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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.
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Since 1975 CREST®, NPD's flagship information
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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.
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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.
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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:
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See how clients have used our analytic solutions to solve their business challenges in our Analytic Solutions Case Study Library.
With new labeling laws on the horizon, it’s critical to understand and address consumers’ concerns. Most consumers now say they are aware of genetically modified organisms (GMOs), and many of them tell us they aren’t comfortable buying and consuming foods that include them. Our new report, Navigating GMOs for Success, gives you new information and expert insight into this consumer mindset. It’s how to get the knowledge you need to improve product positioning and deliver effective marketing messages to respond to GMO-related concerns.
It's a "one-percent world," where growth is largely absent across foodservice segments. And now we're even seeing a slowdown in a former bright spot: quick service restaurants. But rather than simply accepting the status quo, smart companies are looking more deeply into what's actually behind the slow-to-no-growth problem. They want to identify their best opportunities to not just survive, but thrive. That's where The NPD Group's Losing Our Appetite for Restaurants report comes in.
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.
Innovation and Expansion Surround Plant-Based Dairy and Meat Alternatives but Market Still Remains Niche
In recent years there has been a lot of expansion and innovation surrounding plant-based dairy and meat alternatives in the U.S., even with dairy and animal-protein manufacturers finding ways to enter the space, but the market’s potential is still being determined. According to The NPD Group, a leading global information company, the market for plant-based alternatives is still evolving as consumers begin to leverage these items because of food allergies or they’re seeking what they believe to be more healthful options.
Convenience is a key reason why consumers use restaurants and other foodservice outlets and there is nothing more convenient than ordering a meal or snack for delivery, which is why delivery now represents 1.7 billion foodservice visits annually, reports The NPD Group, a leading global information company. Delivery is such a popular way to source meals and snacks that one-fourth of all U.S. consumers claim to have ordered a meal via delivery in the past three months, according to NPD.
A new index from The NPD Group’s Checkout TrackingSM shows that some of the biggest names in retailing and foodservice have become fully woven into American life – reaching an extraordinary percentage of buyers at least once a year.
Snack Foods Are Increasingly Consumed At Main Meals and Gen Zs and Millennials Will Drive This Trend Over the Next Decade
Health consciousness, more solo households, and convenience are among the reasons more U.S. consumers, particularly young adults, are eating snack foods as part of their main meals, finds The NPD Group, a leading global information company. Although most snack foods are eaten between meals, snack foods eaten at main meals now represent 24 percent of all snack food eatings, which is up from 21 percent five years ago, according to NPD’s continual tracking of U.S. consumers snacking attitudes and behaviors.
Although online grocery shoppers can be found across all demographic groups, they are more likely to be younger men, ages 18-44, according to a recent report on online grocery shopping by The NPD Group, a leading global information company. Amazon Prime members and young adults are other groups more likely to grocery shop online, finds The NPD Group report, The Virtual Grocery Store.
Total U.S. Restaurant Counts Dip by Two Percent; Restaurant Density Is At Its Lowest Level in Ten Years
The total number of U.S. restaurants decreased by two percent from a year ago to 620,807 units, according to a count of U.S. commercial restaurant locations compiled each spring and fall by The NPD Group, a leading global information company. With the decline in restaurant units, restaurant density (units per million population) is at its lowest level in the past ten years, dropping from 1,992 units per million in fall 2007 to 1,924 units per million in fall 2016, based on NPD’s Fall 2016 ReCount®, which includes restaurants open as of September 30, 2016.
As goes the U.S. quick service restaurant (QSR) segment, so goes the total foodservice industry. QSRs, which represent 80 percent of total commercial foodservice visits, realized no traffic growth in 2016 and total foodservice traffic dipped slightly, reports The NPD Group, a leading global information company. Visits to full service restaurants, which combined represent 20 percent of total industry traffic, declined last year, according to NPD Group’s daily tracking of consumers’ use of restaurants and other foodservice outlets.
Getting customers who visit restaurants less to visit more may be overstating the obvious in terms of boosting sluggish U.S. foodservice traffic growth. It turns out that it’s not. If half of the light restaurant users made one more visit per year it would be an incremental increase in sales of $1.1 billion, finds a new report from The NPD Group, a leading global information company. The report, which is based on NPD’s receipt mining service, Checkout TrackingSM, and its ongoing foodservice market research, examines the reasons why consumers have cut back on foodservice visits and which type of users — heavy, medium, light, and super light —decreased their visits the most.
