December 2009    

Inside this Issue

Subscribe Newsletter

Job Seekers


Contact Us

Contribute An Article

Current Openings

* Buyer/Procurement Specialist
* Ammonia Engineer

Impacts of the current recession on the food services industry

By: Kelly Kagamas Tomkies, Author, Food Services Career Launcher

No one can argue that times are tough, and businesses in every industry are struggling. One thing the food services industry has going for it is that eating is a necessity. More people than ever before feel that eating out is part of the equation. In fact, according to the National Restaurant Association’s 2009 Industry Forecast, 45 percent of adults say restaurants are an essential part of their lifestyles, one of three say they are not eating out as often as they wish, and 35 percent of adults say that on a weekly basis, they are not purchasing take-out foods or having restaurant food delivered as often as they would like. Eating out and a reliance on already-prepared foods are trends that will continue to rise despite the sluggishly recovering economy.

Even though Americans are still concerned about financial security and are still keeping their purse strings still tightly drawn, the National Restaurant Association says that restaurant sales will continue to grow this year, to a record $566 billion. True, they won’t grow at quite the rate the industry has seen in the last several years, but growth is still growth. This could be attributed to the continuing demand for convenience by families on the go. Edna Morris, an industry veteran of more than thirty years, has served in executive capacities with Hardee’s and Qunicy’s Steakhouse. She is currently the CEO of Geshai Ollin, developing a restaurant concept around locally grown food. She says the restaurant industry remains strong even in the face of tough times.

“People may be going out to eat fewer times, or not ordering a bottle of wine, but they are still going out,” she says. Those in the industry know that before other sectors of the economy feel an impact or change, the food industry is already dealing with it. “When there is discretionary money to go out sales go up,” Morris says. “The restaurant industry is the first to be affected by a rough economy but it is also the first to emerge.”

The industry is huge but despite its mammoth size is surprisingly adaptable, nimbly changing to meet ever-changing customer needs. Currently more than 945,000 restaurants compete in the United States and employ 13 million people. And that does not include industry suppliers.

Its adaptability is just what allows it to succeed, say many industry veterans. According to The Food Service Industry: Trends and Changing Structure in the New Millennium by Charlotte G. Friddle, Sandeep Mangaraj, and Jean D. Kinsey of the department of applied economics at the University of Minnesota, St. Paul, time and convenience are essentials of today’s and tomorrow’s lifestyles and cooking. As mentioned before, younger generations are relying more heavily on ready-prepared foods from grocery stores and restaurants and are spending less time in the kitchen.

In addition, providing good service and quality food are as important as making it convenient and quick. “A customer always wants good service appropriate to the concept, fine dining, fast casual, or fast food,” says Donatos Pizza Founder and CEO Jim Grote. “The customer may put up with ‘poor’ service to get a good price and a quality product when money is scarce, but they will remember who gave the best service and took care of them when times are better.”

Challenges ahead

Most food service operators across all segments cite rising costs as their biggest challenge. Food and energy costs continue to rise, and since customers’ budgets are still tight, operators are reluctant to raise the prices on most menu items. Instead, most restaurant managers say they plan to meet rising costs by increasing sales. The best way to do this, they say, is to create and maintain repeat customer business. Repeat customers account for 75 percent of sales at quick service restaurants, according to the National Restaurant Association’s quick service operator survey, so retaining these valuable customers will be a priority in 2009.

In addition to rising costs, increasing competition and fewer financing options are also challenges many operators face.

Current trends

All trends in the food services industry are geared toward meeting customers’ needs, whether that is for faster service, added convenience, or healthier menu choices. Many of the trends the industry is experiencing today started during the 1970s when a growing number of two-parent working families wanted an easier way to feed their families. Parents wanted it all: convenience, taste, and healthy choices.

Edna Morris, an industry veteran and CEO of Geshai Ollin, a concept being developed around locally grown food says that healthful food choices will definitely be a big trend now and well into the future. “People want healthful food,” Morris says. “They want to know that it is less processed and handled and that the growers are committed to sustainability. People want to understand where their food comes from. You will be seeing more wholesome options and at the same time a consciousness about reducing our carbon footprint. People don’t want their food to come from 3,000 miles away. That will continue to shape the industry.”

The National Restaurant Association surveyed more than 1,600 chefs, asking them to rank more than 200 menu items in terms of how hot a trend they were. These chefs ranked the use of locally grown produce the No. 1 trend in the country.

Mini-desserts are also hot menu items. Restaurants have recognized the need for smaller dessert options, and are cashing in on smaller-scale versions of customers’ favorites. On the opposite end of the popularity scale was pie. Although chefs felt pies are perennial favorites, they are the least trendy dessert option out there.

Healthier menu items, organic produce, and nutritionally balanced options for children also ranked in the top five of the National Restaurant Industry’s survey. New cuts of meat like the Denver steak, pork flat iron, and bone-in Tuscan veal chop, were also voted as hot items. Super fruits like mangosteen, acai, and goji berry, fruits and vegetables as side dishes in children’s meals, and tapas, or small plate dishes on menus also made their appearance on the list of hot trends.

Items that were the least popular on the survey were fried potatoes and French fries, any kind of fried food, baked potatoes, and potato salad. This means they’re not considered a hot new trend, not that they’ll be stricken from menus in the near future. In fact a large number of the chefs surveyed considered these perennial favorites. Experts also say consumers are looking for authentic food experiences.

Menu items aside, there are other trends that will continue to grow. Providing convenience to customers is always at the top of the list. “Convenience is always a huge trend and important to consumers,” Morris notes. “People want to be seated when they are ready. They are time-starved, time-crunched, and want food when it works for them.”

Kelly Kagamas Tomkies is a freelance writer and editor. For the past twenty years her articles have appeared in dozens of publications and Web sites. She served as editor of several publications, including Smart Business, and Midwest Food Service News. She is the author of the upcoming book Food Services Career Launcher, published by Ferguson Publishing Company and available through major retail outlets in May 2010. She offers professional writing and editing services to publishing houses, publications, and authors and can be reached at

Rate this article:

Excellent  Very Good  Good   Average  Poor

Article feedback or topic suggestions for future issues:

Your Name: *


Your Email:  *