For more than 40 years, The NPD Group has been tracking the foodservice and restaurant industry daily. We are the leading source for trends, performance indicators, and market sizing—with unique information and insight that spans the entire supply chain, from manufacturers to distributors to operators.
Our flagship information service for the foodservice industry, CREST®, along with SupplyTrack® and our other foodservice market research, can help you with strategic planning and positioning, product/menu development, customer targeting, competitive analysis, and product performance tracking.
We can also bring these robust data assets along with our industry expertise and combine it with your data or third-party data to address your unique business issues.
Since 1975 CREST®, NPD's flagship information
CREST Local Market
See CREST restaurant information broken out across the top media markets in the U.S. This view allows you to benchmark performance and analyze competitive strengths and weaknesses at the local market level. Ask us for a complete listing of the markets available.
Four times a year, CREST OnSite reports on consumer dining experiences in the vending, business and industry, secondary school, college and university, recreation, lodging, hospital, senior care, and military segments. Clients receive an in-depth view of what foods and beverages are purchased, where and when they are consumed, how much they cost, and how satisfied consumers were with their dining experiences.
Checkout Tracking℠ provides information on consumer buying behavior at the market basket level, based on receipts for brick-and-mortar retail purchases. You get precise, item-level purchase detail that is linked to buyers and their demographics. Data comes from large-scale longitudinal panels, making it possible to study the same consumers over time, analyze competitive market baskets, and identify purchase patterns.
SupplyTrack® is the only monthly point-of-sale service that tracks every product shipped from a critical mass of leading foodservice distributors to each of their operators. It delivers in-depth insights for categories, brands, items, product attributes, and operator segments. Foodservice manufacturers and distributors use this information to view market trends, measure performance, size the market, and develop sales optimization strategies.
Know more with ReCount®, a census of commercial restaurant locations in the U.S. and Canada. It includes both chain and independent restaurant locations. Restaurants are categorized by service type and food specialty within the QSR and FSR segments, and by geography, from the national level down to specific unit address.
QSR Market Monitor
This continuous (daily), syndicated awareness, trial, and usage tracker for quick-service restaurant (QSR) operators captures information on what motivates consumers to visit restaurants, delivering in-depth insight into brand/advertising awareness, ad content recalled, ad ratings, cross-chain purchasing, recency of visit, and customer satisfaction.
Uncover answers with this market benchmarking service for participating chains in North America and Europe. It delivers monthly or weekly reports on total system sales, branded units, and same-store sales trends, based on actual sales data. The SalesTrack® suite also includes SalesTrack Weekly and SalesTrack Market.
Convenience Store Monitor
The Convenience Store Monitor helps manufacturers and retailers understand what is selling and who’s buying at convenience stores. Its exclusive detail includes the unique characteristics of convenience store shoppers, profiles of product categories, and insights into specific chains’ strengths and weaknesses – all of which can be analyzed by dayparts, regions, key channel and demographic metrics.
You have opportunities. You face threats. What you need are smart, quantifiable methods of distinguishing one from the other and maximizing your chances of success. NPD’s Analytic Solutions Group includes a team of senior leaders with extensive experience developing and delivering analytic solutions that address strategic marketing, sales, and planning issues.
We combine NPD POS and consumer information, industry expertise, and custom survey research – then add state-of-the-discipline research techniques and methodologies to explain the "why behind the buy.” Through advanced modeling and analytic services, we offer insight into what will happen in the future, not just what has happened in the past, answering your most pressing business questions:
- What consumer segments should we target and why? How do we know if we’re successful over time?
- Which products are hot? How should we respond?
- What’s the sales potential and ROI for my new / revamped product idea?
- What is the optimal feature combination for my product?
- How do I monitor my performance in my sales territories, distribution areas, etc.?
- Should we raise or lower prices? By how much? To what end?
- Will my product category grow or decline? Why? What does this mean for my market share?
- What’s the competitive landscape and where are my best opportunities (Food)?
- What levers should we pull to increase sales and market share?
- Why are some of our stores performing better than others?
- Why do consumers choose our brand? Our competitors’ brands?
- How effective is our advertising? How can we improve it?
- What products should we develop?
- What products should we sell?
- How can we optimize assortment based on local market dynamics?
- Which people should we target? Why?
- How do we know if we are successful over time?
See how clients have used our analytic solutions to solve their business challenges in our Analytic Solutions Case Study Library.
Is Delivery the Right Choice for Your Business? Delivery is one of the most convenient options a restaurant operator can offer to address consumers’ need for a convenient meal solution. And now there are new possibilities available to you, if you’re looking to enter the delivery market. Explore consumers' habits, behaviors, and attitudes related to food delivery with NPD's new report.
In the food and beverage industry, foresight about the future of how people will eat and drink and deep insight about what they’re doing right now can make all the difference to your growth trajectory. This year we’ve dug deeper than ever before into our unique data assets and industry expertise. The result? An unparalleled look at actual consumption behavior and how it’s changing, both at home and away from home. You can use the Annual Report on Eating Patterns in America to determine which emerging behavior patterns will help drive your business and identify new market opportunities.
