The Future of Foodservice

From VANEEpedia

by William P. Mason, The Hale Group If you think the future is going to look like the past, you will fail.

We all recognize that 2008 was not a great year; and more than likely, 2009 will at best be a difficult year. We need to understand that this is symptomatic of a bigger shift in the industry, and that the sales efforts of the future need to be different.

The foodservice industry has gone through three clear decades: In the-80’s and before, the industry was emerging and grew at 3% (real) In the 90’s, the industry growth began to slow to 2.1% (real) Now in the 2000’s, the industry is likely to grow at 1-1.5% (real) From our vantage point as observers of the industry, we do not see the growth rates returning to pre-2000 levels. The historical drivers of growth in the industry have reached their peak and are now leveling out: Women entering the workforce was a major factor in the shift toward convenient meal solutions for families. In 1960, 32% of the workforce was comprised of women; by 2007, women represented 49%. The number of restaurants (or locations to purchase food away from home) now exceeds 900,000. That is one restaurant for every 300 people! There is likely overcapacity and we will see some continuing rationalization. In 1960, the consumer’s food dollar was spent primarily on buying groceries to prepare meals at home; by 2007, the average consumer spent over 48% of their food dollar on meals prepared away from home. With these shifts in the industry trends, successful operators will have to adapt. In general, operators will have to become more selective in defining what consumers they wish to serve. Today, consumers have multiple choices, from ethnic restaurants, to “eatertainment” concepts, forcing the operator to create both a differentiated concept/offering and a defined value proposition. In addition, operators will need to increase their overall flexibility, from designing new LTO’s, and increased frequency of menu changes, to increasing day part offerings and expansion of menus through shared plates. Operators who believe that only managing costs is the route to success will not prosper. The future operator recognizes that growth will come through taking share from others through skillful analysis of the market and meeting the needs of the market as consumers’ desires shift. In short, an operator’s success is now dependent on a broad base of knowledge, which the broker salesperson can provide… If they understand their future role as a “knowledge provider.” So what does this mean? It means that to achieve success, a BSR will need to address the marketplace very differently. The strategies shift from making calls to a broad base of customers, to one of being highly targeted and focused on the right set of customers; with the right set of products/solutions. As one of the leading brokers in the country has stated – “Our job is to keep the restaurants in business!” So it is not about selling products, it is now truly a need to help solve the customer’s basic business issues: How do I get control of my costs? How do I keep customers coming back? How do I attract new customers? How do I compete with the restaurant (maybe a big chain!) down the street? As a critical element of the manufacturer’s go-to-market system, brokers need to recognize the customer’s needs. The customer does not need more products, there are many acceptable products, and most have negligible differences; if that is the case, you need to make a difference on the basis of service and knowledge. The salesperson of the future needs to spend more time than ever before understanding the customer’s business! Often-used terms such as menu analysis, solutions selling, consumer knowledge, etc., can no longer be a consultant’s buzz words, they are the reality of the future. Organizations need to marshal their resources and focus their efforts on providing the customer with “more than product.” In order to do this, a new set of selling skills needs to be developed and/or honed.