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How restaurant food trends may portend important developments in the future of packaged foods

In many ways, we believe the recent unexpected smash success of the Nintendo Wii may hint at what is to come in the food industry. Despite all of Sony's whiz-bang technology (PS3) and Microsoft's large install base among hard-core gamers (Xbox), the humble Nintendo Wii is currently out-selling all other consoles at a rate of 3 to 1. The secret, of course, is that Nintendo seemed to intuit that the consumer desire to engage in emotionally resonant experiences will, for the foreseeable future, trump most other urges.

By comparison, Nintendo's console is far less sophisticated and offers fewer game titles, most of which are developed with smaller budgets than competing formats. Where Nintendo differs the most, however, is in their philosophical approach to technology and play. In this case, Nintendo trumpets technology only insofar as it maximizes the enjoyment of play in a social context.

At the end of the day, it's just a lot more fun when you're playing inside the technology, with other people. Or, as one consumer recently told us: "The Wii rocks because while you're playing it you look like a fool in front of your friends, and what could be more fun than making a fool of yourself in public?"

Generalizing outward, away from video games and in the future trajectory of any consumer industry, it is clear to us that experiences are set to dominate for years to come. But aside from some vague calls for manufacturers and retailers to start re-fashioning the retail setting into a more engaging experience, what do these observations really mean? How do they play out in other arenas like, say, food? Will consumers begin playing with their food in public settings?

We believe that the answers can be more easily understood by careful examination of simmering trends among core food consumers in restaurant settings. Just as Alice Waters's restaurant Chez Panisse provided the stage some 25 years ago for what is now the most dominant food trend of our era - the trend toward all things fresh, seasonal and local - we believe a select set of current kitchens and dining rooms hold the secrets of what is to come during the next 25 years.

As was the case with Chez Panisse, these restaurants are far, far off the radar of most mainstream analysts, food manufacturers or retailers. Similarly, the practices and behaviors in these settings may seem downright absurd from our position as outsiders. But we caution against the (strong) temptation to dismiss these behaviors as "so far out of the mainstream" as to ever affect normal, everyday consumers such as ourselves.

Think about it this way: If we had approached you in 1982 (some 10 years after Chez Panisse opened) and explained that you need to be paying attention Alice Waters's quirky, hippy restaurant where she only serves food crafted from locally and seasonally sourced produce, dairy and meats, many of you would have likely laughed us out the door. In an era marked by the rapid expansion of over-wrought chain restaurants where the food itself was often an afterthought (Hard Rock Café, Chuck E. Cheese, etc.), such a trend would have seemed patently absurd.

And yet here we stand circa 2007 where traditional grocers are collapsing like victims of the plague, center store is disappearing with alarming rapidity and well nigh every restaurant in America is following Waters's lead with ever-more complicated menus detailing the pedigree and lifestyle circumstances of each ingredient (e.g., pasture-raised, Green Valley Farms veal)

In this spirit we turn attention to a summary of the key trends of the future, with implications for how these trends may play out in the years to come. But before getting to the future, we believe it is most useful to consider a brief synopsis of the (recent) past and present. This grounded summary, a story about the gradual redefinition of food quality from "things we eat" toward experiences which dominate our belief system is detailed below.


The recent past: The search for nutritious ingredients

We begin our story with an account of the typical food consumer of the 1970s and 1980s. Here we find a food world dominated by the interests of large food manufacturers, traditional grocery retailers and mostly disinterested consumers - a situation that had changed remarkably little for most of the 20th century. Due to increasing concern with sugary/salty snack foods, consumers here understood quality largely in terms of the distinction between "nutritious" food and "junk" food.

In this world, in which consumers were largely disengaged with the food production system, we sought to wrestle some amount of control back over our lives by the only means available to us at the time, namely, by exercising nutrition-based choice over the products we purchased and consumed. Traditional in our food consumption habits, we consumers tended to treat food as an instrumental, means-end tool to alleviate hunger or cure boredom (snacking). While we all like to eat, there was remarkably little spirited celebration of food - at least as we have come to understand it by contemporary standards. The operative dimensions of interest for most consumers in this era were convenience, price, habit and nutrition.

In effort to make up for all of the "bad food" we all consumed back in the day, we atoned for our sins by making nutrition-based decisions when eating and shopping. These behaviors resulted in the spate of "low fat," "low sodium," "fat free" "sugar free" and "natural" offerings that eventually dominated the marketplace in the 1980s and 1990s.


