Canada’s foodservice industry continues to move forward from COVID-19, but a number of macro-economic challenges have stalled the path to recovery, including labour, supply chain and inflation. Certainly, the foodservice landscape will remain complex in 2023, but there are signs of progress.
A return in consumer confidence, business dining and tourists will help the industry return to pre-pandemic levels in 2023, with annual sales forecast to rise to $83.3 billion, according to Restaurants Canada’s Foodservice Industry Forecast 2022-2026. Annual sales at full-service restaurants are expected to surpass pre-pandemic levels; catering revenues are expected to reach $6.4 billion, up 1.8 per cent from 2019 levels; and bar sales are expected to grow to $2.6 billion, which will be just 2.6 per cent below 2019 levels.
As the calendar rolls into a new year, F&H uncovers 10 foodservice trends to look for in 2023 from operators and consumers alike.
1. Fusion cuisine reigning supreme
The drive for novelty and innovation will continue as chefs and even fast-food outlets are putting new cultural spins on tried and true favourites. “Humans crave new experiences,” says Jo-Ann McArthur, founding partner and president of Toronto-based Nourish Food Marketing. “Chefs are getting creative in combining the unfamiliar with the familiar. We’re seeing a lot of fusion happening in QSR with matchups like sushi burritos and Korean hot dogs. It’s a bit more nuanced in fine dining.”
Dedicated fusion-style restaurants are offering delectables such as Pad Thai battered fish tacos, Caribbean and Asian-style pizzas, butter chicken mac and cheese, Jerk-chicken lasagna, and plenty of other combinations to tempt a more adventurous and younger demographic.
The trend will continue as the country’s diverse ethnic influences continue to infuse even the most mainstream menu choices, with chefs pairing exotic spicing and ingredients with staples such as fries, pizza, and breakfast sandwiches.
2. Premium proteins
Consumer demand for premium proteins is high when dining out, therefore operators are adjusting their menus accordingly. Despite price increases, consumers are willing to splurge on menu items such as wagyu beef and caviar, for example. Wagyu and caviar are up 32 per cent and 27 per cent respectively, according to Technomic’s Industry Insights for Canadian foodservice for the week of Oct. 3, 2022.
Award-winning steakhouse Black+Blue, overseen by Glowbal Restaurant Group, is one of few restaurants to offer certified Japanese Kobe beef ribeye and striploin, giving Canadians a chance to taste this pricey protein.
“While some Canadians are experiencing some economic uncertainty, there’s still a lot of people with money to spend, so they’re looking for those indulgent luxurious experiences and restaurants can fulfill part of that for them,” says Vince Sgabellone, director of Client Development and Foodservice Industry analyst at The NPD Group.
3. Off-premise ordering shifting to later dayparts
While more consumers are eager to return to their favourite restaurants in-person, there’s still a high proportion of consumers that prefer the convenience off-premise ordering provides, particularly for the dinner and late-night snack dayparts.
According to Restaurants Canada’s REACT Survey, as of the end of July 2022, 89 per cent of Canadians have ordered dinner (either for on- or-off premise dining) from a restaurant in the past month compared to 73 per cent that have ordered lunch, 62 per cent that ordered a snack and 50 per cent that ordered breakfast.
More recently, off-premise order frequency for the lunch daypart was 52 per cent; dinner was 64 per cent (up from 59 per cent in 2020); and late-night meal/snack was 26 per cent (up from 22 per cent in 2020), according to Technomic’s Industry Insights for Canadian foodservice for the week of Oct. 3, 2022.
“Dinner is the one daypart that never declined during the pandemic,” says Vince Sgabellonedirector of Client Development and Foodserivce Industry analyst at The NPD Group.
4. Plant-based Poultry
For the last few years, restaurants have focused on adding plant-based options to their menus, but so far, most of the additions have been primarily beef products. While plant-based chicken may not be everywhere yet, there are indications of significant demand and increased competition in this space that will continue in 2023 and beyond. In fact, plant-based poultry has claimed the spot as fastest-growing protein (up 45 per cent), according to Technomic’s Industry Insights for Canadian foodservice for the week of Oct. 3, 2022.
