JINDAL SCHOOL OF HOTEL MANAGEMENT
Establishing trends in food and beverage induustrySubmitted on
8th September 2018
Nishar Diwan (19425)
The following essay talks about the challenges and rewards of setting up new trends in the F&B industry, from a business owner/entrepreneur and a customer point of view. The diversity of opinions and perceptions of what a trend is to be.
The world is changing rapidly and so is the customer base of restaurants which live in this world. In times like these where fashion and trends change as fast as one’s internet speed can go, it is a challenge for restaurant owners to keep up with the world and not become obsolete. But, this fast-paced world also gives an opportunity entrepreneurs and new innovations. Internet has acted as a catalyst to this change, because people get exposed to different things and can choose a very small niche. Todays market segmentation cannot be divided into exact blocks but only into a spectrum because of homogenization.
A question was asked to people who are related to various parts of the industry, entrepreneurs, customers and consultants alike, “Why are trends needed?”
The answer that could be pulled out unanimously was ‘The need to innovate’. As human constantly need something new, to explore and try out new things. These ‘needs’ create a big market where entrepreneurs can set up shop and customers can choose exactly what they desire. This happens when these two parts meet at a point and in a big spectrum.
It is Customers need to break from mediocrity, bored from the same cycle of repeated action and getting the same thing “they crave for something new, or the mediocre things with a twist.”
An entrepreneur has the option to choose from the ever-rising numbers of trends or start a new trend of its own.
Given under are a few major industry trends that are at the heart of an innovation strategy.
Preference towards a Health-Conscious diet.
Focus on Gen Z
Increasing amount of food service options
CITATION Pau18 l 1033 (Paul Fultz, 2018)At the forefront of this development are the Millennials who have single-handedly changed trend setting across various industries. With the ability of staying connected by hand-held mobile devices. These has re-defined what consumerism and empowered a segment to spend ‘anytime and anywhere” and companies have to keep on this constantly pumping vein of trends to stay relevant. Traditional marketing does not work because as far as Food and Beverage industry is considered most of the people interviewed came through recommendations and/or after reading food blogs.
The newer Generation Z is gradually coming in and taking the baton of establishing trends, the major trend here is making everything about the restaurant from the ambience to the food “Instagrammable”. As the primary concern of this lot is to gather social media attention and be the ‘in’ thing.
The stylization of the trends and innovation relevant for the current customers is, “Exciting” and “Personalized”
The establishing of trends vary from a person to person because of the reason that it is an un-charted territory whether it be innovating something new or just bringing over already established trends to a new place where it hadn’t been.
Basic steps that lead to establishment are the same, but the style of doing them varies upon the individual and the trend they are trying to establish and various other factors. There is a fluid guideline set which is open to interpretation.
For example, three entrepreneurs who were interviewed had three different approaches when it came to product pricing of new products.
Selling price of the product was established and development of product was done that the food cost came to a point that it could meet the required mark-ups. This was done keeping in mind how much a customer is willing to pay
Where the food cost was decided and the profit margin set up after the product was developed. This was done keeping in mind amount of investment the business owner was willing to make on a product
Third was where, the development of product began with no pre-established limits, Food cost was calculated after the development and margins established. This was done not to marginalize the product’s quality by setting any prices, because if the product was good customers would be willing to pay money you ask.
Talking about the rewards of innovating, there are just as many as there are opinions on how to set one. For an entrepreneur apart from monetary returns it gives a sense of fulfillment and satisfaction. For innovating something new and making it work. There are also other rewards which are more efficiency and better profitability in business.
For customers, new innovation leads the breaking of mediocre cycle and the opportunity of trying something new, convenient, healthier, affordable, expanding their range of options.
There are many underlying challenges and potential failures that can hinder these innovation and lead to problems if not tackled correctly.
The first risk that stands is the risk if investment, which more or less is in all businesses but in setting a new trend it is difficult as it is the first time someone is doing it. Many times, market researches and surveys are not completely reliable as humans react to these things differently on paper and in real life.
People like to invest in low risk investments which lead to multiples of the same concepts popping up. As in case of Vadodara, the city has been drowning under an influx of Pizzerias and “Bistros”. Which has left consumers in Vadodara craving for something new.
From a customer’s point of view the negatives are when a new trend fails to live up to the expectations. This is mostly seen in the cases of re-inventing dishes like pao bhaji. The customer wants the same experience but in an elevated form with a twist. If these things don’t hold up a business does not live up to the “hype”.
In conclusion I would like to draw attention to the market driven by the pace of information catalyzed by the internet. Companies need to evolve with the trends constantly. These trends focused on “Exciting, Convenient and Personalized”. A market filled with independent millennials and Gen Z who have made and undivided spectrum of the market needs to be catered. For which there are no set guidelines to work upon, to be successful it is crucial to have your hand on the beating pulse of changes or be the change.
CITATION Pau18 l 1033 (Paul Fultz, 2018)Binny Varghese (Consultant, Innovator)
Vedang Shah (Entrepreneur, Rolling Cones)
Mohiyuddin Fakir (Restauranteur)
Dhaval Mehta (Avid Consumer)