The present: The search for fresh, high quality food

During the 1990s, a funny thing happened.

Alice Waters's spirited championing of all things fresh and local found a comfortable ally in a new generation of maverick food manufacturers and retailers. And as the consumer's penchant for absorbing heretofore unimaginable price premiums became apparent, more and more producers and retailers tipped their hat into the ring.

While traditional marketers and analysts snickered at foolish upstarts like Starbucks, Annie's, Amy's, Odwalla, Trader Joe's, Muir Glen, and the like - what with their absurd price premiums, lack of brand equity and (apparent) ignorance of the American palate - consumers proved more than willing to play along.

And as the power began transitioning away from the hands of "big food companies" and retailers and more toward consumer-inspired brands, several critical developments emerged. Most importantly, some consumers actually started their own food companies with the sole purpose of providing "real food…not the stuff perpetuated by those in the industry."

Moreover, as consumers began to see the net effect of their power operating backwards through the supply chain of more leading-edge retailers, it became much less necessary to try to exert their morality through careful food choices. Now that they had available to them a slate of brands that has arisen to meet their demand for better quality food - retailers such as Wegmans, Central Market and Trader Joe's, brands like Annie's and such - they no longer had to worry about the nutrients or nutrition of their food products. As one consumer recently observed:

"Which would you prefer, wandering around a retailer such as Wild Oats where it just seems intuitively okay to eat anything in the store or trying to scavenge something you feel comfortable feeding your family from the shelves of a Winn Dixie?"

Finally, these critical developments allowed consumers to begin devoting attention to more serious matters, namely, enjoying food (a) on their terms, (b) in a cultural fashion (via the food world and not the food industry's world) and (c) for the food's sake.

These developments are nothing short of revolutionary, and food as we know it will never be the same (at least not in our lifetimes). And the implications are staggering.

Most importantly, consumers have begun transitioning away from exercising careful nutrient-based choice at the shelf and at meal-time toward a more holistic understanding of high-quality food. Here our understanding of food shifts from something that must exist under our control to something that can be elevated to art for the sake of passionate enjoyment And so long as one is patronizing purveyors of quality foods, there is much less felt need to obsess about nutrition.

As Alice Waters's vision of quality food becomes fully realized, legacy packaged food brands, even those designed to appeal to today's "health-minded" consumer, are increasingly viewed as anachronistic curiosities (at best) or toxic byproducts (at worst). To this end, many consumers report fond memories of these brands, memories that relegate the brands to obscure comfort occasions. As a consumer recently commented:

"I used to eat Campbell's Tomato Soup every day as a kid. While it's not the kind of product I would ever serve to my family today, when I have one of those rare days from hell - where you're too tired to even cry on someone's shoulder and you just want to crawl up in a dark hole - I love to open a can of Campbell's."

Likewise, we are also witnessing a similarly declining interest in industry-created food categories such as Jell-O, whipped toppings, juice boxes, food bars, etc., most of which purport to "solve" supposed consumer problems of convenience. The problem is that as consumers gradually revert to a more culturally relevant understanding of food, one which stresses "real foods" of quality and distinction, they find markedly less need for such convenience solutions. To be certain, consumers still have a need for convenience on specific occasions, but they are increasingly able to meet those needs with the "real" prepared and fresh offerings of today's high-quality food retailers.

All told, our research has identified three critical entrance pathways into the new arena of high quality food experiences: fresh, artisanal and "unpackaged." Of these, traditional packaged food manufacturers will increasingly find the latter the most attractive alternative, in large part because of the challenges inherent in competing with retailers on "fresh" and specialty food purveyors on "artisanal."

To remain relevant and succeed in the "unpackaging" of traditional packaged food offerings, manufacturers will need to pay special attention to key dimensions such as product narratives, flavor distinctions and freshness cues. In many instances, manufacturers may find it is easier to compete by building (or acquiring) new brands than actually trying to re-fashion their existing legacy brands, many of which languish under the "legacy curse."

But lest we get too comfortable talking about the present, current cutting-edge restaurant trends suggest it is already time to begin thinking about the future. Specifically, we are finding that the general historical transition from food we control (the past) to food we begin to celebrate (the present) will become fully realized in the (not-too-distant) future. There we will stand in awe and amazement - and work hard - to enjoy our food as an elevated, quasi-religious experience.


