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Foodservice: Looking into the future

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Early 2022 showcased the inequities within the foodservice recovery.

In January, restaurants saw declines of 2 percent in online and physical traffic compared to the year before, according to NPD, due to the Omicron variant dampening demand after 10 straight months of gains.

Spending was up 4 percent, but NPD attributed the rise to higher food and operational costs.

In February, the trends turned around, with online and physical restaurant traffic up 2 percent and consumer spending up 8 percent compared to the same period a year earlier—which had been impacted by inclement weather—but still down 8 percent from pre-pandemic February 2020.

Within the sector, quick-service or QSR fortunes have continued to outpace full-service restaurants.

Online and physical visits to QSRs increased by 7 percent in 2021 compared to 2020, ending just 1 percent lower than 2019. The segment accounted for 82 percent of all restaurant orders in 2021.

Full-service restaurants visits, meanwhile, saw traffic grow by 18 percent last year, but levels remained 16 percent lower than in 2019, after a 29-percent drop in 2020.

“There’s still a lot of recovery to look forward to,” observes Joe Watson, vice president of retail, foodservice, and wholesale at the International Fresh Produce Association BB #:378962 in Newark, DE.

“The business is up almost to 2019 in terms of total dollars, but each bucket is totally different.”

Looking ahead
Looking ahead, many produce suppliers remain upbeat about the foodservice industry’s prospects for the rest of year and going into 2023.

This does not mean the sting from permanent restaurant closures has subsided, or that there aren’t still concerns about the future.

Inflation and supply chain difficulties are still at the forefront, as is the fear there may be new virus variants yet to emerge.

Watson believes there will be a continued recovery ahead, while Dan Robertson, president of Robertson Produce BB #:101876 in Monroe, LA, sees a slowdown in the next 24 months.

Craig Fields, director of account management for the Northwest at RPE, LLC BB #:105471 in Bancroft, WI, points out one of the positives to come out of the pandemic: greater efficiencies both foodservice operators and suppliers have put into place.

“The foodservice industry has constantly been evolving,” Fields says. “The past two years have sped up that evolution.”

David Kraus, senior vice president of custom distribution at Produce Alliance, LLC BB #:159218 in Chicago, IL, concurs: “Produce has been ten years behind other categories—but the last couple of years have driven productivity and efficiencies. I’m extremely optimistic.”

Steve Grinstead, CEO of FreshEdge, LLC headquartered in Indianapolis, IN, is optimistic too. “I’m pretty bullish on the foodservice industry over the next 12 to 18 months. I believe the remaining lagging segments will be coming back over the next six months.

“People are tired of the pandemic and ready to move on with their lives,” he continues. “The extent of people retuning to the office should be watched closely—as it’s likely to be the last segment to return or find its new normal.

“We’re a resilient industry,” he remarks, “and I expect a full recovery over the next year or so.”

This is an excerpt from the cover story in the July/August 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.