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jCarbonara
Joe Carbonara

Labor Lessons

Real growth continues to be hard to come by for the foodservice industry. In fact, overall customer traffic was flat through the first quarter of 2016, according to The NPD Group, a market research firm covering the foodservice industry. Revenues and customer traffic may be inching along, but one area growing at breakneck speed is labor costs.

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jMartinez
Juan Martinez

Post NRA Thoughts: My Labor Costs are Killing Me! What Can I do About It?

The National Restaurant Association’s annual trade show has come and gone to much fanfare. From what I saw and read, the participation was phenomenal. We were able to bring our full consulting team from all of our offices and even made time to break some bread together.  This year, I also participated in a panel discussion that explored unit economics  and was moderated by Steve Romaniello, managing director of Roark Capital.

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jStiegler
Jerry Stiegler

Study Projects Compound Growth Rate for U.S. Foodservice Market

Restaurant sales in June were slower than in May. A new report looks for foodservice to grow 3.33 percent in the next 5 years. A C-store chain says it will open at least 600 locations in the next few years. Taco Bell expands their Cantina concept. These stories and a whole lot more This Week In Foodservice.

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Highlights

Social Media, Marketing and Foodservice

Editor Joe Carbonara talks social media, foodservice equipment and supplies.

Earlier this fall, FCSI-The Americas wrapped up a series of regional events with one in the Chicago suburbs. I highly doubt it was the allure of Chicago in the fall that drew roughly 100 people to this event. Instead, many came looking to invest in themselves and their businesses by learning to make better use of social media and for ways to better manage their business. While the content was geared toward consultants, I found a couple of key takeaways that undoubtedly apply to the entire foodservice industry.

By now, most people are quite familiar with the concept of social media if they are not already active users of its various platforms. But it is one thing to use these tools to reconnect with long lost high school chums and quite another to leverage them to drive business for your company. That's one big reason why the presentations by Internet marketing consultant Marcy Mitchell and FastCasual.com founder Paul Barron were so widely attended.

First, it is important to understand that consumers are adapting to the new social ecosystem faster than businesses are. That was a point Baron made and he's right. In my opinion, consumers are much quicker to adapt to these new tools because they value the soft return on investment or instant gratification they provide. Conversely, businesses want a more quantifiable return on their investment and won't pursue these types of endeavors unless they see a demand. If the CFO won't appreciate it, then it probably won't get done.

Foodservice professionals from all segments, specifically each individual member of the equipment and supplies supply chain, need to understand this new reality their operator customers wrestle with on a daily basis. If your customers are using social media to shape their guest experiences it won't be long before they will expect the same from you. And if you thought e-mail and cell phones upped the ante when it came to speeding up communication, social media gets things moving at warp speed and because of its public nature the ramifications are significantly higher.

Politicians like to talk about the need for transparency in their work and they've taken to that about as well as I have taken to healthy eating: which is to say not at all. In the new social-media dominated era, however, transparency is critical. Your customers have the data and they will not hesitate to share it in discussing your products and the benefits of doing business with your company. This represents a complete change in culture for the foodservice supply chain, where suppliers prefer to keep the nature of their dealings hush hush.

Baron pointed out that the foodservice industry continues to adapt quickly to social media. Increasing numbers of restaurants and suppliers continue to grow their presence via the many social media outlets. And 23 percent of restaurant operators seek to interact with their suppliers via social media, Baron added. Undoubtedly, that demographic will continue to grow rapidly.

From a foodservice equipment and supplies perspective, the reasons foodservice operators are engaging with social media reads like a marketing manager's dream. Beyond growing their own businesses, operators want to engage with suppliers, are seeking resources and are looking for product information, according to Baron. "They are engaging at a fast rate for a business to business crowd," he added.

Of course, with so many social media options out there, figuring out how to enter the fray can be daunting. And when you factor in that the foodservice industry consists of so many small businesses, well, that makes things even more intimidating. Despite how intimidating this may be, foodservice suppliers can't use these as excuses any longer. Simply put, they need to find a way to overcome those barriers just as their customers did. "A lot of times small business owners don't have the people to do this but social and internet marketing allows a smaller company to play on a national level," Mitchell pointed out.

The most important point Mitchell made was that no matter how attractive and powerful they may be, the various social media platforms, such as Facebook, LinkedIn and Twitter, are tools that need to remain part of an integrated and well-thought out marketing plan. "They work cohesively together and you have to understand that relationship," she said. "Social media is great at generating interest but websites close sales."

If the FCSI event underscored one item it is this: the foodservice industry has changed as a result of the economic challenges from recent years and this has way more to do with the way we do business with each other than it does with concepts such as LEED, sustainability, menu development or consumer buying habits. Previously, so many foodservice organizations were happy to do what they always did to get what they always had received in return. It's hard, if not impossible, to function this way today as we all must invest in sharpening our business skills and embrace new ways to interact with the customer in ways they define as effective and efficient.

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