The Future: Food elevated to a (quasi) religious experience

At first glance, the two cutting-edge trends in the restaurant world may seem to be diametrically opposed. As identified elsewhere, at one end of a spectrum we find the Authenticos, the restaurant iconoclasts whose vision of food as an ritualistic, communal experience causes them to shun any and all sense of the restaurant as customer-friendly. These restaurateurs seek to abolish dining as pretense by relying on communal tables, refusing reservations, setting fixed-course menus and refusing to accommodate picky eaters. In their most extreme incarnations these restaurateurs take their operations underground in effort to avoid any trappings of the conventional, status-obsessed food scene.

Much like charismatic cult leaders, these restaurateurs believe so passionately in the communal and spiritual power of the food experience that they would rather risk financial solvency in pursuit of their higher-order truths.

At the other end of the continuum we find the molecular gastronomists, a new generation of chefs, scientists and food technologists who believe in harnessing the power of technology to create something more exalted. Whereas food processing technology was deployed in the 20th century to subjugate food to our base desires for convenience and efficiency, the molecular gastronomists seek to use the same technology to transform food into something otherworldly. So while our parents might have been proud of technology that could create a crude version of a meal in a box (the frozen TV dinner), the molecular gastronomist seeks to transform foie gras into a frozen powder or breathable gas so it can be enjoyed in a multiplicity of textures and contexts.

What is critical to understand, however, is that while the two approaches may seem radically different, in both cases the impulse is identical. Namely, to pursue resonant, quality food experiences wherein the food is elevated to the highest order possible, subject to the limits of our current comprehension.

So while today's consumer is content to enjoy high-quality food in a conventional cultural context, the cutting edge-food folks are working diligently to ensure that our food experiences of the future give the food its proper due and reverence. If eating in the past was about utility and eating in the present is about quality, eating in the future will resemble a form of ritualized worship.

So what does this mean for ordinary consumers - as well as food manufacturers and retailers - in the not-too-distant future?

We are not so naïve as to suggest that in the future ordinary folks will be dining in non-existent restaurants or inhaling essence of foie gras through a mask. Just as most consumers circa 2007 are far too busy to eat in the precise manner as prescribed by Alice Waters's belief system, we suspect that there will be a marked dilution as these cutting-edge trends find their way into the mainstream.

While continued tracking of these trends as they filter into the mainstream will obviously provide the most consistent answers to these question(s), there is one area where we feel comfortable making some generalized predictions.

As evidenced by the growing trend in molecular gastronomy, it is clear that food processing technologies appear to be making something of a comeback. Compared to the Alice Waters philosophy of simple preparations crafted from the freshest, most local ingredients - a philosophy that is clearly opposed to mainstream food processing technology - molecular gastronomists appear to embrace such technology.

While this observation is, indeed, correct, there is one very critical difference. As suggested earlier, the food technology of the past was deployed to subjugate food to our (then) current desire for reliability, efficiency and control. By contrast, molecular gastronomists are deploying food technology to create something superior to what nature itself can deliver - to create a "larger than life" majestical experience. In this, we could suggest that food processing may indeed enjoy something of a resurgence in the future insofar as it is harnessed to create something superior to that offered by our current notion of fresh, local and quality. It would be a grave mistake, however, to believe that consumers in the future will embrace the use of such technologies in the name of convenience or efficiency.

In short, the days when food technology could be utilized to offer convenient, reliable food solutions for consumers - as well significant profits for efficiency of scale-minded manufacturers - appear to be waning.


Bottom Line

But before getting too distracted thinking about the future, we believe it is important to return attention to the present and remind marketers, manufacturers and retailers of the challenges they face on a daily basis.

Make no mistake, today's consumer is no longer interested in endless line extensions promising clever, nutrition-based reformulations of existing legacy brands. Instead, today's consumer seeks brands that represent high quality eating experiences, experiences that go so far beyond the nutrient-based widgets of yesteryear as to all but subsume notions of health and nutrition.

Therein lies the rub. For the true magic of a brand like, say, Annie's is that consumers have no need to investigate ingredients or health claims. Instead, they simply "know" that the products must be good for them because they are of a higher quality standard. In fact, if consumers compared the sodium, calories or fat levels of Annie's products to those of mainstream legacy brands they might be surprised to find out that Annie's doesn't always fare so well. But the point is that because consumers already construe them under this redefined quality halo, such comparisons are moot.


Tinderbox is a part of The Hartman Group, Inc. Copyright 2008. All rights reserved.