Although food delivery has been around for a few years now, fast food brands are starting see it as a viable way to reach their customer base. In August 2017, McDonald’s Canada introduced food delivery services with their partner Uber Delivery to the delight of Canadian fast food lovers. Image: McDonald's Canada, Twitter
The Top Foodservice Trends to Watch for in 2018
By Dwayne Reno
As we begin another new year, we will ring it in as we always do, with our list of the top foodservice trends to watch for.
Food Trend: Is the general direction in which ideas surrounding food are developing or changing.
Some trends are here to stay, while others are here for a moment.
The BBA team has carefully reviewed our 2017 Foodservice E-news submissions to identify the growing foodservice trends we feel will continue to dominate in 2018. Our list is comprised of press releases and articles about the foodservice industry submitted by foodservice operators and other food business from Canada and the rest of the world.
Some of our foodservice trend predictions are returning trends while others are brand spanking new so let’s jump right into our top foodservice trends of 2018.
Fast Foods Comeback - Returning Trend
2017 was a great year for the big fast food brands. According to a report by American Customer Satisfaction Index (ACSI) 2017 was the first year that fast food chains scored higher than full-service restaurants in customer satisfaction. The ACSI’s managing director David VanAmburg stated “the fast food category is not just about traditional burger chains anymore.”
“It’s now about a number of newer, more dynamic, more diverse types of fast casual choices that really stress innovation and the quality of the food they’re serving. And the pricing is very competitive compared to full-service restaurants.”
ACSI surveyed over 5,500 Americans for this report and found that, the variety of full-service options is not as good as in previous years, the beverage quality has deteriorated and the service was a bit slower, HERE.
One of the many fast food standouts in 2017 was McDonald's. Sales at the fast food giant seem to be trending upwards as the company reported an increase in U.S. diners last quarter, HERE. This news comes on the heels of another major announcement by the fast food giant stating they have plans to relaunch their popular dollar menu in 2018. This is a great move by McDonald's and should help to ignite a fast food price war since both Taco Bell and Wendy's have made similar plans for 2018.
We believe that Fast food's renewed focus on food quality and affordability will help the chain operators regain their dominance in 2018. Consumers will also benefit as the top players get ready for an epic price war which will take no prisoners as fast food continues its remarkable comeback.
The Automation of the Foodservice Industry - Returning Trend
This is the second year that this trend has made it onto our list, and for good reason. Earlier this year in an interview with CNBC, Greg Creed Yum Brands (parent company of KFC and Taco Bell) CEO stated that “AI, robots and automation could replace humans in the food services industry "by the mid [2020s]," Here.
A few months later, Yum Brands China and their partner Alibaba's Ant Financial released the first payment technology to use facial recognition at a KFC restaurant in Hangzhou, China, HERE.
Furthermore, other fast food brands started to test or implement automation at their restaurants in 2017.
CaliBurger introduced Flippy the burger flipping robot, Tim Hortons, the iconic Canadian coffee and donut chain finally ventured into the realm of mobile order and pay, Wendy’s also got on the automation bandwagon by adding self-ordering kiosk at 1000 of their U.S. locations.
We believe this is just the tip of the iceberg and as competition and labor costs continue to increase over the coming years more foodservice operators will automate as a way reach a millennial consumer base and to tackle higher labor costs.
Mindful Consumers - Returning Trend
The foodservices industry has been on a health kick for some years now, but the push to improve menu offerings really picked up in 2017, as more brands started to champion the call for cleaner food. Burger King joined the likes of McDonald’s and In-N-Out Burger when the fast food chain announced that they would eliminate the use of antibiotics in their chicken during 2017, HERE.
As 2017 progressed we continued to see more brands get on board the clean label bandwagon. Panera Bread announced that they would be the first fast-casual chain to post signage in the fountain area that states the added sugar and calories in each beverage. The chain also added a new line of non-carbonated teas, lemonades and frescas to its drink menu. The drinks are made fresh daily and with less sugar than current drink offerings the drinks are also free from sweeteners, preservatives, flavors or colors from artificial Sources, HERE.