Meal kit delivery services like Blue Apron and Plated have garnered a small, but seemingly dedicated, segment of enthusiasts in the U.S. Are these kits a passing fad, or is this a trend worth watching? Our new report, Thinking Inside the Box: A Fresh Look at Meal Kit Delivery Services, combines findings of our own custom study with ongoing NET® consumer tracking research, insights from our Checkout Tracking solution, and industry expertise. It uncovers answers to your pressing questions about this new player in your market.
The boundary between foods eaten between and during meals continues to blur, but now you can get clear answers to your most pressing questions about snack foods and between-meal consumption. Our Snacking in America report provides deep insight into consumer behavior to help you answer the question, “What’s the future of snacking?”. Partnering with CultureWaves, the Snacking in America report now has an added layer of qualitative behavioral insights, giving perspective and real time evidence about the evolution of snacking in America.
Now you can determine whether targeting clean eaters is the right move for your business. Our new report, How Consumers Define Clean Eating, sizes the clean eating market, profiles the consumers engaged in clean eating, and reveals how primary grocery shoppers shop for foods that fit into this emerging lifestyle. You can use the report’s deep data and expert insights to understand consumer awareness of this trend and consumers’ ideas of what clean eating means.
Get a comprehensive forecast of the future of U.S. in-home consumption behavior. Our Future of Eating Report uses our proprietary, long-term cohort forecasting technique to capture new detail on aging and generational and population shifts. It incorporates more than 100 individual forecasts to create the story of future in-home consumption.
Total U.S. Restaurant Count at 624,301 Units in Spring 2016, Restaurant Chain Units Hold Steady, and Independent Restaurant Count Declines, Reports NPD GroupThe total U.S. restaurant count stood at 624,301 units in spring 2016, a one percent decrease from spring 2015, based on a restaurant census conducted by The NPD Group, a leading global information company. Total restaurant chain units were flat from last spring at 292,382 and the independent restaurant count declined by 3 percent, according to NPD Group’s spring 2016 ReCount® restaurant census, which includes restaurants open as of March 31, 2016.
Increasing Popularity of Supermarket Restaurant-Style Foods Translates to Growing Food Safety ConcernsWith the rise of the grocerant — supermarkets that offer prepared, restaurant-style foods — comes consumer concerns regarding food safety. Although the majority of U.S. consumers feel that foods in supermarkets are safe, the percentage who feels this way has decreased over the last ten years as grocery stores have increased prepared food offerings, according to The NPD Group, a leading global information company. NPD Group, which has tracked food safety concerns in the U.S. since 2001, indicates that in 2006, 66 percent agreed with the statement that foods sold in supermarkets are safe, and in 2016 (thru August) only 58 percent of adults agree with the statement.
Warranties Are Selling With Notebooks at a Consistent Rate Year-Over-Year Despite Growing Chromebook Sales, According to NPDAccording to The NPD Group’s VAR Invoice Tracking Service, warranties remain a critical part of the notebook sales purchase. Twenty percent of all notebooks sold with a warranty attached during the 12 months ending April 2016. Year-over-year this has remained consistent despite lower priced products like Chromebooks capturing more notebook sales. In the 12 months ending April 2016, notebook average sales prices (on invoices that included a warranty) fell 22 percent versus the prior year, driven by the strong growth of Chromebooks.
Recent Menu Price Hikes, More Telecommuters, and Shopping Online Contribute to Foodservice Lunch Visit DeclinesFoodservice lunch, which accounts for a third of all foodservice traffic, has posted consecutively steeper declines over the past six months, reports The NPD Group, a leading global information company. In the quarter ending June 2016, lunch visits declined by 4 percent compared to same quarter year ago, the steepest decline of all main meal dayparts, according to NPD’s ongoing foodservice market research. The rise in employees working at home and more shopping online, which cuts down on foodservice meal and snack breaks, have been contributors to the softening of lunch traffic and recent menu price hikes have steepened lunch visit declines.
Consumers are price-sensitive. But how sensitive are they at different full service restaurant operators, across different meal occasions? In our September 2016 brief, we take a deep dive on the midscale morning meal to understand the source of its decline, and do the same for casual dining dinner to examine the drop in consumer price point satisfaction.
Specifically, we use Value Composite Scores to explore:
- The strength of the midscale operator’s value proposition at the morning meal occasion
- How much the casual dining dinner’s value proposition has eroded due to higher price points
- Consumer tolerance for future menu price increases
Read on to find out the consumer “sweet spot” and how it’s moved over the past three years.
According to the U.S. Census, 13.4 million people in 2010 worked at least one day at home per week, an increase of more than 4 million people (35 percent) over the course of a decade. At the same time, our National Eating Trends® (NET®) data shows more lunches are being sourced from and consumed in the home.
The average number of lunches per capita prepared and eaten in the home grew from 139 in 2006 to 156 in 2016. In the same time period, the number of carried-from-home lunches declined from 46 to 42. With the home becoming the workplace for a growing number of American workers, we’re seeing a related shift at foodservice: a reduced need for restaurants in people’s daily lives.
Since food consumption is often a zero-sum game, meaning a growing behavior in one area is often at the expense of another, certain segments of restaurants are seeing a corresponding decline in traffic. Overall foodservice traffic is down 4 percent at lunchtime in the latest quarter ending June 2016 versus the same quarter year ago. This decline is driven mostly by casual dining and fast casual (a quick service category) restaurants where traffic was down in the quarter ending June compared to same quarter last year, by 6 percent and 9 respectively.
