If you could only use one word to describe the National Restaurant Association’s Foodservice at Retail Conference on May 23, it’s this: Comprehensive.
The day’s seminars were stuffed with statistics and predictions, but focused largely on overcoming the challenges that result from two industries coming together under one umbrella. Advice and speculation was given on such varying topics as workplace cultures colliding, how to look for and retain the right kinds of chefs and help build solid teams to work with them, employee empowerment, and handling sourcing and shrinkage between departments. Equal time was also given to topics such as consumer expectations, food safety, the benefits of in-house dieticians and consumer education on health, and of course, how to market your foodservice in retail offerings to the public at large, using your products to lure them in and keep them coming back.
Instore could dedicate a whole issue to all of the information those seminars covered, but since this issue is going to press as this is being written, we’ll just take a moment to fill you in on the state of the industry, its unique challenges, and its very encouraging future projections.
Wade Hanson, principal of Technomic, kicked the day off by drawing a clear picture of the burgeoning industry, which is moving quicker than ever, and acknowledging the challenges that lay before it. Consumer demands are intensifying, he said, and retailers and manufacturers are grappling with things like how to source local foods and offer cage-free eggs. The volatility resulting from climate change has been and will continue to impact commodity prices. All of the trends and buzzwords surrounding transparency and traceability are translating to significant cost increases and investments. Consumers are changing, too — those under 35 prefer technology and don’t necessarily want to deal with people. But retail foodservice is the prime beneficiary of all of this. “Retail at foodservice is taking business away from restaurants,” Hanson said, “and they know it.”
Over half of all supermarkets now offer prepared foods, and while c-stores aren’t quite at that number yet, that’s no reason to dismiss them, Hanson said. Considering where that industry has been for so long, it’s a very big deal — especially with consumer perceptions changing so drastically. Restaurants, supermarkets, c-stores, food trucks, meal kits, farmers’ markets and online delivery services are rapidly working on a level playing field now, he said. To the consumer, it’s an explosion of choices, each as valid as the next, so long as it’s tasty.
Technomic’s projected growth for foodservice at retail in 2016 is high: fast-casual dining will keep growing by 10 percent this year, but supermarket foodservice is right behind, with over 9 percent growth projected. “It’s no wonder that supermarkets and leadership are dedicating so many resources toward this area,” Hanson said. “It’s no wonder that so many manufacturers want to partner with supermarkets, because they realize that it’s tough finding growth in other aspects of foodservice, but they see these numbers and they say, ‘We want to get involved. We want to tap into that market.’”
What’s more, Technomic expects foodservice at retail to keep growing by 9 - 10 percent every year for the next decade. But with that growth comes unique challenges, Hanson warned. “The bottom line here is, consumer acceptance is on the rise, but so are their expectations. With all of the options that consumers have, they will basically tell you, ‘If I have a bad experience, why am I going to go back somewhere when I have all these other choices I can make?’ They’re also not lowering the bar and saying, ‘Well, that was a pretty good meal for a c-store,’ or ‘That was a pretty good sandwich for a supermarket.’ No — everyone’s on a level playing field. That experience, that food, that ambiance, that convenience — you’re in direct competition as a retailer with restaurants and other non-commercial foodservice. You’ve got to achieve the same things that those consumers are looking for. So that bar isn’t going to be lowered, it’s going to be raised, if anything.”