U.S. consumers will take a personal approach to their health and wellness in 2017, reports The NPD Group, a leading global information company. Wearable devices that track footsteps and apps that track calories enable consumers to develop their own personal plans to meet their needs, rather than relying on health plans based on averages. Even though dieting is on the decline, “my own diet” is still rising as the most common way consumers take control of their intake, according to NPD Group’s continual tracking of consumers’ eating attitudes and behaviors.
Total U.S. Restaurant Industry Visit Growth Will Remain Stalled in 2017 But Quick Service Restaurant Traffic Will See Uptick
U.S. restaurant industry traffic will remain stalled in 2017 in much the same manner it did in 2016, reports The NPD Group, a leading global information company. The new year will bring little to no traffic growth for the total U.S. foodservice market. Quick service restaurants (QSRs), however, will increase visits by an estimated 1 percent, faring better than the flat growth achieved in 2016. The modest gain for QSRs will offset the anticipated 2 percent decline for full service restaurants, resulting in no-growth traffic for the industry overall, according to NPD Group’s daily tracking of U.S. consumers’ use restaurants and other foodservice outlets.
Understanding consumer behavior around scratch cooking versus foodservice usage is key to finding growth opportunities. Find out more about what is trending in food – it’s all in this video featuring David Portalatin, Senior Industry Analyst.
Foodservice manufacturers, operators and food retailers are looking for opportunities for growth. A key strategy is appealing to the desires of the consumer. Find out more about what is trending in food – it’s all in this video featuring David Portalatin, Senior Industry Analyst.
How Convenience Stores Are Winning Market Share
Most consumers now say they are aware of genetically modified organisms (GMOs), and many of them tell us they aren’t comfortable buying and consuming foods that include them. Our new report, Navigating GMOs for Success, gives you new information and expert insight into this consumer mindset. It’s how to get the knowledge you need to improve product positioning and deliver effective marketing messages to respond to GMO-related concerns.
Foodservice Brief: Full Service – Your “Sweet Spot” Has Eroded
CT-How a Pickle Maker Sold More Product
A major QSR chain’s analytics team had big questions and little time to answer them. Checkout Tracking delivered the answers. And it did it faster than other analytics tools would have
Craft coffee brewers are trending as a niche opportunity in the U.S. coffee market, with coffee consumers now using methods at home, like French press, pour over, and siphons. And that’s causing some confusion in the industry, since these craft-coffee consumers differ from traditional coffee drinkers in some important ways.
Generation, Life Stage, or Both: What’s Behind the Shifts?
Every journalist and student in America knows the so-called five Ws: who, what, when, where, and why. It turns out the same five Ws are also the most basic forms of consumer segmentation.
Insights and Opinions from our Analysts and Experts
As fascinating as the foodservice business is to me, I appreciate that not much ever happens in it compared to, say, consumer electronics or gaming. In those markets there are blockbuster new products or entirely new categories of things, like the Internet of Things and drones and wearables and VR...it goes on and on. In the foodservice business there is more related to meat, spicier things, pumpkin spice, and the "next" pumpkin spice and movie tie-ins (I admit it: I yawned as I wrote this sentence).
Yes, there has been the swift shift in the direction of purer foods. Yes, a fairly large and much-talked-about chain can have problems. Yes, companies can claim to deliver with drones. Chains can insert radical new ingredients (cheese!) into pizza crusts. Stuff happens...but there is rarely something emerging that causes everyone to get excited. OK, the mainstreaming of sriracha is pretty cool but is more of a tweak than a sea change.
The emergence of "Home Meal Replacements" in the '90's got everyone in a tizzy. There were conferences, white papers and special studies as various symbol manipulators saw an opportunity to manipulate some symbols for the foodservice market.
But mobile ordering!! Now there is a reason to get in a tizzy. Or, if you're an under-capitalized independent, it’s a reason to rejoice. ..or not. Everyone is getting into it. Even the local feed spot that is the closest foodservice outlet to the Global Foodservice Blog Mountain Redoubt allows me to place a pickup order using the same interface they use at the restaurant. I'd use the app but going there gives me an excuse to get out of the house and talk to people. They're so nice.
I've written before about how my personal Millennial focus group makes extensive and creative use of mobile ordering. From group customization of pizzas to Pad Thai in a jiffy in a strange city they have seamlessly integrated it into their lives. None have ordered anything via chat bot yet...unless you count pizzas from Alexa. They are really up on things.
