At Technomic's annual Trends & Directions Conference in Chicago, representatives from the research firm did what they do best: outlined a handful of trending topics and backed them up with supporting data, an economic overview and even more data. Here's a look at a few factors that will influence the foodservice industry in the coming year.
From Millennials to Foodservice Hobbyists
By now most foodservice operators and designers have turned their attention toward Millennials, the largest and fastest growing consumer group looking to restaurants for great food, great drink and a great ambiance with plenty of opportunities to socialize. But as talk about Millennials abounds, there is also increasing confusion about just how to define someone from that group. Some say Millennials include everyone born between 1977 and 1992, while others break out Gen Z, which includes those in their teenage years and born as early as 1995, as its own unique demographic.
Moving beyond just age, Technomic describes "foodservice hobbyists" as the most influential consumer group. Technomic estimates that about 19.7 percent of the population can be considered foodservice hobbyists, with this group consuming 20.6 percent of weekly foodservice meals. It's a demographic that not only includes members of the Gen X and Baby Boomer generations, but describes more closely how consumers use and perceive foodservice operations.
"Foodservice hobbyists take risks with food and like to explore, and they prioritize ingredients," Sarah Monnette, Technomic's senior director of consumer insights and innovation, said during the conference. Along these lines, Technomic's research shows 58 percent and 57 percent of Millennials and Gen Z consumers rank ingredients as very important when selecting a restaurant, compared to 51 percent of Gen Xers and 45 percent of Baby Boomers.
Social responsibility is also important to Foodservice Hobbyists, and this means restaurants focusing on serving antibiotic-free meat and other "sustainable" ingredients, such as Chipotle, resonate with this consumer demographic. Fifty-six percent of Gen Zs believe social responsibility is very important when eating out, but other generation groups also feel the same way – 55 percent of Millennials, 52 percent of Gen Xers and 50 percent of Baby Boomers to be exact.
After food taste and fresh ingredients, menu variety plays an important role when choosing a restaurant, and this keeps in line with the notion that foodservice hobbyists, who are open to culinary and ethnic exploration, have grown in numbers.
Foodservice hobbyists can also overlap with other consumer food groups or "psychological sectors," such as the Busy Balancers, who look for value, variety, convenience and have a strong brand loyalty; Bargain Hunters; Functional Eaters, who put convenience first, well over bands, and Health Enthusiasts looking for lighter meals.
While foodservice hobbyists span all ages, they remain most prevalent among Millennials, even over Gen Z who might have less money and time to spend and therefore are more likely to be considered Busy Balancers.
Monnette pointed out brands like Jason's Deli, Panera, and Texas Roadhouse as catering to this foodservice hobbyist group by offering higher end ingredients as well as many unique and seasonal items. "Consumers are a continually moving target," Monnette said. "It can be difficult for chains to target each individual group because all of these needs have become so different." Catering to those looking for high-quality, creative food can help transcend multiple generations.
Community-Based Growth Concepts
The fastest growing fast-casual subsegments are those operations functioning in the Mediterranean and healthy menu categories, growing at rates of 33 percent and 30 percent, according to Technomic. That's closely followed by pizza, which grew 23 percent last year, and barbecue at 21 percent. Salads are growing, too, at a rate of 17 percent last year.
Under the Mediterranean subsegment, chains like Cava Mezze Grill, with eight locations throughout the East Coast, fits into both the Mediterranean and health categories. The chain doubles down on its consumer appeal by focusing on creating a strong community and employee-centric culture. Offering "customizable meals featuring a variety of sauces, seasoned proteins and fresh toppings," this growing fast-casual chain partners with many nonprofits to promote wholesome, locally sourced food.
In the pizza category, the 12-unit Washington, D.C.-based &pizza, also focuses on communities and charity with its #andcharity and Buy One: Feed One programs to help feed the hungry, all while offering sophisticated, oval-shaped pies set in the backdrop of modern, black-and-white décor. The Florida-based chain 4 Rivers Smokehouse takes things one step further as a faith-minded, family-owned business that's not afraid to bring religious references into its concept to attract to like-minded patrons.
The 6-unit Clover Food Lab in Massachusetts started off as a food truck but now focuses on building communities through fully transparent restaurants that have completely open kitchens and no freezers, which further highlights its emphasis on fresh food. Even the chain's blog chronicles mistakes, menu development and sources for its ingredients while "tech-enhanced" mediums like apps and an enhanced social media program helps Clover Food Lab engage with consumers through social media sites, surveys and Yelp.
Chipotle was certainly onto something. Consumers continue to want to customize their meals when dining out, both at limited-service and fast-casual restaurants. In fact, 46 percent of operators say consumers want to customize today more than ever, according to Technomic.
Quick-serve restaurants have begun to get in the game with 61 percent of operators accommodating all customization requests compared to 52 percent of full-service restaurants. From the consumer perspective, 72 percent expect restaurants to allow some customization while 66 percent say the ability to customize is important, even if they order straight off the menu.
Customization is most important to Gen Zs (54 percent) and Millennials (50 percent) compared to Gen Xers (47 percent) and Baby Boomers (32 percent). In fact, Gen Zs and Millennials customize 49 percent and 44 percent of their food orders, respectively.
Burgers and sandwiches represent the most customized items (61 percent and 66 percent), while consumers prefer to build their own pizza (80 percent) and salads (53 percent).
Some drawbacks of customization, however, can include slightly slower service and in some cases higher food prices and labor costs, operators say.
Industry trends analyst Nancy Kruse aligned with Technomic's Donna Hood Crecca, senior director, adult beverage resource group, to point out growing culinary and cocktail trends that might impact how concepts grow and even start out in the coming years. From charred vegetables to underutilized root varieties, the popularity of plants is growing fast as chefs and restaurants realize they can stretch their profits with produce versus expensive proteins.
"Vegetables also keep in line with New Nordic cuisine, where charring has become the go-to prep technique," said Kruse.
From garden to glass, vegetables are also showing up in cocktails, Hood Crecca pointed out. Some examples include the I Got Beet with beet simple syrup at Pitfire Aristan Pizza or margaritas spiked with kale and carrot juice popping up at bars and restaurants around the country.
As the salad and healthy fast-casual subsegments continue to grow, vegetables might begin to take up more space on menus across the board.