Is it time to go hybrid? A guide for food & drink businesses

For many independent food and drink businesses, the past few years have been defined by pressure.

Rising wages, energy costs, food inflation and uncertain consumer demand have combined to create what Jane Pendlebury, CEO, Hospitality Professionals Association (HOSPA) describes as a “perfect storm.”

Recent research commissioned by UK Hospitality shows that one in five hospitality businesses fear they will have to close within the next year. Their latest member survey from Q1 2026 also reveals that two-thirds of hospitality businesses are cutting jobs.

Yet alongside these headwinds, a clear pattern is emerging: adaptation. And at the centre of that adaptation is hybridisation. The shift towards hybrid business models is not just creative experimentation, it’s a direct response to structural pressures. Zempler Bank’s latest research into the state of UK hospitality shows that:

• Only 24% of operators feel confident about growth, while 54% are managing but concerned.
• 60% cite seasonal revenue swings as a major cashflow trigger.
• 62% are actively exploring new revenue streams.

Hybridisation sits squarely within these responses. At its core, it solves one fundamental problem: fixed costs. Rent, business rates and energy bills don’t change much whether you’re busy or quiet, so the more ways you can monetise your space, the better. This means blending formats, launching new revenue streams and rethinking how space and time are used.

What hybrid actually looks like

Hybrid models take different forms depending on the business, but some of the most common include:

1. All-day trading formats

Cafes becoming evening wine bars, restaurants adding brunch, or pubs running coffee offers during the day. This spreads revenue across breakfast, lunch, dinner and drinks reducing reliance on any single daypart.

2. Shared kitchens and pop-ups

Hosting guest chefs, food residencies or rotating cuisines. An example could be a pub offering different street food vendors each evening.

3. Retail and hospitality

Delis, bakeries or farm shops integrating sit-in or takeaway options, monetising both product and experience.

4. One kitchen, many menus

Running multiple delivery-only brands from one kitchen to generate incremental revenue without additional premises.

5. Day/night transformations

Coffee shop by day, cocktail or wine bar by night. These are increasingly common in urban areas and commuter towns.

The common thread: while these models vary, the principle is consistent, hybridisation isn’t about doing more, it’s about doing more with what you already have.

Is hybridisation right for your business?

Hybridisation is not a one-size-fits-all solution. It works best under specific conditions.

It’s likely a good fit if:

• You have unused capacity (quiet mornings, weekdays, or off seasons).
• Your fixed costs are high and need spreading across more revenue streams.
• Your location has diverse footfall patterns (e.g. office workers by day, residents by evening).
• Your team or set-up can adapt without significantly increasing labour costs.

It may not be right if:

• Your business is already operating close to capacity.
• Your brand relies heavily on simplicity or a single core offer.
• You lack the operational ability to manage multiple concepts effectively.

When should you consider hybridising?

Zempler’s latest research shows that many small businesses are still operating a largely defensive playbook. Over the past twelve months, 75% have raised prices, 55% have cut staff hours and 52% have switched suppliers.

These are often necessary moves to protect margins and stabilise cashflow, but they’re typically reactive, short-term measures rather than long-term growth strategies. Hybridisation offers a complementary approach: one that can sit alongside these tactics while helping to build more resilient, diversified revenue over time.

Mark Hughes, Director of Growth at CreatePay says “We’re seeing more hospitality businesses look beyond traditional cost-cutting and instead focus on creating additional revenue opportunities within their existing setup. The businesses performing strongest are often the ones finding ways to maximise every trading hour, rather than relying on a single income stream. Using transaction data and reporting tools also gives operators clearer visibility into peak trading times, quieter periods and customer spending habits, helping them make smarter decisions about when and how to introduce hybrid offerings.”

In practice, there are a few clear moments when it becomes particularly relevant:

1. When cashflow pressure becomes consistent

If you’re regularly navigating shortfalls, even relatively small ones, it’s often a sign that your current model isn’t generating enough consistent income. Short-term fixes like price increases or cost-cutting can ease the pressure, but they don’t fundamentally change how revenue is generated. Hybridisation, on the other hand, creates new income streams from your existing assets, helping to reduce reliance on a single source of revenue.

2. When your trading pattern is uneven

Seasonality, quiet midweek periods, and heavy reliance on weekends are persistent challenges for many UK food and drink businesses. Hybrid formats can help smooth demand across the week by activating underused time slots. This doesn’t have to mean replacing short-term tactics like promotions or reduced hours. Where discounts may drive occasional footfall, hybrid models aim to structurally rebalance demand.

3. Before expanding to new sites

Traditionally, growth in hospitality has meant opening a second (or third) location. But with rising costs and ongoing uncertainty, many businesses are rethinking that approach. Hybridisation allows you to expand within your existing footprint first, testing new concepts, audiences or dayparts without taking on the financial risk of a new lease.

