Archive for the ‘marketing’ Category

That Burger’s Gonna Cost You

August 10, 2011

Feeling a little sticker-shock after eating at your favorite restaurant lately? Following nearly half-a-century of record low prices, Americans are experiencing something folks in much of the rest of the world have been enduring for the past couple of years: rising food costs.

Now 3 to 4 percent tastier.

That burger and shake is gonna cost you more from here on out.

While food-service industry watchers have been warning about this for some time, the United States Department of Agriculture pretty much confirmed that last month with its food price outlook for 2011 and 2012. Food purchased in restaurants, according to the Consumer Price Index, is expected to rise 3 to 4-percent over the year while groceries purchased for consumption at home are expected to rise between 3.5 and 4.5-percent over the same period.

Take the cost of pork, for example. According to the USDA, pork prices are 8.5-percent higher than they were last year at this time. Dairy is more than 7-percent higher than this time last year, and produce is rising, as well. An interesting side note: beef prices are falling as I write this because cattle-ranchers throughout much of the U.S. are being forced to sell off their herds because of drought conditions across the country. That temporary reduction in consumer prices won’t last for long, though.

While a number of causes might come into play here, one in particular is hitting the restaurant industry particularly hard: its own success. A growing middle class around the world, coupled with a growing demand for convenience and restaurant foods, is putting a serious crimp in the world’s supply of commodity foods. Over the past decade, many American quick-service companies – they prefer “quick service” to “fast food” – have begun expanding overseas to fill the demand of newly emerging markets in places like China and India.

We haven’t seen much impact from that until now. Even as commodity prices were increasing, and exports of American-produced commodities to foreign markets increased, decreasing the availability of those commodities here in the U.S., restaurateurs were reluctant to raise prices in the midst of a worsening economy. Consequently, many chains began offering specials to keep their cash-strapped customers coming in but that could only go on for so long.

“The shifting reality is one the nation’s quick-service restaurants can no longer overlook,” noted trade journal QSR Magazine in its August issue. “Some may alter prices; some may explore more sustainable, savvy buying programs; and others may simply hope the world’s supply-and-demand scale finds its equilibrium.”

That may take a while. Earlier this year, marketing research firm Blue Shift predicted a full 5-percent increase in menu prices before 2011 is finished but noted, too, that price increases probably won’t contribute much at all to overall profitability. While prices may rise as restaurants try to recoup their costs, overall profitability may fall, Blue Shift said, by as much as 10 or 11-percent.


The gluten-free growth market

June 5, 2009

If you’re one of those people who are always on top of what’s hot in food trends, you are – no doubt – eating your share of gluten- free cuisine.
Sales of gluten-free products are rising, quickly, and are expected to continue growing over the next three years. Marketing research firm Packaged Facts says “demand has been growing exponentially as sufferers of a wide variety of maladies (including celiac disease, autism, attention deficit disorder, irritated bowel syndrome, and MS) have come to believe a gluten-free diet will provide relief”.

In their search for that relief, consumers spent more than $1.5 billion on gluten-free foods last year, up from $580 million in 2004, and those figures are expected to hit $2.5 billion in 2012. So, what is gluten and why are people so worried about it?

What is gluten?

If you like to bake, you’ve met gluten even if you’ve not been formally introduced. Gluten, also known as glutenin, is a protein found in wheat (and rye and barley) and when ground and mixed with water, forms the muscle that gives bread its strength. In other words, it’s gluten that gives bread dough its form and traps gas released by yeast during the baking process. When that happens, the bread rises. Cake flour, incidentally, is made from low-protein wheat, which results in a product with lighter texture and crumb.
The problem with gluten, for an estimated 2 million Americans who suffer from celiac disease, is that their immune systems essentially kick into gear when confronted with it and begin destroying the tiny, fingerlike growths called villi that line the small intestine. Villi are responsible for absorbing nutrients from food as it passes through our digestive systems. If your digestive tract won’t absorb nutrients, malnutrition is your lot no matter how much you eat. Celiac disease, then, is not an allergy: it’s an autoimmune disease, much like Crohn’s disease or lupus. So far, the best way to live with the condition is to eliminate gluten from one’s diet completely, and for life. Easier said than done, of course.

Off the table

All this means there’s an enormous number of foods that are suddenly off the table for people with Celiac disease. It isn’t just a matter of not eating wheat-based breads or desserts. Among the hyper-processed foods that form the bulk of the American diet, wheat and wheat byproducts appear just about everywhere. Gluten is frequently used in one form or another as a thickening agent in many foods where you would least expect to find it, such as ketchup and candies. Not only is semolina and durum pasta verboten, but so are many processed meats such as hot dogs, sausages, and cold cuts. Bouillon cubes? They may very well contain wheat. Soy sauce, lipstick, many sauces and gravies, medications, even the venerable communion wafer, all potentially contain gluten.

A trendy condition?

Not everyone eating a gluten-free diet is actually gluten intolerant. While some with other conditions such as autism or attention deficit disorder are turning to gluten-free eating in the hope it might be helpful, gluten iglutenfreecookbookntolerance seems to be rather trendy, as well. In a recent column in the San Francisco Chronicle, nutritionist Marion Nestle responded to a question from a school chef who was perplexed by the number of students who were suddenly professing gluten allergies.

“If you are seeing an increase, it could be because parents whose kids have such symptoms may be experimenting with gluten-free diets,” Nestle replied. “If their kids behave, learn and feel better on such diets, parents may conclude that their kids are gluten intolerant without bothering with invasive and expensive lab tests.”

“…a growing number of the people dodging gluten fall into a gray area: they don’t have Celiac disease but seem to be unable to digest gluten properly,” notes  Harvard Health Letter.  “There are no tests or strict criteria for this problem, aside from simple trial and error with a gluten-free diet. Often people self-diagnose. It’s hard to know what’s going on. Some people may be getting caught up in a food fad.”

Problems with nutrition

Another problem is arising from all this. As food processors jump onto the potentially lucrative gluten-free gravy train, ahem, they’re marketing foods that short on nutrition. Again, Harvard Health Letter points out: “Food makers have also learned how to use xanthan and guar gums to replace gluten’s elasticity: a common complaint about gluten-free baked goods is that they are powdery. But these formulations can also leave diets short of fiber and B vitamins”.

Research from Spain suggests that gluten-free diets are not particularly hospitable to important gut bacteria. The presence of healthy gut microflora is important for a healthy immune system and people with Celiac disease have enough problems with their immune systems already.

Nonetheless, there’s plenty of money to be made here and plenty of people willing to join the party.

submit to reddit