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The Foodservice Industry is Ripe for Disruption

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Blog March 28, 2017 by Jean-Pierre Lacroix
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The Foodservice Industry is Ripe for Disruption

Most industries have gone through one form of disruption or another, forcing transformational change on older industries or building totally new ones over the ashes of legacy businesses. For many years, the foodservice industry has been immune to major disruption, other than the introduction of fast casual that has filled a white space not previously owned by either fast food or casual dining operators. It could be argued that the reason for this lack of disruption is the fact the customer needs are being met by current foodservice experiences. Even the introduction of mobile apps has done nothing to disrupt how we frequent and enjoy eating out, irrespective if it’s a quick gut fill or relaxing with friends and family. However, all of this stability and confidence in current business models are about to change as the following three potentially disruptive technologies and platforms start appearing, filling the need for customization, speed of service, food safety and convenience.

1. Alternative branded food experiences

For the food industry, one major disruptive threat focuses around frequency of visits and check size. This threat will come from industries not traditionally related to foodservice but that can gain incremental sales and brand loyalty by providing eating experiences. With razor sharp margins, supermarkets have clearly identified foodservice as an opportunity to provide added value, higher margin offerings to their customers. Our recent assignment with a leading supermarket chain included the development of a foodservice experience ranging from sushi to a wide range of hot and cold food offerings, branded as part of a cafe experience with comfortable seating and even a fireplace.

Food trucks are another example of an alternative branded experience that is growing significantly, providing exotic and unique food offerings to customers bored with the fares offered by most chains. Museums, automobile and motorcycle brands are also evolving to capture the needs of millennials who value having an experience more than owning a product. These industries are all getting in on the foodservice action, such as Harley-Davidson Canada which opened a motorcycle-themed pop-up cafe in Toronto last June. They’re providing fast casual experiences while slowly disrupting the industry by stealing occasions that for many decades was the foodservice industry’s undisputed domain.

2. Automated delivery systems

The recent launch of Eatsa, where patrons order their meals on an iPad and pick up their order in a cubby, is creating a huge stir. It’s obviously a rehash of the New York City automats that were all in vogue at the turn of the last century, with technology replacing slot machines. Another trend which may be more ominous are the advances in AI and facial recognition where future vending machines will be able to remember your last order and conveniently deliver it within seconds, bringing in a whole new level of fast food. If you are on a diet or participating in a health program being monitored by your watch, the vending machine may also provide helpful suggestions on what is best for you.

3. 3D printing

We have all witnessed the disruptive impact to the coffee industry by Keurig and Nespresso who provide miniaturized manufacturing that is customizable to each customer. So why not apply the same disruptive power to fast food manufacturing technology, bringing the capability of a factory the size of a city block to your counter top in a company cafeteria, at an airport, or even right in customers’ homes?A company called Natural Machines has introduced a 3D printer for food – the Foodini. The Barcelona-based startup is the only company capable of printing a wide range of dishes such as homemade pizza or filled pasta. This technology will not only revolutionize the foodservice industry but also food manufacturing and cooking as a whole.

The best way to avoid disruption is to put a disruptive strategy in place that would eliminate any surprise or new industry shaping technologies emerging to impact the status quo. The foodservice industry business model also needs to be reevaluated to determine where it brings the most value to patrons and where there is little to no value. In most restaurant studies, it’s not food quality that will impact a customer not coming back but more importantly the overall experience including customer service and restaurant ambiance. With the rising concern about food safety, the growing interest in locally grown and organic foods, in addition to millennials’ need to discover new food experiences, the foodservice industry may want to explore new disruptive strategies that focus on the experience.

How is your foodservice business preparing for these three disruptive technologies? Are you early adopters or wait and see-ers? Let us know how you’re preparing for the future of foodservice in the comments below and be sure to subscribe to receive the latest Shikatani Lacroix insights in your inbox.

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