Massive Big Food study holds lessons for the restaurant industry today


American Big Food is losing market share like someone just unplugged their communal bathtub, according to a recently released study on the State of Big Food.

Hush! Do you hear that collective sigh? It’s the sound of America’s big food companies losing market share and customer loyalty as if someone had just pulled the plug to their collective bathtub. This is a major finding from a study published today by AT Kearney into the state of Big Food, which the company says is currently in serious trouble.

Why is this important for restaurateurs?According to the people behind the research, the story of Big Food is also the story of the restaurant business. It comes down to the fact that the iconic names that have long dominated the business are being threatened by smaller brands that are steadily increasing their customer base and bleeding business from the big fast food brands.

Much of this change is due to the deep-rooted reputation of large chains for distributing highly processed foods with questionable nutritional value.

Major QSRs are taking steps to address this issue, such as McDonald’s incorporating healthier and more sustainable offerings into its daily menu, a change which was announced last month. But that might not be enough, the researchers say.

“This study focused on branded food manufacturers selling primarily at retail, however, the same trends are seen in the restaurant industry,” wrote Dave Donnan, partner and global food practice leader. and drinks at AT Kearney, in an email to QSRWeb. “These trends have accelerated over the past five years. … [They] do not only concern the younger generations. Baby boomers are trying to live longer, so they focus more on healthy eating, and millennials have been raised with a greater focus on nutrition and health, which is reflected in their shopping habits. »

Causes of the drop in sales

Donnan said the research points to three fundamental factors driving the current evolution of Big Food and its service chains. These include:

  • a global shift towards so-called “free” foods that do not contain antibiotics, hormones or genetically modified ingredients;
  • the growing focus on health and well-being favoring purchases of fresh and less processed foods; and
  • growing consumer preference for small, innovative companies that source from sustainable food suppliers.

In the Big Food and Beverage industry, all of this is manifested in a huge loss of market share. The research indicates that the nation’s retail food and beverage sales, now driven by the top 25 U.S. food manufacturers, fell from 66% in 2012 to 63% in 2015.

The study shows that this happened as the overall market grew by almost 3.5%. That growth, according to the study, went to small and medium-sized businesses, which drove $14 billion in additional revenue. That compares to $16 billion in growth for all major food companies combined, according to the study.

Donna said that in Big Food, there is a massive shift underway to restock products to meet the changing demands of today’s consumers. And make no mistake, consumers are drive this trend.

Research has found that today’s buying public almost revels in the power it wields over every segment of the food industry. In the report summarizing his research, AT Kearney discusses the results of a 2015 study by the Hartman Group.

Hartman’s research has shown that consumers — especially those in Millennials and Gen Xers — believe the best way to control what happens in society at large is to vote with their money.

“For the first time, consumers believe that their buying decisions have a far greater impact on society than their voting decisions or their involvement in their local community,” observes the AT Kearney report.

Three ways to answer

The authors of the study advise Big Food to pursue three objectives for readjusting to the current market. These research-driven tips could also be useful for large restaurant chains.

The study indicates that the food and beverage market as a whole has a “$70 billion opportunity” for growth over the next three years. The researchers advise key industry players on three tactics to claim a share of this activity, including:

  • enable investment growth through cost reduction and disposal;
  • the acquisition of small established players in trending categories, as well as the development of external venture capital; and
  • create venture capital funds to purchase and develop emerging brands, products and technologies in line with consumer trends.

The report also urges companies to develop “cultures of innovation” that lend themselves more to the kind of risk-taking needed to try out new ideas and concepts.

Research also strongly suggests that winning in the US grocery business these days means being truly transparent about where food comes from and how it’s produced and prepared. Sounds familiar, doesn’t it?


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