Innovation for Food Service

This programme has been funded with
support from the European Commission
A Time of Great Change
Food Service & the
Customer
Module 1

INNOVATION FOR THE FOOD SERVICE SECTOR
Welcome to SUSTAIN, a new learning resource,
specifically designed to drive Innovation in the
Food Service Sector
This SUSTAIN course has been designed to equip training organisations and food
service businesses to develop healthy innovative products and digitize business
processes to ensure that food service SMEs in Europe are inspired and upskilled to
dynamically respond to obesity challenges, changes in technology and lifestyles.
Of course, our course also responds to the devasting changes that have challenged
the food service sector since March 2020 and Covid-19.
This course has emerged through our identification of training gaps and the very specific needs in the
food service business. The course is developed for flexible, self-led learning. Take any of our 6 modules
and read, watch, listen and save for later, our additional multimedia resources.

Module One
Food Service & the
Customer
With COVID-19 turning food
service and hospitality industries
upside down overnight, business
owners are faced with adapting
their business models to survive.
Module One is divided into 3 parts
& focuses on the consumer and
how their attitudes and behaviour
along with brand positioning can
affect product choice within the
food service sector.
CHANGING CONSUMER ATTITUDES TO
FOOD, IMPLICATIONS FOR FOOD SERVICE
CONSUMER BEHAVIOUR/PERCEPTION
REGARDING PRODUCT CHOICE
(Sensory/Physical)
THE POWER OF BRAND POSITIONING

Part 1: Changing Consumer
Attitudes to Food
MODULE 1

A time of great change…
In this first learning section, we put the spotlight on the
consumer. Their changing behaviour needs to be at the core
of business planning so that food service operators can both
recover and future proof their businesses.
LET’S LOOK AT SOME INSIGHTFUL RESEARCH
A survey of 5,000 consumers in 10 European countries
showed lockdown measures may have caused lasting
behavioural changes in relation to food consumption. See the
opportunity for the food industry to build on rising health and
sustainability trends below on the EIT website.
LEARNING ACTION: Immerse yourself in this fascinating
report just hit download below!

The Irish Food Board (Bord Bia) in its Market Insight report predicts 6
key trends need to be considered, to allow for a sustainable future of the
Food Service Industry. These trends apply right across Europe.
6 CONSIDERATIONS FOR THE
FUTURE
Changing
Landscape
Off-Premise
Acceleration
New Restaurant
Layouts
Reinvention of the
Business Model
Safety & Sanitation
Will Be Front and
Centre
Supply Chain
“Bumpiness”

1. Changing Unit Economics Will Change the
Landscape…
A number of key issues will have a long-term impact on the revenue and
profitability of the food service operator:
• Consumer orientation toward price suggests that price increases and a
premium positioning may encounter resistance from customers in the
short/medium term. Returning to normal spending levels may take several
years.
• Labour is a key concern. Operators have had to make key employees
redundant, and training and retention challenges are expected to continue.
• Off-premise fee costs have been a challenge as operators have shifted to
delivery models. Passing these higher costs onto the consumer may prove
difficult.

1. Changing Unit Economics Will Change the
Landscape continued…
• As demand shifts to the suburbs, operators may find it
hard to maintain a significant presence on the high street.
• Interior spacing has been reconfigured and with
associated capacity limits, revenue capacity is reduced.
• Exterior seating/spacing has been a welcome addition in
places where it has been possible (even in countries with
little history of outdoor dining (UK and Ireland). Going
forward, there may be more interest from operators in
using outdoor space as a part of the business model.

2. New Restaurant Layouts Will Emerge to
Create Flexibility…
Front-of-House
• Flexible seating options, with fewer built-in booths, and
a greater ability to move tables and create dining options.
• More planned outdoor space—operators will want to
have patios, garden seating or even work with local
councils to have pavement/street dining to mitigate dine-
in restrictions.
• Separate pickup areas will likely be incorporated into
front-of-house locations to help facilitate takeaway.
• At the same time, to entice guests to return, operators
will need to deliver an enhanced dine-in experience. This
may involve more tableside preparation, dine-in specials,
limited-time offerings (LTOs) will create a differentiated
experience for the consumer.
Back-of-House
• New locations will likely focus on smaller, more
modular kitchens that can be reconfigured easier.
• Multifunctional equipment will be necessary.
• Separate off-premise production kitchens will
grow in importance.

