While 2024 should bring a more stable growth rate, high prices and sagging consumer confidence affecting consumer behavior are two substantial challenges awaiting the foodservice industry in 2024, according to a new report from CSP sister research arm Technomic, Chicago.
“Foodservice stakeholders once again need to tap into their reserves of creativity to thrive,” according to the report, What’s in Store for 2024. “They will need to be ready for hurdles and develop contingency plans. Operators must lean into technology, menu and service innovation that avoids disruption of the consumer experience and, when possible, takes advantage of existing ingredients or resources.”
Expect More Stability
“The foodservice industry’s roller coaster of significant losses from the pandemic followed by substantial growth during recovery will start leveling out in 2024,” Technomic said. “Most restaurant segments should return to the low single-digit rates of real growth we saw in pre-crisis years.”
Expect limited service to enjoy benefits from recent unit growth and consumers’ ongoing trade-down from full service. “Success for sit-down restaurants will depend on the adoption of competitive price positions and availability of exceptional value and experiences that are different and engaging,” Technomic said. “The primary threat for all restaurants in 2024 and beyond: America’s aging consumer base and slowing population growth, making organic growth harder to come by.”
Occasion Shift
Consumers this year will reduce their delivery spend for more takeout and drive-thru, Technomic said. Also, breakfast will boom, replacing lunch during the workweek as a satisfying yet more affordable option. On weekends, brunch will rise in popularity over dinner “thanks to its equally appealing social aspects, large adult beverage selections and lower average checks,” Technomic said.
Effects of Weather
The increasing frequency and intensity of extreme weather will continue affecting restaurant sales and traffic. Operators will have to think about energy-saving equipment, misters and fans to combat high heat and humidity, and upgraded HVAC systems and windows to assist come snow, rain or shine. “For the menu, preparations requiring little to no heat will provide a more comfortable setting for back-of-house staff, while lighter dishes will better appeal to guests dining in sweltering temps,” said Technomic.
Granular Menus
Vague menu descriptors are gone as more transparent listings become vogue. Cocktails won’t contain just any apple flavor but, rather, a Granny Smith. Similarly, generic red wine vinegar will move aside for Barolo wine vinegar. In addition, expect more callouts of regions or countries of origin and influence, especially lesser-known ones, such as Haitian honey. “This menu detail will further push quality, premiumization and transparency in the consumer mindset,” Technomic said.
Odd Offerings
The recent pickle palooza, from pickle pizzas to pickled fries, has opened the door for more offbeat fare. “Sensory-seeking consumers inspired by TikTok recipes like chopped sandwiches and feta pasta will get their kicks at restaurants serving savory sweets and cocktails, such as fat-infused fried desserts and garlic or mole cocktails,” said Technomic.
Access the full report here.
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