Changing consumer behavior is behind this growing trend. Some operators are finding it hard to adjust while others continue to cleanup their food and beverage offerings as a way to appeal to a more mindful consumer base in 2018.
Acquisitions and Global Expansions
Increase competition is fueling the need for foodservice operators to expand globally. As the markets become more saturated with competitors those who can afford to will expand into new markets as a way to increase profits. Tim Hortons who has already expanded into Mexico, Philippines and Great Britain, announced in 2017 that they will continue their internationally growth strategy with plans to open their first location in Spain. Also, The Cheesecake Factory opened their first location in Toronto, Canada to the delight of Canadians. Furthermore, the world's third largest pizza chain, Little Caesars Pizza, known for their HOT-N-READY pizzas announced their plans to expand into Central and South America in 2018, HERE.
On the merger and acquisition side of the coin, Burger King and Tim Horton's parent company acquire Popeyes Chicken for billions, HERE. Also, not to be outdone, Panera Bread was acquired by JAB (krispy Kreme's parent company) in a deal worth billions HERE. Furthermore, Panera Bread also announced their plans to acquire Au Bon Pain, a longtime rival for an undisclosed amount.
The acquisition would place Panera Bread in airports, hospitals and colleges allowing them to better compete with coffee chains and others with a similar presence. In 2018 We expect this trend to continue as more foodservice giants acquire competitors and expand their presence in the quest for profits.
Spiking Beverage Sales with Non-alcohalic Cocktails
We have seen an increase in the need for independent operators especially FSR (full-service restaurants) to differentiate themselves from competitors, and using non-alcoholic cocktails is a great start. Also fast food operators are now using the sale of alcohol (beer and wine) as a way to reach the millennial consumer base, HERE. Another reason this trend will grow is because the Canadian government is considering to lower the limit to 50 milligrams of alcohol per 100 millilitres of blood from the current 80 milligrams, HERE. As I have said before this can have a negative impact on foodservice profits since margins on drinks are so high and many foodservice operators depend on drink sales.
If the Canadian government does lower the blood alcohol levels, Canadian foodservice operators will need to step up their non-alcoholic cocktails by offering unique drink combinations that can’t be found at other establishments. Their need to differentiate themselves and draw in new customers is the main reasons we believe this trend will explode in 2018.
Dining out, at home
Food delivery has the potential to become a huge trend in 2018. At BBA, we believe in this so much that we are planning to expand our successful B2B online store in 2018. The changes will include a B2C component that will allow Ontario residents to order their groceries suppliers online and have it delivered to their home. For more information about BBA's home grocery delivery service, HERE.
Although food delivery has been around for a few years now, fast food brands are starting to see it as a viable way to reach their customer base. In August 2017, McDonald’s Canada introduced McDelivery with the help of their partner UberEATS, HERE. Uber Canada, also announced that their popular food delivery app will be available in Vancouver British Columbia, Canada. The platform has already expanding into cities like Ottawa, Edmonton, Montreal and Calgary since its launch in Toronto, two years ago.
Online retailer Amazon also has plans to expand into the fast food delivery category with the help of a New York based fast food delivery service. Food delivery is not new to Amazon, but the new partnership will allow Amazon to better compete with other major players in the space HERE. No launch date has been mention by the online retailer however, KFC has promised to offer food delivery to customers via Amazon’s Alexa app sometime in 2018, HERE. Lookout for fast food delivery to get even bigger in 2018 as more players get involved.
The Fast Foods Wars R Coming
Early In 2017, we started to notice an increase of fast food restaurants stating that they would bring their dollar menus back, with improvements. It started with Taco Bell, then continued with McDonald’s. Wendy’s, has also announced that they would expand their 4 for $4 meal deal in 2018.
In 2018, we will see more of these value menus popping up but why? Well, it’s simple fast food operators are basking in their victories over fast-casual and FSR (full-service restaurants) rivals. With their renewed focus on food quality and affordability, in our opinion fast food chains will lead other food operators into a food war that consumers will benefit from in 2018.
Until next time your customers want to know why they should spend money at your restaurant, bar or cafe. So give them the goods!
Dwayne Reno CEO & Founder
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