Restaurants & Retail: Who Influences Whom?
By Chris Auman
Many of the same trends of convenience, health, locally sourced and organic are found throughout both foodservice and retail. Does one influence the other more, or are both driven by consumer demand? And what does that mean for the produce industry?
“Given several macro trends — continued move toward healthier eating, influence of world cuisines with heavy produce influence, clean label and ingredient transparency, seasonal menuing, etc. — I believe produce has only begun to realize its influence on American menus,” says Maeve Webster, president of Menu Matters, based in Arlington, VT. The consultancy group focuses on helping manufacturers and operators identify, evaluate and leverage trends in the food industry.
In some areas, however, retail is following foodservice, especially in the digital world. According to David Portalatin, vice president and food industry analyst for market research group NPD based in Port Washington, NY, “When you look at the restaurant space, digital orders are up 45 percent over the past two years because you have things like GrubHub, DoorDash and Uber Eats. Now you have AmazonFresh and Amazon Now and other digital platforms that offer the opportunity to get fresh foods into the hands of consumers in a very, very short span of time. I think you’ll see, even though it’s relatively small, those kinds of things are going to grow rapidly.”
How much do restaurants cut into retail and has the availability of chef-prepared delivery impacted retail in any noticeable way? “At the moment, I’m not sure these prepared meals or meal kits have significantly hurt either the restaurant or retail industries, as these programs tend to have a somewhat high drop-off rate,” says Portalatin. “That said, they indicate consumer interest in alternative sources for prepared or partially prepared meal options for at-home consumption.” Portalatin believes that, while this may be a threat, retailers are better leveraged to deal with it than foodservice. “Given the retail sector’s move into foodservice-style offerings, that differentiation may be dwindling. I think the food industry will increasingly see new and unexpected options pop up as the traditional segments continue to blur or, in some cases, potentially even disappear.”
The biggest influence of all may be the adoption of foodservice offerings by supermarket retailers. “Retailers are remodeling their prepared food areas to look more like the open food markets that have become very popular in a number of urban areas around the country,” says Brian Darr, managing director for Chicago-based market research firm Datassential. Darr breaks down foodservice into three major segments: restaurants, retail hosts (supermarkets, convenience stores, and other retail outlets with foodservice offerings) and on-site (schools and hospital cafeterias, etc.). “When we look at foodservice growth the past five years and forward the next few, we see supermarkets and C-stores as segments with growing foodservice sales and solid growth opportunities going forward. Foodservice sales at supermarkets have been estimated to be growing in the 4 to 6 percent range annually the past few years. That’s a stronger growth rate than what we’ve been seeing at restaurants.”