Eat out? Or at home? It’s a decision consumers are giving more thought to as economic fears mount. Last year’s spike in wholesale food prices was the largest in 27 years. Accompanied by a sudden downturn in the U.S. economy, it has forced people to consider more carefully how and where they spend their food dollars.
At the same time, the sector is battling soaring labor, energy and material costs, and increased ready-to-go meal competition from retailers.
It’s not all doom and gloom, though. There are words of optimism for foodservice professionals and their suppliers â€” some of the most heartening coming from the competition itself. In March, at the Reuters Food Summit in Chicago, General Mills CEO Kendall Powell downplayed how much people will be shifting back to at-home eating as the economy weakens.
"Quick-serve restaurants, casual dining â€” food away from home â€” is really an embedded part of the way Americans eat now," Powell said. "[The] industry is a little more resilient than most people sometimes think."
The prospect could be particularly critical for meat and poultry processors and their respective packaging suppliers: Online research, conducted in January by the Los Angeles-based foodservice trends research company Datassential, found 83.7 percent of foodservice operators saying protein costs have hurt their margins over the last three years.
Potential solutions, though, aren’t limited by any lack of technology.
“There’s so much that can be done,” says Anne Bieler, a senior associate with the Kalamazoo, Mich.-based packaging consulting firm PTIS. “An operator can say, ‘we’re going to add this to the menu,’ and a week later they’ve got options to choose from. You can get pretty much anything you want if you find the right partner to work with.”
Indeed, partnerships between protein providers and their packaging companies can go a long way to help operators. But, Bieler says, it means having a good dialogue and “trying to drill it down to what operators need.”
Increasingly, those needs are likely to be centered on yields and efficiencies, according to Joe Pawlak, vice president at Technomic, a food industry consulting firm in Chicago. The focus has intensified considerably over the past eight to nine months as commodity prices have increased, he says.
As a result, successful packaging solutions are likely to stand on an offer of greater convenience, shelf stability and time and labor savings, as well as more efficient space utilization and reduced waste volumes.
Kitchen simplificationIt’s a scenario that puts value-added processors such as privately held Chicago Meat Authority in an enviable position.
“We’ve always packaged with efficiency in mind,” says Peter Bozzo, the Chicago-based company’s director of operations. “A lot of our products are individually quick-frozen, and packaged in an efficient style for customers to take product out of the box.”
In the case of diced pork, Chicago Meat Authority offers individually quick-frozen cubes and sells them in two easy-to-use, 5-pound vacuum pouches per box. The company had been packing the product in poly bags, but switched to vacuum pouches about a year and a half ago, increasing the product’s shelf life and ease of handling without any change to the price.
“When we look at the product and the change that we made, we’re selling more ground pork than we’ve ever sold,” Bozzo says. “Our customers’ concern is as much about labor as it is product quality, and we’re able to hit on both of those fronts.”
To be sure, portion control and other packaging solutions that tap into operators’ concerns about labor costs and skill levels are well positioned in this business climate, where increasingly the question is whether labor is trained enough to make product most effectively with the least waste.
There’s a range of available packaging materials to offset those challenges with much more temperature flexibility than ever before, serving to minimize food handling, shorten cooking times and maximize food safety by allowing kitchen workers to cook or warm pre-cooked product right in the bag.
Convenience requirements also are heightened for foodservice packaging solutions at retail, where there’s really no food prep at the store level at all.
That was the central consideration when Dinuba, Calif.-based Ruiz Foods introduced its innovative El Monterey Tornado, a batter-dipped tortilla developed as a hot-to-go meal solution exclusively for 7-Eleven.
“Our c-store customers do not have large storage capacity. In addition, they look to offer variety and want to easily access multiple flavors. [Our smaller pack sizes] accommodate the need for flexibility and efficiency as well as less shrink,” says Bryce Ruiz, the company’s president and chief operating officer.
Eco-efficienciesIn foodservice, most eco-packaging initiatives have been directed to the front of the house. But experts indicate that back-of-the-house packaging efficiencies will come under greater scrutiny as margins continue to tighten.
The reason? Operators are being told by consultants and advisory groups that they are paying for packaging twice: first, when they buy it as part of product purchasing, and again when they contract to dispose of it as excess waste.
Of course, packaging efficiency is hardly a new idea for foodservice. New City, N.Y.-based Murray’s Chicken, which eliminated the use of polystyrene trays for its retail packaging, says it also is working on environmentally friendly solutions for foodservice distribution packaging. By making minor reductions in its master case size (which is fully recyclable), the processor reports that it has reduced emissions by eliminating the need for one in every 50 trailers by fitting more boxes on a pallet and more pallets on a truck. The result is a reduction in solid waste of 455,670 pounds â€” the equivalent waste of 12 full garbage trucks per year.
Experts say sustainability needs to move from something processors and suppliers are talking about to something they can begin implementing because the issues surrounding sustainability are intensifying.
“Now, it’s a point of differentiation. But one or two years down the line, it’s going to be the cost of doing business,” says Technomic’s Pawlak.
This story originally appeared in the Summer 2008 issue of Modern Packaging, a sister publication of The National Provisioner.