10 Food Industry Trends That Will Dominate in 2023

End of the year 2022 blog header image

2023 marks a significant shift in the foodservice industry. As we leave the remnants of the pandemic behind us, foodservice professionals now have to deal with an impending economic recession and continued labour shortages that are severely impacting their operations. 

As always, data-led insights will be at the heart of how these organizations tackle the challenges that lie ahead. At Brizo FoodMetrics, we’re constantly monitoring billions of data points for our clients, which puts us in a unique position to forecast what’s in store for the foodservice market. 

Our food industry trends report for 2023 looks at what’s driving change in the market, as well as how savvy players can leverage these insights to help weather the challenges ahead. 

1. The growth of the smartphone as a kiosk

A smartphone ‘kiosk in your pocket’ isn’t new – but adoption within the foodservice industry will continue to increase this year for two key reasons.

The first is that while physical kiosks offer a fix for front-of-house labour shortages, most businesses require more than one kiosk to service their business. The recommended two or three kiosks are not only cost-prohibitive for most owners, but their footprints also require more space than the average restaurant can allow. 

The second is that, in our post-pandemic world, consumers have become reluctant to use public screens for fear of spreading viruses. A personal device is more sanitary and safer for consumers, which means it will likely be their ordering method of choice. 

App-based ordering will also be more easily adopted by restaurant operators, given its short learning curve. Custom-built physical kiosks often require training, maintenance and upkeep that a smartphone app doesn’t. According to our data, 74% of establishments across the US & Canada currently offer online ordering, which means diners can likely order their food through their phone. 

That said, traditional kiosks will still have a place in the market at larger venues, such as sports stadiums. These sites have the necessary space to house the units but also cannot rely on WiFi-enabled ordering when so many devices are trying to connect to a network in a concentrated area at the same time. 

2. The resurgence of value meals and scaled-back menus

Reduced consumer purchasing power will force restaurant chains to focus on offering value meals and value pricing to their customers. The Consumer Price Index in December cooled to 6.5%, but menu prices remained high in both the limited-service and full-service sectors: limited-service prices were up 6.6%, and full-service prices were up 8.2% year-over-year.

We believe restaurant chains will be forced to review their pricing strategy in light of the impending recession. According to our data, 809,853 foodservice establishments in US & Canada with a median menu item price of $15 or less. We expect to see that median price fall even further this year.

While value is always a big driver for the Quick Serve Restaurant (QSR) market, it will become even more critical as consumers demand more for their money during an economic downturn. Expect to see the return of $1 and $2 menus at fast food chains. 

Even restaurant operators will need to refocus on value pricing, including daily specials and discounts to ensure diners feel like they are getting good value for their money. 

A similar cost-saving measure will see restaurants simplifying their menu with a scaled-down offering, focusing on fewer dishes and using data to identify which ingredients will be the most cost-effective. 

3. Expansion of dynamic pricing

Dynamic pricing has been around for a long time in eCommerce, but the restaurant industry is only beginning to adopt this pricing model.

Essentially, dynamic pricing uses market data to predict purchasing trends and set the pricing accordingly. For example, if you’re a restaurant located near the Rogers Centre, you would want to increase your pricing when there’s a Jays game on. If it’s snowing, you’ll likely decrease your prices given reduced footfall traffic. 

This type of price optimization is an effective way for restaurants to leverage industry data to adjust their pricing in response to market demand. 

4. An increase in staff outsourcing

The food service industry’s labour shortage shows no signs of improving this year as an economic downturn looms large. As a result, we’ll see many operators outsource front-of-house roles. Last year, Freshii made headlines when it launched Percy, a virtual cashier in Toronto (physically located in Nicaragua) who took orders and processed payments from over 3,000 km away.

Restaurant chains are also relying on voice assistant technology to help at drive-throughs. McDonald’s leads the pack using AI voice technology in its drive-thrus, and it’s no doubt QSR competitors will follow suit this year. 

5. Creating more favourable working conditions for restaurant employees

The unionization of several Starbucks locations across North America last year significantly impacted the food service industry’s labour market. Starbucks Workers United is a national collective in the US demanding better treatment, fair scheduling practices, and freedom from unfair dismissal and discipline for its employees.

This year, Noma, one of the world’s most prestigious fine dining restaurants, announced it was closing its doors amid rampant accusations of employee mistreatment and allegedly unbearable working conditions. 

It’s clear foodservice workers are demanding better treatment – and many operators are listening. In an attempt to end the stigma around the restaurant industry’s toxic work environment, restaurant operators are offering benefits, including flexible working conditions, shift swapping, unlimited holidays, immigration reimbursement, child and elder care coverage, mental health services, college tuition support, same-day pay options and more. 