I don't spend a lot of time in or thinking about the U.S. market since my focus is global foodservice. So the first time the mobile ordering thing came to my attention was in China. In China, mobile has gone from nothing to everywhere in a couple of years. There are dozens of startups fighting it out for share using dedicated apps or inside the WeChat parallel universe. They are even selling food from chains at below the price the chains charge. Talk about cutthroat!
When we look at NPD's CREST consumer foodservice tracking data in China we can see how this is playing out in the market. If we divide the method of ordering into three groups - mobile, internet and Old Boring Way (including sitting at a table and asking a server) - and we index them to a starting period of 2014, we can see that the Old Boring Way is the same size that it was ten quarters ago and the other two methods have grown consistently, quarter-after- quarter. Mobile ordering in China is now more than four times the size it was at the start of 2014.
Source: The NPD Group, CREST®, year ending September 2016
While the same pattern is not exactly repeated around the world, the flatness of the "Old Boring Way” is. In Europe the new cool ways are growing but often in fits and spurts. In Brazil the Internet is as flat as the OBW (Old Boring Way). In Australia the Internet is growing and mobile is flat.
I went down to Research Science Row to get some perspective on this. I found someone sweeping up at the end of the day who said that it's fair to say that "pretty much all" the growth in the global foodservice market is coming from mobile or Internet platforms. She also said it was OK to say that mobile ordering in China is "way tons" bigger than it was in 2014.
The thing about mobile ordering is that, as fast as it is growing, it still is very small. Below is another chart showing the percent of restaurant visits that come from each of the three ordering methods. Note that the Old Boring Way totally dominates all markets, which means that all the growth in these markets is coming from the incredibly cool and dynamic tiny slivers at the top.
In a market where the vastly dominant ordering form is stagnant, that is a reason to get excited.
I love reading things about the tastes of Millenials. For instance, I recently read that restaurants supposedly can really go a long way with them by offering vegetarian fare. I've been using CREST® global consumer foodservice tracking data to look into the foodservice tastes of generations just to see how different they are. I was inspired by hearing someone at a conference talk about how the new Generation Alpha (of which the oldest are 6) are and will be completely different (they're not). At that same conference someone said that the "global Millennials" were completely different from everyone else.
So as long as I had the data organized, I thought I'd see what it said about Millennials.
But before I looked at real data, I consulted my Millennial focus group about the vegetarian thing. One of the ten is a pescetarian who longs to be vegan but likes pudding too much (kidding, that was when she was much younger). Another is "sort of" vegetarian who doesn't bat an eye at chicken Parmesan or sausage pizza. Another will bat an eye at those things but will eat them to be polite if that's what's being served. The rest eat meat unapologetically. So, that's (generously) three out of ten. I think the folks on research science row would allow me to say that it's about a third. For the record, my imaginary better self is also vegetarian but since he's imaginary we can't count him in the stats.
This gives credence to the claim in the opening paragraph. My Millennial focus group has a higher incidence of vegetarian leanings than you'll find in most groups of people. NPD's National Eating Trends®, which continually tracks all aspects of consumption, reports that the incidence of flexible vegetarians or “flexitarians” are 8 percent of the population with actual vegetarians at 1 percent and vegans at half that. So there is an unusual prevalence; but (and again research science row backs me up here) that's not close to a majority.
Off the top of my head the biggest, broadest offering of a "veggie" thing is Sofritas at Chipotle. So I did a quick survey of my personal Millennials and found that one didn't know what it was (so much for a halo), one described himself as "intrigued" but had never tried it, one actually uses it as a kind of relish on top of the meat, one tried it and went back to the chicken. The most committed vegetarians pretty much always get it. I like the guy who uses it to express his vegetarian sympathies. We'll call that 25 percent incidence.
Again you can see why veggie offerings have value to a restaurant. But none of that is actually data. That's really just me talking to some people.
