It's the beginning of the year and it is a time when many columnists, bloggers and the like share a few trends they will monitor in the coming months. So, with that in mind, I would like to share a dozen thoughts and ideas about the foodservice industry as it enters 2012.
1. Casual dining operators will start to shake off the doldrums and gain strength.
Polished casual concepts are holding their own while more traditional casual players are sharpening their games through redesigned prototypes, enhanced menus and more.
2. Operators will continue to deal with business pressures in the form of food prices, labor and utility expenses.
As the NRA's Hudson Riehle reported via his Twitter feed, wholesale food prices were up 8.1 percent in November, in a year over year comparison. While there may be some relief in some categories, on the whole operators will continue to wrestle with operating expenses, doing what they can to drive efficiencies to avoid having to increase prices for as long as possible.
3. Operators will also continue to ride an emotional roller coaster of foot traffic and the economy.
During the course of the year, foot traffic will ebb and flow for many operators not named McDonald's or Chipotle, so expect the restaurant community's outlook to adjust accordingly. While these peaks and valleys are natural, keep an eye on the industry as a whole to see if things are trending in the right direction.
4. The equipment and supplies purchasing process will remain competitive, with an advantage toward solutions perceived as collaborative and innovative.
Every supplier claims they provide their customers with solutions and not just a product for a price. But ask yourself if that's really the case with your company or suppliers. For this to happen, suppliers and customers alike have to be willing to dedicate the time to having an honest and open discussion about opportunities and pain points. Suppliers that serve merely as order takers and customers who place their vendors in that role will not reap the dynamic return on investment associated with working with one another, and not just having a transaction-based relationship.
5. Is now the time for consolidation in the dealer community?
Last year was marked by asset purchases within the dealer community. With business conditions improving, is this segment poised for a period mergers and acquisitions as many have forecasted for a while? I am not really sure but it is something worth monitoring.
6. The time is now for consultants to look for opportunities to partner with each other.
The economic challenges of recent years really took its toll on the consultant community. So many are forced to market their services for the first time in their storied careers and many smaller firms have gotten even smaller. And now with Revit making slow but steady inroads into the foodservice design process it would seem that this segment may have to endure another period of change. It would make sense, then, that many consultants look for ways to partner with one another to expand their reach and augment their skillsets. We saw some of this last fall when Daniel Design merged with Camacho Associates and we've seen a number of design consultants align their businesses with MAS consultants in recent years. It would make even more sense, now, for this trend to continue.
7. Service agents have never been more valuable.
Factories and dealers report earning a sale has never been more competitive. One key element in any purchasing decision has to be the supply chain's ability to support the equipment once it is installed. In response to the challenging business climate, many operators don't have back up items available and some dealers have even lowered their inventory levels. So the service agent will need to be able to fix an item in an efficient manner to help minimize the loss of operator revenue that comes in the form of downtime for key items.
8. Competition is everywhere for most everyone.
For example, 91 percent of dealers surveyed by FE&S for its 2012 Forecast Study said they feel the industry is more competitive than it was five years ago. That's due, in part, to the fact that operators are requiring more bids before making purchases. And operators are feeling the pinch from all sides, too. For example, here in Chicago, Walgreens introduced a new upscale unit that features a coffee bar, sushi made to order and more. So regardless of your position within the industry, your customers will want you to provide value on their terms — not yours.
9. Technologies such as Revit are changing the way the industry designs and works together.
While getting started on working with Revit may be a little daunting and that may be keeping some foodservice organizations on the sideline for now, that will change eventually. The benefits of working collaboratively in Revit are too hard to ignore. So perhaps you or your company won't become Revit experts but you will need to partner with one eventually.
10. Social media may not be a significant marketing tool for the equipment and supplies segment yet but that will change.
Younger generations entering the industry, particularly on the operator side, will have grown up with social media technology, no matter how new it seems to us today. As a result, they may not make purchasing decisions for high ticket items like warewashers or combi ovens via Twitter, but they will want to use social media tools to build relationships and contribute to the dialogue that comes with them.
11. The political rhetoric associated with the presidential election will keep the business environment uncertain.
As part of the run for the White House, I expect to see political action committees and many candidates trying to scare us into sharing their perspectives on the economy and our current leadership. These scare tactics will only serve to mask the real challenges and opportunities in the business environment as things continue to play out in the coming months. So it is important to remember that all economics is local and understand what's meaningful to your business and the community it serves.
12. The industry is ready for a discussion about sustainability that goes beyond the sourcing of ingredients.
For the longest time, when the topic of sustainable foodservice came up, the conversation mostly centered on where operators would buy their vegetables. Now, it seems as if the industry is ready to broaden that conversation to include some less sexy but equally as important topics such as waste management, water efficiency and more. This is due, in part, to the fact that 80 percent of diners expressed concern about food waste in restaurants, according to a recent study by Unilever. Consumers continuing to express these types of thoughts have operators taking notice and additional steps to do right by the environment, which is good for everyone. And if you are interested in learning more about sustainable foodservice practices be sure to sign up for FE&S' Jan. 31 free webcast that will address this very subject.