As the weather cools, the pumpkin spice latte makes its long-awaited return and couples everywhere make their annual trek to go apple picking. Fall truly is America’s favorite season—more than twice as popular as second place summer. But ask any child what the highlight of the fall is, and they will say “Trick or Treating.”
As my neighbors decorate their yards ahead of Halloween, it got me thinking: what tricks and treats are in store for the foodservice industry?
Trick: Food Prices are High (But There is Hope)
Between inflation and the war in Ukraine, food prices are much higher than they were before COVID. The good news, however, is that those prices are finally coming down. While customers from all income brackets are cutting food expenditures in both restaurants and groceries, these drops in prices mean there is long-term hope. While this year’s holidays will probably be leaner in most homes, 2024 may tell a different story.
Foodservice manufacturers who can pivot to cheaper product offerings may be able to secure short-term gains. If that is cost prohibitive, staying the course in anticipation of brighter days may be the better option.
Treat: Potential Grants for Organic Food Industry
Consumer demand for organic foods has grown consistently during the 2000s. While this represents a growing opportunity to serve customers who are willing to pay a premium for their preferred products, the transition to organic certification can be expensive.
The good news is, Congress is considering funding for the Organic Market Development Grant program in the upcoming Farm Bill. The program aims to support many aspects of the organic farming industry, including production, manufacturing, and distribution. If passed, this program should help foodservice manufacturers gain more consistent access to a variety of organic products.
Trick: El Niño Will Make the Holidays Less Sweet
The cyclical El Niño weather pattern disrupted the 2023 cocoa and sugar crops. Competition for these commodities will be stiffer this year, meaning that Halloween candy, Thanksgiving pies, Hannukah gelt, and Christmas stocking stuffers will all be more expensive.
Manufacturers can mitigate the impact of El Niño by pivoting to fruit- or nut-flavored desserts, exploring alternative sweeteners, or scaling down portion sizes. Though beware of shrinkflation: customers notice it, and they don’t like it.
Treat: Street Foods
The post-pandemic restaurant excess is over. As consumers tighten their belts, one product line that is poised to do well is street food. Comforting and cheap, it is no wonder 49% of eaters have expressed an increased interest in street food.
Food manufacturers with both foodservice and direct-to-consumer lines are especially well suited to take advantage of this trend. Shoppers have shown eagerness for both restaurant and ready-to-eat options.
The Bottom Line
Foodservice manufacturers and operators are constantly dealing with change. Fluctuating prices, evolving government programs, shifting weather patterns, and changing consumer preferences are part for the course in this industry. If your firm needs help navigating change, get in touch with FoodService IP.