And we're now coming around to the point. OK...so I took a look at our CREST® ongoing foodservice research data from the U.S., Great Britain (which the Continental Europeans all say is just like the U.S....HA!), Italy, China and Japan. I broke out the global Millennials and looked to see what foods and drinks they consume the most.
|Regular CSDs||Water Still||Meat Dish||Regular Cola||Chinese Stir Fired|
|French Fries||Espresso||Japanese Tea||Chips/Fries||Plain Rice|
|Pizza||Croissant Farcito||Noodle, Pasta||Beef Burger||Burger|
|Breakfast Sandwiches||Pasta Semola||Coffee||Diet/Low Calorie Cola||Soup|
|Tea-Iced||Cola Regular||Veg Dish||Bacon||Chinese Stew|
|Lg Cheeseburger||Pizza||Lunch Box||Pizza||Cola - Regular|
|Bottled Water/Seltzer||Panini||Sushi||Plain Still Bottled Water||Soy Milk|
Source: The NPD Group/CREST®, year ending September 2016
While you could pick the lists apart and point out opportunities for vegetarian options (pineapple jalapeño pizza, for instance), they all look pretty much like everyone else in their respective countries. The Italian list looks very Italian to me (that's a stuffed croissant in the list). And the Japanese list looks very Japanese. They don't seem very "global millennial." The Chinese list, with burger and cola, is the most striking in its difference from the population. The soy milk in the list is not the soy milk we find in the Americas and Europe. It might more accurately be called "liquid tofu" and is the dominant breakfast beverage. And anyone can see that the British and the Americans are completely different. OK not really. They're disturbingly similar. The thing that looks very millennial to me (though not vegetarian) in the U.S. is the breakfast sandwiches; the seeds of all-day breakfast. The bacon in the British list may be a deconstructed bacon bap sandwich.
My Millennial focus group would likely come close to the U.S list if you replace cheeseburgers with burritos.
Now, we could "index" (it's a verb, not a noun) these and see which tiny things are more likely than average to be consumed by global Millennials. Alcohol would be prominent in a couple of countries. Just for fun, I'll tell you that bruschetta has the highest index for Millennials in the U.S.
Years ago there was a speaker on the U.S. foodservice conference circuit who spoke about his experiences at Burger King and the objections from their customers when Burger King removed salad bars that nobody ever used. He'd say that "people talk thin and eat fat." Customers liked to come in and see the salad bar before they ordered their Whoppers. So headlining a menu with a dish made of roasted cauliflower topped with spicy tomato sauce, almonds, and avocados is not an illogical thing. My imaginary better self is always ordering things like that while I'm pondering whether to get a full or half slab of ribs. Maybe just don't prep so much of it.
There has been a sort of double arms race in delivery of late.
The first arms race is built around information technology. This race has mostly been run by plucky startups. The introduction of apps that aggregate many different restaurants, chains, and independents has created a situation in which non-pizza places and independents in general are now able to compete with chains on a more equal footing. This has proved to be such a successful model that many of these startups, all over the world, have become none-too-plucky and have set themselves firmly on the road to Behemoth (which I believe is a town in Montana).
The second arms race is built around hardware. Chains, the residents of Behemoth, have taken the initiative here by (OK, in just a couple of instances) developing an air force of drones and different unmanned vehicles to deliver their goods. Truth be told, almost nothing has been delivered this way but there has been a lot written about each and every item delivered.
All the while, a behemoth with its own IT and its own drones has been entering the fray: Amazon.
Amazon appears to have moved beyond all the cool zip codes inside actual cities and into...well... Irvine, California. I suppose it's like a city and it's kinda cool but it is in no way as cool as the city of San Francisco...or whatever the name of the cool part of Brooklyn is...or Wrigleyville (Chicago)...or the Pearl District...or the neighborhood of the Global Foodservice Blog Mountain Redoubt (where, to be fair, Prime takes an extra day and we pick up our mail at the post office). The point is that it's one thing to market some stuff to those people who do all that cool stuff on their phones. It's another thing entirely to sell stuff to their older siblings or their parents. It's a move to the mainstream.
There is concern among restaurant chains that the kind of dis-intermediation taking place in the delivery "space" is less than desirable. The apps control the way the outlet is presented. A good bit of branding is removed. This is less of a problem for independents. If they can offer Pad Thai to a complete stranger at the price they put on their menu, it's a complete upside for them.
As we've talked about apps and foodservice delivery at other times in this space, the big benefit from the IT applications standpoint in the U.S. has been the independents. The apps provided them with reach and payment processing that they could not afford or manage in the past. Much of the growth in delivery in the past few years in the U.S. has come from non-pizza, non-chain outlets.
As much talking as there is about apps, NPD's report Delivery-A Growth Opportunity on the Horizon clearly illustrates that the telephone is still the primary means of ordering delivered food....except for millennials. And, apps are still less than a fifth of all foodservice orders across the board. What's missing from all research is the incidence of internet/app ordering offerings at restaurants. From our data, I'd guess that the majority of restaurants still rely on the phone. To me that means that there is still a huge upside and that's where Amazon comes in.
