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April 2018April 5, 2018Written By: Ashley Kile

“Do we need to be on Instagram?”

It’s a snowy afternoon in mid-January and I’m sitting with our integrated planning team talking about the most frequently asked questions from clients. From understanding what to expect in audience engagement, platform usage and content demands, the team agreed social media warranted a deeper dive for our foodservice clients.

So last month, we partnered with Datassential for a proprietary research study with over 400 operators across all segments asking about a variety of topics including social media, advertising content and trade shows. For this month’s Thought for Food, we’re giving our readers an in-depth analysis into operators and social media usage, as well as considerations for your 2019 marketing plans.

WHAT’S HAPPENING

Our decision to invest in operator research began while reviewing Datassential’s 2017 Media Engagement study, which showed the most popular types of media used by foodservice operators to get information for their business. The data didn’t just confirm our team’s intuition on operator social media use, it showed adoption of these tools was deeper than conventional wisdom would indicate. That intel provided us a point of focus.

Source:“Pulse Topical Report: Media Engagement Chapter.” Datassential. December 2017.

Knowing that many of our clients are weighing the investment in social media, we felt it was important to dig deeper and understand:

What percentage of operators are actually following foodservice and/or beverage suppliers?
Which platforms do they prefer/use most often?

In our follow-up Omnibus study with Datassential, we found that 52% of all foodservice operators follow foodservice and/or beverage suppliers on social media, with Facebook, Instagram and Twitter being the most used platforms.

WHAT WE THINK

Social media must become part of our operator engagement strategies moving forward.

As the foodservice decision-maker demographic shifts to include more Millennials–the most active generation on social media overall–manufacturers will need to be active on these platforms to reach this group. Many B2B industries are already involved in social selling–the use of social media by sales professionals to interact with and sell to prospects, by offering content and answering questions until they are ready to buy–and foodservice is not far behind.

WHATS NEXT

Not all platforms, segments or content types are created equal when it comes to social media. Because engagement requires a long-term resource investment, here are three questions to answer when developing a social strategy:

Who should we target?

Certain segments are more active than others on social media and gravitate towards different platforms. Commercial and C&U operators are most likely to be engaged, while Healthcare and K-12 decision makers are least likely to be active.

Source: “JT Mega Operator Omnibus.” JT Mega and Datassential. February 2018.

What is the most popular platform?

Facebook is the most popular–likely due to its longevity in the marketplace. But that doesn’t mean it should be your go-to platform when investing in a social strategy. Your content plan, marketing objectives, target audience and budget will largely dictate which social platform makes the most sense for your brand.

Source: “JT Mega Operator Omnibus.” JT Mega and Datassential. February 2018.

What type of content is most valuable?

Food and consumer trends, new product updates and company news were frequently sought after by all operators, while white papers, contests and success stories scored low across all audiences.

Source: “JT Mega Operator Omnibus.” JT Mega and Datassential. February 2018.

Final Thoughts

Investing in a social strategy is a long-term commitment. It requires consistency to build brand awareness and brand loyalty over time. Social can be a very powerful tool for your brand, but it needs resource prioritization.

Look for more social media insights in our upcoming “Marketing to the Modern Foodservice Operator: Social Media ” e-book scheduled for release later this month.

The Dawn of Flexitarians

February 2018January 31, 2018Written By: Ashley Kile

Last month, casual dining chain TGI Fridays announced it was adding a buzz-worthy option to its 465 nationwide locations: The Impossible Burger. Made from all natural ingredients like wheat, coconut oil and potatoes, this plant-based burger is unique in that it bleeds, smells and sizzles like a regular beef patty thanks to a naturally-occurring iron compound called heme.

With less than 2% of the U.S. population identifying as vegan, many industry skeptics wonder why TGI Fridays believes a plant-based burger will thrive on a traditionally carnivorous menu.

The answer: Flexitarians.

