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The Next Idea 2012 Food and Eating Out Forecast

As The Next Idea’s research team began to assess and forecast 2012’s trends in dining out and hospitality, we were faced with the extraordinary task of examining the unparalleled changes that 2011 world events brought to our industry at every level. While our task is to report on 2012 global hospitality and dining out trends, we simply could not ignore world events. We felt we must discuss the broader implications that these events will have on consumer behavior and trends in general.

Report Methodology

To predict buyer behavior, one must thoroughly understand consumers. Forecasting future trends relies on balancing an insightful perception of history and foundation, with a concise analysis of the current consumer frame of mind.

Our report is based on findings from leading market research firms, augmented by our own consultants’ grassroots and global experience this past year working with our national and international clients.

To accurately predict hospitality trends, we present here an appraisal of the restaurant, food, and hospitality consumer: identifying the overall consumer landscape, examining the consumer mindset, and finally, forecasting notable ideas and future trends for 2012 and beyond.

The objective is that by comprehending the consumer mentality, you can more effectively meet evolving consumer expectations. This will in turn facilitate innovation, continued relevance, and ongoing success.

Overview

Last year we predicted; ‘For 2011, the prevailing message reflects a melding of increased consumer intelligence, expanded empowerment and alternatives, and a demand for a balance between cost and quality’. Indeed, this has proved extremely accurate, not just in the U.S., but across the globe. As we watched people turn to the streets in both peaceful and not so peaceful demonstrations, we were not just observing political change. We were witnessing populations exercising their newfound powers in social media and popular demonstrations to achieve individual and collective betterment in living standards.

While we could argue that there is a big difference in quality of life between the USA and, say, Yemen, the fact is that in both countries the population expects and deserves transparency, fairness and most of all, honesty. Interestingly, although the U.S. has largely been taken by surprise by the ‘Occupy Wall Street’ and subsequent ‘99%’ protests, the desires and goals expressed by the moderates of these groups are not substantially different from those of mainstream Americans. For example: reduce corporate America’s influence in politics, improve education, universal healthcare, and so on. Despite which side of the political spectrum each of us is on, it is difficult to argue the fairness of multi-million dollar bonuses awarded to bankers who survived only because of taxpayer bailouts, when American per capita earnings are dropping in the midst of higher inflation, stagnant wage levels and marginal job security.

These protest movements, in whatever country they take place, tell us one thing: the silent majority is no longer silent. It is both informed and motivated, and if not appeased through fair governance (not necessarily democracy), it will force change at an unprecedented level.

Of course, The Next Idea is not a political commentary agency, so what, one might ask, is the relevance of 2011 global events to dining out? The answer is both simple and clear:  We believe that the world’s mood is changing and that this will impact all areas of consumer thinking and behavior. While restaurateurs, hoteliers and ‘foodies’ like to believe they effect change through innovation, the reality is that the consumer effects change through demand and need. Simply put, in a post-recession restaurant and hospitality marketplace, consumers are increasingly calling the shots. We must therefore understand the consumer frame of mind to identify important future trends.

Forecast of Change

While 2011 has been a year of unparalleled history that will shape the next 25 years, we must now assess how the resultant changes will impact the world of food and leisure in general.

In a nutshell, the post-modern consumer (2009-2010) has evolved into a more astute and aware activist. He is no longer searching for answers to ‘how we got into this mess,’ but instead is demanding a way out. When it comes to food, the consumer wants an understanding of and solutions to the plethora of diseases that modern day food consumption is generating. With more than 180 million American consumers overweight or obese, childhood obesity rates tripling over the last 30 years, and the alarming increase of unexplained childhood disorders, consumers’ decisions related to what, when and where to eat, now impact every part of the restaurant, hospitality, food service, and grocery industries.  

The health issues are not solely confined to the U.S. In fact, in all markets and developed parts of the world, food-related diseases such as obesity and diabetes are on the rise and will only continue rising now that the world’s population has exceeded the 7 billion milestone in 2011. 

In addition to health issues’ impact on the consumer -- the recession and lackluster recovery have profoundly affected the consumer’s view on almost everything corporate. It started with mistrust of banks and corporate America in 2008-9. Then, as a result of mass layoffs and the soaring numbers of unemployed workers, Americans soon turned their attention to the large food corporations, demanding clarity in labeling, nutritional information, and the source of ingredients. The corporate response has been, in part, to provide greater information and healthier menu options. The economics and efficiencies in the U.S. food distribution system, however, has not allowed for large-scale change in better quality and more natural ingredients. The consumer, therefore, remains agitated and is looking at ‘local’ more favorably than before as ‘local’ speaks to the re-energized consumer value of honesty.   

