SHHA: How Gens Y and Z are affecting restaurants

Roberto Sarjoo, director of marketing and communications for Restaurants Canada.
Roberto Sarjoo, director of marketing and communications for Restaurants Canada.

REGINA — The really good news is that two thirds of our population are foodies who like to eat out often, but eating out is undergoing a sea change, according to Roberto Sarjoo of Restaurants Canada, and Greg Prokopowich of Sysco, who both spoke at the SHHA/SLGA Conference May 28.

Sarjoo’s statistics regarding the Canadian foodservice industry are impressive. Today it is an $89 billion industry, which grew by $4 billion over the past year. At 1.2 million jobs, it is the fourth largest employer in Canada, and the number one employer of first time employees. Restaurants in Canada get 22 million visits per day — that’s equal to 55 per cent of the Canadian population. And the growth will continue, with $100 billion in sales forecast by 2021.

When asked about the challenges, 86 per cent of those cited labour costs; 61 per cent mentioned food costs; and 55 per cent talked about labour shortages. 

What these figures don’t necessarily show is how the face of food consumption is changing, thanks to the two youngest groups of consumers, Gen Y or Millennials, born between 1980 and 1995, and Gen Z, born after 1995.

Here are some of the changes Sarjoo noted:

— Eight out of 18 operators say environmentally sustainable operations are important to the success of their businesses. These include local and plant-based food. Seventy per cent have made menu changes to reflect this.

— In a chef survey, environmental sustainability was the biggest factor affecting their operations, including use of paper straws, meatless meals, reduction in meat consumption, and plant-based products.

— People now belong to food tribes, including paleo, flexitarian, vegan, vegetarian, etc. 

— Protein consumption by Canadians is shifting. The highest growth is in consumption of vegetarian and vegan products; the biggest decrease is in pork and beef consumption. Plant-based offerings are not going away; people are adjusting their diet to do their part of save the planet.

— The digital consumer has more and more influence, determining the value of your brand through their likes.

— Gen X and Gen Y can get anything they want, all on their mobile phones, with apps like Skip the Dishes and Uber Eats. The place they want to eat food is at home. Twenty-eight per cent are lounging more at home than they were two years ago. It’s a mobile-first, consumer driven, fast family lifestyle.

— Delivery by digital is now work $4.3 billion, and it’s growing rapidly. There has been a 44 per cent increase from 2017 due to fast-paced families and Gen Z. Two years ago, the norm was ordering Chinese food or pizza. Now people can get anything they want.

— They want to try new things, e.g., burgers with Reese’s Pieces.

— Many brand are locations that specialize in snacking. Booster Juice used to have 710 ml size smoothies — now they have smaller sizes. McDonalds is offering smaller snacks. 

— 79 per cent of Gen Z ordered food at a restaurant at least once a week or more in 2018.

— Here are some tips for attracting Gen Z: break the rules; think differently; think about the triple bottom line, putting PEOPLE and PLANET on a par with PROFIT.

Know where the puck is going

Greg Prokopowich, director business resources for Sysco Prairies, started his presentation with a remark about hockey great Wayne Gretzky. “He always said, it’s all about knowing where the puck is going, not where it came from,” Prokopowich noted. When it comes to eating trends, “The puck is moving fast, and it’s no longer where we thought it used to be.”

It’s important to pay attention to Generations Y and Z because they currently comprise two thirds of Canada’s population — with Generation X, the Boomers, and the Greatest Generation falling into the last third. In Regina, 53 per cent belonged to Gen Y or Z in 2015. The median age in Regina was 36.4 years, compared to Canada as a whole, where that age is 41.

Millennials eat out more and spend more. Prokopowich’s figures showed that 41 per cent of millennials eat out twice a week or more. For Generation Z, 78 per cent eat out four times or more. “Generation Z is more accelerated — they have a different approach to money,” Prokopowich said.

Here’s what he found out about these two generations:

— They respond to mobile marketing.

— They also respond to word of mouth, via social platforms of course.

— Having a digital strategy is crucial, as those under 40 generally find a restaurant via google search on social media.

— The social media presence can’t be commercial as it doesn’t work. It’s better to put a social face to your restaurant with video clips of people doing something like making food. Those human videos are the ones that go viral.

— While Gen Y is into #Foodporn (188 million posts on Instagram), Gen Z is into #Foodgasm (42 million posts on Instagram).