WHY IT’S HAPPENING

A 2017 consumer survey by the Nielsen Group found that 40% of U.S. consumers were incorporating more plant-based foods into their diets. Not fully vegetarian or vegan, but consciously limiting their consumption of meat and meat byproducts, these new eaters are called flexible vegetarians, or simply, Flexitarians.

In a separate 2017 survey by Mattson, nearly 30% of U.S. adults said they followed one of two Flexitarian eating styles: Somewhat Vegetarian and Mostly Vegetarian.

Source: “What You Need to Know About the Meteoric Rise in Flexitarian Eating.” Mattson. August 2017.

What’s driving the shift towards plant-based cuisine? Based on Mattson’s research, consumers are drawn to plant-centric cuisine for health & wellness benefits and environmental concerns.

Source: “What You Need to Know About the Meteoric Rise in Flexitarian Eating.” Mattson. August 2017.

WHAT WE THINK

Investing in plant-based innovations is important, but widespread consumer adoption is still a ways off.

There is a significant movement with consumers experimenting and adopting more plant-centric diets. But 85% of the U.S. population is still eating meat and meat byproducts. Food and beverage companies should continue to look for relevant plant-based innovation opportunities, but set realistic volume and sales goals based on current consumer adoption trends.

WHAT’S NEXT

It’s important to keep the following in mind when vetting potential plant-based innovations:

# 1: Consider at-home vs. away-from-home consumption

According to Mattson’s research, 67% of consumers are most likely to try plant-based cuisine in a home environment. Meaning trial is more likely to happen in the grocery aisle than at a restaurant.

54% say they are most likely to try plant-based dishes at home
13% say they are most likely to try plant-based dishes at a friend or family’s home
33% say they are most likely to try plant based dishes away-from-home

# 2: Identify the need you intend to fulfill

For any plant-based product, the consumer needs must go beyond “I want a plant-based dish.” Is it intended to satisfy a craving for vegetable fare OR a craving for a traditional meat-based item made from plants? Is it meant to provide satiety and protein fulfillment OR the feeling of wellness associated with lighter, fresh ingredients? These answers will help craft your product narrative, and also help identify your target customer.

# 3: Know who your target customer is

Not all plant-based innovations will appeal to plant-seeking consumers in the same way. Here we see a consumer test of two plant-based burger concepts with two different “likely customer” outcomes:

Black Bean Burger

Satisfies a craving for a plant-forward burger experience
Most likely customers are Somewhat Vegetarians, Mostly Vegetarians, Vegetarians and Vegans

The Impossible Burger

Satisfies a craving for a beef-burger experience but made with plant-based ingredients
Most likely customers are Mostly Vegetarians, Vegetarians and Vegans

Source: “What You Need to Know About the Meteoric Rise in Flexitarian Eating.” Mattson. August 2017.

While True Omnivores may experiment with plant-based cuisine because of curiosity or a periodic craving, they shouldn’t be counted on to drive sales of plant-based innovations either at home or on the menu.

What does this all mean for TGI Fridays? Because their core menu is centered around traditional meat and meat byproducts, it could be a challenge to get vegetarian-leaning consumers in the door for just one item. After the initial excitement wears off, time will tell if their traditional (True Omnivore) customer-base can sustain the item long term.

Big Game. Bigger Opportunity.

February 2018January 31, 2018Written By: Ashley Kile

This Sunday, as we watch the country descend on our snowy metropolis for Super Bowl LII, nearly 50 million Americans are expected to partake in a sacred tradition: purchasing takeout/delivery fare.

1.35 billion chicken wings will be spiced, sauced and devoured¹. Domino’s and Pizza Hut will bake off 33 million slices of pizza². And party guests will shell out $58 million on grocery deli sandwiches and another $10 million on grocery deli dips to go along with their potato chips³.

Why settle for a snack stadium when you can build your own Viking-inspired snack ship with this video-tutorial, courtesy of Minneapolis/St. Paul Magazine.

But with Sunday’s big event comes an often-missed marketing opportunity: takeout/delivery packaging.