This has resulted in several trends towards local purchasing by restaurants, hotels, and some start-up services that have a promising future. For example, Farmlink in West Michigan (USA), is a website that puts chefs and farmers in direct contact. TNI believes that this new service, while in its infancy, could very well, if executed properly, set the model for many similar services that will drive inordinate change in the U.S. distribution model over the next 10 years.

Along with health and a greater desire for locally grown food, additional factors are impacting consumer choice. Enhanced environmental awareness, greater understanding of food quality, and a generally elevated interest in food, are all aspects that will shape consumer demand trends in 2012 and after. 

The hospitality and restaurant industries are ever evolving, spurred on by the world’s shifting economic and demographic dynamics, forcing rapid change at an unprecedented rate.

To fully understand these rapid changes and how they affect the consumer, it is essential to understand the consumer’s ‘mood.’

In broad terms, today’s consumer has modified his thinking – out goes “super-size” in comes ‘enough!’ Extremely Cost-Sensitive Consumers and Budget-Savvy Consumers are the new emerging customer segments that food and beverage brands will be targeting in their new and re-packaged product launches. Value to the everyday consumer is basically about price point. It is no longer important what the cost per ounce is. What matters is what the consumer can afford – the days of ‘trading up’ have migrated to trading down. This means that demand for small sizes, convenient sizes, and economic alternatives will be in vogue, and will drive restaurants to rethink their portion sizes and pricing.

This downsizing falls neatly into the trend of healthy eating, which has seen remarkable traction in the mainstream marketplace for the past 5 – 10 years. Smaller portions means fewer calories. The consumer, however, is more aware than ever of price vs. portion size, and he is looking for the ideal price/portion balance for him and his family.

Most importantly, the 2012 consumer remains skeptical of corporations and is far more inclined to support local businesses than before. In the food business, this recently adjusted consumer position will impact how and what we eat across the board over the next 10 to 20 years.  

2012 TNI’s Food Forecast: Green, Local and Low Calorie

Based on The Next Idea’s understanding of the consumer, we have identified the following trends that will spur change in the coming years.

Street Food Mashups

The ever-increasing use of social media is driving street food mashups to a new level. Street food mashups are basically food trucks forming outdoor food courts – open-air versions of the familiar shopping mall food courts. These are new ways to buy breakfast, lunch or dinner while exploring world food trends, such as those from the Asian and South American cultures. Street food is inexpensive, trendy, tasty, and makes portable eating both social and fun. A good example is Jappadog. Jappadog's are hotdogs with various Japanese toppings that appeal mostly to Millennials (or Y Generation – those born in the late ‘80s to mid ‘90s).

Modernizing Common Food

Innovation is often considered the creation of something new. However, in food it applies just as much to the modernization of old recipes. A great example is the humble hot dog, which saw a huge renaissance in 2011. In Denver, Billy’s Gourmet Hot Dogs gained substantial appeal, as has Washington, D.C.–based DC-3. On the West Coast, there have been a number of new hot dog restaurant openings, one of the most notable being Otis Jackson’s Soul Dog, in North Hollywood, which offers authentic soul food toppings within its retro-designed restaurant, and has fast become a favorite of the media and local celebrities.

Technomic’s MenuMonitor, (the primary industry research firm) reports a 5 percent increase in the number of hot dogs on fast-casual menus in 2011.

It’s not just hot dogs that are seeing an overhaul. The gourmet burger trend continues to outperform many industry categories, and is expected to continue, while pizza is being taken to a new level of popularity with the use of flat bread bases and ever more unusual and exotic cheese, vegetable and protein toppings.

Healthy Vending

One area that illustrates changing demand is vending machines. Healthy vending machines are offering snacks like carrots and apples, hummus, meal replacement bars and yogurt. These machines are popping up in response to consumer interest in nutritious eating, combined with legislation aimed at limiting junk food in schools.

The healthy vending machines movement has been an ongoing trend that is growing as a result of childhood and adult obesity and the general wellness movement. While this trend mainly began in schools, it is expected to expand into hospitals, airports, hotels and offices, as the consumer seeks tasty, healthful alternatives to high-caloric junk food.

