Over the past two years, the foodservice industry has exhibited remarkable adaptability as the arrival of COVID-19 spurred fundamental changes in the way consumers make decisions about food. And as the pandemic continues to evolve, so will the industry. Our vice president, health, authenticity, and strategic insights, Jennifer VanDewater, shares her insights into five of the trends that will matter most for foodservice operators and suppliers in 2022:
Ongoing labor shortages and supply chain disruption
Adapting to manage ongoing supply chain disruptions and labor shortages has become the norm for operators over the past 18 months, and the problem is not going away any time soon. Bar and restaurant closures in 2020 resulted in the elimination of nearly 2.5 million foodservice jobs (Fortune). Subsequent employment gains as the economy reopened in early 2021 have not been enough to support the surge in pent-up demand, remaining 800,000 short of the industry’s pre-pandemic peak (National Restaurant Association) as low wages, limited benefits and increased work-related stress have driven an exodus of workers from the industry. Supply chain challenges related to procuring ingredients has also been an ongoing pressure on the food industry. In fact, more than 9 in 10 operators across every restaurant segment reported supply delays or shortages in recent months (National Restaurant Association).
Among the ways operators can minimize the impact of decreased labor availability and increasing costs is by simplifying menu options and streamlining the food production process. Rich’s has responded to the labor and supply chain challenges its foodservice and in-store bakery customers are facing with a variety of solutions designed to save them time, resources and money. Among them: No-Proof Dough, which greatly simplifies the breadmaking process, and Soft Whip, which makes it easier to achieve the cold foam finish that’s trending in iced coffee drinks.
An increased appetite for off-premise food service solutions including delivery, takeout and curbside
Consumers have a wide range of options to satisfy their hunger and it’s led to an increase in demand for off-premise options including takeout, delivery and curbside pick-up. These behaviors took root in the early days of the pandemic out of necessity and continue to hold strong as consumers have been won over by convenience. According to NPD, Dine-in visits to restaurants were down 48% in the 12 months ending September 2021 compared to the pre-pandemic level in the year ending September 2019. Off-premises orders, like carry-out, drive-thru, and delivery, were up 20% versus two years ago September. Year-over-year, dine-in visits declined by 10% in the 12 months ending September compared to a year ago, and off-premises grew by 10% in the period.
Greater competition for the food dollar and omnichannel partnerships
During the pandemic, retailers got a taste for commanding a larger share of food spending and, as a result, they have increased investment to add foodservice experiences to the store perimeter. Foodservice operators are also eager to attract diners and are doing so by featuring more global cuisine offerings—food consumers say they prefer to eat at restaurants rather than at home. Spending on food both at home and away from home has been elevated since March 2021. In fact, inflation and pent-up foodservice demand, combined with an increase in planned celebrations, led to a record-setting level of food spending—$166 billion—in July 2021, according to the USDA Food Expenditure Series. While spending was down to $158 billion in September 2021, that figure still represents a 22% year-over-year increase.
Health concerns spur growth in plant-based food
A heightened focus on health—both their own and that of their communities and the planet—remains at the top of consumers’ priorities going into 2022. Health concerns around COVID-19 accelerated the adoption of plant-based diets and Rich’s saw a big increase in trial and repeat rates during this time. In response to this growing demand, plant-based categories in foodservice are expected to grow by 8.5% through 2025, according to Rich’s 2020 Plant-Based Market Assessment.
Consumers are looking for delicious ways to incorporate more plants into their diet. Across the spectrum of plant foods—fruits, vegetables, nuts, seeds, beans, legumes and grains—they seek recognizable plant ingredients they can feel good about eating.
We anticipate demand will continue to rise as more consumers try, and feel good about, choosing plant-based products. Rich’s 2021 Gen Alpha research reveals that 52% of parents want to feed their kids more plant-based foods moving forward—and 34% have been asked by their kids to do so.
Consumers may be eager for more plant-based food offerings, but they aren’t willing to compromise on taste in the process, according to a recent Rich’s consumer sentiment poll. Rather, they favor foods with familiar ingredients and nutrient density that deliver on their physical and emotional wellness goals.
Rich’s continues to invest in new cross-category plant-based innovation platforms, keeping the focus on taste and familiar flavors and textures. For instance, Rich’s has introduced a new line of plant-based pizza crusts and flatbreads including cauliflower, sweet potato and zucchini, along with a sweet potato brioche and cauliflower roll dough.
Committing to the values consumers—and potential associates—care about most
Environmental and social responsibility has become a requirement of doing business for foodservice operators. Americans, and particularly millennials and Gen Zers, are choosing to spend their dollars on—and to work for—brands that align with their values. Delivering on commitments to diversity, equity, inclusion and environmental sustainability are critical to gaining their loyalty. And it’s equally critical to winning the war for talent.
As many as 86% of Americans expect companies to address social and environmental issues. Seventy-two percent of Americans say they feel it is more important than ever for the companies they buy from to reflect their values, and 88% of consumers say they are more loyal to companies that support a social or environmental issue (QSR Magazine, October 2021).
According to Kerry Ingredients’ Sustainability in Motion study (2021), 58% of consumers are strongly influenced by sustainability when making a food or beverage purchase at a restaurant. And a recent Deloitte Insights report, Future of Work: Diversity Equity and Inclusion in the Food Industry, reveals that 68% of food and beverage companies are training their employees on diversity and inclusion to prepare for future workplace challenges.