Foodservice

Foodservice: Creating indulgent experiences and building trust

Introduction

The foodservice market continues to face challenging conditions. Although the industry is benefiting from consumers increasing their dependence on out-of-home venues for convenience and indulgence purposes, the cost-of-living crisis is still affecting spending in the foodservice channel. FMCG Gurus research shows that consumers visiting high street or takeaway outlets are looking for high quality produce. This includes affordability/value and a sense of occasion when choosing the location of purchase.

Indulgence-led foodservice experiences

Capturing consumer attention within the foodservice channel can be difficult. This is especially true at a time when consumers are exposed to more choice than ever before. This can be seen both on the high street and via direct-to-consumer delivery channels. Seven in ten global consumers surveyed stated that they are looking for products that excite them at a foodservice outlet. This highlights the importance of offering a memorable experience which could encourage consumers to trade-up. Consumers are most interested in indulgent and hedonistic experiences. This aligns with the larger trend of people turning to food and drink for escapism during an era of anxiety and global uncertainty. Menu innovation continues to be of high importance. Therefore, when appealing to consumers considering which outlets to visit, new offerings should be positioned as offering a premium experience.

Trust, transparency and perceptions of value

For consumers, trust and transparency is synonymous with value. This is because consumers feel that maximum care and attention has been given to creating authentic products. Trust can also encourage trade-up if consumers think prices are because of brand philosophy rather than profit maximization. When asked what makes a foodservice outlet more trustworthy, global consumers were most likely to identify “transparency over how products are made” (81%). In addition, 69% of consumers said “ethical/environmental credentials”. These attributes are interlinked and highlight the importance of foodservice outlets being seen to be acting in an ethical and honest manner along the supply chain.

These attitudes towards the environment and sourcing ingredients will reflect the quality and attentiveness they put into the making of products. Perceptions of premium are also likely to be swayed by ethical credentials and natural, high quality ingredients. This further emphasizing the link between trust and quality and how consumers are attentive to ingredients, using this as a benchmark for shaping perceptions of quality.

Brand voice and strategic storytelling

Outlets should look to emphasize brand values and provide the story behind the products sold. This includes the sourcing of ingredients and the creativity around the creation of recipes to highlight to consumers that products are the real deal and worth trading-up on. A strong brand voice and heritage will contribute towards the consumer experience, creating a memorable occasion and encouraging repeat visits.

This article is based on FMCG Gurus – Foodservice Trends - Country Reports 2025. To discover more, please click here.

Price Inflation: The Impact of Rising Prices in 2024

Introduction

There is a widespread lack of confidence in the global economic outlook for the next year, with a majority of individuals feeling that their country is in a recession. Additionally, there has been a decline in the percentage of people who believe their household can comfortably cover living expenses over the past year. This indicates that a growing number of individuals are experiencing financial strain, which will significantly impact their purchasing behavior. 

Consumers are Making Conscious Efforts to Cut Costs in Various Areas

As consumers face financial pressures, they are making significant lifestyle adjustments to stretch their budgets. While these measures may offer a sense of financial control, they can have adverse effects on both physical and emotional well-being.

In the past year, there has been a noticeable rise in the number of people seeking to minimize their energy usage as a result of escalating prices. For instance, FMCG Gurus’ consumer insights reveal that 66% of global consumers have made attempts to reduce their energy usage at home in the last six months. This poses the risk of people feeling cold in their own homes, particularly impacting the health of more vulnerable individuals. Additionally, there has been a slight increase in the proportion of people reporting reductions in spending on gifts for loved ones. This can impact emotional well-being as it leads to feelings of reluctance to make sacrifices and may induce guilt, particularly among certain demographics such as parents. 

Consumers are Concerned that Price Inflation within the Food and Drink Market will Continue to Worsen

Even prior to the current cost-of-living challenges, many consumers found that shopping for food and drinks was a costly endeavor. The inflation in prices over the past year has heightened these concerns, with a noticeable increase in the percentage of individuals who now perceive grocery shopping as expensive. For example, FMCG Gurus’ market research demonstrates that 53% of global consumers deem food and drink shopping to be expensive, having increased from 47%. In contrast, the proportion of people who believe that prices are rising has remained steady, suggesting that there is a growing segment of the population that was managing living costs a year ago but is currently facing difficulties.

