The restaurant sector is at a turning point. The impact of digital and other changes in consumer needs have led the industry players to change their business model in order to generate higher profits. In order to fully understand this evolution, we have identified some keywords that businesses who are committed to facing and winning the current challenges might find useful, especially in a market that we at The Ad Store know pretty well.
There are quite a few similarities between the Food Retail sector and The Ad Store. Our expertise in developing integrated communication projects for the food industry is only the tip of the iceberg. But what’s under the surface?
First of all, our name: The Ad Store. We are a store that sells communications. Then we’re a network. From Italy, we lead the biggest international group of independent creative agencies, which:
- interact under the same brand
- share the same values
- work to create relations with their local communities and regions, independently
- co-operate on projects that need international development.
That’s why I consider The Ad Store as a sort of communication retailer. This is what allows us to understand the dynamics of food retail and to develop communication projects that are effective, concrete and result-oriented. So what are the 5 keywords that summarize the main trends in the food retail sector?
Premiumization /priːmɪəmʌɪˈzeɪʃ(ə)n/
Premiumization is the new password for businesses in the retail restaurant sector. It’s a strategy that allows brands to stand out from the competition by offering excellent products at affordable prices and meeting the needs of aspirational consumers that define their status through value-conscious products.
Research from Milan’s Bocconi University shows that the commercial catering services adopting premiumization strategies get better results in terms of business, financials and consumer satisfaction.
IN A NUTSHELL: premiumization means offering services apparently dedicated to a niche of connoisseurs but actually targeting a wide audience.
Fast Casual /fɑːst ˈkaʒjʊəl/
Within the consumer food service and in the wake of premiumization strategies, an intermediate retail category was born combining fast food and fine dining. This category is undergoing a remarkable growth at the moment. We’re referring to the so-called Fast Casual Restaurants where two contrasting approaches to “restauration” coexist.
Oscar Farinetti defines this idea in his theory of seemingly opposites, i.e. the practice of “successfully combining positive values that may appear contrasting to most people”.
In the end, this philosophy allowed the development of the Eataly empire with its chain of stores offering high quality Italian gastronomical products by combining informality with authoritativeness, pride with self-irony, honesty with shrewdness, accessibility with high level.
Chainification /tʃeɪnɪfɪˈkeɪʃ(ə)n/
Most Italians opening a restaurant tend to see it as an extension of their home and kitchen. Until 20 years ago, only 1% of food businesses in Italy took the form of a restaurant chain. Things are changing and the restaurant chain market share has currently increased to 7%. In the US the scenario is totally different with a market share of 50% when it comes to restaurant chains!
THE ROSSO POMODORO CASE
Opening a pizza restaurant in Naples (Italy) - among something like 2,500 pizza businesses managed by the same number of families - might sound crazy. But for Rosso Pomodoro, one of the most popular Italian pizza chains, it was an international success. The main reasons of this success? Rosso Pomodoro’s chainification strategy and storytelling. But this is another word…
Storytelling /ˈstɔːrɪtɛlɪŋ/
Big brands have understood the importance of storytelling to stand out and engage their target. The main objective of “telling stories” is creating a deep relation with your audience: you don’t only want to engage them, but also inspire them actively and emotionally. And for a story to be effective and real, believable, what should you do? You should tell who you are, your culture and your offer – basically, what makes you unique.
And here we go back to Rosso Pomodoro. Their seemingly impossible challenge – opening a new pizza restaurant in Naples – was a success because it leveraged on the storytelling of their products and highlighted their excellence.
Digital /ˈdɪdʒɪt(ə)l/
I left this term at the end, not because it’s less important but because I believe that, today, every brand should be aware of how important it is to establish its presence digitally and on social media. You’ll understand why if you have a look at this case study: it’s a perfect example of how the effectiveness of your online storytelling is more important than what you actually do offline.
