Why Now Is the Perfect Time for Food Service To Innovate
Four words – cost-of-living crisis. It’s everywhere, and it’s unavoidable…
Here at FIS it’s been a popular blog topic for months, and trust us, we wish it wasn’t. Unfortunately, it doesn’t seem to be going anywhere any time soon, especially when we’re being told that the crisis is likely to last until the “second half of 2023” (RSM UK).
So, if we’re going to keep having to deal with the repercussions, it’s probably worth getting some hard numbers and actual facts about exactly how rising prices are impacting consumer behaviour and spend across food service.
How is the cost-of-living-crisis impacting food service?
Our sister agency, KICR Innovation, has launched an ongoing cost-of-living crisis tracker to stay close to the issue, and highlight important changes in consumer behaviour over time. Lots of interesting insights have emerged so far (follow KICR on LinkedIn and Instagram to keep up-to-date!), but one key insight to come from the tracker is that out-of-home spend is down between 42-54% across all food service formats (so channels such as QSR, cafes and sit-down restaurants).
Not the news we wanted, especially after a tough couple of years for the food service industry with the pandemic dramatically changing people’s out-of-home food and drink spending habits. However, even through those tough times, many businesses adapted to survive and even flourish! Companies should take this new challenge as another chance to review and renew.
What should food service do next?
With consumers tightening their purse strings, in order to overcome these new barriers to purchase it’s important for food service outlets to put the customer right at the heart of their offering. And although it may seem counter-intuitive, it is the perfect time to innovate, as long as you do so in a way that truly delivers value for your customers. Value that they will value. Innovation can take many forms – the most important thing is it meets your consumer needs and their changing values.
For example, one big trend we’ve seen is people want ‘comforting’ food that tugs at the heart strings and almost feels like a hug. Fine-tuning a menu to help deliver that feeling could help keep people coming back. Tools like our sister agency Good Sense Research‘s consumer community can help here, because you can check in with real people to make sure your ideas resonate, and fuel faster and better innovation.
Staying stagnant isn’t an option, you’ll just be left behind. So even though it might seem like the time to batten down the hatches, be brave!
And then give us a call, because we can help.