We have all been hearing for some time about “big data” and the value — and risk — it may pose.
But the big data chatter doesn’t end on the farm. The foodservice industry, distributors and operators alike are also taking note.
On the production agriculture side, some advocate that big data can offer efficiencies, increased production and yields, and other opportunities, while others are concerned about data privacy, ownership and stewardship.
Similar debates about the value versus risk are happening throughout the supply chain.
Mike Hampton, dean of the Chaplin School of Hospitality and Tourism Management at Florida International University, tells the National Restaurant Association that the purpose of collecting data is to better predict changing guest desires, behaviors and trends.
In turn, that data can drive menu changes, service, delivery options or new location opportunities.
For example, Hampton says that by using data, a quick-service chain can monitor drive-through lanes to determine which items to display on its digital menu boards.
When the lines are longer, the menu features items that can be prepared quickly. When the lines are shorter, the menu features higher-margin items that may also take longer to prepare.
In another example, a New York-based restaurant — Fig & Olive — has used software to track more than 500,000 guests and $17.5 million in checks.
The restaurant uses the data to offer customized dining experiences and promotions such as a recent “we miss you campaign” that drove traffic and sales to the establishment.
“Technology that helps you in understanding who your guest is — that’s the holy grail,” said Bill Chait, managing partner and CEO of Sprout in Los Angeles, in a 2015 Nation’s Restaurant News article.
“If you don’t have the ability to capsulize it in ways that become useful, you’re just going to end up swimming around.”
This sentiment is echoed throughout the supply chain — from the farm, to the packinghouse, distributor and retailer or foodservice operator, and every point in between.
“It’s important to not only know how to use this new data, but also see how it can help redefine business processes,” said Jason Lobel, CEO and co-founder of SwiftIQ, a data analytics company, in an interview with Bill Bishop, chief architect of Brick Meets Click, a leader in retail trends.
A past report from McKinsey & Co. and MIT shows that companies that inject big data analytics into their operations outperform their peers by 5% in productivity and 6% in profitability.
The ideal scenario is a path that remains unpaved using big data to strategically — and transparently — connect retailers, restaurateurs, farmers and ultimately the consumer.
The National Restaurant Association offers the following tips:
- Start small — Don’t let big data overwhelm you.
- Have a goal in mind — What problems are you and your customers trying to solve?
- No one size fits all — Identify your needs and find solutions to those needs.
- Appoint a chief data officer — Designate someone to be your company’s data steward.
Huge value can be created by using data to improve the alignment between supply and demand.
One way it plays out is having progressive suppliers partnering with retail and foodservice chains to seamlessly address public concerns about food production, while adding value to the shopping experience.
But it’s more than a marketing or supply chain opportunity, it’s a way to more tightly integrate production agriculture into the larger economy — helping those at both ends of the distribution channel improve productivity and lower costs while reducing the need for (and cost of) market intermediaries.
This is clearly a trend worth exploration throughout the supply chain, as those who understand how to use big data and invest early could use knowledge gained through data as a competitive advantage and to get better aligned with customers.
As the era of “big data” continues to play out, one thing is clear: all facets of the industry — foodservice and grower-shippers alike — will have to get smarter about using data to drive growth or fall way behind their biggest customers and most progressive competitors.
Tim York is CEO of Salinas, Calif.-based Markon Cooperative. Centerplate is a monthly column on “what’s now and next” for foodservice and the implications for produce.
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