TORONTO — Approximately 180 foodservice industry professionals gathered at The Glass Factory in Toronto yesterday for the 2016 Canadian Foodservice Summit presented by the NPD Group and Foodservice and Hospitality magazine.
Following a welcome from F&H editor and publisher, Rosanna Caira and Robert Carter, executive director, Foodservice for The NPD Group, Scotiabank’s Aron Gampel opened the conference with an economic reality check. “The global economy is stuck in a low gear we can’t get out of,” he told the crowd, citing factors such as low oil prices and the impact of labour shortages on the foodservice industry.
Next, a panel of restaurant executives, including Paul Hollands of A&W Foodservice of Canada, Christian Polge of Coca-Cola Limited, Mark Pacinda of Boston Pizza International Inc. and Peter White of Dairy Queen, dove deeper into the challenges faced by Canadian foodservice operators and suppliers.
According to Hollands, there are no new visits in the industry right now and haven’t been for many years. “We have seen a fundamental shift in customers’ ability to pay,” he said, calling the shift a “structural problem that isn’t going to go away.”
Pacinda agreed, saying the only way for operators to grow in today’s economy is to fight for share. “We need to make sure when customers are going out to eat, they’re coming to us.”
A sentiment echoed by White, whose company has placed an increased focus on value offerings — a strategy which he admits can be tough on franchisees.
The “M” word was once again front-and-centre during the panel, with all panelists agreeing that millennials are driving foodservice trends and dollars. “Millennials grew up with a different perspective on food and they are driving menu trends,” said Hollands, adding consumers’ attitude towards what’s in their food is a fundamental shift. “I read an article which said 40 per cent of millennials don’t trust the food served in restaurants.”
Pacinda summed things up by saying “[Restaurants] need to drive compelling points of difference and, at the end of the day, you just need to be a brilliant operator. There really isn’t anywhere to hide.”
Rise of the Digital Consumer
The digital foodservice industry in Canada is currently $1.2 billion and has experienced 29-per-cent growth over the last five years. That fact, presented by Dave Fleet of Edelman Canada, made the audience at the first breakout session of the day sit up and take notice. But, he warned, digital can both build and destroy a brand, so operators need to have a strategy in place. “Social media is now mainstream,” he said. “You can’t just play around with it anymore — people will notice.”
The consumer’s expectations of a brand’s social media presence have changed, with 53 per cent of people surveyed by NPD saying they expect a social customer service response in one hour or less. And 53 per cent expect those responses to be tailored to their needs. “They don’t want to have to re-explain the issue with every interaction so your system needs to be integrated across all channels,” said Fleet.
Changes to watch for in the digital space include messaging apps and conversational commerce; live video; virtual reality; and artificial intelligence, he said.
Know thy Customer
Shifting segments and consumer behaviours were the topic of conversation for the afternoon’s Master Class session, led by The NPD Group’s Steve Thornberry and Matt Voss. “Challenges in the foodservice industry are increasingly driving the popularity of segmentation,” said Thornberry. “Segmentation improves relevance and that’s pretty much all you need to know about why it’s important.”
Voss presented case studies of both operators and suppliers who utilized segmentation to better target customers. “You have to focus on the right customer,” said Voss. “Not all are the same and they have many [foodservice] options to choose from so you need to cater to their needs and demands.”
Mark Dempsey, Client Development, Foodservice, The NPD Group offered some industry predictions for the coming year, leading off with the fact that the foodservice market in Canada will remain flat and reiterated the stealing-share strategy as the only path to growth. The FSR segment, he added, will continue to lose out to the more nimble QSRs in addition to being hit by a challenging economy.
“It’s become a real race to get value messages to customers,” he said. “QSRs have really capitalized on this.” Top value message consumers’ wants include two-can-dine deals and daily specials. “This is the most critical time to believe your customers. They’re telling you what they want and then putting their money where their mouths are.”
Breakfast continued double-digit growth in 2015 by stealing share from other dayparts. The greatest growth occurred in the QSR segment, while full-service restaurants lost share. Other predictions included the continued growth of the fast-casual segment ($275 million in sales this year); food and menu inflation will increase beyond the rate of inflation; and “more of the same in the next 18 months to two years.”
Rock Star Finale
The highlight of the day was the Food for Thought: Leading Chef Panel, moderated by Caira and featuring chefs Mark McEwan, Michael Bonacini, Alex Chen and Rob Gentile. Food trends was the lead-off topic, with all chefs agreeing that although ethnic foods are hot on menus across the country, the definition of “ethnic food” has changed. “If you think about it, pizza was ethnic food at one point,” said Gentile, adding that good Italian food never goes out of style.
South American cuisine has come front and centre in Vancouver, according to Chen, who stressed the importance of staying true to the origin of a dish while not being afraid to utilize new technology to improve the cooking process.
The South American influence can be found across the country, said Bonacini. “Food from South America is part of a new generation of dining in Toronto,” he said. “You can judge the caliber of a city by the quality of its dining and Toronto takes a back seat to no one,” said Bonacini.
Other topics for this all-star panel included tracking food trends in Canada; the business case for opening a new restaurant in this challenging economy; the move to a no-tipping model; labour challenges; and challenges facing the Canadian restaurant scene. For full coverage of Food for Thought: Leading Chef Panel, check out the upcoming July/August issue of Foodservice and Hospitality magazine.