When analyzing price inflation, consumers are more inclined to believe that prices have risen for essential items like bread and dairy, as opposed to non-essential luxuries. This signifies the difficulty of significantly reducing spending on essential groceries. However, it's important to acknowledge that despite their best efforts, consumers may struggle to adhere to a budget and make impulsive purchases on non-essential items, leading to feelings of guilt afterward. 

The Foodservice Sector will Continue to Experience Challenges Across the Next Year

In the past year, three out of four individuals worldwide have cut back on their spending in the foodservice sector, indicating how restraining consumption has become a part of daily life for many. When reducing expenses, individuals are not solely focused on cutting spending in formal, upscale outlets, but are also aiming to limit their spending on more informal, casual occasions such as snacking and enjoying hot drinks in this sector.

However, it's important to recognize that people place a high value on self-indulgence and are opposed to feelings of sacrifice, particularly when they often turn to treats as a means of escaping daily pressures. Consequently, there has been a noticeable increase in the proportion of individuals seeking out small indulgences (like cakes, chocolate, and alcoholic beverages) as a way to compensate for reduced spending within the foodservice sector. Despite the cost-cutting mindset of consumers, brands and retailers must promote the concept of affordable indulgence in 2024.

This article is based on FMCG Gurus: Price Inflation: How Rising Prices Will Impact Consumers – Global Report 2024. For more information, please click here.

Foodservice: Healthy Eating, Sustainability and Rising Costs in 2022

The impact of Covid-19 saw considerable disruption to the foodservice industry. However, the market has been able to bounce back. For instance, 100% of consumers say that they have eaten food or drink from a restaurant or fast-food service outlet in the last six months. FMCG Gurus consumer insights found that almost 9 in 10 consumers have purchased food and drink from home delivery services, casual dining outlets or full-service restaurants in the last six months.

Healthy Eating

Healthy eating and 'good for you' consumer trends have prevailed in the foodservice industry. Consumers associate 'good for you' foods with free-from artificial ingredients, containing low to no sugar, and containing ‘good’ ingredients, like protein and fiber. FMCG Gurus consumer insights found that over half of consumers consider their eating and drinking habits as healthy or very healthy when visiting food service outlets. This saw an increase of 10% since 2020. This demonstrates the impact of Covid-19 on consumer behaviors towards health. Consumers wish to take preventive measures such as eating healthier to reduce their vulnerability to illness.

Interestingly, morning and mid-morning are when consumers would be more compelled to eat something healthy from a foodservice outlet. This time of day is when consumers are more motivated to eat well to fuel themselves for the day.

Functional Ingredients

Consumers seek out functional ingredients, such as protein when eating out of the home. Protein is attributed to aiding recovery and reducing hunger. FMCG Gurus consumer insights reveal that 70% of consumers find products containing protein as appealing. The top foods that consumers want with added protein, are products in the snack bar and breakfast food categories. Again, this demonstrates how healthier eating is prioritized in the morning.

In addition to consumers making efforts to eat healthier, an increasing number of consumers are turning to alternative diets. This includes veganism, vegetarianism and flexitarian diets. FMCG Gurus findings highlight a 10% decrease in meat eaters since 2020. Notably, 46% of vegans claim to be unsatisfied or very unsatisfied with the number of foodservice outlets that cater to their dietary requirements.

Sustainability

Linked to healthier eating is the trend of sustainability. Healthy foods are seen as more environmentally friendly and good for the planet. FMCG Gurus consumer insights have found that since 2020, there has been a 13% increase in the number of consumers valuing sustainability initiatives from brands or outlets. When asked what trends consumers would like to see, foodservice outlets incorporating environmental initiatives stood out. Some examples include avoiding food waste and recycling packaging. Nearly three quarters of consumers stated that they would like to see more sustainability initiatives from brands. Notably, nearly half of consumers state that they research the environmental and ethical policies of foodservice brands. This highlights the importance of these issues to the consumer.

The Cost-of-living Crisis

In 2022, 72% of consumers claim to be concerned about the rising cost of living in their country. This is reflected in their eating out habits. FMCG Gurus consumer insights found that 43% of consumers have reduced their spending at foodservice outlets over the last six months. Furthermore, the importance of price when purchasing in foodservice outlets has seen a 12% increase since 2020. As the cost-of-living crisis persists, consumers will place greater importance on price, along with reducing consumption while eating out. Over half of consumers state that they have made changes to their spending when eating out in the last six months. These changes include reducing the frequency of eating out of the home, looking for promotional offers and reducing spending by cutting back on starters and desserts.

This article is based on FMCG Gurus: Foodservice Survey Series in 2022.