Five things to get right when going hybrird

Hybridisation can improve profitability, if executed properly. Adding new revenue streams introduces complexity, so success often comes down to how well the fundamentals are managed.

1. Operational complexity

Running multiple offers, different menus, dayparts or formats, can quickly stretch teams and processes. Without careful planning, this can lead to slower service, mistakes, and inconsistent delivery.

What good looks like:

• Start with one clear extension (e.g. evenings or delivery), not multiple at once.
• Keep menus tight and operationally simple in the early stages.
• Build systems and routines that support switching between formats.
• Cross-train staff so they can flex across roles without compromising quality.
• Plan rotas carefully around demand, not just opening hours.
• Introduce new formats gradually rather than all at once.

The most successful hybrid businesses don’t try to do everything, they focus on doing a few things well.

2. Customer experience

A hybrid model should feel like a natural evolution of your brand, not a disconnected add-on. If you have to explain the concept too much, it’s probably too complicated.

What good looks like:

• Ensure every extension aligns with your core identity (e.g. quality, price point, audience).
• Clearly communicate when and how your offer changes (day vs evening, dine-in vs takeaway).
• Test new concepts as limited-time runs before making them permanent.

3. Focus on margins, not just revenue

It’s easy to be attracted to new revenue streams, but not all revenue is equal. Some hybrid models (particularly delivery or aggregator-led sales) can drive volume while quietly eroding margins. Growth only matters if it’s profitable. Hybridisation should strengthen margins, not dilute them.

What good looks like:

• Stress-test new offers against real costs (labour, ingredients, platform fees).
• Prioritise high-margin add-ons (e.g. drinks, simple food concepts, retail products).
• Use delivery as a channel, but avoid over-reliance on high-commission platforms.
• Track profitability per channel, not just total sales.
• Start lean: pop-ups, guest residencies, or test menus before committing.
• Use partnerships (e.g. guest chefs or vendors) to share cost and risk.
• Repurpose existing equipment and space wherever possible.

4. Use of data

“Many hospitality businesses are now focusing less on reactive cost-cutting and more on creating additional revenue opportunities within their existing set up. Transaction data and reporting tools can help operators identify peak trading periods, quieter time slots and customer spending patterns, making it easier to assess where hybrid models can deliver the greatest impact.” – Mark Hughes, CreatePay

What good looks like:

• Use sales data to identify your busiest and quietest periods.
• Test new ideas where demand is weakest, not strongest.
• Track performance of new formats and iterate quickly.
• Keep it simple. Focus on the key numbers that drive decisions.

5. 5. Technology infrastructure

As operations become more complex, having the right systems in place becomes critical. Manual processes that worked for a single-format business often don’t scale well in a hybrid model.

“As hospitality businesses introduce more revenue streams, having connected systems and clear reporting becomes increasingly important. The operators adapting most effectively are usually the ones with real-time visibility across payments, sales and customer behaviour, allowing them to make faster and more confident operational decisions.” – Mark Hughes, CreatePay

What good looks like:

• EPOS systems that give clear, real-time visibility across sales channels
• Integrated payments to simplify transactions and reporting
• Inventory tools to manage multiple menus or product lines
• Systems that bring delivery, dine-in and retail into one view

The goal isn’t more tech for the sake of it, it’s better visibility and control, so you can make faster, more informed decisions.

Final thought: evolution, not reinvention

Hybridisation is not about abandoning what makes your business special. It’s about evolving it. The most successful businesses treat hybridisation as iterative. They test, learn, and refine, rather than committing fully upfront. Hybridisation doesn’t have to be about bold reinvention; it can be about practical optimisation. This is all about getting creative and making better use of what you already have.

We have a bank of insights and blogs focusing on helping the hospitality businesses in the UK, which you can find here. 

• How Pubs and Restaurants can prepare for Summer
• Restaurant Menu Engineering: How to Price Dishes That Customers Love and You Profit From
• How to Price Your Cafe Menu Without Losing Profit (UK Guide)

Zempler Bank works with hospitality businesses across the UK. They support restaurants, cafes, pubs, food trucks, and more. Zempler offer business accounts with built in tools to help you stay on top of cashflow. We also know that running a hospitality business takes resilience, creativity, and commitment.  Zempler’s hospitality hub is packed full of practical guides on cashflow, tax, licencing and banking for UK restaurants, cafes, pubs and food trucks. 

This article does not constitute guidance, advice or a communication from Zempler Bank or CreatePay. References to Zempler Bank, its products or services are included for information purposes only. Zempler and CreatePay makes no representations or warranties, express or implied, as to its accuracy, completeness or suitability for any particular purpose. To the fullest extent permitted by law, Zempler Bank and CreatePay accepts no responsibility for the content or any reliance placed upon it. Any action taken using such content is strictly at the user’s risk. Zempler Bank Limited (“Zempler Bank”) is registered in England and Wales at Cottons Centre, Cottons Lane, London SE1 2QG (No. 04947027). Zempler Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Firm Reference Number 671140.