Today, nearly half of operators consider how a new food item will be packaged as part of the development process.
This percentage must grow, however, to keep foodservice humming, considering takeout and delivery have taken a serious chunk of dine-in share since the COVID-19 pandemic arrived.
Operators are dealing with historically high costs and struggle (even in the best of times) to keep up with labor, food, real estate, franchisee and government-related costs. Food packaging, more than ever, must be a key ingredient in the product development process.
With a recession potentially in the works based on mixed economic data, the foodservice industry must always be two steps ahead of a downturn. Foodservice is one of the leading indicators of a recession. Economists will often cite the decline in away-from-home traffic and sales as the precursor to a recession. The latest figures in August 2022 also showed a drop in consumer confidence, which tends to impact future away-from-home expenditures.
Before moving into operator cost-cutting measures, however, it’s important to caveat the discussion with the fact that today, quality packaging is an important attribute to both consumers and operators. In fact, product quality and availability of the “right” packaging surpass price in terms of selection criteria. Other factors are shown in the table below.
Foodservice operators, fresh off the heels of a COVID-19 recession, are well aware of the dangers. Therefore “freebies” like packaging, napkins, water cups, etc. are also the areas where operators look to cut some costs. Some of the major cost-cutting responses are using less expensive material (foam vs. paper), switching to private label or using other distributor sources.
C-Store Consumers Are No Exception
Turning the focus to the convenience store segment specifically and its patrons, it is clear that portability is paramount. Some 57% of shoppers consume prepared foods immediately after purchase. There are certain menu items that are simply purchased less (or not at all) if the packaging doesn’t hold up to enroute requirements.
As the table to the right shows, there are a few menu items that require better “vessels” for travel, including Mexican fare, pizza and fried items (breaded chicken and fries). Wraps and burritos have historically been one of the most challenging items to package for on-the-go eating.
However, retailers that invest heavily in quality packaging are more likely to see a better return on customer satisfaction and be rewarded with higher margins.
Tim Powell is a principal with Foodservice IP, a Chicago-based management consultancy solely focused on the food industry and geared toward food processors. Visit FoodserviceIP.com. FoodserviceIP is launching a takeout packaging study in December 2022.