As more consumers are choosing to prepare and consume their lunches in the home we’re also observing changes in what makes it on the plate. While sandwiches are still the top item consumed at this midday meal the type of sandwich is experiencing slow but steady shifts. For example, while peanut butter and jelly and ham sandwiches are the most commonly consumed sandwiches, their share has dipped; cheese and other cold cuts have taken share. There are also shifting preferences for the breads that surround the sandwich filling. White bread has been used less often, and in its place we’ve seen more whole wheat bread, tortillas, and buns/rolls.
For marketers involved with lunchtime products, make sure you’re moving with the consumers who are working from home. Just because more consumers are using their homes as their offices, it doesn’t mean they’re spending more time in the kitchen to make lunch. Lunches are still motivated by speed and simplicity since these people need to get back to work just like anyone in a traditional workplace.
Craving pizza? Just Tweet a pizza emoji. Want that area rug? Just click the Buyable Pin for it to adorn your own home. Wish the watch in your Instagram feed were on your wrist? Just click on the brand’s profile link to buy it.
Since 2012, social media platforms have integrated click-to-buy features that allow retailers and manufacturers to sell directly to consumers within social platforms. Twitter, Facebook, Instagram, Pinterest, Tumblr, and Snapchat have all gotten in on the trend.
But even though online sales are growing and consumers are spending more time on social media, the jury’s still out: do these social buy buttons actually encourage people to buy, or have we seen the last of them?
Get our latest Insights – The Future of Social Commerce: How “Buy Buttons” Are Disrupting the Retail World
Disruptors happen in all industries, causing shifts in the way consumers use or access products. These disruptors force marketers to adjust their ways of doing business to ensure they remain relevant with consumers’ needs. Food and beverage works this way as well – and there is evidence that new disruptors are on their way.
Before discussing any detail behind disruptors in food and beverage it’s important to understand the pace at which these changes are likely to move. Our consumption behaviors are deeply rooted in culture and are very habitual. Historically these behaviors change at a very slow pace compared to, for example, behaviors in the technology industry. The phones we carry in our pockets today probably look very different from those five years ago and include far more functions, but by comparison, what we have eaten over that same period of time probably looks similar. Disruptors in food and beverage may take 10 to 20 years to take their full grip, but it’s important to plan for them before you have to start playing a game of catch-up.
The grocerant is a good example of a disruptor we see unfolding. As the name implies, it’s a grocery store-restaurant hybrid that provides restaurant-quality, fresh-prepared foods, with in-store enjoyment options from café seating to table service. Our research shows these store formats are competing most closely with fast casual restaurants based on motivations for visiting the establishment. For both sectors, price, quality and variety of the food, and the ability to get a healthy meal drive consumers to dine there. And while both fast casual restaurants and grocerants attract Millennials, the grocerant provides its services at lower prices, helping these cost-conscious consumers dine within their budgets.
Fresh foods are a key component of grocerant offerings, and the desire for fresh carries into the home as well. The problem consumers have is that fresh doesn’t stay fresh if it lingers too long. And since many fresh items have to be purchased in larger sizes, a decent amount may spoil before all of it can be consumed. With food waste in mind, many consumers have begun experimenting with fresh meal delivery kits, which provide just the right amount of fresh food and effortlessly answer the question, “What’s for dinner?”
There are other disruptors on the horizon, and in each case there is a common theme – the disruptor saves the consumer time or money, or both. In the grocerant case, consumers save time by being able to remain in the store to get a fresh meal after shopping is done, and the prices save them money compared to other outlets. Meal delivery kits save consumers time by eliminating trips to the grocery store and by cutting out the need to research recipe ideas. Both of these concepts represent a small part of their respective segments – grocerants account for about 4 percent of the QSR retail sector, while 3 percent of individuals in the U.S. tried a meal delivery kit last year.
There’s great growth potential. It won’t happen from just one year to the next, and we need only look to history as evidence of this pace. Consider the microwave oven, which is now a fixture in about 90 percent of U.S. households. It began its residential use around the late 1970s, when advances in technology allowed for lower price tags. Despite that, it still took the better part of a decade for a majority of homes to have one. Given the way the microwave oven saves time with cooking and the vast amount of products that were developed as a result of its invention, it was clearly a disruptor. Those who prepared in the early 1980s for its expansion reaped the benefits of their preparedness.
Marketers would be wise to find ways to associate their products with current and emerging disruptors. For example, getting your products inside the fresh meal delivery kit shows consumers new ways to use your products. And while the consumer is in the grocery store, make your products available at the grocerant as either the main feature or the side component.
A major QSR chain’s analytics team had big questions: how did its dessert offerings stack up to its competitors’ dessert flavors, sizes, and pricing? And was there an item selling well for its competitors that it should add to the menu? Checkout Tracking delivered the answers, and did it faster than other analytics tools would have.
The United States Congress voted to set a national standard for labeling the presence of genetically modified organisms (GMOs) in food and beverage products. The language of the bill, however, allows manufacturers to disclose this information using scan codes, providing a chance to talk about more than just GMOs.