In 2020, KFC Canada added its plant-based chicken sandwiches as permanent menu items following a successful pilot with Lightlife in 2019. Then, in 2021, Beyond Meat expanded its partnership with A&W Canada for the launch of its plant-based chicken nuggets, and Pizza Nova partnered with Greenleaf Foods, SPC, owner of Field Roast, to offer its new Plantollini Chick’n Bites at all Pizza Nova locations.
Most recently, Mary Brown’s Chicken introduced Lightlife plant-based Tenders and Lightlife plant-based Sidekick Snack Sandwiches to its menu at stores across Canada.
5. Clean Eating
While clean eating can mean different things to different people, the one common element that drives those choices is health concerns. Whether it’s reduced fat, sugar, or salt in menu offerings, or organic and sustainable ingredients from top to bottom – or all of the above – diners are demanding accountability for the foods they eat.
Even the once-popular “healthy choice” of plant-based burgers has come under scrutiny as the ingredient decks and processing can be complex. Add to that a growing concern about the environment and animal welfare which can work their way throughout the supply chain, from how animals and fish are raised and harvested, to delivery and processing.
Consumers are also paying heed to what has been labeled “reductionism” – i.e., the reduction of sugar, fat, and salt – in their quest for healthier choices. It’s a trend that took hold during the pandemic and is continuing today.
Chefs are increasingly on the lookout for ingredients with short, easy to understand ingredient lists, as more and more customers are asking those questions. As Jo-Ann McArthur, founding partner and president of Toronto-based Nourish Food Marketing, puts it, “things that can be pronounced. We’re seeing movement away from ultra-processed foods which is why faux meats are faltering as they are not actually healthier.”
6. Vegetables over plant-based alternatives as centre of plate
Despite the eruption in plant-based meat alternatives, there are some early warning signs that the trend is slowing down. Although beneficial for the environment, plant-based meat alternatives are still considered highly-processed foods.
According to analyst Jennifer Bartashus at Bloomberg Intelligence, “after growing by 13 per cent in 2019 and almost 40 per cent in 2020, sales of meat alternatives at the five biggest North-American producers slipped by four per cent in 2021. The group of companies includes Canada’s Maple Leaf Foods, which previously committed $310 million to build a new factory in Indiana to produce meat alternatives. While the company’s products that sell under the Lightlife, Field Roast and other brand names booked almost $45 million in sales in the first quarter of 2022, they no longer expect significant category growth rates,” as mentioned in a CBC News article.
Instead, vegetables such as Portobello mushrooms, eggplant and cauliflower are taking centre stage. When seasoned, cooked and served correctly, these vegetables can also mimic meaty textures and smoky flavours.
“Consumers demand clean labels in other categories, but faux meats got a get out of jail free card for the initial honeymoon stage,” says Jo-Ann McArthur, founding partner and president of Toronto-based Nourish Food Marketing. “People are now looking at the labels for alternative-meats, which are long and complicated, so we’re seeing a trend back to whole, clean foods.”
“It’s hard to get the non-vegetarian to buy in because it doesn’t taste as good as the real stuff,” says Vince Sgabellone, director of Client Development and Foodservice Industry analyst at The NPD Group. “There’s also a plethora of restaurants out there with so many excellent vegetarian options that aren’t trying to emulate meat, especially with the ethnic variety we have in our foodservice landscape. Why eat a burger that doesn’t taste as good as original meat when you have fabulous and flavourful vegetarian dishes?”
7. Specialty mushroom varieties
As they are local and fresh year-round in Canada, foodservice establishments are increasingly turning to mushrooms as a “meat inflation buster” as they can be combined to extend meats. “Consumers also see mushrooms as a great immunity booster with lots of Vitamin D,” says Jo-Ann McArthur, founding partner and president of Toronto-based Nourish Food Marketing.
