The foodservice industry has endured its fair share of turbulence since the pandemic, but where will things go for the industry in 2024?
Lizzy Freier, Director, Menu Research & Insights at Technomic, joined The Food Institute Podcast to discuss how the industry fared in 2023 and notable trends to watch for in the new year.
Foodservice Traffic and Consumer Behavior in 2023
Freier highlighted the challenging landscape for restaurants in 2023, with a modest 1% improvement in consumer traffic among major U.S. chain restaurants. The economic environment, plagued by inflation, significantly influenced consumer behavior. This resulted in a shift where limited-service restaurants outperformed full-service counterparts due to pricing dynamics.
Limited-service restaurants faced challenges as certain fast-casual outlets raised prices higher than some casual dining establishments. Consumers responded by being less inclined to substitute full-service occasions with quick-service orders, leading to an overall decline in foodservice visits.
The number of consumers reporting no visits within the past week increased to approximately 30%, reminiscent of the pandemic months.
The Evolution of Off-Premise Dining and Dayparts
The landscape for off-premise dining transformed in 2023. While third-party delivery services witnessed a decline in weekday orders, the trend remained stable for dine-in experiences. Consumers, reacting to the high prices of third-party deliveries and additional costs for dining in, expressed a preference for takeout and direct delivery, signaling a shift in consumer behavior patterns.
Dayparts also underwent notable changes. Breakfast and brunch occasions observed a rise, presenting themselves as more affordable options for consumers. Conversely, dinner became more of a planned and experiential event due to decreased spontaneous visits. Consumers seemed to view dinner outings as occasions that required planning due to the overall rise in prices across the industry.
The Rise of Global Cuisines and Limited Time Offers
A significant surge in limited-time offers (LTOs) characterized the foodservice landscape in 2023, showcasing a 45% increase in launches over five years. McDonald’s celebrity-backed meals and LTOs, including the BTS meal and the Grimace Shake, utilized social media to generate hype and drive foot traffic.
Simultaneously, international cuisines like West African, Ethiopian, Caribbean, and Middle Eastern flavors gained prominence. Independent and emerging chain restaurants embraced these flavors, demonstrating an upward trend in menu offerings that catered to diverse palates.
The 2024 Foodservice Outlook – Personalization, Customization & Authenticity
Anticipating trends for 2024, the focus will be on transparency and authenticity in menu offerings. Menus are expected to become more granular, highlighting ingredient varietals, origins, and influences to emphasize quality and premiumization. This trend aligns with evolving consumer demand for genuine experiences and ties into the rise of international cuisines.
In the coming year, personalized and customizable formats are expected to gain traction, catering to consumers seeking diverse culinary experiences. The ongoing shift in consumer preferences, the transformation of dayparts, and the integration of global cuisines are poised to continue shaping the landscape of the foodservice industry in 2024, fostering innovation and consumer engagement.
The Food Institute Podcast
The foodservice industry has had its fair share of twists and turns the past few years, but where is it headed in 2024? Lizzy Freier, Director, Menu Research & Insights at Technomic joins The Food Institute Podcast to talk restaurant traffic, international cuisines, LTOs and more.