Vermont has a GMO labeling law that recently took effect. It caused a stir in the industry, creating calls for a national standard. The federal bill, which would supersede Vermont’s regulations should it become law, appears to be the result of compromise – on one hand, it would require manufacturers to make their GMO content information available to consumers, but on the other hand, they wouldn’t be required to do that on product packaging. Consumers would scan a special code on a package with a smartphone and be taken to a website showing the GMO content for that product.
GMOs have become an interesting topic in the food industry since most consumers know very little about the issue. Our report on the topic, Gauging GMO Awareness and Impact, revealed more than half of U.S. consumers say they know little to nothing about GMOs, yet at the same time about 70 percent have concerns about GMOs in food products. While consumers aren’t sure precisely what happens when a food is genetically altered, it’s clear that just mentioning “GMO” or “genetically modified” conjures thoughts of danger; many consumers think twice about using a product that might include genetically modified ingredients.
Should this bill become law in its current form, marketers might be able to talk about more than just GMOs when consumers scan the code. This could be an opportunity to talk about why GMO products were used to help calm consumers’ fears. For example, our report noted that among those who say GMOs have benefits, most talked about stronger and more disease-resistant crops.
The conversation could go beyond GMOs as well. While consumers are on your site talking about GMOs, you might also mention other health benefits of your products to help balance the GMO concerns. For instance, while a product might contain GMOs, it’s could also be a good source of protein, or perhaps your plant uses sustainable energy sources.
The key to winning with consumers on GMOs is communication. Being open and honest with consumers will go a long way in proving that what they see is what they get and you’re not trying to hide anything. In fact, a greater number of primary grocery shoppers are telling us they want labels to state if the items contains genetically modified organisms than those who want GMOs removed altogether from products.
Meal kit delivery services are a growing sector in the food industry. They’re helping consumers satisfy the need for fresh foods without spending time gathering the food, but should grocers or restaurants be more fearful of the potential impact on their business?
On a per-person basis, food consumption is a zero-sum game, meaning an increase in one behavior is often at the expense of another. For example, we’ve mentioned over the last decade more consumers are having eggs, yogurt, bars, and a few other foods more often at breakfast, but these increases are largely coming at the expense of cold cereal consumption.
Our new report, Thinking Inside the Box: A Fresh Look at Meal Kit Delivery Services, sheds new light on the growth dynamics of these services as well as several of the potential pitfalls these fledgling businesses could face. Among them is the finding that two-thirds of meal kit users say the meal they prepared from the box replaced a home-cooked meal; less than 25 percent say it replaced a restaurant meal.
It seems the most direct competitor to the meal kit is the grocery store, on the surface at least, since that would have been the source of the meal that otherwise would have been prepared. The question is whether or not meal kit users see the value in replacing their home meals with a more expensive meal where everything is premeasured and delivered to their doors. On average, the cost of an in-home dinner where the consumer sources the food from a grocer is about $4 per person. Meal kits are about $10 per person for the same meal. For those who live in a high cost of living market such as New York or San Francisco, $10 per person for dinner might sound like a bargain, but elsewhere it represents a higher cost in need of justification
Companies such as Blue Apron and Hello Fresh will have to convince consumers that the extra spend at dinnertime is outweighed by the time saved at the grocery store and the time spent searching for recipes. In the meantime, manufacturers should consider how they can get “in the box.” This would be a new way to show consumers additional ways to use your products as they prepare meals. For restaurants, take advantage of your flexibility – allow customers to order on demand and aim to satisfy everyone's personal tastes with different meals. To avoid lost trips, retailers can leverage prepared food sections and further the Grocerant concept by providing fresh food customized to consumers’ tastes.
The behaviors of the Millennial generation have been highly analyzed and studied, so it shouldn’t be surprising to hear this group prefers fresh foods and beverages and favors healthy snack food choices. The unanswered question until now has been whether these behaviors are attributable to life stage or if they are generational shifts that will carry through the rest of their lives.
Americans have been told for the last 30 years they should consume more vegetables, with little movement from consumers on that initiative. Marketers have attempted to make vegetables more enticing with dips and other additions, but increasing vegetable consumption has been an elusive goal. What’s shifting is where people source vegetables in the grocery store. Our National Eating Trends® data shows nearly half of the vegetables eaten in the 1980s came from the fresh aisle of the store; that has grown to about 60 percent more recently. It’s apparently a zero-sum shift as consumers move away from frozen and canned forms of vegetables in favor of fresh – while keeping their total vegetable consumption levels steady.
We’ve observed that Millennials are a big reason why fresh consumption has been increasing overall, but can we attribute that increase to where they are in their lives? Our new report, A Generational Study: The Evolution of Eating, says Millennials’ shifts reflect a fundamental change in the way they prioritize fresh foods, emphasizing fresh over other forms. When looking at fresh consumption among individuals under the age of 40, it’s happening in greater numbers than it did among their predecessors 10 years ago. We see the opposite dynamic for those older than 40.
