Saturday, January 2, 2010

Food Service Trends and the Economy

At tomorrow's class - providing it doesn't get snowed out - I have to turn in the first paper I've written in about a decade. I chose the topic of how the current state of the economy will effect food service trends for the coming year. What was different about writing this, as opposed to all of the other papers I've written is that it's actually a subject I care about. So I like to think that I was a little more thoughtful, a little less cavalier with this one. In addition to the food industry publications I used as sources, I also had the opportunity to get a few amazing local chefs to weigh in on the topic. So follow the jump to see what I came up with. And many thanks to Matt Jennings, Joe Hafner and Bun Lai for taking so much time to thoughtfully answer my questions!

Every year, restaurant industry experts try to predict the trends in food service that will dominate restaurants that year. For the most part, these predictions are spot-on. But what experts were not expecting was for the economy to be crippled over the last several years, forcing many diners to stop eating out all together, or at the very least, dine out with less frequency or make cost-saving menu choices. According to an article in Convenience Store News, consumer research conducted by Mintel in January, 2008 showed 54 percent of people who dined out regularly were cutting back on restaurant spending because of the economy.


The article quoted Maria Caranfa, director of Mintel Menu Insights, as saying that "restaurants need to be ready for customers who feel tired, overwhelmed and tapped out financially.” As a result of this climate, restaurant trends for 2010 can be expected to be focused heavily on quality ingredients and cost saving options for diners in addition to particular flavors or cuisines.

This is in contrast to the trends predicted earlier this decade. In an article written by Kelly Smith Killian, editor in chief of Restaurants & Institutions, Killian compares the trends predicted in the year 2000 to how they actually stacked up against the past ten years.

Killian looked back at an article written for Restaurants & Institutions back in 2000 that was summed up as follows. “At the start of the new millennium, quality will be equated with convenience, value, organic ingredients, well-prepared dishes, the perception of healthy and fresh food and a satisfying overall dining experience.” Killian states that while value, health, convenience, sustainability, quality and good experiences are top priorities, the recipes and strategies emerging now show that operators are constantly looking for innovative and exciting ways to meet diners’ many demands and still deliver an enjoyable dining experience.

Over the last several years, the demands of diners have revolved heavily around the value aspect, and restaurants are listening to those demands. Eateries of all kinds have focused on ways to keep their existing customers coming back, and bring in new diners with attractions such as two-for-one deals, prix fix menus and drink specials. This seems to be especially true here in Providence, where we have more than our share of fine dining institutions that are making concessions for their loyal customers, who, due to the economy, have more of a “pub budget” than an “amuse bouche budget.” An example that stands out in my mind is a recent trip to Gracie’s restaurant in Providence. Normally an unapologetically upscale dining destination, Gracie’s featured a prix fix menu for a mere $30 – a small price to pay for the gourmet fare available there.

When I spoke to Joe Hafner, Executive Chef at Gracie’s, he said that the fixed price menu is here to stay. “Its a win win situation. The customer gets a deal at a restaurant that may have been out of their price range, and the restaurant, if they are putting out a quality, consistent product with great service, builds loyalty. You can't pay for that. But the restaurant must be able to rely on their service staff for great service even though the check average is lower in many cases. The service must be rock solid. The love needs to be there from the valet to the coat check person and everyone in between.”

In researching this topic, I had the opportunity to speak to several other local restaurant owners about their own predictions for how the economy will affect their business. Bun Lai, of New Haven’s Miya’s Sushi, gave the following insight:

“During a recession, the general quality and value of a restaurant business tends to improve – it has to. The consumer can expect more bang for their buck as the market becomes more competitive. A bad economy is often good for businesses because it forces the business to aggressively improve.”

Online resources tend to agree with Lai that a down-economy can be an opportunity. In an article written for Hotel News Resource, Chris Urban sites the trends for 2010 as follows: comfort foods; “new corners of Asia,” meaning that things like Korean barbecue will hit the mainstream; the exploration of new frontiers of flavor, such as the use of ingredients like hibiscus flowers and umami; a prevalence of the use of proprietary herb or vegetable gardens, with an emphasis on local and seasonal ingredients; and finally, a trend toward breakfast type foods available at all hours, in restaurants where breakfast is an unexpected menu option.