Now, Amazon is a behemoth for sure. But merchants seem to keep coming to Amazon to front for them and handle all those pesky details like billing and logistics. This could be similar to inventing an entire new ecosystem under which all restaurant offerings are more or less equal. Although there are lots of restaurant chains working tirelessly all around the world to regain their advantages in the new world of apps. Based on NPD's delivery report, we can see that we're only at the start of this.
You’ve probably heard me say already that food and beverage consumption patterns are slow to change, but lately I find myself eating those words (pun intended). My colleagues and I at NPD have been watching several trends that might disrupt what we consider to be the fundamentals for the food industry. We will closely monitor these shifts in the coming year and beyond.
Sweating the small stuff
It's the little things grabbing consumers’ attention these days; they can be small but influential ways to garner loyalty among consumers. Increasingly consumers are looking to support brands and companies that do more than manufacture a product —they want to support causes and actions aligned with their values. People feel they’re doing right when they support companies that are connected to locally sourced ingredients, donations to charities, sustainable environmental practices, and animal welfare practices. The constant flow of Internet-based information will continue growing, so expect younger consumers especially to research brands and pinpoint those with the qualities they value.
Healthful eating gets personal
It’s not about what works on average but what works for the individual. Just as consumers want personal touches in the foods they eat, health is getting personal as well. Wearable devices that track footsteps and apps that track calories allow consumers to develop their own personal plans to meet their needs, rather than relying on health plans based on averages. Even though dieting is on the decline, “my own diet” is still rising as the most common way consumers take control of their intake. They’re looking for personal plans that meet their own specific interests, and more importantly, their lifestyles.
The future is now
Technology is quickly making its way into how we acquire our foods and beverages. It represents a small portion of food acquisition but has the potential to grow if consumers are convinced the extra cost of technology saves time in other areas of their lives. Technology is also helping consumers avoid the grocery store entirely by enabling them to purchase their groceries online and have them delivered to their homes. Based on growth patterns for this behavior we expect to see more people in the coming years use retailers’ websites or third-party sites like InstaCart to acquire foods and beverages.
Meal kits, still in their infancy, are another time-saver and solve the age-old problem of figuring out what to have for dinner. The kits also prevent fresh foods from spoiling by providing the exact amount of ingredients called for by a particular recipe.
Home is where the
It’s becoming more common to make meals at home while also using dishes sourced from restaurants. Those purchased components are more likely to be appetizers or side dishes, indicating consumers use these dishes as quick ways to round out or complete their meals. It’s yet another sign people want freshly prepared items in the home without having to spend a great deal of time in the kitchen. This is a true generational shift; younger consumers already consume fresh foods at rates higher than older adults did when they were the same age. As these younger consumers age, our forecast shows their demand for freshness in a hurry will only increase.
I’ve got my eye on these trends and so should you. If you’re a food and beverage marketer i then now is the time to react to these shifts because more and more it seems the pace of change is accelerating. It’s about connecting with consumers on a personal level to let them know you understand them as an individual. One size fits all doesn’t seem to fit anymore.
I was just at a conference in Dubai. It was intended to be a global conference and, if you looked at the attendees, it pretty much was; especially from an American point of view. The content was largely presented from an American perspective. This was fine with me because I haven't been to an American conference in years and it was interesting to hear what the Americans are concerned about.
The Americans, like the Chinese, Canadians, Australians and various Europeans, are concerned about delivery apps and third party aggregation services.
Before I go further, I need to remind everyone that delivery is less than 10% of the traffic in any of the 13 markets we track with our CREST® foodservice market research. But, while these services are taking a part of something that is less than 10% of the market, they have grown from nothing with alarming speed. And, they have created services, like aggregation, that were unimagined just a few years ago. It feels like they could change everything.
The delivery aggregation services were likened to the hotel web sites that we business travelers love so much. Apparently, the hotels don't love them in the same way. They, like the restaurants, lose contact with their customers. They lose the ability to make themselves stand out and they, to some degree, lose pricing control. Now, we just started asking about these services in a couple of countries; but, we are well aware of the alarm with which some companies view them.
