Ad-ology Research recently updated their Industry Marketing Insights report for Foodservice Suppliers & Wholesalers. The following are the predicted Top 5 Opportunities/Challenges from the report for this industry for the upcoming 12 months:

• Suppliers may be selling more locally-sourced foods to show their commitment to the grow local trend.
• Restaurants are cutting their inventory of equipment and supplies and making smaller, more frequent orders.
• Restaurants may be looking for alternatives to take-out packaging as scrutiny of plastic bags and polystyrene containers increases.
• Sophisticated menu items drive demand for new and higher quality equipment including unusual dinnerware for tasting menus even at casual restaurants.
• Ethnic spices and foods from the Spanish, Thai, Cajun/Creole cuisines are expected to be in demand in 2010.

The Industry Marketing Insights report for Foodservice Suppliers & Wholesalers is available on Ad-ology.com (Research Store) for $195 USD with local market data for any U.S. market.

[Source: Ad-ology Research. March 4, 2010]

Candy manufacturers are continuing to find innovative ways to convince consumers to purchase more sweet treats. Last spring I blogged about how wedding planners were using candy buffet stations as a wedding accessory. Now, even powerhouse companies like Mars are selling directly to consumers, via www.mymms.com,  who want to purchase personalized M&M’s for special celebrations and to businesses who are looking for a unique marketing tool.

This move has not gone unnoticed by the competition. A recent New York Times articles highlights how the Hershey Company is introducing some variations on its own product lines. Ad campaigns are currently touting Almond Joy Pieces, York Pieces and Hershey’s Special Dark Pieces. The Hershey Company has been  using both live marketing events and TV to promote its new offerings which are essentially smaller and sometimes reformulated versions of long-standing favorite consumer treats.

These product extensions come as food manufacturers are under increasing scrutiny for contributing to the rate of obesity in the U.S. The firms must walk a fine line as they look for profits from new products while they appeal to health conscious consumers. Mintel analyst Marcia Modelonsky says that the concept of lower calorie treats and smaller servings can work well if firms don’t repeat the mistake made by Kraft when it introduced Nabisco Oreo Thin Crisps. Many devotees criticized the product because it didn’t include the cream filling, the entire reason many consumed the cookie.

Modelonsky indicates that the latest product offerings may do well in the marketplace where consumers, and moms, in particular, are looking for a way to control portions of sweets in their children’s diets. In any case, the new product introductions are an indication that food companies are looking for ways to grow sales and are willing to spend on ad campaigns to influence consumer purchases.

[Source: Newman, Andrew Adam. “Candy Makers cut the Calories, by Cutting the Size, New York Times, 2.16.2010]

As restaurants look for new ways to get customers coming back through the doors, some operators may fine-tune their offerings and marketing to appeal to a prized demographic group: Baby Boomers.  While consumers in this group eat at full-service restaurants more than other groups, they also have some unique characteristics. A recent report in Restaurants and Institutions highlighted how operators can target these consumers.

First, here are the dining out characteristics of Baby Boomers:

• Dine out 1-2 times a week: 55%
• Read nutritional information on restaurant Web sites: 63.8%
• Say they are adventurous diners: 37.8%

These consumers also say that they have cut down on dining out at full-service restaurants because of income limitations and are looking for coupons and other deals to help pay for the expense.

The Restaurants and Institutions report indicates that operators can use the following non-price tactics successfully with Baby Boomers:

• Promote entrees with low/reduced-sodium, low calories and low carbs.
• Offer varying portion sizes. Nearly 70% of Baby Boomers like this idea.
• Train servers to describe exact ingredients included in and preparation methods for entrees.

The findings of this report concur with what appears to be an increased interest in food quality by U.S. consumers. Restaurants who understand and cater to this trend both in their food preparation and marketing may see business start to improve.

[Source: Leahy, Kate. New American Diner Study, Restaurants & Institutions, 1.1.10]

Conventional wisdom indicates that consumers traded down when eating out during the economic contraction. However, that wisdom hasn’t held true for all consumer types and restaurants. Consider the case of the 18-34-year old demographic which historically has been a gold mine for quick serve restaurants. Who knew that this group has seriously decreased its frequency of quick service restaurant visits? According to Sandelman & Associates statistics, the number of monthly visits made by consumers in this age group changed as follows:

• 2006: 19 visits
• 2007: 15 visits
• 2008: 14 visits
• 2009: 13 visits

One quick serve chain enjoyed enviable growth prior to the recession by specifically targeting super-fans. Burger King made it a point to attract younger demographics with irreverent advertising. As the recession drags on and high unemployment rates endure, critics claim that the chain’s marketing focus on this narrow demographic niche is to blame for declining sales.

Writing for the Wall Street Journal, Julie Jargon says that other trends such as healthier eating may also be contributing to slower sales.  An NPD analyst noted out that the 18-34-year old group has been eating more at fast casual outlets. It doesn’t help that Burger King’s chief rival, McDonald’s, seems to be faring better despite tighter household finances throughout the country.

It is situations like this that prompt C-level executives to make big changes ranging from menu offerings to marketing programs. To date, Burger King has begun promoting value meals and thus generating protests from some of its franchisees.  If the recession drags on, more quick serve restaurants may begin to offer and market items that appeal to a wider demographic group in order to preserve profitability.

[Source: Jargon, Julie. As Sales Drop, Burger King Draws Critics for Courting Super Fans, Wall Street Journal, 2.1.10]