A look at the top food service trends for the year ahead reveals the resilience of the industry in the face of economic or political uncertainty. Faithful to the principles of the so-called “lipstick effect,” consumers might be prepared to tighten the belt in some areas, but remain reluctant to sacrifice simple pleasures. In fact, dining out grew globally at 5.6% in 2017, and will continue to do so as markets in Asia and the Middle East join mature markets in Europe and North America.
Food service distributors can reap the rewards, providing they adapt to an emerging market of empowered, informed consumers. That means keeping an eye of the following trends…
The rise of food halls
Bringing a new concept to market remains a costly, risk-laden enterprise, typically taking several years to break even. In response, food service operators are exploring more agile approaches to develop menus and distribution without incurring heavy opening costs. Minitel notes the growing popularity of food incubators and co-op cuisine, which allow businesses to test and refine a concept without investing heavily in a permanent location.
One in 10 U.S. consumers have dined out at a food hall, while pop-up restaurants continue to penetrate the traditional dining landscape. Shared kitchens allow independent operators to keep the cost of utilities and disposables in check, leverage better economies of scale, and focus on differentiation through the menu. For the food service distributor, there is the opportunity to service a collective operation more efficiently and economically through discounted orders.
While consumers are still only testing the waters with food halls, they have already taken the plunge when it comes to off-premises dining. Neighborhood and chain restaurants face unprecedented competition from non-traditional sources as consumers look for new formats, flexible options, and choices that meet their personal schedule.
Food service operators should re-evaluate the distinction between the menu and the dining experience they offer because the two are no longer necessarily synonymous in the eyes of the consumer. Particularly in larger cities where there is a network of gig economy delivery options, customers expect the option of ordering directly from a restaurant for dining at home. As a result, food service operators need to invest in their online presence to make sure they can be found easily, and accept payments securely. Those establishments that pride themselves on their service and décor may bristle at the prospect of an invisible customer base, but a loyal online following that shares good reviews is as important today for reputation as word of mouth.
Dining out as entertainment
By extension, when we do choose to dine out on premises, we want more from the experience. Driven most notably by millennials, consumers are looking for a dining experience that is not just satisfying, but shareable. Marketing-savvy chain restaurants are already responding to the demand for signature dishes that translate well to Instagram or Facebook with eye-catching creations, bold serving suggestions, and dishes that evoke well-being and healthy eating. Consumers will pay higher margins for items that carry a so-called “social media halo,” whether the much-maligned avocado on toast or the deconstructed burger.
For the food service operator, the rewards can be far greater than any paid advertising strategy or glowing review from a food critic. Millennials lean heavily on social media when it comes to choosing where to dine out, so adapting the menu to chime in with their preferences boosts visibility at negligible extra cost.
Healthy, ethical dining
It’s hardly controversial to point out that healthy eating has proven to be much more than a passing fad. In fact, 74% of consumers today identify healthy food as a priority when choosing where to dine out.
Food service operators can drive popularity by sourcing from local producers or even urban farm sources, and by preparing in-house menus from scratch. Consumers are looking for local food with a story, and a more nuanced narrative at that, one that highlights not just the farm fresh origin of the product, but also its values, ethical pedigree, and sustainability.
The successful “farm to fork” journey is now being joined by the rising popularity of “trash to table.” Empowered consumers want to see their loyalty translate into sustainable initiatives, whether it is waste cafes creating dishes from food discarded by the large retailers, or restaurants developing their own in-house fermenting, curing, and pickling operation.
The driving force behind sustainable dining, according to Forbes, is an influx of college-educated, tech-aware talent into the food service sector. The number of farmers under 35 is actually growing, according to the USDA, but these younger producers are developing innovative vertical farming models with a heavy focus on plant-based, sustainable agriculture. Food service distributors, therefore, have a rare opportunity to reach out to a new generation of thought leaders in order to develop fresh approaches to supply chain and sustainability.
Click and collect
As Forbes notes, the biggest supermarket chain on the planet will soon be in our homes. Thanks to the rise of the Internet of Things, by utilizing Amazon’s Alexa AI, consumers will soon be accustomed to automated reordering of staples and disposables, while distributors will capitalize on the power of personalization and big data.
eCommerce presents enormous opportunities for local producers and farmers, who often struggle to compete for shelf space in traditional retail outlets. Establishing a visible online presence is the easy part, with the greater challenge presented by distribution and delivery. Not surprisingly, the food distribution giants have already recognized the appeal of niche producers, and continue to snap up artisanal brands into their portfolio rather than invest in the R&D to create new lines. But the big distributors do not hold the balance of power locally, and smaller distributors can take advantage of a cost-effective route to market through eCommerce.
Automation, online ordering, and collective kitchens might present a strange, perhaps terrifying, landscape to the traditional food service operator, but ironically the overall trend is for food service to come full circle with a return to farm-fresh menus made from scratch. Family-owned businesses are still the pillar of food service distribution. Based on the trends highlighted above, the onus isn’t on food service operators to change their offering, but rather to embrace more disruptive approaches to interacting with their customers.