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Winners and Losers in the Locally Sourced Menu Trend

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Last year, when the National Restaurant Association released its hottest food trends for 2014, three of the top 10, including the top two spots, were locally sourced food. Locally sourced meat was the hottest trend, with 81 percent of the nation’s top chefs selecting it as the winner. Locally sourced produce came directly behind, and there was an even newer consumer trend rising up to number six: hyper-local sourcing. This refers to the practice of some restaurants growing what they need in their own gardens, often on the roof. Several chains have been making a big splash online by supporting the local food movement. Here’s a quick introduction to which chefs will come out on top and which ones stand to lose out as supply chains shorten.

Winners

High-End Restaurants

Near the top end, but not the most exclusive, these restaurants cater to customers who are willing to pay a premium for original dining experiences. In survey results from the 2014 Cone Communications Food Issues Trend Tracker, 66 percent of Americans are willing to pay a premium for food produced close to home, and 64 percent say that supporting local businesses is their main reason for preferring local foods.

Mid-Market Chains

Locally sourced foods have developed a reputation for being fresher, healthier and cheaper. These aren’t always the case, but that message is connecting with this segment. Chipotle leads the mid-sized restaurant chains seizing on the locally sourced movement to capture sales away from the big chains. A Harris poll demonstrates that price remains the number one consideration in choosing a restaurant for 90 percent of the population, but a majority, 58 percent, are looking for healthy menu items now, and locally sourced menu choices fit the bill for them.

Losers

Gourmet Restaurants

Restaurants that have built their reputation on exotic foods like ostrich meat and pomegranates cannot take advantage of the locally sourced trend without damaging their core business. At this level, retaining each customer is critical. The inconsistency of local produce can lead to disappointment. Top chefs will continue to use local sources when possible for seasonal dishes, but improvements in international supply chains will give a competitive advantage to those restaurants that use rare and unusual ingredients.

Volume-Based Restaurants 

Low-priced diners and fast-food chains that depend on low-priced menu items and plenty of customers cannot take advantage of the locally sourced food trend. International supply chains have economies of scale that save time and cost for reliable orders of ingredients. Customer demand for certain types of food doesn’t vary with the growing season, so these restaurants need to keep certain items in stock year round. For these businesses, people’s preference, predictability and low price trump every other factor.

Big Data for Menu Management

There will certainly be changes to the locally sourced supply chain as demand increases. Clearinghouses for local producers are already emerging. Another secondary trend will be the application of big data in software specifically built for smaller producers to handle problems associated with identifying trending menu data, coordinating orders, setting prices, tracking invoices and planning logistics. Larger suppliers tackled these problems years ago, but as local producers deal with increased volumes, they will have to find a more efficient way to serve their customers.

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