Millennials’ consumption of more fresh foods isn’t the whole explanation for their increased usage. Another key dynamic for fresh foods is that people tend to consume more of them as they age. We should expect this to continue for Millennials as well, who are already consuming more fresh foods than those at the equivalent life stage 10 years ago, but Boomers have hit a life stage when people typically consume the most fresh items in their lives. Despite the fact that Boomers aren’t consuming fresh foods in the same quantities as previous generations did at their age, the sheer size of their group is large enough to continue driving fresh consumption higher.
Source: The NPD Group/National Eating Trends® (NET®), Years Ending February
food defined as fresh fruit, vegetables, refrigerated meats, poultry, fish, and
End dish and additive/ingredient uses
Changing snack food consumption is another hot topic, but the drivers of change differ from what’s driving growth in fresh foods and beverages. Looking at snack foods consumed during snack occasions, Millennials do not appear to be outliers. The changes we’re observing there are mostly attributable to overall increases with each generation as well as the natural tendency to snack more often with age.
To learn more about generational versus life stage shifts in consumption contact firstname.lastname@example.org.
Insights and Opinions from our Analysts and Experts
Two blistering hot delivery stories in the news this week: Amazon Food in London and Chipotle/Alphabet delivering burritos at Virginia Tech via drone. I love drones. I love delivery because it accounts for less than 10% of traffic in every market we track but it seems to attract everyone's attention. It certainly gets a lot of press. I’m going with the drones.
Before I start, think about this: Have you actually been to a pizza restaurant to eat a pizza "on-premises" recently? The pizza is hot. Really hot. The cheese is like napalm. The whole experience adds up to an entirely different food from the thing we either pick up or have delivered. Yes, it's satisfying and convenient to have a restaurant-made pizza in the home. And, it has been so long for most us since we had one in a restaurant that we've forgotten what it's like. Eating at home or in the office or wherever is not the same as eating it in a restaurant is. Hold that thought.
One of the very thrilling aspects about living in the San Francisco Bay Area is that you get to be part of all the very cool things that online companies are trying to do. You can talk to Alexa and she'll have pizza or groceries or an Uber at your door in no time. You see Google and Amazon trucks running around delivering things in a jiffy. You see billboards advertising these magical services. Your Millennial kids talk about how great they are. It's like living in the future.
Unless you have a place near my wife’s office. Not South Bay. Not the Peninsula. Not exactly East Bay. Wannabee Silicon Valley. All equal distances from the three main airports. Frequently driving next to those massive private commuting buses. But not in a zip code that is cool enough for any of those cool things. To be fair, I once received an Amazon order a couple of hours after I placed it. I don't remember what it was but it made me feel very up on things all the same.
So, you'd think that if ANYONE is going to have burritos delivered by DRONE, it's going to be those people who drive past me in a giant bus on the 101. It's not going to be someone in Blacksburg, Virginia (a lovely town). Well, turns out you'd be wrong.
But let's think about the napalm cheese on a pizza. Everybody loves leftover pizza. It’s great for breakfast. It’s great as you’re putting it away after binging on Game of Thrones (although, everyone I know watched it week by week). That’s why it’s ok to have it delivered. It’s different, but it’s nearly as good in its tepid or cold states as it is when it is blistering hot out of the oven.
Not so much burritos. A quick survey of my Millennial focus group about the consumption of leftover burritos got some quick and serious feedback…as well as the hashtag #noburritoleftbehind. Some didn’t understand how a burrito could be left over. All agreed that a burrito could not be consumed later. There was some agreement that a burrito bowl, with the right ingredients, might be eaten later. You know why? Because burritos are only good when they are at their hottest and freshest.
All ate burritos last night.
All the action in delivery in recent years in the US market has been in the method of ordering. This has had the effect of sharply increasing the proportion of delivered goods that are NOT pizza. That was a problem waiting to be solved. Because of these cool new services, all the growth in delivery in the US has been non-pizza driven.
I feel old and cranky when I say this but, I’m not clear about the problem that is solved by delivering things with drones. Domino’s seems to have solved the “delivery problem” by having a bunch of people hanging around the stores. Uber Eats is roping bunches of people into piece-work labor. Amazon Restaurant is (if you live in a cool enough zip code) doing much the same thing as are other services all around the world with cars, scooters, bicycles, and feet.
However, looking at the traffic in Shanghai, Sao Paolo, or any number of cities around the world, I can see the motivation to find some other way of getting around. So, it’s bound to come no matter what I think. And, if you spent any time in Shanghai, you know that it won't be long before people are sending their kids to school hanging from a drone.
So, now I’m imagining a catering kitchen or even an old K Mart converted into bunches of micro-kitchens that prepare food to go that has been ordered through different apps. On the roof lives the drone operator who loads the devices, incanting “fly my pretties, fly” as he sends off wave after wave of self-guided flying robots.
I love looking at a bunch of people after an event standing at the curb, looking down at their smart phones and then looking left, right or center to see their Ubers arrive. This will now be complemented with a bunch of people standing outside their doors, smart phones in hand, scanning the sky for the arrival of their dinners.
O brave new world.
When my wife and I were new parents, tired and broke, we once vacationed in Minneapolis by staying in her brother's house while he and his wife were away. It was a small and lovely house near the lakes in the city and it proved to be a relaxing getaway.
