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Four Trends Disrupting the Food Service Industry

With more diets and information about nutrition entering our daily lives, it is not surprising that the food service industry is seeing disruptive trends.

Commodity deflation compromising grocers’ revenue growth. Demographic and generational change impacting dining out behaviors. Foodie experiences in one day and out the next. The USD 1.5 trillion food service, restaurant and grocery industry is a treacherous battlefield on which to be competitive. Companies’ ability to keep up with advancing technologies and harness the power of data may go a long way to determining their success. As might their mastery of today’s highly fragmented media marketplace. Meeting the expectations of customers who have been given a taste of seamless service provision in an environment bursting at the seams with new brands offering to take their taste buds on new and exciting adventures is made all the harder by the added demands of diverse dietary restrictions and ethically minded consumer behavior.

It’s a good thing Accenture is on hand to steer us through four major trends currently disrupting the food service industry. Here they are in all their glory:

1. Convenience


In an era of self-help books promising narrower focus and increased productivity, gurus and anti-gurus alike encouraging us to invest our time and energy in mindful ways, and ever more of us continuously feeling like we’re trying to keep too many spinning plates in the air, it comes as no surprise that waiting in line doesn’t make our to-do lists.

Convenience in the food service industry comes in many shapes and sizes. A select few:

  • Skipping the queue at Starbucks thanks to online advance orders.
  • Delegating preparation by buying pre-sliced apples – according to The Washington Post, value-added products experienced sales growth of 255% between 2004 and 2014.
  • Outsourcing the compiling of ingredients thanks to meal prep kits – an option increasingly popular among those reluctant to abandon home-cooking entirely, but happy to relax into the ease of following step-by-step instructions…

Then there’s the hybrid option, Papa Murphy’s Take N’ Bake style: Have someone else make dough from scratch, shred cheese from blocks and chop vegetables by hand, dictate exactly how you want your pizza to be made, then pop it into your very own oven, so you get the satisfaction of bubbling-hot cheese and aroma wafting through your home.

2. Delivery


Naturally, the ultimate convenience is to have restaurant-quality food delivered directly to your door. Hospitality Insights recently reported on the increased demand for home delivery in Switzerland in particular, and presented aspects for restaurateurs to bear in mind in accommodating this shift.

In terms of the technology required to facilitate deliveries, aggregators, such as Uber Eats or Just Eat, have lowered the threshold. This sets the scene for large-scale growth, with Morgan Stanley estimating the US food delivery market alone could swell to USD 210 billion in the long term. With just under half of meals purchased from restaurants being eaten at home as takeout according to Supermarket News, this sizeable growth may well be feasible, perhaps accompanied by more prevalent curbside-pickup options.

3. Choice


Whether you choose to eat in or out, choice is the operative word. Accenture explains that the playing field in the food business has become more complex, because new, specialized brands are tuned into what customers want and are able to cater to that, drawing lessons from compiled data. Specific dining occasions – a “quick bite” differing substantially from a “guys’ night out”, for instance – can be correlated to purchase patterns. Profiling customers into “eater types” can make for better targeted marketing.

Accenture found that America’s top 100 restaurant brands (while grappling to ensure their business models evolve with the times like any other established brands) are spreading like wildfire, with familiar logos popping up in thousands of new locations, including over 3,000 in the Fast Casual sub-category. Meanwhile, an additional 2,000 locations were added by convenience brands.

4. Transparency


A whole host of television shows promising to lift the lid on food industry scandals, such as The shocking truth about food, Food secrets or What it says on the tin, speak to our curiosity regarding what goes into our food. Whether customers want to know more about ingredients out of pure interest, to stave off allergic reactions or to safeguard their clear conscience, the food business is taking note. Accenture has found that restaurants are demonstrating increased openness as to the ingredients they use.

Providing the desired transparency may consist of something as simple as accurately labeling foods as “organic” or “non-GMO”. Or it could extend to a more sophisticated solution like Chipotle’s ingredient tool, enabling users to quickly identify which meals are suitable for them, whether they are following a vegan, Paleo, gluten-free diet or otherwise.

 

NPD’s Eating Patterns in America, for one, concluded that as of 2019, “One in five adults try to manage a health condition with their food and beverage choices.” If the world is cottoning on to the wisdom of Hippocrates’ “Let food be thy medicine and medicine be thy food”, the food industry certainly has its work cut out.

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Hospitality Insights is a platform for the analysis of growing trends and events shaping the hospitality sector.