Foodservice Industry Trends: Insights and Analysis for 2018

The foodservice channel continues to show growth, even in more mature markets, presenting an opportunity for food manufacturers to capture. David Henkes, the advisory group senior principal at US-based foodservice consultants Technomic, sets out the nine trends that will shape the sector in 2018.

The global foodservice industry continues to grow, with spending on food away from home throughout the world expected to grow by 5.6% in 2017.

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Emerging markets in Asia and the Middle East are fuelling the growth, but even mature markets in Europe and North America are moving in a positive direction. Chain restaurant operators, suppliers and distributors are increasingly viewing opportunities not only in their home market, but working to take advantage of trends that reflect the growing out-of-home dining trends that are taking place everywhere.

As we do every year, Technomic takes stock of the current trends across the global foodservice landscape and makes forecasts on what to watch for in the upcoming year. Our big “macro” trends are things we are seeing in multiple markets that all companies, regardless of type, should be watching.

Trend 1: Emphasise Experience

Consumers are more “experience-driven” than ever before. Globally, two-thirds of consumers say dining out is a form of entertainment.

Successful global operators have realised that the total experience must be memorable and has been a means to creating a potent point of differentiation.

Suppliers can help create high value, differentiated experiences through product development and enhancement that makes a meal memorable.

Trend 2: Off-Premise Push Promises Profit

Consumers increasingly want food whenever and wherever. Often, an in-unit restaurant meal is not part of the equation, and the growth of delivery, and particularly third-party delivery services, speaks to the growing call for food on the consumers’ terms.

Players like GrubHub, DoorDash, Deliveroo, UberEats and a host of others are growing rapidly to cater to the consumer demand for a convenient solution to sourcing restaurant-quality food.

For manufacturers, this “food on the go” phenomenon speaks to the need for food that carries better as well as more convenient solutions for busy consumers look to dine outside the restaurant.

Trend 3: Keep It Local

Big brands have been challenged, and consumers increasingly want to support local business.

Importantly, the definition of “local” remains fluid, and ultimately success in this area comes down to telling the story of the product – where it was produced, the back story of the brand/company and why it is different.

Having “food with a story” resonates with consumers.

Trend 4: Food in new formats

Operators and suppliers cannot think in terms of “traditional” foodservice any longer and increasingly need to be where the consumer is via new formats – delivery, grab-and-go, non-traditional locations.

This also means flexibility within the menu and being willing to offer snack options and broader daypart offerings.

Manufacturers must be aware that the options are growing for consumers to source food and build sales, marketing and product opportunities accordingly.

Trend 5: Make tech your friend

Much of the consumer desire to personalise and customise experiences has been driven by technology.

Kiosk, mobile ordering via apps, increased integration with social media – all of these technology initiatives are meant to bring the experience closer to the consumer.

Much of the result of this investment in technology leads to greater need for customised food solutions – something with which manufacturers can certainly assist their foodservice customers.

Trend 6: Make ingredients the hero

Clean menus and sustainability are highly important to foodservice consumers globally.

High quality, fresh ingredients are nearly always one of the top two traffic drivers across multiple country research.

Telling a story that involves transparency in food sourcing and real ingredients resonates with foodservice consumers.

Trend 7: Bend the Healthy Rules

“Real” resonates strongest as a “health halo” term globally, with 74% of global consumers rating this important.

Rather than tout low-calorie, low-fat items as “healthy,” operators and suppliers are featuring more language on menus that underscores real, natural, fresh and “free-from” qualities for food and drink.

Restaurant operators as large as McDonald’s and as small as the independent down the street are working to remove processed foods and ingredients and cater to this consumer need to bring a balance of natural, “good-for-you” options to the menu.

Trend 8: Be authentic – for real!

This is true not only for ethnic operators that tout “authentic” preparation styles, but for all operators.

Authenticity can be around an item, an ingredient or a concept/process and is highly valued by consumers throughout the world.

The idea of artisan products made faithfully to traditional recipes, or brick ovens imported from Italy to bake pizza all create a story that resonates with consumers. As such, manufacturers that have a brand story to tell can help operators create authenticity around their menu.

Trend 9: Know your competition

Foodservice increasingly competes for share of stomach with a diverse array of offerings. It cannot be assumed a restaurant’s competition comes just from the other restaurants down the street.

Food-to-go among retailers is growing strong, non-traditional sources like recipe boxes (meal kits), food halls and food trucks are all increasingly part of the global foodservice landscape.

Manufacturers must strategically target new opportunities as they rise and remember that the foodservice business has evolved beyond traditional restaurants and cafeterias.

Foodservice is rapidly becoming a global industry, and foodservice/restaurant operators, distributors and manufacturers be aware of, and stay ahead of, big trends to be able to fully capture the growth opportunities available.