WHY IT’S HAPPENING

The consumer demand for more delivery and takeout options is a fairly recent phenomenon, with Uber Eats making its first delivery in 2014. Unfortunately, the packaging world has found itself scrambling to develop travel-friendly containers that not only maintain temperature, but also control humidity.

David Chang, world-famous chef of Momofuku and founder of Ando–a delivery-only restaurant in New York City–spent two years trying to solve this mystery and redefine restaurant delivery. He developed a travel-friendly menu and experimented with different packaging methods for improved transport. Yet Chang and his team consistently struggled to ensure hot, fresh food arrived to its customers. Industry analysts believe it was a contributing factor in Chang’s decision to let Uber Eats acquire Ando last month.

Because the functionality of takeout and delivery packaging has yet to be solved, marketing and branding opportunities have largely taken a back seat.

WHAT WE THINK

As packaging becomes more important in the food delivery/takeout space, it’s likely consumers will pay closer attention to its features and benefits as well.

Just as packaging innovations are made to improve food quality and portability, branding and storytelling opportunities must also be addressed. While consumers largely overlook the containers, boxes and bags today, companies will begin to differentiate their brand with packaging through functionality, storytelling and play.

WHAT’S NEXT

Here are three examples of how we see companies utilizing delivery/takeout packaging with customers in the near future:

Functionality

Responsive packaging systems react with stimuli in the food or environment to enable real-time food quality and food safety. While this coffee lid turns red to alert a consumer that their beverage is too hot to drink, this concept could be used for quality assurance purposes. Packaging could use the color-changing technology to indicate whether food is still hot and fresh upon delivery.

Storytelling

Innovative companies will reimagine boxes and carrying containers as a canvas for branded storytelling. A 2017 campaign for Pizza Hut Malaysia by Ogilvy Malaysia demonstrates the power of narratives on the pizza box itself to showcase popular reasons why customers order a pizza for delivery. In this case, the all-too-familiar dinner fail.

Interactivity & Play

Other brands will use packaging as a way to interact and engage with customers. In celebration of the McFlurry’s 22nd Birthday, McDonald’s Canada collaborated with the University of Waterloo to create a limited-edition drink-tray boombox that works with any standard smartphone. In addition to being portable, the tray-based sound system is 100% recyclable.

Just some Thought for Food^™

1 “Wing-Onomics.” National Chicken Council. 29 January 2018.
2 “The Staggering Amounts of Food Eaten on Super Bowl Sunday.” ABC News Online. 2 February 2017.
3 “From Live TV to the Grocery Aisles, Americans are Prepping for Super Bowl 51.” The Nielsen Company. 30 January 2017.

New Year. New Options.

January 2018January 4, 2018Written By: Ashley Kile

This week, millions of Americans renewed their gym memberships and promised 2018 will be the year they start eating healthier. Yet a committed subset of this group took their resolutions to the next level by enlisting the scientists at Habit to create personalized wellness and nutrition plans.

A high-profile disruptor in the food-tech sector with the backing of Campbell’s Soup Co., Habit uses biological samples to identify genetic variants and biomarkers within a customer’s DNA to create a personalized nutrition profile and, in some areas, even deliver personalized meals based on their biological profile.

The process isn’t for the faint of heart, as author and contributing writer at the Washington Post, Sophie Egan, found out the hard way. The $299 (plus shipping and handling) investment requires a DNA cheek swab, core measurements and the ingestion of a proprietary Habit Challenge™ Shake. But perhaps Egan’s most astute observation came toward the conclusion of her essay when she wrote:

“On the face of it, personalized nutrition makes sense. Many people feel that the existing national dietary guidance of one-size-fits-all has failed them.”

Unlike other diet/nutrition companies that promote the ability of users to customize their programs, Habit is unique in its promotion of nutrition personalization. And the latter is quickly becoming the new consumer expectation.

