Five Strategies for Food Service Companies to Fill the Gap between Mass and Luxury Markets

A RESEARCH CONDUCTED AT SDA BOCCONI SCHOOL OF MANAGEMENT EXPLAINS HOW TO BE PREMIUM IN CONSUMER FOOD SERVICE

The Italian consumer food service companies that pursue strategies of premiumization report the best growth rate and brand share. By offering goods and services as if they were aimed at a niche group of users, but instead aiming at as many people as possible, they bridge the gap between luxury and mass market retail and they differentiate themselves from their competitors. These are the results of Being premium in consumer food service, a research conducted by Guia Beatrice Pirotti, Professor at SDA Bocconi School of Management, presented today at a conference on food retail and food services.
 
We can define premiumization as the process of making luxury more affordable. It responds to the needs of the consumers that Elizabeth Currid-Halkett, author of the book “The sum of small things”, calls aspirational, a class that defines itself by its consumer choices. In the consumer food service segment, an intermediate category between fast-food and fine dining has emerged and is growing at a fast pace. “The phenomenon is booming also in Italy and is constantly rising”, Pirotti says.

Researchers analyzed six sectors: full service restaurants, cafes/bars, fast-food, chained consumer foodservice, street kiosks and home delivery/take away at the level of individual brands. In order to consider only comparable companies, giants such as Autogrill or McDonald's and micro companies haven’t been examined. An innovation radar has, instead, selected some important emerging brands.
 
Studying the managerial choices of the growing companies, the researchers discovered that the best companies offer premium contents and identified five pillars to trigger the process of premiumization.
 
• Highlighting ingredients. Premiumization is achieved by certifying the raw materials and getting to "sign" the ingredients as fashion brands, as Panino Giusto does with its “Panini Italiani” certification. "Being focused on a particular product helps", explains Pirotti, "as well as offering a menu that changes and amuses the consumer. La Piadineria offers the possibility to choose dough, shape and recipe, Alice Pizza offers more than 60 different tastes, which change according to the season."
 
• Service is no less important. The best companies also take care of the pre- (Ham Holy Burger's app) and post- consumption moments and are able to move the service elsewhere, to supermarkets or airports (as Sushi Daily does). The availability of different brands, which accompany every occasion of use, is also part of this strategy (La Bottega del Caffè is part of the Cibiamo Group, which covers different occasions of use with its formats).
 
• Experience. The customer can be involved using an open kitchen (Miscusi has a mill in its restaurants) and the ability to transform consumption into a process of discovery or the ability to link themselves to a fun theme (Old Wild West).
 
 • Standardised craftsmanship. Investment in training, with the creation of in-house academies to transform employees into craftsmen, has proved to be a winning strategy for succeeding in creating a product that is as artisanal as possible, albeit in a system that aims to be scalable. That's what Alice Pizza, Sushi Daily and Panino Giusto do.
 
• Communication: the consumer as an actor. "The customer is increasingly involved in the communication process. He is no longer a consumer, but an actor who expresses opinions on products and that the company considers a true connoisseur", says Pirotti. It is the strategy of Briscola Pizza with its “Confraternita della pizza” (Pizza fraternity), and Roadhouse with its social media.

by Claudio Todesco