Small is Hip

Although small, bite-sized food is not new, it is on the upswing now as a result of the consumer’s ever increasing mobility and interest in trying many dishes at meal time. At the high end of the industry, Michael Mina has taken this concept mainstream. There are many niche restaurants, however, that are serving unique, bite-sized food to discerning diners. In addition, many brands have introduced bite-sized products such as Starbucks Petites, Cake Pops, Mini Cupcakes, Whoopie Pies and Sweet Squares. This new concept has succeeded since the consumer can indulge in a treat and have fewer regrets due to the small portions.

This trend is expected to grow in all food service categories, and we expect to see some new niche concepts focusing on purely bite-sized food items over the next five years.

 Global Food

As the world becomes more interconnected, more new ethnic food becomes available. Although the U.S. market will take time to react to global food trends, the rest of the world will move faster. Fusion food will take on a highly mainstream position internationally with new global fusion food concepts expected to pop up in Asia, India and Europe at an increasing rate. The influence will be Pan-Asian street food, which will slowly, but surely, take root in many countries. We will see new Pan Asian concepts (especially QSR) cuisine in the U.S., and most likely starting in some of the major cities as well as quickly growing regionally. It remains to be seen whether these brands will be coming from primarily from Asia or home-grown in America.

Vegan

Driven by the concept of wellness, one of the food world’s surprises has been the rise of veganism. Currently, although only 1 percent of the U.S. population is vegan, the cuisine is appealing to more and more people as a healthful meal option.

Veganism  simply involves animal-free food – and zero tolerance for animal bi-products in food. This means that only food that comes from the ground -- vegetables, fruits, grains and plants -- is acceptable to eat.

Traditionally, veganism has been more a lifestyle than a diet. Its philosophy extends to clothing, cosmetics and so on. Recently, it has been promoted as a diet form in its own right. Indeed, recent years have witnessed many high-profile people identifying themselves with a vegan diet: Bill Clinton, Steve Wynn, John Mackey (Wholefoods CEO), and even Mike Tyson.

There are already a few vegan restaurant chains in the West Coast -- Veggie Grill and Native Foods, along with a growing number of independents. This cuisine and eating style is forecasted to grow at a substantial rate over the coming years as it addresses both health and economic concerns and has been sufficiently well developed to appeal to the broader customer taste profile.

Local is best

The farm-to-table movement has continued to grow and independent restaurants are making conscious attempts to purchase locally. Restaurants increasingly feature their farmer suppliers, including stating the source of their products and offering special menus from individual farms.

This trend will continue to grow and we will see restaurants paying less attention to chefs while focusing on the farmers and food artisans.

The great news for consumers’ health (and demand) is that more attention to the supply chain also means more attention to food safety and product traceability, not to mention local sourcing and freshness.

Equally, the increased use of seasonal and local items suits the previously mentioned less-is-more trend. To facilitate flexible purchasing, growers, manufacturers, distributors and operators continue to embrace a more transparent, safe and efficient supply chain.

Ethnic Food. The U.S. offers a broad representation of ethnic foods, especially Asian and Mexican.

As the new decade progresses, The Next Idea predicts increasing influence from Indian, Peruvian and Mediterranean food. Although these cuisines have been slow to gain traction in the U.S., they offer wonderful and exotic flavors along with healthier cooking methods. Mediterranean food in particular has many healthy attributes, often promoted as heart-healthy and abundant with anti-oxidants. A new trend is that these foods will be made with authentic recipes and locally purchased fresh ingredients.

Social Networking Accelerates

In 2011, it was difficult to find any business or industry journal that did not refer to Facebook, Twitter or LinkedIn in some manner. The reality is that social media has now become a way of life, not unlike Google 10 years ago. New industries have emerged, jobs are being created, and many companies are building their business model around the social media community. However, while interactions on the internet will most likely never go away, it is worth considering what Facebook might look like in the next five years. Many people believe that Facebook is here to stay, though that is not so clear. Certainly, people are either going to love the social benefits they obtain from sharing information or they are going to become sick of people being aware of everything they’re doing. Facebook has become such a major social platform for other services that it will likely overcome a substantial amount of users dropping off or elevating their privacy settings. The broader question is how will it defend itself against increasing competition, and more importantly, user boredom? Lastly, we are bombarded with thousands of new data points everyday just from friends and people we follow on Facebook and Twitter. When will it be too much? So, although social media is an ever-increasing trend, it remains unclear what the future will hold.

