown, these apps gave restaurants a way to stay open, albeit a flawed one, and primed them to accept subsequent tech innovations. So, it’s not surprising that restaurants’ willingness to embrace technology is a trend that is projected to continue—which will, in turn, make restaurants even more agile moving forward and, therefore, an even better bet for investors.

2. Back-of-house innovations are catching up to solve persistent structural inefficiencies and inequities

Restaurant Business once labeled the pre-pandemic restaurant industry “technophobic.” Indeed, throughout my decades of experience in the restaurant industry, I’ve noticed back-of-house (BOH) operations—the work of running the business—is historically the last place owners and their suppliers embrace change. After all, if a restaurant’s distributors are still sending paper invoices and taking payment via physical checks, digitizing operations might not seem obvious.

These antiquated BOH processes prolonged, even exacerbated, the structural disadvantages for independent restaurants and are among the many reasons fueling venture capital investments in restaurant tech, which grew to $2.3 billon in 2021, according to Crunchbase.

However, due in part to the rapid escalation of customer-facing technology, restaurateurs are increasingly open to updating their BOH operations. At the extreme, we’re seeing robots of many varieties also showing up in restaurant kitchens. But more basic changes, like a move to cloud computing, have been a monumental step forward for many. Exchanging the paper trail in a back-office filing cabinet for online data is helping managers more easily analyze sales, manage inventory or run payroll. And it frees them up to access the information from virtually anywhere, improving efficiencies and even security.

With a cloud-connected back office, chefs are able to take advantage of other innovations like Internet of Things (IoT) technology that connects the walk-in cooler, the ovens and more to monitor everything from cooking times to energy use. Connected inventory and perishables can even track freshness and help multiunit restaurants manage products between locations. And for any BOH staff who grew up with smartphones and tablets, an app-driven kitchen is already second nature and a big advantage in efficiency.

3. Restaurants are integral to modern life in America.

According to the National Restaurant Association’s 2022 State Industry Report (download required), 63% of adults say restaurants are an essential part of their lifestyle. That statistic includes 75% of millennials and 70% of Gen Z adults, indicating that restaurants will grow more vital in years to come.

On a broader scale, restaurants are a major driver of the American economy. Even with recent staffing shortages, the foodservice industry employs 7% to 10% of the American workforce and will generate $898 billion in sales in 2022, according to the association’s projections. Investing in the restaurant industry on a structural level allows investors to capture a piece of this enormous market.

For these three reasons, and thanks to a large group of resilient restaurateurs eager to adopt new solutions, the foodservice industry is poised to be stronger than ever. In fact, for investors, it’s never been a better bet.