3. Safety and Sanitation Will Be Front and
Centre…
Safety and sanitation will continue to be a critical part of the Food Service emphasis
during and post-COVID-19. Ensuring that consumers feel safe and that your facility has
been properly sanitized is a most important customer service and brand positioning
action.
• Going forward, being able to “sell” safety and sanitation by telling the story of how
thorough the cleaning process is and the steps that are being taken, will take a much
more important role in marketing.
• Tech-based automation will be a key enabler for this expanded emphasis. Such as:
o No-contact food handoff
o Frictionless ordering and payment for on- and off-premise
o Re-emergence of QR codes – who thought they were dead and gone, be honest?!

4. Off-Premise Acceleration and Focus Across
All Sectors…
A key trend to emerge and accelerate from this pandemic will the shift to off-premise
strategies, particularly in segments where this had not previously been a focus.
• Sit-down restaurants, pubs, and even institutional operations have invested during the
pandemic in click-n-collect technologies, and this capability will continue to grow and
thrive post-pandemic.
• Delivery is an area that many are exploring to mitigate risk. Expectations are that delivery
(whether through aggregators or even self-delivery) will accelerate.
• With a more concerted focus on off-premise, there remain significant operational and
cost concerns, particularly for those new to this area. Packaging costs, making food “travel
-ready,” setting up front-of-house space for takeaway/delivery & factoring in additional
costs & technology are challenges that some food service businesses will struggle with.

5. Reinvention of the Business Model
• New formats/hybrids of food service business models are appearing, including an
integration of retail products into a restaurant setting. Meal kits, which have been a
successful way for operators to bring the restaurant experience to the at-home
consumer, will likely continue.
• Next-phase delivery kitchens are already being explored. Some SMEs have decided (or
will) that they don’t need as much dine-in space—or any at all. Delivery-only kitchens
may gain prominence not only in urban areas, but in suburban & rural areas where a
traditional restaurant may not make economic sense.
• It is likely that many food service businesses will re-evaluate their location. City
centres may not be as attractive longer-term for certain operators, like those that cater
to business lunches, etc. (especially with continued working at home) & operators will
assess whether there are more opportunities in suburban locations.

6. Supply Chain ‘Bumpiness’ Will Be An Issue
for Foreseeable Future…
The supply chain challenges that commenced with the pandemic in 2020
and Brexit in 2021 are likely to continue.
There were issues—often significant—with out-of-stocks & operators often
found themselves with substitute products or without the ability to serve a
particular menu item.
Similarly, operators were often left with extensive stock when government
lockdowns were introduced. It’s clear that supply chain forecasting and the
ability to accurately assess supply and demand has been largely one of
guesswork throughout most of 2020 -2021. It is unlikely that this will
change in the short to midterm.
Until the industry is on an established growth trajectory with little concern
for additional lockdowns, there will be challenges in maintaining stock and
supply levels.

Let’s recap on the commercial actions that
impact your food
service business
01
Shift to off-premise—Given dine-in closures, operators
that were able to pivot to takeaway or delivery saw some
success with these as a “bridge” to survival.
02
Menu Rationalisation—Menu complexity was reduced in
favour of a focus on the items that drove revenue and
profit.
03
Exploration of new service areas— Restaurants often found
themselves with new business models, including selling
grocery items/opening food halls & delicatessens in their
restaurants or increasingly building online retail portals.
Given the significant disruption
experienced by commercial
operators, the 8 ‘Takeaways’
listed here are mostly concerning
food service business survival.
As we have learnt, the following actions
were common responses arising in the
sector:

Let’s look at the commercial actions that
impact your business
04
Increased usage of single-use packaging, Given the central
role off-premise played in keeping many operators afloat,
most reportedly saw huge spikes in packaging, although this
is expected to reduce post pandemic
05
Reliance on suppliers and distributors - Operators have been
more reliant on suppliers for flexibility in payments and in
returns and found it difficult to maintain stock based on
significant fluctuations in demand.
06
Increased sales/focus in suburban areas—Footfall has been
virtually nonexistent in city centres. Many operators with
locations in suburbs and outlying areas report better trading
conditions outside of urban areas.
Given the significant disruption
experienced by commercial
operators, the 8 “takeaways”
noted are mostly concerning
food service business survival.

Let’s look at the commercial actions that
impact your business
07
Investment in technology to facilitate ordering and collection.
Many operators accelerated or initiated plans to build online
capabilities, including apps, websites, online stores and more
loyalty programmes to capture customer data.
08
Reconfiguration of stores/dining facilities—Socially distanced
tables and one-way queues that minimised interaction
between guests and with staff were requirements to operate.
Now complete REFLECTION Exercise 1

Spotlight on Changes in Consumer
Attitudes as a result of Covid-19
In the previous section we look at the trends and changes that
unfolded at industry level as a result of Covid-19. We now look at
changes at individual consumer level. Understanding consumer
changes is fundamental to food service businesses responding in
an innovative way.