Our sister-in-law was and remains a person adept at wielding the resources around her. One of those resources was an avid cook in the neighborhood. She had arranged to have this cook provide her and my brother-in-law with a couple of vegetarian (really, what else would it be?) dinners every week. They thoughtfully failed to cancel this service while they were away and we had the delightful surprise of a couple of fresh dinners that week. My sister-in- law long ago stopped that arrangement but now has a caterer living in her attic. The results are rewarding.
I thought of that vacation when I read about this Etsy-like app for home cooked meals the other day on an Australian web site. There are similar services in other countries. With this service, a home cook could announce through the app that they'd be preparing, say 20 chicken enchiladas with mole along with black beans and rice on the side. A buyer could, through the app, say "I'll take two" and then pick the order up at the cook's home, theoretically on their way home from work.
Having once been in the business of selling food to go, my thoughts immediately turned to the amount of space that the packaging takes up and the soggy disappointment when prep time and pickup weren't well-synced.
Practical considerations aside, it's hard to put a finger on what existing behavior this service would take advantage of. Our CREST® foodservice market research reveals what a varied target the at home eater is around the world. The Japanese and the Americans are the most likely to take their prepared meals home to eat. That particular behavior is not popular at all in Southern Europe. It's somewhat more popular in other former British colonies.
In the U.S. the restaurant category with the highest share of at home traffic is the hamburger category, followed by pizza. Both are pretty tough to compete with from the home. In Australia, pizza and burger top the list while retail fits in just in front of chicken places and fish & chip shops. In Japan, prepared foods from retail dominates the at home feeding market. The Germans and the English lean toward ethnic foods while the French buy from sandwich places (that was unexpected...the French data constantly surprises me).
The thing about most of the popular concepts is that they provide foods that just aren't the same when they are made at home. Yes, you can make a sandwich at home but does that really compare to the sandwich you can get from your local bakery-themed fast casual joint? And, yes, that caramelized onion, blue cheese, and grape pizza you made on a corn meal crust was delicious but is that really a way to feed yourself at the end of the work day? So, these cooks would need to work around well-defined existing solutions.
But, while it's hard to compete with traditional take home foods, no single home cook needs a mass market. They just need a couple of dozen people who will pick-up a meal from them from time to time. Just as aggregator ordering and delivery services put independent restaurants on the same footing as chains, this sort of app let's anyone be a pop-up restaurant. And, as this is a social app, more like Etsy than Uber, reviews on the app would weed out the weak performers.
So, I thought this seemed pretty cool and it made me feel really up on things. My familial Millennial focus group put me in my place, raising practical issues like food safety and generally giving the idea a pass. Maybe it's just my romantic side, imagining a world of artisans serving their local communities. It certainly addresses a well proven need with an enabling device that has proved to be effective for independent restaurants.
There's a lot going on in the U.S. these days that is drawing the attention of Americans and generally dumbing them down to world affairs. I mean, what could be more important than Ryan Lochte's future endorsement deals? So when you mention Brexit to a typical American you might get a confused look...maybe they'll say something like "wasn't that the Donald Trump thing in some foreign country?"...or they'll say "when was that?".
Any non-American would describe this response as being "very American," which is never a good thing.
Europeans (and Brits) know that there has been no Brexit. There was just a vote and there will be many months (kindly) of difficult negotiations to go through before there is an exit agreement. And before that there will be months of posturing.
That doesn't stop people from asking how Brexit is affecting the foodservice market in Great Britain.
It's not…or rather it hasn't yet.
According to our SalesTrack® Weekly report, which tracks same store sales for a group of the largest chains in the England, the market has held remarkably steady in the weeks following the vote.
The British market was the strongest global market in Q2 2016 tracked by NPD’s CREST® foodservice market research. Now, however, our NPD analyst in Great Britain tells us that consumer confidence is faltering. It is likely that we will see a negative impact once something actually happens. In the meantime, things have been pretty much OK.
I’ve often wondered if I could convince Grubhub Seamless to give me equity in the company given the number of times I use their service. I probably order food for delivery from the internet too often so I decided to take a different path. I’m still using the internet but this time I’m using a meal delivery kit.
A friend already uses Plated so she sent me a link to get my first complimentary box. Just like at meetings in the office, free food is a great motivator! The selection process was fairly easy and I was even able to make slight recipe adjustments that fit my tastes. Everything arrived as planned and I was even impressed with how little packaging was required. All the ingredients were separated by the appropriate recipe and everything still looked fresh despite having been on a delivery truck.
Now the real test – how easy was it to prepare and how did it taste? Well, I still had to do a fair amount of chopping, slicing, and preparation, but the key convenience of the service is that I didn’t have to make a trip to the grocery store. In some areas of the country, going to the grocery store is merely a chore, but in New York City it’s a nightmare with long checkout lines (and sometimes lines to enter the store), crowded aisles, frequent out-of-stock items, all on top of having to take the Subway to get your items home. A little chopping and preparation is a small price to pay here for avoiding the shopping experience. The recipe was easy to follow with pictures to show me exactly how it should look when I’m done with each step. In about an hour, my zucchini lasagna was finished and, I have to say, quite tasty.