With the possible exception of the hibiscus flower, each of these trends seems to speak of a leaning toward more affordable, cost effective ingredients and techniques. For example, when many people think of comfort food, things like beef stew and macaroni and cheese come to mind. These are things that can be made inexpensively, but given gourmet flourishes to delicious effect.

Matt Jennings, chef, cheese monger and owner of Farmstead and La Laiterie, has found that his customers seem to be of a different sort: they love food and are interested in quality ingredients. They’re willing to sacrifice other things in order to indulge in good food. Said Jennings, “We don't think we are positioned to really be one of those restaurants that offers 'discounts' - but we do like to offer more special events at lower costs - for example, maybe a play on a southern style picnic, paired with craft beers, priced at $30 per person. This sort of thing really generates interest and buzz, and we do a lot of them.”

Food Processing, a website for the food and beverage industry, weighed in with an article from November of 2009: “According to the International Foodservice Manufacturers Association (IFMA) forecast and Knouse Foods’ industry expertise, there are several foodservice trends emerging as a result of the recession and changing consumer behaviors. Knouse Foods highlights four trends that foodservice professionals can address to help diversify their menus, save costs and appeal to consumers’ evolving preferences.”

According to Food Processing, these trends include more healthful options; again, comfort foods; diversity in children’s menus and more innovative labor and cost saving solutions. On the one hand, the IFMA expects the current state of the economy to cause diners to be drawn to foods that are both inexpensive and nostalgic – reminiscent of simpler times. On the other hand, this is contradicted by a predicted leaning towards more healthful choices. A balance between the two concepts, combined with greater efforts to reduce labor and costs and actively working to create less waste will make for a successful restaurant business in 2010.

In conclusion, many food lovers have and will cut back on their restaurant visits in the down-economy, but many more will simply look to make more economical choices. Although many restaurant industry analysts name flavor and ingredient trends for the coming year, the main focus of many eateries will continue to be saving money within their own business, while creating value for their patrons. The restaurants that manage to do this will be the ones that survive and thrive well past 2010.


WORKS CITED


Killian, Kelly Smith. “How Foodservice Trends Have Changed over a Decade.”
Restaurants & Institutions, December 15, 2009. http://www.rimag.com/article/CA6710069.html?industryid=48496

Urban, Chris. “Five Leading Menu Trends for 2010.”
Hotel News Resource, December 10, 2009.

Staff Writer, “Five Foodservice Trends for 2009.”
Convenience Store News, December 11, 2008.

Staff Writer, “Knouse Foods Highlights Foodservice Trends For 2010.”
Food Processing, November 30, 2009.


FIRST PERSON SOURCES CITED

Hafner, Joe. Executive Chef.
Gracie’s, Providence, RI

Jennings, Matt. Chef, Cheese Monger, Owner.
Farmstead and La Laiterie, Providence, RI

Lai, Bun. Executive Chef.
Miya’s Sushi, New Haven, CT



3 comments:

Melina said...

Bravo Kate! That was both informative and interesting to read, especially as a consumer and as someone who enjoys good eats! Good luck with your paper :)

elizabeth said...

This is great! Innovation, I think, is really going to play a big role in the coming year among fine dining establishments. We're already seeing bar-friendly menus (as you mentioned)--I'm very curious to see what else restaurateurs come up with to get me to part with my cash.

Something that I think will start to percolate over the next few years, though, is the idea that there will be many more refined palates out there as a result of people exploring at home, making food they like, therefore not necessarily requiring them to go out to get their fix of fresh pasta or roast beef, because they can't really get it the way they like it. I'm not sure if it's simply requiring flawless execution (thereby requiring quality ingredients and staff) or if it's allowing a greater degree of involvement on the patron's part, but I do think that there will be a much higher standard applied to restaurants (especially ones where you plunk down triple digits or more) than even today.

I noticed in some reading for work that there are some restaurants that are encouraging diners to experiment with oils and salt with their bread--I can only imagine that this will evolve as more people really understand what tastes good to them.

I found it through this site, which if you need any more resources for your paper, could add some interesting color: http://www.foodchannel.com/stories/2154-top-10-food-trends-for-2010

Great job!

Kate Lowther said...

Hay Elizabeth, thanks so much for the feedback! I'll definitely check out that article. And I agree that as people get more comfortable in their own kitchens, restaurants will have to find new ways to get them in the door. I think some combination of pricing, innovative events and top notch service will be the ticket!