F&B Truths, Trends And Take Aways
Here’s a look at the latest trends to best prepare you in how to leverage the trends to make your hotel F&B business more profitable.
The Federal Reserve significantly reduced its forecast of economic growth in the United States over the next two years recently, the latest in a long series of acknowledgments that pace of recovery continues to disappoint its expectations. Now with that dour pronouncement, we will continue to be covered by what some are calling a “cold or wet blanket of despair”. Some in our industry may try and predict the next type of global food or new and exciting cuisine that might hit the next issue of a food magazine on the newsstand for the year 2012, or a new preparation for Tripe, or some other organ meat, however I have always thought that depending where and how you grew up, you probably already have your favorite places for “exotic” food items. I guess I am more of a realist or pragmatic, and appreciate the cold hard facts and then you can make some decisions on the best path to take moving forward.
Any growth for the restaurant industry will mean understanding the shift in consumer behavior and utilizing different strategies. Age will no longer define the frequency and type of restaurant visited; less wealth, unemployment, anxiety about what may happen tomorrow or in the future will be the concern in years to come, regardless of age or demographic. Food Trucks are the new “Mom & Pops”
- Lower price of admission
- Lesser cost of doing business day to day and lower overhead
- Success more in dense populations – bringing the food to the guest
- Based on today’s customer, but not necessarily for the long run
Expansion of Day Parts
- i.e. Breakfast all day
- Morning Happy Hours
- Supper aka “Small Plates”
- Blue Plate Specials – the new/revised & current definition of Prix Fixe
Hamburgers
- An American Icon
- Independents thank the chains for upgrading the awareness
- Overdone and not every new burger concept means profitability and success
- Response to the economic position we are in
- Eventually will burn out - think TCBY/FroYo outlets of the 1990’s
Good Enough
- Consumers are justifying the reason to spend less
- We have stepped down in our acceptance of requirements
- Stepped over the threshold of negative stigma that couponing is a fact and way of life
- Stepped sideways to let the “food trendinista’s” talk about the next big trend, but the majority of consumers are not necessarily buying
Urban versus Suburban
- Restaurant chains want locations where there are potential for transient consumers - i.e., dense populations
- Independent operators will cling to city centers like New York, San Francisco and Washington D.C., due to the large concentration of potential consumers
The Cost of Food
- Stable food prices have been a silver lining in the weak economy. That is changing fast
- The U.S. Agriculture Department said it expects retail food prices to increase 3.5% to 4.5% this year, after climbing just 0.8% in 2010, the slowest rate since 1962
- The midpoint of the new USDA outlook signals the sharpest acceleration in the food inflation rate from one year to the next since 1978, and makes the increase itself the biggest since 2008, when prices rose 5.5%
Food prices could rise 4.5% in 2011, says USDA
- Compared with restaurants, grocery stores and food manufacturers are having less of a difficult time passing on costs to consumers, who are preparing meals at home more often
The future or should we say a return to the past
- Local sourcing of produce, meats and seafood; sustainability, and simplicity
- Terms like house-made, artisan, chef-grown, and made-from-scratch resonate with customers
- Less is More, focus on fresh and healthy
Generation Y a.k.a.the Millennial's, (Americans born between the late 1970’s and mid 1990’s), are discovering that wine is their beverage of choice
- For the past decade, the Millennial Generation is being credited with driving wine consumption growth in the U.S.
- Single service plastic and metal wine containers are now becoming popular
- Beer is now seeing competition from wine as Major League ballparks go upscale, offering more high-end and branded foods and beverages
As you review the above thoughts, ideas and “take aways”, keep in mind that not every location can do everything or please every customer or guest. Each marketplace has different demographics and consumer demand generators, so if the wave of the future has yet to hit your shore, don’t despair, at some point it will!