Technomic’s expert predictions give a glimpse of what operators and customers should expect to see heading into the new year
As we head into 2021, the world of foodservice remains in unprecedented territory as we collectively deal with the immediate and long-lasting impacts of the COVID-19 pandemic. While many unknowns linger as the world anxiously awaits an end to the virus, we do know that those who demonstrate the most versatility in response to industry, consumer and cultural shifts are best set to succeed in the coming year.
Read ahead for Technomic’s expert predictions to better equip yourself for what’s to come and how to prepare for a post-pandemic world.
The road to recovery steadies
Foodservice will experience the start of a financial recovery in 2021, but sales results across segments will be a mixed bag.
Overall sales in the Canadian foodservice industry are expected to see 14 to 17 per cent growth in 2021, a significant increase from the 25-28 per cent decline in sales estimated as the impact of 2020. That is quite a recovery jump.
For restaurants and bars, sales growth is expected to be 13 to 15 per cent, and commercial sales growth should be about 11 to 17 per cent. For limited-service restaurants, that figure falls to 9 to 10 per cent growth, which would constitute a return to 2019 revenue levels by the end of 2021. On the other hand, full-service will rebound more slowly, challenged by unit closures and consumer nervousness about returning to traditional dining.
Investment in off-premise initiatives will be central to sparking a financial comeback across segments. Overall, Technomic anticipates moderate to solid growth in 2021 but sales levels will still be below that of 2019.
Taking a stronger stand
Although social and environmental progress paused when the pandemic hit, the degree to which these calls to action have become louder and more urgent means we’ll see operators double down on efforts over the coming year.
Operators will take a firmer stance on climate change by menuing more plant-based substitutes, marketing carbon footprint levels of items and restaurants, and supporting suppliers who implement environmentally friendly practices. To tackle social inequalities, we’ll see an uptick in donations to fight food insecurity and support minority organizations; more diverse hiring and promotion practices; and the expansion of inclusive tipping to ensure fair pay of employees.
In particular, Technomic research has noted that:
- 65% of Canadian consumers say social responsibility is important to them when deciding what restaurant to visit. This has significantly risen, particularly among the younger and more diverse customer base of millennials and Gen Z – core foodservice customers who drive future trends.
- 50% of Canadian consumers say environmental social responsibility carries weight when deciding on a restaurant to visit. Brand identity is important. Some employers have already started including carbon footprint info on their menus.
- 46% of Canadian consumers say it’s important to them that restaurants are engaged in social justice. Fairness to employees is also important.
- 56% of Canadian consumers are more likely to visit a restaurant that is taking steps to create a more inclusive and just world. Some examples here are that Restaurant Brands International has committed to racially diversifying its staff, and Richmond Station in Toronto is implementing inclusive tipping into its menu prices.
Sustainable off-premise strategies
While the extent to which consumers will return to dining rooms remains unknown, operators across segments are moving forward with investing in off-premise for their long-term growth strategies. For full-service operators, evolving to an off-premise-focused business model will provide a better chance to survive the pandemic and potentially even thrive.
Concepts to watch for:
- Smaller dining rooms that accommodate more walk-up ordering windows
- Multiple drive-thru lanes
- Designated curbside pickup spots
- In-store pickup and grab-and-go stations that minimize time at the restaurant and contact with others.
To help make the off-premise experience seamless, expect further development of:
- Mobile ordering, geofencing, and other technologies
- More delivery services brought in-house to better control costs and quality
- Further adoption of ghost kitchen models that efficiently fulfill the influx of delivery and takeout orders.
These trends will be driven, again, by the younger consumer base:
- 30% of Canadian consumers aged 18-34 are ordering for off-premises occasions more often now than one year ago.
- 27% of Canadian consumers aged 18-34 are ordering delivery from a wider variety of restaurants now than one year ago.
As consumers seek out a wider range of delivery options, different amenities and attributes will matter to this demographic. Ages 18-25 will prioritize cravability and low prices from off-premise, whereas young to mid-30s are often parents to young kids and so will look for a wide variety, kids’ options, and restaurants that can deliver family-sized meals in various portions.
Examples of concept shifts being seen
- Burger King in the U.S. has developed a new flagship concept – expanding to triple drive-thru lanes and a walk-up window, with lanes designated for different kinds of orders.
- Box’d by Paramount has developed a fully automated restaurant with digital grab-and-go cubbies aimed at reducing risk and keeping things frictionless.
- Pigeon in Vancouver has launched From2, an app-cost delivery service for independents.
In 2021, operators will continue to grapple with the dilemma of proprietary delivery vs. third-party.
- 63% of consumers at least somewhat agree that they trust a restaurant’s own delivery drivers than those of third-party apps or sites. But third-party delivery has been a big lifeline for many restaurants.
- 32% of consumers who are ordering off-premise more often are doing so because of all the amenities that are making it easier to do so.
The many facets of comfort
As food continues to provide solace, operators will find more ways to serve up comfort fare. In conjunction with new craveable classics, we’ll see a surge of quirky dishes that cheer the heart, including the revival of wacky mashups (think sushi casseroles) or simple vintage recipes (think peanut butter bread). Stressful times will also open the door for controversial ingredients, such as MSG and fats, to sneak onto menus.
But health won’t take a backseat entirely. In addition to more anxiety-alleviating items, such as lesser-known leafy greens, citruses and mushrooms, expect operators to disguise better-for-you meals as indulgent, including alternative noodles and fries or vegan desserts and cocktails.
- 58% of consumers say fun or aesthetically pleasing foods help boost their mood
- 40% of consumers are buying more comfort foods from restaurants now than before the pandemic
- 31% of consumers are buying more healthy foods from restaurants now than before the pandemic
As travel limitations persist both within Canada and at its borders, traditional restaurants and noncommercial venues will reimagine new ways to generate revenue by drawing local visitors and endorsing “our home and native land.”
As a nod to the local tourism campaigns mounted by cities and provinces this year, operators will similarly ramp up promotions of authentic hyperlocality in marketing materials, such as by celebrating local farms and businesses by sourcing products from them. Further, new grassroots movements around supporting local independents and small regional chains will spread.
- 65% of Canadian consumers reported their summer travel plans cancelled or changed due to COVID-19
- 51% say they are buying from local restaurants to support the community
- 43% believe food described as having local ingredients is tastier
- Canada Take Out every Wednesday supports local restaurants
- The Canada United movement supports local economies and businesses
- Tim Hortons Hero Cups pay tribute to local heroes
- McDonalds and Heinz are returning to Canadian sourcing and production
This information was based on Technomic’s consumer research and predictions in foodservice for 2021. Technomic is a Chicago-based foodservice research and consulting firm that provides clients with the facts, insights and consulting support they need to enhance their business strategies, decisions and results. The company’s services include publications and digital products as well as proprietary studies and ongoing research on all aspects of the food industry, including menu trends.