The plan I used for Plated costs $72 per week, and each box has three meals that feed two people. If you do the math that comes out to $12 per person per meal and for me that’s a bargain! It costs much less than going out to dinner, ordering for delivery and is probably only slightly more than going to the grocery store to get the ingredients. I fully understand, however, that prices where I live are higher than the rest of the country (and don’t get me started on Hamilton tickets).
At NPD we recently conducted a study on consumers using these services and one of the most interesting findings was that the majority of users said had they not prepared a meal from the kit they would have made another meal from their homes. In other words, meal kits are mostly replacing meals from the home but at higher prices. I’m often asked about the long-term viability of these services and my answer is always that meal delivery kit companies need to convince consumers they are worth the extra spend for the convenience and time savings they provide. Consumers also tell us a key challenge at dinner time is finding new and different recipes to make, which meal kits inherently provide and can be a key marketing message as well.
I just returned from the National Confectioners Association’s State of the Industry conference where the phrase, “There’s a war on sugar – not candy,” seemed to be a recurring theme. In today’s age of sugar avoidance, it might seem like a Hail Mary pass from an industry trying to navigate through tough headwinds, but when you look at consumers’ actual wants and needs it makes sense.
For full disclosure, I am one of the many people who want to avoid sugar in their diets and I actively try to avoid sweets whenever possible. I make eggs in the morning to avoid the simple carbs in many cold cereals, at lunch I opt for whole wheat bread for my sandwiches, and at dinner I try to use vegetables as side dishes and avoid rice and bread.
Every once in a while, however, I’ll get a craving for some nice chocolate and when I sink my teeth into it, I feel a rush of satisfaction and forget all the thoughts about avoiding sugar because my mouth AND mind are experiencing such a degree of bliss.
NPD’s ongoing snacking research reflects similar sentiments among consumers when it comes to their sweets. They try to avoid them, but they love them nonetheless. When you look at what we snack on over the course of the day, better-for-you items like fruit, yogurt, and savory snacks are the snacks of choice earlier in the day. It’s not until around 8 pm that we allow ourselves sweet indulgences. Maybe we want to reward ourselves for being good up to that point or are so tired our discipline is depleted.
This is why I’ve said during my snacking presentations that it’s not a matter of altering candy products to appeal to those who are watching their sugar intake, it’s a matter of appealing to the wants and emotions of consumers at the time of day when they are most likely to indulge in sweets. Point being that there is no war on candy…at least not in the evening.
If you’re old enough (and you probably aren’t), you remember when chicken sandwiches were once new, innovative items on fast food menus. And then, when fried chicken took on a less-than-healthful patina, grilled chicken sandwiches were brought in to address issues of healthy preparation. One wonders where the grill lines came from in restaurants that had no char broilers?
In the late ’80′s we were pretty limited in how we asked consumers what they ate. Due to the space constraints in the CREST foodservice market research paper diary we used in those days, we could only present consumers with a (pretty short) list of possible items. One drawback to this was that consumers might tell us they had a food item at a chain that we knew the chain didn’t sell.
This brings me back to chicken sandwiches. We found that consumers were reporting a fair number of broiled chicken sandwiches at a chain that we knew did not offer broiled chicken sandwiches. When we looked into this more carefully we found that lower income men were reporting fried chicken sandwiches, just as they should have. Higher income women, exactly the people you’d think would be eating broiled chicken, were reporting broiled chicken sandwiches. That is, the people who wanted fried, reported fried. The people who aspired to broiled reported broiled.
That was then.
Nowadays in the US we ask a whole bunch more stuff about what people are eating in our CREST consumer foodservice research. We ask toppings. We ask bread type. We ask salad dressing. We even ask if the consumer used flavored cream in their coffee. For the largest chains we insert the chain’s menu into the questionnaire. We also present the respondents with a bunch of attributes (organic, low fat, gluten free, locally sourced and bunches more) and ask if any of these attributes apply to the foods they ate in the meal they are telling us about.
So, here’s the cool thing: we can look at different demographic groups and see what kinds of attributes the foods they’re eating have. And, because we’re analysts, we can compare them and jump to conclusions. Because of the chicken sandwich experience, I was sure that the Millennials would be all over the “organic” and whatever while Boomers would skew to “low sodium” and stuff like that. Y’d think, wouldn’t ya?
But, and this is always a disappointment to an analyst, there isn’t much of a difference between young’ns and old’ns. Yes, the young are more likely than the old to identify some sort of attribute. And, yes older consumers are more likely to say “healthy” and young ones “high protein,” but there isn’t much difference for things like “organic” or “vegetarian” or even “low sodium.” These attributes amount to and offer that which appeals to everyone. And people are taking restaurants (even chains) up on that offer more and more.
BUT…not all organic food has an equal chance of being Snapchatted.
Everyone is on the qui vive for the next wildly inventive food fad. Who knows, maybe for the next fad even people living here around the global food blog’s mountain redoubt will get a chance to eat/see the exciting new thing. We can all hope.
Remember when there was no Cajun food outside of Louisiana? Probably not. You have to be kind of old to remember when Paul Prudhomme published his first cookbook and the country went crazy for all things Cajun. There was a surfeit of new Cajun restaurants in Chicago and non-Cajun restaurants all had “blackened something” on their menus.
