The business of food is entering a period of upheaval—one that should benefit independent restaurants and smaller chains, according to research firm Technomic.
In a new report, “Food Industry Transformation: The Next Decade,” the company takes a look at complex challenges facing the food business, which is expected to nearly triple to $2 trillion in annual sales in by 2025.
“To grow their share of industry sales, food providers need to continually reimagine, reinvent and reallocate resources to align their offerings with the evolving technology-enabled supply chain and the changing needs of consumers,” says executive v.p. Bob Goldin. Among predictions made in the report:
• Consumers will increasingly opt for independent restaurants and small chains over larger chains. Technomic projects a compound annual growth rate of 5 percent for the former, versus 3.5 percent for the latter. But watch out for supermarkets, where the sales of prepared foods are expected to soar 7.5 percent.
• Traditional retailers, such as supermarkets and supercenters, will lose 10 points of market share to nontraditional retail alternatives. That trend could factor into restaurant site selection.
• The food supply chain will need to be updated to reflect the desire for good-for-you and good-for-the-planet offerings. “The winning products of 2025 will include not only those that can legitimately be labeled as ‘natural’ or ‘local,’ but also those with ‘clean labels, fewer ingredients, less processing and a favorable carbon footprint,” according to a Technomic statement.
The company predicts that every aspect of the business—from sourcing, processing, distribution, operations and marketing—will feel the impact from shifts in labor, food production and distribution, consumer psychographics and demographics and the economy.