Free Food

Free. Free is in—and we don’t mean free food. Consumers are not just looking for additive and pesticide-free food. Minorities are now the majority, and they want food free from their nemesis --whatever said nemesis may be. For example, the estimated three million Americans with celiac disease want gluten-free. Lactose-intolerant consumers want lactose-free. A range of folk need casein-free, and so the list goes.

The gluten-free food market is set to grow by $1.2 billion throughout the next five years, according to research by Datamonitor. Of course gluten is found in wheat, as are carbohydrates, which are becoming blacklisted both by those looking to lose weight and by diabetics, so the race is on to create a gluten and carb-free bread!

Contributing to this cause is the nearly epidemic rise in childhood disorders. This will further fuel the trend, as parents look to their child’s diet as a potential cure for disorders such as autism and ADHD. Sure, clinical evidence supporting the link between such diets and a decrease in childhood diseases is limited at best. But when you couple parents publically testifying to positive results, with the determination of mothers with afflicted offspring, you end up with increased demand. Increased demand means restaurants will respond (i.e. expect a gluten-free or casein-free establishment in your area soon).

Calories are history

Well not quite – but certainly they are being watched like never before.

Almost every restaurant has a ‘Healthy’ section on their menu and lists calorie levels. Restaurant and food service brands are removing fat and calorie-laden items from their menus and introducing lighter, healthier options as consumers are giving a clear indication that they are more conscious of their health and the types of food that they choose to eat.

Restaurants that cater to the health-conscious consumer are showing growth ahead of average  industry levels, which reflects the strong consumer trends towards healthier living. Consumers are demanding nutritious and healthy food, low cost and with fast service. Health food has proven to be a sustained and growing trend in the food industry, attractive to all demographics.

Diet companies are generally showing unprecedented growth, and there will be a growing trend towards pre-made fresh meals that have been calorie counted and customized to the dieting consumer’s tastes and dietary needs.

The ‘healthy eating’ trend is predicted to be one of the most prolific over the next five years as consumers make a major shift in how and what they eat, along with understanding the health benefits of more nutritious and less fatty foods.

Summary: The Food and Restaurant Forecast

As we reflect on 2011, we still shudder at the mesmerizing events that literally shook the world.

However, at The Next Idea, we believe considerable good will be generated by history. Moreover, this good will be driven by the people who were affected most: Globalization is changing our world, faster than we know it. Although Facebook may have changed the world, new technologies will eventually challenge its presently enviable position. One thing that never changes is our need to eat, and social behavior is a human instinct. This is why the ever-evolving  change in how and what we eat will remain one of the most fascinating topics. Still, one thing is an absolute certainty: While many of the world’s mightiest crashed in 2011, the humble restaurant will survive another year.

ABOUT THE NEXT IDEA

The Next Idea (TNI) is a leading international restaurant and leisure consulting group based in Los Angeles, with offices in the UK, United Arab Emirates (Abu Dhabi), and India. We work across the world, specializing in concept creation and development – everything from strategy, brand and product development, to design, execution and communication.

We are specialists focusing our expertise exclusively on food, food service operations, restaurants, cafes, leisure and entertainment.

Our unique experience offers comprehensive expertise for our clients, given our ability to bring together many of the advanced food and restaurant concepts presently found around the globe. We retain the knowledge, experience, and ability to take account of regional considerations such as local demographics, culture and tastes. Our skill set, therefore, becomes invaluable when developing uniquely differentiated concepts adopted for integrated markets.

In addition to our extensive management experience, our team of partners and consultants has collectively developed over 40 new concepts, and opened or refurbished over 750 restaurants and cafes worldwide. This experience brings the deep knowledge of combining idea generation and creative processing with the reality of day to day operations and execution.

The TNI team has consulted with some of the world’s most eminent chefs and upscale restaurant groups, in addition to working with clients in entertainment, casual dining, fast casual dining, resorts, theme parks and travel. In each project, we have been involved in all areas of the business, and have delivered programs and plans that have targeted the elevation of concept positioning, product and menu, operating standards, infrastructure, and overall quality.

Presently, The Next Idea has concept development projects in: USA, Dubai and Abu Dhabi (UAE), Nigeria, China, Qatar, Mexico, Saudi Arabia, UK, Bangladesh, and India.

For Information about our services please visit our website at:

www.thenextidea.net or

email us at: info@thenextidea.net / phone: +01 818 992 6765

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