Five Consumer Trends Shaping the Future of Food & Foodservice
What’s driving the shift in what and how we eat?
CHICAGO -- Sluggish restaurant traffic growth and stalled sales in the center aisles at grocery stores are evidence that U.S. consumers’ eating behaviors are evolving. The growing influence of Hispanics, millennials going through life stages, aging boomers smaller households, as well as the need for fresh and non-processed foods are among the factors driving the shift in what and how consumers eat, according to The NPD Group.
Tracking how consumers eat in and away from home, NPD said that among the changes in demographics and behaviors driving the evolution in eating behaviors are:
1. Hispanics. The U.S. Hispanic population is growing exponentially compared to non-Hispanics. In 2014 U.S. Hispanics grew restaurant visits while non-Hispanic visits declined. In-home the Hispanic population combined with their adherence to dining traditions is beginning to influence national consumption patterns. Fresh and from scratch are the most common food forms during Hispanic meal preparation. Stovetop preparation dominates Hispanic meals more than non-Hispanic meals due to the types of dishes being prepared.
2. Millennials. In 2015 the millennial generation is projected to surpass the Baby Boom generation as the nation's largest living generation, according to the U.S. Census Bureau population projections.
Based on its sheer size, as millennials go, so goes the food and foodservice industries. Millennials are driving changes in this country’s eating behaviors with their approach to food choice and preparation. They like fresh, less-processed food, which has played out in their preference for fast-casual restaurants that offer freshly prepared foods and shopping the perimeter of grocery stores where fresh and non-packaged foods can be found.
This generation is in a life stage when they would, historically, visit restaurants more often than other age groups, but in recent years they have cut back to the point where people 50 year and older go out more often than millennials do. In addition, 65% of U.S. Hispanics, a growing population base, are millennials or younger.
3. Aging Boomers. The Baby Boomer generation is aging, considering retirement, becoming empty nesters and developing health ailments, all of which are typically associated with major changes in the way we approach food and beverage consumption. While shrinking in size, this generation is still too large to ignore, especially given their expected lifestyle changes. This group will be less driven by the latest fad and more by what they need to sustain their health and lifestyles. Healthful foods, such as high in whole grains, protein and calcium, or low in saturated fat, cholesterol, and sodium, will be of most interest to this generational group.
Boomers’ restaurant visits have surpassed those of younger adults, who have cut back on visits over the past several years.
4. Smaller Households. Consumption behaviors in the United States have become less household-oriented and more individualized than previous generations, and now more than 50% of eating and beverage occasions happen when consumers are alone. Also contributing to consumers dining alone is that 27% of all households now consist of just one person—the highest level in U.S. history, according to the U.S. Census Bureau. The number of solo eating and drinking occasions has wide-ranging implications for food and beverage marketers and foodservice operators in terms of new-product development, packaging and positioning, restaurant seating design, menu development and more.
5. Fresh. From 2003 to 2013, consumption of fresh foods—fruits, vegetables, meat, poultry, fish, and eggs—grew by 20% to more than 100 billion eatings, and it’s the youngest generations, Generation Z and millennials driving the trend. In addition to eating more fresh foods, Generation Z and millennial consumers are also interested in eating more organic foods. In terms of foodservice visits, millennials prefer fresh ingredients and freshly prepared items—key differentiators among many fast-casual versus traditional quick-service restaurant (QSR) formats. An aspect of freshly prepared that suits millennials are menu components that are made to order or that can be customized.
“Visits to U.S. restaurants are forecast to grow less than 1% a year over the next decade, slower than the 1.1% a year growth in the country’s population,” said Bonnie Riggs, NPD restaurant industry analyst. “A greater share of visits will source to those 50 years and older in 2019, but as consumers ag,e they become less-frequent restaurant users. This means the restaurant industry will have heavier dependence on lighter buyers.”
“Macro food and beverage consumption behaviors are slow to shift akin to the movement of the continental plates. If you sit and stare at the plates along a fault line you’re not going to observe any discernible difference from one moment to the next,” said Darren Seifer, NPD food and beverage industry analyst. “However, if you put a stake in the ground on both sides and return some time later, you will see that a small but definite movement occurred. Food manufacturers, foodservice operators and retailers need to be aware of these slow changes in behaviors or they will be caught off guard. “
The NPD Group, Chicago, provides market information and business solutions in the automotive, beauty, consumer electronics, entertainment, fashion, food and foodservice, home, luxury, mobile, office supply, sports, technology, toy and video game sectors.