5 Food & Beverage Consumer Trends in Europe During
COVID-19
Trend 1: A focus on 'self-protection’
From immunity-boosting products to comfort food,
consumers are looking for ways to protect their bodies
and minds during this time.
A 2019 survey by Kerry ConsumerFirst found that
some 30% of European consumers claimed to change
their diets in order to help their immune system. So,
this trend has been at play since before COVID-19.
However, this has accelerated - according to Google
Trends, internet searches for 'food' and 'immune
system' rose 670% globally in the first 2 weeks of
March 2020.

5 Food and Beverage Consumer Trends in Europe During
COVID-19
Trend 2: A new relationship with cooking and drinking.
Of huge significance to food service outlets, over 50% of European
consumers are now cooking more at home and attempting new
cuisines and recipes, according to Kerry ConsumerFirst data.
How did food service sector respond? Meal kits supply pre-
measured ingredients and full recipe instructions, which aim to help
make the process of cooking at home simple. Back as far as 2016,
big players like UK’s Gousto, and Germany's Hello Fresh, were in this
space, educating consumers and getting them comfortable with the
idea of ordering measured ingredients that they cook themselves.
Now this business model has been used by thousands of restaurants
to stay solvent during Covid-19 .

Trend 3: Snackification is on the rise.
Consumers turn to snacks for comfort, but the nature of snacking has
shifted from a quick fix on-the-go to an at-home occasion. Prior to
COVID-19, shared snacking fuelled a number of markets. A survey by
Mondelez found that 71% of adults say snacking gives them time to
connect with themselves and 53% look forward to snacks more than
meals – this is very significant for hospitality and food service
businesses.
Due to the current environment, consumers are looking for snack
products that are functional, from an immunity perspective, and even
those that provide relaxation and mental benefits. For those who are
looking for a treat, snacks that prompt a sense of nostalgia seem to be
delighting consumers. Is there an opportunity for food service
businesses to respond?
5 Food and Beverage Consumer Trends in Europe
During COVID-19
Click on Image
for further
trend info…

Trend 4: Importance of e-commerce.
Digital technology has been embraced by all
sectors of society, from staying in touch with
loved ones to ordering food online. This trend is
set to grow and strengthen, with foodservice
outlets pivoting to online delivery and engaging
with consumers via mediums such as Instagram
and carrying out cook-a-longs on Facebook Live
and Zoom.
Module 6 of this course is fully dedicated to
learning about the role technology plays when
innovating your food service business.
5 Food and Beverage Trends in Europe During COVID-19
Click on image to access post

Trend 5: “Less but better” diet mantras.
According to Mintel, under the “less but better” philosophy, people
will consume dairy, meat, poultry and other animal products less
often, but will trade-up when they consume them. These buyers often
choose animal products that are better-tasting, more nutritious or
have ethical or environmental claims (or a combination of these
factors).
More mindful consumption of animal products is a step toward
sustainable, or planet-friendly, diets. The UN FAO defines sustainable
diets as having “low environmental impacts that contribute to food &
nutrition security and to a healthy life for present and future
generations.”
Mintel tell us more people will follow these diets through to 2030.
5 Food and Beverage Consumer Trends in Europe During COVID-19

It’s not all about Covid-19, health consciousness is
a key industry challenge and opportunity
So, we know that consumers are more ‘health-conscious’
these days. Through media headlines, we read about the
obesity epidemic, the war on sugar and sugary drinks and
find a plethora of diets on offer: keto, paleo, sugar-bust,
calorie controlled slimming clubs etc. etc…
As food service and hospitality businesses, we are faced
with key questions:
• Do healthier foods cost more to produce than less
healthy options?
• Will the consumer happily pay for a differential ? A
study in the US reveals the daily price difference of
eating healthier is $1.50 per day translating to $550
higher annual food costs per person.

A CHANGE IN POSITIONING…
We are seeing market positioning and messaging move from ‘food as pleasure’ to ‘food
as functional fuel’ for a healthy lifestyle. It’s also fair to say that healthy food
consumption is a core policy objective in national and international agendas.
Understanding healthier consumer food choice and acceptance is critical for any food
service business. There is a whole world of study on food development methods and
acceptance criteria, this module focus now moves to two key areas:
• Perception as a basis of food acceptance and consumption
• Senso-emotional optimisation of food and brand
Before we move on, our next slide invites you to get scientific and watch a video on
What’s Happening in our brain when we eat?

LOOK AND LISTEN
Explore our multimedia resources below, watch our hand
selected YouTube videos and enhance your learning by
listening on the go to our top podcast picks!

Innovation for Food Service

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