The end of Fast Food as we know it | #eBizTrends | Dion Chang

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Never before have we had as great information access as we do today.  If you wanted to find out the calorie intake of a beef burger versus a chicken burger on your smartphone, you can. If you wanted to check the scarcity of a type of fish before you eat it, you can also do that. You can even track your total calories of the day at your fingertips and that’s not even delving into the plethora of exercise apps that can help you determine just how to burn it off. There are stockpiles of smartphone applications out there that will track and break down your meal content into its precise protein and fat percentage. This influx of information is lending to smarter and more health conscious consumers.
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The economic downturn has led to lowest ever dining out rate since baby boomer days and the gen X food buying choices have dramatically changed since. The food industry tries harder than ever to appeal to its ever decreasing market share of the 18 – 30 demographic.

In light of the newfound health consciousness, traditional food companies are abandoning their brand DNA to retain customers. In maintaining its relevance, a food company has to blend a right mix of flavours, healthy choices and sustainable sourcing. The calorie-driven instant-satisfaction type of fast food chain as we know it is losing its grease glistening lustre.
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Why it’s important

The farm to table idea has been championed by pioneers such as Alice Waters since the seventies and au naturel grocery store Wholefoods has been around since the eighties but never before have we seen as great popularity and interest as we do today. The smartphone at our fingertips is turning all of us into health gurus if we so choose. Consequently, consumers’ relationship with food is altering. They are commanding a new level of health consciousness, caring about the ethics of sourcing, demanding a boarder selection and wanting customization at will.

The average American is lowering their sugar intake year on year. The fat intake per person is increasingly reduced. This change in preference is reflected in the continual rise of organic produce sales and the declining purchase of higher calorie food products.
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Wall Street is also once again eyeing the food industry with reinvigorated interest. Potbelly the sandwich customization shop, and Noodle & Co a fast casual dining restaurant specializing in international and American noodles, respectively made financial headlines last year for outperforming the market. On the contrary Crumbs the once popular mom and pops cupcake store took a stock plummet in 2013. Consumers now look to longer-term healthy consumables instead of sugary treats for instant gratification. The on going juice trend also serves as a trend indicator.

What’s the butterfly effect?

Social pressure was not the only catalyst for change. First time in nearly a decade, McDonald saw a comparable sales decline in 2012 and after years of popularity reign, it took a hard blow when it discovered that, amongst customers primarily aged 18 – 32, it didn’t make the cut as a top 10 favourites for the demographic.

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In an effort to remain relevant, McDonalds has introduced healthier McWraps and “hold the yolk” egg white breakfast muffins. Salads and fruits are now options as burger accompaniments – an option that is already offered in France and will be available early this year in the U.S and full availability in all US locations by 2020. Soda beverage giant Coca Cola also launched a branch of beverage targeting the younger and greener conscience demographic in Argentina. The updated coke, named “Coca Cola Life”, aims to target the Millennial with natural sources of sweetener and environmentally friendly packaging that is 30% plant material and 100% recyclable.

Even the iconic brand colour is substituted to green.  The total calories per bottle is reduced from 250 calories to 108 calories. Following McDonald’s and Coca Cola’s announcements, Burger King made a press release to unveil its 20% lesser calorie crinkle fry. Dunkin’ Donuts is releasing Gluten-free donuts and muffins to lure younger and a more health conscious crowd. Taco Bell released a range of “Power Protein” products targeted at gym enthusiasts. Even the quintessential Warhol-iconized American soup brand – Campbell – is trying to overhaul its image. Its research team surveyed the ultimate American hipster cities – Austin, San Francisco and Portland – for clues of what to include in its newest youth appeasing formula. The results were plastic-pouched multi-flavoured concoctions of Moroccan styled chicken and Spicy Chorizo soups.

The Pioneers and Global Hotspots

Starbucks – To sate the palate of the incoming generation,  acquired the San Francisco bakery La Boulange in 2011 for an upgrade of the existing baked goods. The original founder at La Boulange re-introduced croissants and cakes for the collaboration and packaged the gourmet version in blushing pink paper bags. Reviews have been positive so far accompanied by the growth of sales.
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Starbucks also tapped into the juice trend by buying out Evolution Fresh in year 2011 with a focused marketing message on health benefits and its preservation of nutrients. The eventual expectation is for customers to pick up a juice along with their daily caffeine fix.  No longer confining itself to the coffee business, it is also venturing into the tea industry, acquiring Teavanna in 2012 as its foray into an estimated $90 billion tea market. The price point will be higher and the stores will offer a more sophisticated, Zen-like ambience. Its first tea bars have opened in New York and Seattle respectively.

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Chipotle – The Mexican inspired restaurant has served as the poster child for nailing modern consumer needs. It capitalized on the fast casual dining business model during the ’07 economic downturn, capturing a niche of a median priced (lower than a restaurant but higher than a fast food chain) market and inviting ambience with ethical sourcing and fresh ingredients.

The haunting yet mesmerizing Scarecrow video that went viral last year well illustrates Chipotle’s core marketing voice and the viewership that garnered 11 million cemented their leadership on the new concept of food chain. The 3 minute long animated video takes us through the commercialism prevailing food industry practices – the reality of hormone injected livestock and the lack of passion commanding the industry. The ending injects hope with movements supporting sustainable food growing and wholesome ingredients much like the mission that defines Chipotle.

 

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My point is not that China dominates this value chain – it always has. I’m lamenting the loss of creativity and individuality as the recession forces us to embrace the lowest common denominator. Independent retail is collateral damage in a globalised world. Cheap is not necessarily cheerful.

 

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Dion Chang in conversation with eBizRadio’s Nick Snow

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