6. The continued rise of robots, AI and automation

You’re unlikely to experience a robot serving you dinner (though it did happen in Calgary last year), but where robotics, AI and automation will really come into play in 2023 is in a restaurant’s back of house. 

Miso Robotics has dominated the restaurant robot-as-a-service (RAAS) market with automated beverage dispensers, AI-powered coffee makers, and their famous Flippy line of products that can deep fry, flip, season and finish a number of popular QSR menu items. 

We see this technology advancing to include operational tasks like cameras that alert you to kitchen fires or contamination in your prep space. 

The use of AI and automation will be instrumental in restaurant growth, helping to improve the speed of service that enables restaurants to take in more orders or improve their table turnover rate. 

7. Third-party food delivery apps will start to feel the pinch

Historically, one of the first indicators of a recession is a drop in restaurant reservations. However, another key metric about how the average dollar is spent on food is the household split on groceries vs. takeout. 

We saw the tides start to shift last year, with new data from the NRA showing that restaurant sales tapered off in December to $88.3 billion compared to $89.2 billion in November.

But while consumers may not be eating out in restaurants as often this year, we do believe they’ll still be ordering takeout. 

However, delivery services will feel the pinch most acutely here. In order to save money, consumers are likely to forego increasing service fees, delivery fees and tips by picking up the food themselves. Delivery apps are already experiencing this shift in consumer belt-tightening as inflation continues to grow. 

According to Brizo FoodMetrics market analytics, we can see that 55% of foodservice businesses currently use third-party delivery marketplaces. But we can also see that 12% offer direct delivery to consumers (without the use of delivery marketplaces), and we expect to see that number rise throughout the year.

8. Ghost and virtual kitchens will reset

The pandemic truly laid the foundation for ghost kitchens and virtual kitchens to flourish. When restaurants closed their doors during COVID lockdowns, operators quickly got set up on delivery apps to help keep orders coming through and their businesses afloat. And because a brick-and-mortar, dine-in location was no longer a requirement, ghost kitchens – restaurants that offer delivery-only dishes and are both quick and easy to launch – began popping up everywhere. 

But this demand for delivery was based on data from 2020/2021. In 2023, we’ve returned to relative normalcy in terms of how we dine out and takeout, and a ghost kitchen with no physical presence fails to instill trust. 

Celebrity ghost kitchens, including those from big names like DJ Khalid, Steve Aoki and YouTube star Mr. Beast, launched quickly during the pandemic with little oversight. But many have been roasted online for the poor-quality dishes they’ve put out through their delivery-only service. 

But ghost kitchens are not dying. The model remains viable and continues to evolve in our post-pandemic world. Restaurant chains are adjusting the high hopes they had for virtual kitchens and refocusing efforts on transparency and rebuilding brand trust. 

Chains like Chick-fil-A are continuing to use virtual brands to test and launch new product lines. Burger chain Wendy’s is reducing the number of Reef outlets it previously planned to open from 700 to just 150 in order to focus its growth in key densely populated markets. 

9. A renewed commitment to loyalty programs

During the pandemic, third-party delivery apps became the go-to choice for consumers. When dinner time came around, “Let’s get DoorDash” (rather than, say, Swiss Chalet) became a common phrase. 

These third-party apps jumped on their newfound popularity and began mass marketing their brand and creating celebrity-filled commercials to strengthen their relationship with consumers. 

But the tides have shifted, and restaurants want to rebuild those relationships themselves and reestablish brand loyalty with their customers. More importantly, they want to harness the immense power of the data they can mine through their loyalty programs. 

Digital touchpoints will increase in 2023, providing restaurant operators with an influx of consumer data that can be leveraged to drive revenue.

10. The absolute necessity of a digital presence for restaurants

Any foodservice provider that has been able to avoid having a digital presence this far will finally see themselves left behind in 2023. From Google Business profiles (with high star ratings) and online ordering to website booking systems and digital menus, restaurant operators must be online if they want to be a viable business moving forward. Social media profiles, from Instagram to Facebook, are a must-have, while TikTok is sure to be a ‘must-have’ by the end of this year. 

According to our data, 67% of establishments have a verified websites, 69% are on Facebook or Instagram, 55% are on marketplaces, 32% offer online ordering and 11% make use of reservation services. We expect to see growth across these metrics this coming year as more establishments become digital savvy.

The future of foodservice is insight-led data

Smart foodservice pros know that what lies ahead is written in the market data. Brizo provides actionable, data-rich insights about the foodservice market to help customers prequalify markets, reduce customer acquisition costs and close more deals.

If you want to be on the front foot for 2023, get in touch with our team to see how we can help you leverage our 1.2 billion data points for your foodservice business.