WHY IT’S HAPPENING

Personalization is the direct result of the consumer shift from Affluence to Influence. As Generation Z witnesses the true death of a majority at a conceptual level, mass fragmentation will make the idea of ‘majority’ irrelevant for both brands and marketers. As A.T. Kearney explains:

“Affluence Model consumers bought the fiction that ‘one size fits all.’ Alternatively, Influence Model shoppers believe ‘one size fits nobody–except possibly by accident.’ Societal fragmentation will be celebrated as personalization in the Influence Model.”

WHAT WE THINK

The desired result of personalization vs. customization is identical: a better customer experience. But the paths to get there are dramatically different.

Customization: Brands provide a single set of choices that consumers can adjust based on their preferences

Personalization: Brands curate choices already tailored to a consumer’s preferences based on previous behaviors/interactions

WHAT’S NEXT

To achieve true customer personalization, brands and marketers must leverage the power of customer data. Below are a few ways personalization will likely come to life in food and beverage marketing:

Loyalty Programs Get Personal

In a November 2017 consumer study, Restaurant Hospitality found that 59% of consumers said they would be more likely to participate in a loyalty program if rewards were customized to their prior purchases. For example, instead of offering a generic “Free Drink” reward, Starbucks could utilize consumer transaction data to instead offer this customer her most frequently ordered beverage: a grande salted caramel mocha with extra whip.

Consumer-Designed Food

Back in 2014, Barilla introduced the world to their 3D pasta printer, which could print unique shapes in under two minutes. Contests are held each year to come up with new designs and, as Saveur Magazine explains, the 3D software can sculpt forms that could never be made by hand or machine. As technology becomes more accessible, consumers could theoretically craft and print their designs for a truly personalized pasta experience at home.

Menu Recommendations

UFood Grill recently installed new ordering kiosks with facial recognition software at their Owings Mills, MD, location. Customers who opt-in for having their face scanned sync it with a credit card and the system begins tracking their orders. On the next visit, a quick scan by the kiosk can bring up past orders for quick ordering. Proponents of the technology say facial recognition, paired with data algorithms, will soon be able to serve up personalized food and beverage recommendations.

The Rising Cost of College Dining

October 2017December 28, 2017Written By: Ashley Kile

“Like many college students, I have a full bookcase and an empty fridge.”

In a March 2017 Op Ed, Olivia Ellison–a senior at University of Colorado majoring in Exercise Science–shares her experience and thoughts on an alarming C&U student trend: food insecurity.

Ten years ago, Georgia State University officials became worried about the impact of pricier student housing on the ability to afford earning a degree. Research was commissioned to examine the connection and the results were sobering: for every $5,000 in unmet financial need, a student was 12 percent less likely to graduate^[1].

As the higher education industry faces declining undergraduate enrollment and falling numbers of high school graduates, basic and affordable amenity options are quickly becoming top priority with C&U leadership looking to attract increasingly cash-strapped students and their families.

WHY IT’S HAPPENING

Consider the following statistics regarding the costs of higher education:

It shouldn’t be a big surprise that 83% of Americans say they can’t afford a college degree for themselves or a family member.

With tuition, class materials and student fees being inflexible fixed costs, students are opting out of meal plans–or buying the bare minimum–to save money. In addition to declining meal plan revenue, campuses are now also battling double-digit levels of food insecurity* among students.

According to a recent food insecurity study of college students^[4]:

47% of students enrolled at four-year colleges say they experienced food insecurity in the last 30 days.
43% of students at four-year colleges and enrolled in a campus meal plan say they experienced food insecurity in the last 30 days.

*Food insecurity is defined as the state of being without reliable access to a sufficient quantity of affordable, nutritious food.

WHAT WE THINK

The projected financial reality of future C&U students and their families makes changes to dining services inevitable.

The desire for quality, nutritious and delicious food is universal among students. But the average college and university charges about $18.75 per day, for a three-meal-a-day dining contract, compared to the less than $11 a day a single person spends for food^[5]. As the number of financially stressed students who see cost as a barrier to selecting a meal plan that fits both their budget and hunger state increases, so do the risks to current C&U dining services models.

