Key trends in food and drink – why quality is key but price is still king
Food businesses are currently in a difficult position – as the chart below shows, customers are becoming more interested in food issues across the board, wanting to know how healthy their food is and how it has been made. However, they’re still most influenced by the price of their food. This presents businesses with quite the challenge – how do you keep customers happy when they’re demanding healthier, higher quality food at ever lower prices?
Smart food businesses are making these ever-fussier customers happy by thinking laterally – so they can deliver more with less.
Delivering more with less is one of the key drivers behind the booming street food scene. Food vans enable businesses to give customers more of what they want – fresh, high quality ingredients – and less of what they can do without – namely, table service and décor.
Businesses with permanent premises can tap into this trend too, however. Leon is one example. It sells healthy, high quality food but manages to keep costs down by bringing in elements of a fast food restaurant. For example, its pre-packaging salads and wraps don’t have to be made to order, and its food is served in boxes rather than on plates. This approach is working well – Leon’s turnover grew by 17% in 2011.
Barrel-aged cocktails are now moving from America to London, partly because they’re new and interesting, and partly because they enable bars to save money. Barrel-aged cocktails are premixed and left to mingle in old bourbon, rum or sherry barrels where they absorb some of the flavours of the wood. Customers like them because they’re interesting and different. Bars like them because customers pay the same price for them as they would a standard cocktail, yet prep time has been reduced from 10 minutes to 2. Bars can use the money they save on prep to put higher-quality ingredients in the drink, charging the customer the going rate for a much better product.
Other companies are selling more to customers by pitching an experience rather than a standalone meal. Gingerline is a secret supperclub that charges around £50 per person for a 3 course meal with one cocktail and cabaret entertainment. Guests only find out the address of the venue by SMS on the evening of their experience. The meal, like the venue, is kept secret until the event – enabling Gingerline to serve almost everyone the same meal and keep costs down. By telling customers they will be dining somewhere in East London, but keeping the precise location a secret, Gingerline is able to justify the fee it charges each attendee. However, as the space is actually in a relatively affordable part of South East London, the business achieves a much higher profit margin than its rivals in the hippest parts of town.
These are just three examples of businesses thinking creatively to deliver quality food to customers and increase margins without increasing the cost of delivery. Find out more about this trend, and a whole host of others, at Insider Trends ‘Future of Food and Drink’ trend presentation. It will take place in Newcastle on Tuesday 14th May and London on Tuesday 21st May. Alternatively, you can download the trend presentation here.