The hottest trend of 2015 might just be your ingredients

2015 could be the year consumers stop eating the brand and start eating the ingredients. Restaurants can increase both profit and appeal by capitalizing on the shift.

In the previous century commercial food processors had to compete with skeptical customers and, more importantly, home cooking. They favored real ingredients. And they made sure to call attention to it, as in this Campbell's soup advertisement from the 1920's:

Recent consumers, however, have more often judged their food on price and convenience than on how well it would fit on Grandma's dining table. Commercial restaurants and food manufacturers have played along by finding cheaper ways to produce food and methods to extend, enhance or altogether replace expensive ingredients.

Compare Girl Scout cookies from the 1920's and 30's with their milk, butter and eggs (and real vanilla!) to today's girl scout cookies where all those ingredients are substituted by modern counterparts. It's a sample of how far processed foods have moved from their original underpinnings. Joanna Blythman's harrowing account of the processed food industry "Swallow This" shows just how far. The Guardian has an excellent excerpt.

SOCIAL MEDIA CHANGES

But something happened along the way to ever more 'modern' food. Pinpointing when is imprecise, but the BPI beef processor's "pink slime" controversy that exploded on news and social media in 2012 signaled a sea change. Consumers suddenly had a way to find out and spread their concerns. Videos on YouTube. Documentaries on Netflix. Discussions on Facebook. Campaigns on Change.org. The passive power of consumers - largely bottled up in private hand-wringing - had coalesced.

In BPI's case, the effect was astonishingly swift. BPI lost 72 of their customers over a single weekend after the story broke. They shuttered three out of four processing plants. Previous to the outburst, BPI's Lean Finely Textured Beef (the trade name for 'pink slime') had been found in 70% of US ground beef. One year later, in 2013, it was in a scant 5% of US ground beef and was completely eliminated from markets where it had been most entrenched (schools).

MCDONALD'S TIPPING POINT

Certainly, there have been other food controversies since the BPI story. And there have been businesses that proactively hook into that same social media flow, in a positive way. Chipotle did it most noteworthily with their Willie Nelson and 'Scarecrow' videos on YouTube which promote Chipotle's better quality ingredients.

But the tipping point was almost certainly reached with McDonald's surprise March 2015 announcement that they would phase out sourcing of chickens that were raised with antibiotics important to human health. An exclamation point was added by the relatively brisk two-year period alloted for the phase-out to be complete.

Other companies quickly followed suit. Large poultry producers like Tyson and Purdue accounced similar plans to phase out antibiotic use. Distribution outlets such as Costco - which sells 80 million rotisserie chickens a year - likeise announced ambitious plans to remove human antibiotics from their chicken supply.

Restaurants followed too. Including Chick-Fil-A, which had already made the same commitment to restrict antibiotics in its' poultry a year earlier - apparently without much fanfare. In the wake of the McDonalds announcement, Chick-Fil-A reiterated their plan with a 5-year time window. They were joined by smaller chains like Panera.

The sandwich chain Subway made related news when it abruptly pulled azodicarbonamide from it's bread supply. The chemical is an elasticizer that had the unfortunate distinction of being used for the same purpose in both yoga mats and shoe soles.

SLOW CHANGE, ALL AT ONCE

"We're listening to our customers," Marion Gross, senior vice president of McDonald's North American supply chain, told Reuters at the time of the change. It had followed a deep drop in McDonald's earnings and forecasts. As a CNN Money article gloomily summed up the state of McDonalds at the time "Profits are crumbling, sales are shrinking and guest traffic is declining all around the world."

McDonalds was not alone in this. As Treehugger writer Katherine Martinko pointed out this past March:

"Campbell Soup lowered its full-year results forecast after only one quarter and is looking for ways to save $200 million a year. Kraft’s profits dropped 62 percent in 2014 – “a difficult and disappointing year,” according to its CEO John Cahill. Kellogg dropped its prediction for long-term annual revenue growth from 3 to 4 percent to 1 to 3 percent; cereal sales were down nearly 6 percent last year. ConAgra also slashed sales projections and fired its CEO."

Campbell Soup CEO Denise Morrison put it squarely “There has been mounting distrust of so-called Big Food, the large food companies and legacy brands on which millions of consumers have relied so long."

PAYING THE DIFFERENCE

If one thing distinguishes the trend towards better ingredients, and supports it as much more than a fad, it's the fact that consumers are willing to pay more for food with better ingredients. Following McDonalds' announcement, Technomic conducted a pointed survey that laid plain the shifts in consumer sentiment. Noteworthy among the findings was a marked increase in customers' willingness to pay:

Generally, a full third of customers were willing to pay significantly more, across a range of different 'better' food variables. One aspect that was not examined, but could be inferred, is that customers would have an even higher willingness to pay for a number of concurrent variables - like an example of antibiotic-free, local and pastured chicken. That lessened sensitivity to price is likely to carry over to the known universe of food and food inputs - from meats to dairy to flours, pastas and everything else - from healthy items to indulgences as well.

It's important to note, as good news, that customers are not largely demanding expensive or hard-to-source ingredients like organics or biodynamics. The same Technomic chart shows 'organic' delivering no greater value margin that other examples of better ingredients. Judging anecdotally from our menu experience at OrdrUs, it is 'local' that truly owns that day. Customers have retreated to what they can trust - which is plainspoken, unadulterated ingredients, especially those with a clear provenance. Simply, they only want food in their food. And they are willing to reward restaurants and purveyors that are able to help them meet that goal.

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