WHAT’S NEXT

It’s important to proactively anticipate these conversations and be prepared with both product and business solutions to help foodservice directors navigate this next evolution in C&U dining.

Consider the case of Jerry Rackliffe, Georgia State University’s vice president for finance administration:

After seeing the research on financial need and graduation rates, he convinced the housing department to open a “tiny-dorm” option that would include smaller rooms, more basic amenities and an unlimited meal plan that would collectively cost less than a room alone at other upperclassmen units. When Patton Hall opened in the fall of 2009, it filled up faster than any other campus housing option. It was so popular, the school converted two local hotels to the same concept in 2011.

A basic-tier plan that provides unlimited meals could be a mutually beneficial solution: increasing meal plan participation among financially at-risk students and relieving pressure from stop-gap hunger solutions like food banks and student meal donations.

Just some Thought for Food^™

^[1] “Why Universities Are Phasing Out Luxury Dorms.” The Atlantic. August 21, 2017.
^[2] “Tuition and Fees and Room and Board Over Time.” The College Board. 2016
^[3] U.S. Department of Education. 2017.
^[4] “Hunger on Campus: The Challenge of Food Insecurity for College Students.” Dubick, Matthews and Cady. October 2016.
^[5] The Hechinger Report. 2016.

GPO Traction with Independents Changing The ‘Street’ Game

June 2017June 7, 2017Written By: Ashley Kile

In late April, I attended a summit in Chicago exploring the rise of Group Purchasing Organization (GPO) membership among independent restaurant operators and the statistics surprised many of us in the room:

Source: “The Fight for Foodservice ‘Sweet Spot’: GPO Traction with Independents.” Pentallect. April 2017.

Nearly 40,000 independent operators belong to a GPO
Independents only represent 40% of total GPO purchasing volume, but comprise more locations than chains/groups (60% of GPO volume)
Independent membership in GPOs is projected to experience double-digit growth over the next five years

As Pentallect poignantly observed “independent foodservice operators [represent] a $100 billion market with little clout.”

Why It’s Happening

It’s a combination of several factors, but two themes emerged throughout the day: price and transparency

Independents pay 10% – 20% more than ‘groups’ for products and services
Average GPO gives operators an immediate 5% – 7% savings on margin
The rise of non-traditional foodservice ‘distributors’ (Restaurant Depot, Webstaurant Store, Amazon) are pushing the industry toward total price transparency

What We Think

Manufacturers that rely heavily on street business must have an overarching GPO strategy.

GPOs are here to stay. With penetration already high in non-commercial, expect aggressive pursuit of independents and even K-12 accounts. Adopting an overarching GPO strategy is critical to protect margins and will help ensure pricing consistency as operators demand (and receive) more price transparency.

What’s Next

There is no one-size-fits-all strategy that works for everyone. Manufacturers need to identify GPO partners that align with strategic portfolio and business priorities. Partnerships should:

Ensure programs align with one another
Ensure operator compliance
Have measurable ROI systems in place

Want a deeper dive on how GPOs with independents are changing the industry? Contact your account service representative to learn more.

Questions, comments or want to learn more? Let's connect! akile@jtmega.com

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Thought for Food^™

Category: Foodservice

The Dawn of Flexitarians

WHY IT’S HAPPENING

WHAT WE THINK

WHAT’S NEXT

Big Game. Bigger Opportunity.

WHY IT’S HAPPENING

WHAT WE THINK

WHAT’S NEXT

New Year. New Options.

WHY IT’S HAPPENING

WHAT WE THINK

WHAT’S NEXT

The Rising Cost of College Dining

WHY IT’S HAPPENING

WHAT WE THINK

WHAT’S NEXT

GPO Traction with Independents Changing The ‘Street’ Game

Why It’s Happening

What We Think

What’s Next

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Ashley Kile

Director of Research and Insights