By Jo-Ann McArthur
The face of food is being dramatically reshaped right before our eyes. All signs indicate 2018 will be “The Year of Disruption” in the food and beverage industry. This disruption is driven largely by millennial consumers, who now outnumber Boomers. How will these macro forces affect the restaurant business? And, can you future-proof your business, as well as profit from these changes?
This trend should concern everyone in the restaurant and foodservice business
First and foremost, the way consumers source, purchase, and prepare food has drastically changed. Remarkably, consumers now spend more money on eating out than in grocery stores. Yet new research from IGD shows that even faster growth is possible.
More people could be encouraged to eat out more frequently if their health needs are being met. Data shows 31 per cent of people would eat out more if there were healthier options available. This rises to 41 per cent for parents with young children who often face the conflict between feeding their kids the food they love and keeping them on a healthy diet.
Regardless of generation, consumers are increasingly seeing food and beverage as a primary path to health and wellness. “Freshly made” is the number-one health cue according to the research study. The question is, how can you bring some aspect of “freshly made” to live in your establishment? What sensory cues can you use to tell this important story?
Grocerants and meal kits – two words that didn’t exist five years ago are now shaping the future
As lines blur between restaurants and larger, more sophisticated HMR (home meal replacement) sections in grocery stores, how can you maintain or grow your “share of stomach”?
Kroger, the largest grocer in the U.S., opened its restaurant concept “Kitchen 1883” (the year Barney Kroger started the grocery chain) in December 2017 adjacent to one of its stores in Union, Kentucky, with its own separate entrance. The meals look nothing like what you can find in one of Kroger’s grocery stores and by all reports it has been a success.
Another U.S. grocery chain, Hy-Vee, has led the way with its Market Grille restaurants. These spaces have become community hangouts, drawing customers from noon to night and perhaps turning into that fabled “third place” that Starbucks popularized.
How can restaurants defend against the ready-to-eat and ready-to-heat grocerants? Do you have a retail to-go section in the front of your establishment?
Meal kits are growing in popularity, especially with millennial families, as they make life easier. They operate like an efficient sous chef, taking care of everything from recipe selection and measuring, to prepping and cooking. Thirty-six per cent of consumers say planning meals consumes more time and energy than they would like. Cooking skills are also in decline, with many consumers cooking on weekends as more of a hobby.
Freshii offers a meal plan service that takes care of those pain points, eliminating shopping, chopping, cooking, and cleaning so that its customers can get on with their busy lifestyle. Every box includes breakfast, lunch, dinner and two snacks, and can be customized by number of days or “dietary mission”.
The age of disruption is here; that fact is indisputable. The question to ask yourself now is: are you ready to not just stand your ground, but to embrace, adapt, and succeed in this new reality?
About the author:
Jo-Ann McArthur is the President and Founding Partner of Nourish, a marketing agency that specializes in Food & Beverage, working across all aspects of the food ecosystem. Clients include producers, processors, retailers, manufacturers, food service, and restaurants. Nourish has offices in Toronto, Guelph, and Montreal. Want to know more? Jo-Ann can be contacted at firstname.lastname@example.org, or sign-up for the agency’s monthly newsletter at: http://www.nourish.marketing/.