Hard Times will Change Food Habits
I had lunch a couple of weeks ago in San Francisco at Perbacco with two friends, a New York magazine food editor and a prolific, award-winning cookbook author. When I joined the table, the place was humming — every chair filled, waiters bustling around. “There’s no recession, here,” I commented, looking around the room. To which they both replied that people of a certain income group are immune to recession and for them, life goes on.
Not so fast. Not long after that lunch, I saw a survey reported in the San Francisco Chronicle that found the rich are doing some belt tightening, too. The paper pointed out that Unity Marketing, a firm that monitors the luxury market, said its Luxury Consumption Index was at the lowest ever in January. The company’s survey found that 39 percent of the well-heeled would spend less on luxury goods in 2008 than before (16 percent would spend more). Whether or not that includes food purchases and restaurant dining is to be seen.
Meanwhile, all is not well in the restaurant world. Yesterday’s Wall Street Journal’s “Weekend Journal” led with a story on “Cutback Cuisine” — how restaurants. even the luxury ones, are managing food costs by menuing more pastas, reducing portion size, using lower-cost ingredients and getting rid of low-profit entrees.
The Journal attributes wholesale food price increases to what we all know: the rise in oil prices resulting in higher transportation costs, and demand for ethanol that has made corn and feed more expensive, along with a weak dollar that makes imported food products cost more.
With concerns about the economy, food — one of the few necessities we need every day — is going to be affected. From a period of low food costs for years, we are approaching a new, not-so-pleasant era.
We’ve been there before. During the Great Depression, housewives (that’s what we called them then) made mock apple pie with Ritz crackers substituting for more costly apples. During World War II, rationing led to unprecedented kitchen economies and housewives and food marketers devised inventive ways to stretch the food dollar.
During the 1970s, inflation and the high cost of meat proteins caused another change in behavior, giving rise to one-day-a-week meatless meals. Also during the 70s, a sugar shortage drove prices sky-high, encouraging homemakers to use fruits and honey to sweeten desserts.
Here’s what I see ahead:
- High-end restaurants reinventing themselves with new lower-scale formats to menu dishes at lower price points, just as we saw after the dot.com bust.
- More people eating more starches and fewer fresh fruits and vegetables to save money, leading to poorer nutrition.
- Giant year-on-year gains in organic food products flattening in the short term as consumers source the cheapest food for subsistence, not sustenance.
Marketers of low-cost foodstuffs working to create new recipes mimicking popular dishes, providing lower-cost alternatives.
Consumers pulling back from exotic cuisines for the sake of adventure and diversion in favor of more sobering, back-to-basics American classic comfort food because it’s unseemly to be a food dilettante when others are hungry.
At the same time, changing demographics in the United States means “classic” comfort food could be a Mexican cazuela or Indian dahl. Those cuisines that know how to create delicious meals with economic use of meats, and liberal use of grains and legumes will continue to thrive.
Faux foods — During the 1970s, it was high meat prices that popularized meat analogs, vegetable protein that mimicked meat. With more sophisticated food technology, faux versions could be a compelling substitute for higher-priced food ingredients.
More home cooking — Economic necessity will trigger more home cooking and entertaining. Recipes and cooking tips online, at point of sale, through TV, radio, newspapers, magazines, You Tube demos — marketers will find more ways to encourage consumers to return to the kitchen.
INSIGHT: After years of plenty, we are headed for lean times where consumers will have to pay more attention to their food choices. This is an opening for food marketers to help consumers by providing appropriate food education and creative meal solutions — and keep their food business relevant and viable at the same time.