The variety of mushrooms, including Shiitake, oyster, lion’s mane, porcini, chanterelle, enoki and reishi, also provides plenty of room to innovate, she adds. “They’re very adaptable. Some are bolder, others milder; you can serve them raw or cooked. They are kind of the original super food.”
8. Re-generative food
Button mushrooms continue to account for the bulk of the market, but COVID drove people to explore more varieties to satisfy a more curious palate. “A few chanterelles on top of something really elevates a dish,” says McArthur. “And they are plant-based/plant-forward making them incredibly versatile for chefs. One of the best things is that climate change doesn’t affect them.”
The transition to re-generative food systems is a highly anticipated trend for 2023 and beyond. According to Toronto-based Nourish Marketing’s 2023 Trend Report, “rising input costs, labour shortages, increased regulatory pressure, water availability and extreme weather” are significant challenges for farmers, which have led them to “adopt new farm practices, such as focusing on soil health, reduced tillage, planting cover crops and participating in carbon sequestration programs.”
Additionally, areas of innovation outlined in the 2023 Trend Report include biological inputs to support soil health and fight against harmful insects and disease. Furthermore, gene editing using CRISPR-Cas9 technology can make subtle changes within a plant’s genome. Consumer benefits include reduced browning in produce, reduced allergen levels and extended shelf life while farmer benefits include stress resistance, improved yield abilities and drought tolerance.
Furthermore, labels for food grown using re-generative farming/agriculture practices are gaining traction. For example, Alpha Food Labs sells a line of crackers that each offer different ingredients based on crop rotations from their farm suppliers. On a bigger scale, General Mills has partnered with farmers and suppliers to use sustainable practices on one million acres of ingredient crops for their food products by 2030.
9. The Rise of Swicy Food
It wasn’t that long ago that salted caramel hit mainstream menus. Considered out-of-the-box thinking at the time, the “swicy” trend (i.e., sweet and spicy elements in one dish) has grown exponentially over the past five years for everything from chicken nuggets with sweet-chili dipping sauce, to hot honey pizzas.
McCormick’s Flavour Forecast report pegs “Beyond Heat” as a major pillar for 2023, noting, “We’ve witnessed an exciting evolution to this new, multi-sensorial, layered taste experience that pushes beyond the singularly spicy realm where heat and ingredient pairings come together to shape how heat is perceived and how long it lingers and ﬁnishes.”
Ethnic diversity lies at the heart of this growing trend. “We see swicy’s roots in Korean cuisine and in Mexican, such as mole sauces. Most of what we see on the swicy front are condiments and snacks as they present a low cost/low risk way to test out a trend,” says Jo-Ann McArthur, founding partner and president of Toronto-based Nourish Food Marketing.
The Whole Foods Market Trends Council identified spicy flavours as one of its five major flavour trends for summer 2022, particularly in the condiment category. Chili varieties from ancho to cayenne are increasingly popular. This trend reflects a global shift toward spicy options, evidenced by skyrocketing sriracha sales.
10. Food Halls
Food halls will continue to thrive in the wake of growing consumer demand for more communal and/or upscale dining experiences on a budget. Not only do they offer up a multitude of cuisines from noted eateries, they often combine food ordering and dining with takeout and retail services to offer a one-stop foodie experience. Operations such as Eataly in Toronto and Time Out in Montreal have become major attractions for locals and tourists alike, where customers, and in particular younger consumers, can enjoy local and international cuisines, cooking lessons, and cocktails.
“Food halls are a trend that we are going to see continue,” says Vince Sgabellone, director of Client Development and Foodservice Industry analyst at The NPD Group. “These food halls take on a number of different formats, but there seems to be one consistent trend. They tend to promote and encourage smaller businesses to expand their presence. Whether it is a brand moving into a new market, or perhaps a new restaurateur trying out a new concept, these operations tend to be about food exploration. Younger consumers appreciate new and different concepts and respond well to choice and authenticity; both themes that are supported by food halls.”