No sooner had the excitement settled into a dull roar than the food press began talking about the “next Cajun.” Would it be Jamaican? Maybe Indian (still waiting). Could it be Middle Eastern? These days we’re thinking that maybe Peruvian could be it. The truth is that nothing has hit the food world quite like Cajun did in 1983 and 84. And don’t tell me Mexican; that just means you’re from the Northeast. And don’t tell me Thai; that predates Cajun in my food timeline.
Then the Cronut came along and, in its own way, became the next Cajun. Sorta. I’m pretty sure the words written about the Cronut out number the count of the people who ate the real thing by a factor of about 10. It spawned the phrase “the next Cronut.”
Speaking of the next Cronut, we’re getting ready to launch CREST Korea, our ongoing foodservice market research. We’ve already done a pilot to prepare for the launch and found that:
1. Koreans (like everyone) like their own food and their own brands. The fast food landscape is dominated by Korean chains.
2. Coffee and Cafes play a larger role in the Korean foodservice market than you might expect.
3. Bakeries? Who knew?…including Paris Baguette, which was recently identified by a US trade mag as being “French.” One look at the place, with the self service, the trays, and the tongs tells you this is Asian, not European.
4. Bulgogi is delightful. OK, that’s not the data talking. That’s me. But it is, 100%, a fact.
So now we and our CREST Korea clients are ready. Data collection will kick off on 1 January and will continue (as I tell everyone) until the end of time; just as is the case in any of the 12 countries where we have a CREST service. This spell of time before launch, no matter how far in advance we start, is always kind of frantic as we review build-after-build of the questionnaire until it’s just right…then we will translate it to Korean and start all over again.
Part of that process is to actually take the questionnaire over and over again to see if it breaks during any sequence of answers. It’s good to have an actual visit to a restaurant in mind when taking the questionnaire or a person can get lost. For the big chains, we present respondents with the chain’s actual menu to tell us what they had to eat or drink.
And, there on Burger King Korea’s menu, as I was testing the questionnaire, were the words “chicken doughnut.” Those two words, chicken and doughnut, together for the first time. You don’t need a good reason to go to Seoul. It’s lovely. And the Koreans do things with chicken that will make you smack your lips.
But if you want a shot at the next big thing? Chicken Doughnuts. ’Nuff said.
Is there anything in the foodservice business that is more appealing than a Taco Truck? As a former restaurant guy, I have to say that the idea that all I need is a kitchen with wheels and no dining room, and that I can move that kitchen to where the people are, is an appealing idea. No servers. No reservations.
The beauty of food trucks is that they offer the independent restaurateur the opportunity to get a concept up and running at a much smaller investment and risk than signing a lease and staffing up a full service place. It’s no surprise that these have been emerging just at the time when the number of independent restaurants has been steadily dropping. Here’s a cute little video that articulates just that, so I like it a lot.
The NPD Group office is in a suburban office complex. As a result, we don’t see a lot of food trucks in our neighborhood. So, we were a little out of the loop when people began to ask us about the “trend” in food trucks. But, we saw the light and began to figure out how to capture this.
It’s not as easy as it sounds. For one thing, long before there were the food trucks that everyone talks about there were the famous “roach coaches” that ply construction sites, machine shops or other places where people have little time to go to lunch and no on-site services. We’re pretty sure that no one is any more interested in them than they have been for the past 35 years.
So, it’s a very fine slice of the market to find. As part of our regular CREST foodservice market research questionnaire update, we gave people the option to tell us that they had purchased the food from a food truck in addition to all the other possible answers. About 0.1% did so in the test. The pie chart depicting this is below.
Now, before you all get all r-squared on me and ask about sample biases and all those things that people do when their preconceptions aren’t supported by data, let’s think about it. There are nearly 600,000 restaurants in the U.S.
Richard Myrick of Mobile Cuisine Magazine guesses that there are between three and four thousand high-end food trucks and near 3 million traditional food trucks (I don’t have the data and I don’t want to get all r-squared on the guy but that would mean more than 13,000 per DMA, which seems like a lot).
So, let’s go back to the 4 thousand. Add those to the just-shy-of-600,000 restaurants and you get, more or less, roughly 600,000 outlets….high-end food trucks account for about 0.7% of available outlets. Given that the trucks have a smaller capacity than most restaurants, this relationship (.7% to .1%) makes sense.
Now, let’s think about how much business they might do…there are 300 million people in the U.S. About 46% of them buy a prepared meal or snack in a day. Those that do, do so between 1.1 and 1.3 times in that day. So…carry the three…that’s about 170 million visits of all sorts in a given day. And, the .1% of those visits would be…borrow a one…170,000 food truck visits, which would mean that every one of those 4,000 gourmet food truck owners would be serving about 50 people EACH AND EVERY DAY. RAIN OR SHINE. WINTER OR SUMMER. PORTLAND OR CHICAGO. Given that that would be the average. And, given that this doesn’t take into account the traditional trucks, and given the lack of regulatory support for them and the seasonal variation in many cities, this adds up to a niche market segment that has great appeal within its niche.
So, the truth is somewhere in between.
The march seems inexorable. Here’s a New York Times article about food trucks in Paris. And here’s an actual food truck that I came across in Mexico City called Frijolero. Note the greenery to the right of the door. Nice truck!
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