The Future is Now for the Foodservice-and-Hospitality Industry

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Illustration by Michael Morenstern

Throughout the foodservice-and-hospitality industry, there are ongoing discussions about how technology, new products and a shifting labour force (or lack thereof) will drive major transformation in the structure, competitors and services offered to our Canadian and international hospitality and culinary customers. Recent research undertaken by the Centre for Hospitality and Culinary Arts, George Brown College, indicates these trends are closer to being a reality — and a significant current driver in the industry — than initially believed. The research reviewed key trends in North America and around the world to assess the extent of trend evolution — or is it “trend revolution” — and the findings signaled both a wake-up call and a call to action, as the penetration of many trends is happening faster and more broadly than in the past.

In particular, two forces are driving this accelerating birth and adoption of new models, products and ways of doing business. The first is demographics and the related change in consumer-behaviour patterns. From a demographics perspective, the most important influences are coming from that somewhat maligned but highly valuable group — millennials, who represent the dominant population group in the workforce according to U.S. data, relegating Boomers and their values to third place as a population sub-group. This means different values and behaviours are driving our workforce and our customer behaviour.

Secondly, the impact of technology-enabled innovation, which is pervasive and accelerating, can’t be ignored. Shifting values and behavioural drivers are defining the changes to which we must respond and technology is enabling those changes to be adopted at an ever-increasing pace.

Here are just three examples of the type of research findings our industry is having to respond to. One such shift is the rise in pursuit of “experiences” compared to the more-traditional product-consumption driver. For instance, according to Cision Canada, 78 per cent of millennials would rather spend money on an experience than on a product. And it’s not just millennials who are pursuing experiences — 58 per cent of Canadians across all age groups want to “live like a local” when travelling and, according to Cision, 85 per cent would rather have two years of experiences than upgrade to a luxury vehicle.

The culinary-and-hospitality industry is responding to this rising demand for experiences. For example, Airbnb has now moved beyond its original model as an alternative-accommodation provider to offer more than 5,000 active experiences in more than 40 cities and 26 countries.

Food halls, a rising trend in the U.S. and several Canadian markets, offer an immersive experience beyond eating, including products for sale, contact with a wide range of suppliers, entertainment and social events. According to a 2018 report by Cushman & Wakefield, Food Halls of North America: The Sharing Economy for Restaurants, in the U.S., the food-hall market is projected to triple from 2017 to 2020 and in Canada, the number of food halls is expected to nearly double by 2020.

Travel brands are responding to consumers’ continual pursuit of rarer and more unique experiences by structuring travel to enable travellers to be the “co-creators” of a trip (for example, having the opportunity to “stumble upon” unexpected discoveries that make the experience), without the travel brand prescribing what the outcome will be. Research by Skift shows this had led to the integration of local atmosphere and activity options within luxury hotel-brand product offerings and tour guides suggesting experiences that exist outside of the structure of their conventional tours.

The pursuit of personalized products and services and the expectation of ‘instantaneous service’ is another accelerating trend, enabled by digital marketing and social media, according to a 2015 report from Deloitte called Made-to-Order: The Rise of Mass Personalization. Recent research by Epsilon Marketing also indicates that 80 per cent of consumers are more likely to do business with a company that offers personalized experiences and 90 per cent find personalization appealing. This desire for personalization, says the Deloitte report, is supported by customer willingness to provide personal data and pay a price premium in return for a more personalized service.

Social media is increasingly used for customer service — globally, 34 per cent of customers have used social media for a customer-service question — which drives expectations for instantaneous service. When customers turn to social media for a customer-service question, a Twitter study by Evolve24 shows 42 per cent expect a response within an hour and 57 per cent expect the same response time on weekends and at night as during business hours.

While personalizing and creating experiences, the industry must also respond to another trend — the ways in which consumers are conscious of the social and environmental impacts of their spending. Again, millennials are the trendsetters here. According to Local and organic food on wheels: exploring the use of local and organic food in the food truck industry, published in the Journal of Foodservice Business Research, Canadians under 35 are three times more likely to consider themselves vegetarian or vegan than those aged 49 or older. More than a quarter of all Canadians are more likely to visit a restaurant that offers organic or environmentally friendly food and 84 per cent of Canadian travellers expressed a desire to “go green” on future vacations (according to 2018 data from Booking.com).

An overarching lesson from our research is that trends are achieving faster penetration and with more impact than ever before, highlighting a need for aggressive pursuit of Canadian marketplace data to validate and prioritize the changes we need to respond to. At the Centre for Hospitality and Culinary Arts, we’re creating an accelerated plan for research into the dynamics of the industry, leveraging our Canadian and global partner network, our faculty, our food-and-beverage product-research team, FIRSt (Food Innovation and Research Studio), and our diverse student population. CHCA is committed to sharing its findings and partnering with like-minded industry leaders interested in “nailing down” the urgent actions needed to lead, not follow, a rapidly changing industry of critical importance to Canada’s economy and to our global hospitality-and-tourism position.

Written by Lorraine Trotter

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