We have, on the other hand, been asking about Internet ordering and generic mobile app usage for a year or more all around the world. If I look at what CREST tells us about these services, it's easy to see why the Chinese and North Americans are so excited about this. In China, just shy of half of all delivery orders are through the Internet or an app. In Canada and the US, the number is a little smaller than that. This is up from zero just a couple of years ago.
But these tools are not just delivery. They're used for pickup. And at the conference they said that the day will soon be upon us when we use an app on our personal device to order while sitting at a table in a restaurant. Perhaps that day is already here. My Millennial focus group thinks use of on-premises apps is pointless. OK, so maybe they think it'd be worth it for discounts or coupons. One, whose food is always late, thinks that perhaps it would be good for tracking her order. Another thinks that, combined with Go Pro cameras and a VR headset, it could be a path to an entirely new level of transparency. My wife, a solid Boomer who is always up on things, has used an app-like device at Applebee's to speed up the service...but not a phone app. Maybe the on-premises app is something for Generation Alpha. Watch this space.
Source: The NPD Group/CREST®
I should go to more conferences.
I was just at a global foodservice conference in Dubai (with a distinctly American agenda) and came across the term "Generation Alpha," which covers anyone born after 2010. Sure this is likely a term bandied about in conference rooms all over North America…but it isn't in Asian or South American conference rooms. Even less here in the neighborhood of the Global Foodservice Blog Mountain Redoubt in California.
Boy are these kids going to be different. Boy they are different. You need to completely change your game to satisfy these kids like nothing before.
At the moment the oldest of Generation Alpha is 6-years-old.
So I thought (and I'm quoting myself here),"what are they eating so much of that's so different?"
Just to get myself started, I went to the U.S. CREST® foodservice market research database to see what it had to tell me. I found that the five most popular items for Generation Alpha were:
- French Fries
- Chicken Nuggets
- Regular Carbonated Soft Drinks
"No Way!" (I'm quoting you here). "They're eating fresh fruit and quinoa salads."
But these guys are supposed to be different from any previous generation? What if I went back to 2010, before any of them were born, to see what the favorite items of the youngest Generation Z kids were eating...
- French Fries
- Regular Carbonated Soft Drinks
- Chicken Nuggets
But we market researcher guys have a trick to tease differences out of the data to highlight things that might not be very important (quinoa) but are very different. We "index" the numbers for each generation relative to the average. This tells us the "propensity" to do a certain thing compared to (in this case) older people.
And when we do that we find that quinoa is the most important.
Just kidding. We find:
- Juice that's not orange juice
- Corn Dogs (!!!!)
- Yogurt-not frozen yogurt (that's better)
- Chicken Nuggets
And, to complete the circle, if we go back to 2010, we find the Under 6 set indexing "high" on:
- Juice that's not orange juice
- Grilled Cheese
- Corn Dogs
I love grilled cheese sandwiches so much I blogged about them last year.
So, I guess the thing about this generation isn't so much what they eat but how you're going to reach them. These kids are going to be as much younger than Millennials as Millennials are to Boomers. Sheesh! What are they going to be up to?
This little business, Two Penny Blue (the name refers to a stamp), is maybe my favorite business in the world. It's tucked into an arch in the old post office building in Sydney, Australia. Just to be clear, it's outside. All the customers are standing on the sidewalk. When the shop is closed there is virtually no sign that it exists. It embodies so many of the global trends.
- It serves coffee and handheld items...not meals. When the Australians ( like most people in the world) say "coffee" they mean espresso drinks. Australians, like most people in the world, have a special way to say "American Coffee" that evokes the idea of spitting something unpleasant out of your mouth.
- Every drink is customized...somehow even more than what you hear at a Starbucks. That's possibly because the default order is with sugar (which they put in for you). There is a person at the register to take your order and pay. That person also puts the sugars in the drinks along with the chocolate for the mochas and queues up the cups. Two people handle the espresso shots and steam the milk. Mostly they add the milk to the drinks and then put them on the counter. There is some system where the fourth person also adds milk. That person also puts the tops on and calls the drinks. During rush hour there are five or six people in line and ten or so waiting for drinks.
- It's very personal. The second time I walked up the cashier knew my drink.
- If you look carefully, you can see a tablet on the counter in front of the fourth person. That is where the mobile orders come in. See the cups next to her in the picture? She's playing the role of the cashier for online orders.
- And somehow it reeks of "authentic." I'm never sure what that's supposed to mean but this is a nearly perfect coffee serving machine of a business. It's like a permanent pop-up business.
