The new year is on the horizon, waiting to dish out its challenges and triumphs in this post-pandemic era. It has generally been established that we are in a food revolution, and things will never go back to what they used to be pre-pandemic. So, what awaits the food industry?
Based on research that has been conducted, although the ‘climate has begun to settle,’ what is around the corner will require new ways of thinking and planning, to be able to endure the steep climbs and to conquer financial and other challenges. Additionally, this post-pandemic era calls for new ways of engaging with and retaining customers, who are becoming increasingly sophisticated and demanding.
The Economic Outlook
The International Foodservice Manufacturers Association (IFMA) released its 2023 Foodservice Industry and Segment Projections in August 2022. Several key assumptions fed into their projections including an economic recession in 2022, supply chain constraints, labor shortages, and many white-collar employees continuing to work remotely rather than in the office. According to their Press Release, the IFMA projects that in 2023, the food service industry will experience inflation of 7.7 percent and flat growth in real terms. The press release states “most food service segments will spend more in 2023 than they did in 2022 as a result of higher cost of goods rather than increased consumer demand.”
In a similar vein Morgan Stanley indicates in a report that “With the Federal Reserve’s 75-basis-point rate hike, the probability of recession has doubled… the likelihood of a recession on most econometric models has risen from 30 percent to about 60 percent.” The report points out that consumer inflation is the highest the US has seen in 42 years.
Inflation weighs heavily on customers and impacts their buying behavior. While food and commodities prices are some of the hardest sectors hit, restaurateurs have to prepare for the shifts and meet customers where they are. More than ever, it is vital for restaurants to have real-time information on rising food costs and plan appropriately to navigate the many challenges that inflation brings. This includes the implications on their operating costs, downside risks on stocks and the general bottom line.
Consumers are dining differently
Buyer behavior can be mysterious, particularly during times of upheaval. Priorities shift, demands shift and entire industries shift. Perspectives evolved and changes were borne out of the pandemic. According to a new study by data intelligence company, Near, “it is clear that there’s no longer a singular dining experience.”
We have widely accepted that take-out and delivery have exploded. The Near study states that quick-service app downloads in 2020 lifted 21 percent to 83 million. In spite of the spike in take out and delivery, an article by QSR Magazine indicates that “consumer expectations for the dining experience are even higher than pre-pandemic levels.” It reveals that consumers dine at restaurants for specific reasons including cravings for particular foods, special occasions, not wanting to cook and the ambiance. The report shows that diners have great appreciation for outdoor dining and human interaction with waiters. Now, they are looking for personalized touches, mostly through digital means.
Customers want to know that their food is safe and restaurants are transparent in food-safety measures. They are also having a say in the menu and supply chains. KtchnRebel explores the Food Report 2023 from renowned food trend researcher, Hanni Rützler. Rützler identifies emerging trends and shows that consumers want to support sustainability. One trend, called new glocal, is a “shift in global food trade towards regional agricultural structures, shorter and more transparent supply chains and a focus on domestic markets.” There is also a trend of veganizing recipes where traditional dishes are being reinterpreted as vegan. Rützler also discusses regenerative food, another major trend. This is food that comes from sustainable agriculture, which focuses on biodiversity and soil regeneration.
In an article by The Food Institute, a similar concept is discussed called Clean Label where consumers are demanding plant based or vegan food with ‘significant references to natural foods that are healthy, sustainable and free of artificial ingredients.’ Several sources, including The Food Institute, discuss consumers’ emerging outlook on ‘mood foods’ where psychotropic compounds are used as potential functional ingredients, as health now encompasses not just physical aspects, but also mental and emotional ones.
Diners are more sophisticated and more demanding. In the article by QSR Magazine, Near’s founder and CEO, Anil Mathews says: “Restaurants know that it can be difficult to appeal to a wide and varied customer base, while also building a single, cohesive brand. The two priorities can often feel at odds, but when restaurants combine global trends with local demographic data, they can navigate this new landscape of dining experiences.”
Embrace Technology
The food service industry is a digital renaissance. A report by Finance Online titled, ‘10 Significant Restaurant Software Trends for 2022/2023: Latest Forecasts You Should Know’ explores 10 of the latest restaurant software trends that industry experts believe will define today’s global dining scene. Among other topics, the forecast discusses providing healthier food options, food delivery options, environment-friendly restaurant operations, and adoption of smart tech for restaurants.
This evolution of “smart restaurants” is catapulting the dining experience into the next generation. The Near report shows that younger guests are amenable to using technology such as digital loyalty programs, QR codes, kiosks and apps. Similarly, Finance Online highlights the fact that diners have taken a liking to smart restaurant technology. With this increasing appetite for convenience, speed and sustainability, it is absolutely necessary for restaurants to streamline their operations across the board, by digitizing systems and mining data. Restaurants require consistency and transparency to fulfill customers’ orders quicker and more efficiently, while remaining profitable.
MeazureUp is a software application that can refine processes, improve operations, digitize in-store and online orders, shorten process times, and monitor employees, among other things. Schedule a demo today to learn more.
