To grow business, you need to invigorate your concepts and deliver innovative products. But how do you do this?
On May 31, the NPD Group will be hosting the first-ever Canadian Foodservice Summit in Toronto, in partnership with Foodservice and Hospitality magazine. The event will focus on fresh insights on trends shaping the industry, new approaches to reaching high-potential consumer segments and ideas for growing business in this challenging foodservice landscape. One of the main objectives of the Canadian Foodservice Summit is to examine the overall state of the industry in an effort to determine where the real opportunities are. The following is a look at some of the biggest trends in 2015 and how they impacted the marketplace.
Customer traffic has become a major challenge in the foodservice industry. Overall, visits to foodservice have declined (per capita) four years out of five — a concerning trend for all operators, but especially for independent operators, who have been hardest hit with a traffic decline of 217 million over the last five years. Traffic weakness has been an ongoing challenge for the Canadian marketplace, with flat sales over all quarters in the year 2015 following a decline in all quarters for the year prior.
While this has been a challenge for some operators, others (most notably in the QSR space) have benefited significantly. For example, the decline in oil prices has clearly hit Alberta harder than any other region in Canada; however, given the underlying economic uncertainty in the province, QSR has seen solid gains in share twice in the past 18 months (see chart). It’s not surprising then that QSR has outperformed the market, resulting in stolen share from FSR.
In Canada, technology-based digital-door traffic has tripled in the last four years — a disruptive revolution allowing savvy operators to steal share from competitors. Foodservice apps, online service and in-store kiosks are growing in popularity, offering consumers a new way to connect with the brands they love. Not surprisingly, millennials show the highest interest in using foodservice apps, kiosks and tablets. In a recent NPD study, 85 per cent suggested they would find a restaurant app useful, while more than 80 per cent of millennials believe a self-ordering kiosk would contribute to their experience at QSR. Clearly, millennials have embraced technology and are more than willing to utilize it in a foodservice setting.
Why is this important? It’s a matter of data. Attracting millennials is vital as this group has dynamically over-contributed to foodservice visits in Canada. In fact, millennials have increased their visits to foodservice by over 64 million over the last five years.
It’s All About the Message
As Canadians cut back on restaurant visits, the challenge for foodservice providers is finding appealing ways to draw them back in and increase check size. Leveraging technology, enhancing menu innovation and focusing on premiumization are tactics used by some operators, while others are focusing on locally sourced and ‘better for you’ messaging. Terms such as new, unique and limited time have proven to pique customer interest, especially with millennials. A recent NPD study found that 22 per cent of consumers will try a restaurant because they have unique items. So what is your brand doing to invigorate, innovate and grow?
At the end of the day, identifying these opportunities requires a savvy operator who understands the industry and the consumer. While the future of our industry may remain challenged in the short term, there is plenty of room for strategic and innovative brands to make their mark.
Volume 49, Number 3
Written By: Robert Carter