Understanding foodservice sales: strategies for growth in a dynamic industry
The foodservice industry is a massive, rapidly growing sector, contributing significantly to the global economy. According to Statista, in 2023, total retail and food service sales reached a staggering $8.33 trillion in the United States alone, marking a substantial increase from previous years. This growth reflects the industry’s dynamic nature, where companies continuously adapt to changing consumer preferences and technological advancements.
For companies involved in the foodservice industry, staying ahead of trends and strategically positioning themselves is crucial. Whether understanding foodservice insights or leveraging food analytics, businesses must adopt innovative approaches to maintain and boost CPG sales.
What is foodservice sales?
Foodservice sales refer to the total revenue generated by businesses that prepare and serve food and beverages to customers. This includes various establishments such as restaurants, cafes, bars, caterers, and even food trucks. The industry is massive and encompasses everything from fast food outlets to fine dining restaurants, and each segment faces unique challenges and opportunities.
In the modern foodservice industry, consumer preferences have evolved significantly, driven by factors like environmental awareness, health consciousness, and the rise of technology. Today’s consumers are more informed and demand transparency in the food they consume, leading to an increased focus on organic, locally sourced, and sustainably produced ingredients. The industry’s ability to adapt to these changes is critical for maintaining and growing foodservice sales.
Commercial operators, such as restaurants and cafes, dominate the foodservice industry, primarily focusing on selling food and beverages to generate profit. However, non-commercial operators, like hospitals and educational institutions, also contribute to foodservice sales by providing meals as part of their services.
As the industry continues to evolve, the challenges of sustainability, traceability, and customer expectations will shape the future of foodservice sales. Companies that can navigate these challenges by leveraging foodservice data, food analytics, and effective foodservice marketing will be better positioned to thrive in this dynamic environment.
8 tips for increasing foodservice sales
- Leverage data-driven decisions
Using foodservice data is key to understanding market trends and consumer behavior. By analyzing this data, companies can identify what products are in demand and tailor their offerings accordingly. For instance, restaurants can use food analytics to determine which dishes are most popular during specific times of the year and adjust their menus to maximize sales.
- Enhance the customer experience
Customer satisfaction is critical in the foodservice industry. Simple changes, such as improving service speed, offering personalized menu options, or creating a welcoming atmosphere, can significantly boost sales. For example, Tastewise, a GenAI-powered consumer data platform, helps businesses understand what their customers truly want, enabling them to stay ahead of trends and launch precise campaigns.
- Optimize menu design
A well-designed menu can be a powerful tool for increasing sales. Highlighting high-margin items, using descriptive language, and strategically placing popular dishes can encourage customers to spend more. Regularly updating the menu based on foodservice insights also keeps it fresh and relevant.
- Invest in technology
Technology is transforming the foodservice industry. From online ordering systems to digital payment options, investing in the right technology can streamline operations and enhance the customer experience. For example, using AI-driven solutions like recipes, and surveys, to analyze foodservice data can help businesses predict customer preferences and optimize their inventory accordingly.
- Focus on sustainability
Consumers are increasingly concerned about the environmental impact of their food choices. Offering sustainably sourced ingredients and reducing food waste can attract eco-conscious customers. In 2020, the global vegan food market was valued at approximately $15.4 billion, and it is projected to grow significantly in the coming years.
- Improve employee training
Well-trained employees are essential for delivering excellent customer service. Investing in staff training ensures that employees are knowledgeable about the menu, understand food safety protocols, and can provide a high level of service. This, in turn, can lead to repeat business and increased sales.
- Use social media marketing
Social media platforms are powerful tools for reaching new customers and engaging with existing ones. Regularly posting high-quality images of dishes, sharing customer testimonials, partnering with influencers, and running promotions on platforms like Instagram and Facebook can drive traffic to your establishment.
- Expand delivery options
With the rise of food delivery services, offering convenient delivery options is a must. Partnering with popular delivery apps or developing an in-house delivery service can help businesses reach a wider audience. The global food delivery market has more than tripled since 2017, highlighting the importance of this channel.
Foodservice sales growth expectations for CPGs in 2025
The CPG sales sector within foodservice is expected to see significant growth by 2025. According to industry data, the global foodservice market size is projected to reach a whopping $4.1 trillion by 2026, with a steady annual growth rate of 5.4%. For CPG companies, this presents a lucrative opportunity to expand their presence in the foodservice market.
To capitalize on this growth, companies must focus on a few key areas:
- Innovation in product offerings: Companies need to continuously innovate their product lines to meet the evolving tastes of consumers. This includes developing new flavors, healthier options, and products that cater to specific dietary preferences, such as vegan or gluten-free.
- Strategic partnerships: Forming partnerships with foodservice operators can help CPG companies expand their reach. By collaborating with popular restaurants or cafes, CPG brands can introduce their products to new customers and increase brand visibility.
- Data utilization: Leveraging food analytics is essential for CPG companies to understand market trends and consumer preferences. This data-driven approach enables companies to make informed decisions about product development, marketing strategies, and distribution channels.
FAQs
What is the impact of seasonality on foodservice sales?
Seasonality plays a significant role in foodservice sales. For example, ice cream sales typically peak in the summer, while hot beverages see increased demand during the winter months. Businesses can use foodservice insights to anticipate these seasonal trends and adjust their offerings accordingly.
How can small foodservice businesses compete with larger chains?
Small businesses can compete by offering unique, locally sourced menu items, creating a strong brand identity, and providing personalized customer service. Utilizing food analytics to understand local market preferences can also give small businesses a competitive edge.
What role does technology play in modern foodservice sales?
Technology is crucial in modern foodservice sales. From online ordering platforms to AI-driven consumer insights, technology helps businesses streamline operations, enhance the customer experience, and make data-driven decisions that drive sales.
By leveraging foodservice insights, embracing innovation, and focusing on customer satisfaction, businesses can position themselves for success in this dynamic market. As the industry continues to evolve, staying ahead of trends and adapting to consumer needs will be key to thriving in the years to come.