Trends to note for F&B industry for 2012.

by Chee Leng
(Singapore)

NPD (a renowned Food Service analyst company) recenly reported findings and trends to take note for US restaurant industry.Two items which I deem would be applicable for most of our readers are:

1. The increasing influence of social media for Food Services

It is not hard to see how social media has impacted business. MacDonalds launched the coffee moment in UK to get their customers to share their coffee moment on their Facebook timeline which would then be use in TV/Radio and print. Noted that Facebook is the main medium and the rest of the media are supporting it.

The reason is with social media such as facebook, your customer would check on it few times a day and your exposure rate to them is much higher than say TV or newspaper which is a one off thing. The lifetime value on facebook is very much higher than any other media.

Then with the introduction of QR, mobile apps, it is getting easier to be on social media, so using it should be seen as a key strategy. You can use social media to reach your target audience easier.

2. Beverages would be the point of focus.

Coffee in particular would continued to experience growth. Despite the gloom and doom with the econom, MacDonalds and Starbucks are profitable and for th former, they cite coffee as the reason for their healthy profit.

Regardless, what people says about the increasing cost of coffee, the margin that companies are able to mark up and people are willing to pay is still huge and this translate to healthy margin for companies doing it.

In addition, beverages are a good reward to be using to run promotion and as a front for generating buzz, i.e. new product launch.

My $0.02

Social media enables us to market our products and reach many consumers at a fraction of the usual cost. The thing about social media is the maintenance portion of it. The fact that Starbucks or Macdonald is able to do it well, is not so much about the budget they have, but the on going maintenance that they are doing.

For social media, it is about engagement and relationship. But, isn't that what you as a shop owner wants in the first place. Imagine, a relationship with all your customers, and all you need is to buzz them about new promotions and they would turn up at your shop.

This is not a thought, this is an actual scene from Starbucks Canada, and it shows how they leverage on social media and their coffee. They successfully migrate their reward cards owner to their apps, with coffee as a reward. This apps allows user to be "promoted" so that they can earn more free coffee.

To be"promoted" they need to make 30 visits to Starbucks. The coffee as a reward cost very little to Starbucks and the apps creation would be marginal investment. They manage to get 1 million apps download and if everyone goes for the "promotion", they are effectively looking at 30 million visits with each visit about $5 spend at Starbucks.

Starbucks now are having a relationship with a million canadians just by rewarding with some free drinks, and they would in turn likely reward Starbucks with 30 million visits.

This is the potential of using technology, I do not know if mobile apps can be consider as social media, but this definitely brings in good business for starbucks. It also illustrates very well what NPD spoke about the key trends of using social media in marketing F&B businesses and focusing on beverages...