Two Penny Blue coffee shop in Sydney, Australia. My favorite little business in the world.
When I’m on vacation I do my best to turn work off in my brain, but since I study food trends for a living that’s often hard to accomplish. Take for example a trip I recently took to Munich, Germany, where I met up with a friend who lives there. Since it was Oktoberfest we certainly had a few beers (maybe more than a few) and traditional Bavarian food, but he also introduced me to a dairy product in their grocery stores, which is not easily found in U.S. stores.
I told him I wanted to get Greek yogurt, but he insisted if I liked Greek yogurt I would definitely enjoy quark. I like to take the when-in-Rome attitude during my travels so I threw caution to the wind and purchased the plain-flavored version of the brand he recommended.
Since I enjoyed what I was eating I did a little online research to see what was so great about quark. First, quark is technically not yogurt but instead a curd cheese that has been smoothed, but the end result is a texture that nearly matches that of Greek yogurt. Quark also boasts health benefits that many manufacturers claim exceed what you’ll find with Greek yogurt. In Europe nutrition content labels show nutrient levels per 100 grams of the product versus per serving in the U.S., which allows consumers to compare across products regardless of the size. Protein levels per 100 grams of quark are claimed to be nearly twice that of Greek yogurt while having slightly less sodium. And just like with yogurt, quark can come in a variety of fat levels.
Quark is in limited distribution in the U.S so is it time to think about expanding its availability? A few years ago I might have said that yogurt is doing just fine and it’s growing organically. From the 1990s through 2012, consumption of yogurt in the U.S. nearly tripled, but the last few years have seen mostly stagnant consumption rates. And with nearly half of consumers telling us that they’re trying to get more protein in their diets, quark might be able to give them more bang for their buck.
I’ve also found that food and beverage innovations that attempt to evolve consumers’ behaviors versus revolutionize behaviors, have a greater chance of success since our consumption behaviors are habitual. Quark might be a new name and is not actually yogurt, but it is consumed the same way, tastes and looks similar, and wouldn’t ask consumers to make any drastic changes in their behaviors.
In my experience it was the perfect counterbalance to the beer, brats, fried food, and sweets I ate while celebrating Oktoberfest!
Two articles came across my screens here at the NPD Global Foodservice Blog Mountain Redoubt. The first is another piece of evidence that living in Mountain View, CA shifts you perceptibly into the future (one of my Millennial focus group witnessed a confused Google self-driving car trying to deal with California’s self-righteous pedestrians…and the car became paralyzed). The other articles build on the first.
So, here’s this article about robotic pizza that is par-baked and finished, cut, and boxed in the delivery truck. And then there’s this news article from the Buckeye State about using 3-D printers to assemble pizzas. And then there’s the news about ordering pizza by chat bot.
BTW, the chat bot thing is so new that I had to explain it to my usually-reliable Millennial focus group. I think "nonplussed" is the word to describe them in that situation. SJ Perlman might have said “slack jawed.”
Tech developers think a lot about pizza, that’s for sure.
That’s because their parents in the 80’s and early 90’s raised them on delivered pizza. CREST® foodservice market research shows that the story of the U.S. foodservice business in the ’80’s was basically the story of restaurant pizza consumed in the home. `Women surged into the work force, creating more household income and less time for food prep and shopping. Domino’s introduced delivery to much of the U.S. Little Caesar’s grew like crazy with take-away pizza. Papa John’s came on the U.S. scene a little later.
Pizza so dominated the trends that our long time, insightful, U.S. foodservice market analyst, Harry Balzer, would intone to food companies in the 80's, “If you want your product to grow, put it on pizza.” Chicken pizza? Barbecue pizza? Ham and pineapple pizza? Jalapeño pizza? All fantastic. None existed in the ’70’s. Thanks Harry.
Now, delivery was and still is dominated by (1) pizza and (2) restaurant chains. Recent development from aggregator delivery services has created a big shift in the market. This shift has made independents and non-pizza places much more competitive. Much of the recent growth in delivery has come from non-pizza places. But these new technologies are going to add a new capital bar that will be tough for independents to get over.
OK, now visualize this…
3-D pizza printers with robotic ovens/cutters/boxers inside self-driving delivery vans. And just like the Uber patrons and folks waiting for their burritos via drone, bunches of consumers standing curbside, their phones face-up on their palms and their eyes shifting from the screen to the horizon looking for the robot within the robot within the robot. Sign me up.
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.