Key Trends Impacting the Food Industry in 2023 With Maria Castroviejo

Welcome to the latest episode of our podcast the Food Service Growth Show where we bring you an insightful conversation with industry experts on the trends and issues shaping the food industry today. 

In this episode 'From Crisis to Comeback: What Lies Ahead For European Restaurants?', we have Carl Jacobs, CEO of Apicbase in conversation with Maria Castroviejo, Senior Analyst of Consumer Foods at Rabobank.

Over the next 45 mins, Carl and Maria take a deep dive into some of the key trends and issues that are currently impacting the food industry. They explore the challenges faced by food businesses in staying competitive and discuss some of the innovative strategies being used to overcome these challenges.

One of the biggest trends affecting the food industry is that food businesses are grappling with inflation. Carl and Maria delve into the root causes of inflation in the industry and discuss the strategies that businesses can use to mitigate the impact of rising costs. They explore how businesses can improve their procurement practices, optimize their menus, and streamline their operations to reduce costs and maintain profitability.

Another key topic discussed is the increasing importance of technology in restaurant operations. Carl and Maria discuss the impact of technology on various aspects of the industry, such as supply chain management, food safety, and customer experience. They explore how technology is changing the way restaurants operate and how businesses can leverage technology to stay ahead of the curve.

Throughout the conversation, Carl and Maria draw on their extensive industry experience to share insights and best practices that businesses can use to navigate these challenges. They discuss how businesses can use data analytics and market research to better understand consumer preferences and stay ahead of the competition. They also explore the importance of sustainability and how businesses can adopt sustainable practices to meet the evolving needs of consumers.

If you want to stay ahead of the situation of economic downturn, inflation, recession and war, this podcast is a must-listen 

It will help you gain a deeper understanding of the key trends and issues impacting the food industry today. Whether you are a food business owner, franchise owner, or simply someone who is passionate about food, you will find valuable insights and actionable strategies that you can apply to your own business or career. 

So, tune in now and join Carl and Maria as they take you on a fascinating journey through the world of food.

Learn how our restaurant management solutions help your restaurant business keep costs under control.

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Transcript

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Hello, I'm Carl Jacobs and I'm co-founder and CEO of Apicbase. At Apicbase, we are building the world's best food and beverage management platform. But in this podcast series, it's all about finding answers on how to grow and scale your food service business. I'm talking to numerous experts and industry professionals who are passionate about building a healthy food service industry. Join me on this fascinating journey of entrepreneurship in food. All right. Good afternoon, everybody. Today with me is Maria Castroviejo. She is a senior analyst of Consumer Foods at Rabobank. Is it correct? Am I saying this correctly or is it something else? Hi, Carl. Thank you for having me here today. You said it perfectly. I think the only clarification that we can do is when we say consumer foods or consumer foods and services, we are meaning about the downside of the value chain of processed food, food retailing and food services. All right. So it's a very broad sector. Yes. Luckily, I'm not alone. We are a big team. Yeah. Yeah. Maybe we can start with that, actually. So can you maybe elaborate a little bit? What is your role at Rabobank and what is the team's role at Rabobank? I think it's worth spending a minute there. Well, you may know or may not that Rabobank is just a Dutch mainstream bank in the Netherlands. But once you are outside the Netherlands, the bank made the choice of specializing in the food and agri value chain, from food, fertilisers to retailers and food services. And many years ago the bank made the choice of emphasizing knowledge as a better way to service their clients, and they set up our team. So we are around 80 analysts in the world covering the different geographies and the different segments within the food and agri value chain. So as you can very well hear from my marginal accent, I'm Spanish by origin, but I'm based in the Netherlands and I cover the European market together with some other colleagues here. And we also have people looking at China and North America. All right. Fantastic. And so you analyze the market, let's say, and maybe a stupid question, but to what extent actually? So you're analyzing it and then, you know, with this analysis that what are you doing then as a bank? It's not a stupid question at all because actually we are a bit of an odd figure. We are not equity analyst. A lot of people, when they think about the bank, they think of risk managers or equity analysts. We are none of that and we are not market data analysts like what you can expect from a Euromonitor or an IDG or this kind of people. What we try is to understand an industry to see what is happening, to be able to engage on strategic dialogues with Rabobank's customers, but also to help the bank give a better service to the clients by supporting all the different units in the bank. So we support credit, we support M&A, we support the bankers. We are sort of like a micro consultant unit within the bank. If you want to make it in a simple way. So it is a bit of a helicopter view and it is indeed from the perspective of a bank trying to reach out to the food and agri community. All right. And when you talk about the food and agri community, are you also analysts doing analysis on the startups and software businesses that focus on that, such as Apicbase? Uh, very little, I'm afraid. Very little. To some extent, just for the Dutch market, But for the international market we have limited capacity. And the reason is purely commercial is not because we don't like the business. And of course, as an analyst, I'm always reading and trying to learn about it. But the bank has limited capacity to bank and these startups tend to be too small to be target clients outside the Netherlands. However, as an analyst, we are very curious about everything that is happening there and we understand the value that they bring to all the other businesses. It starts to be like, right, imagine a business 30 years ago that didn't have a telephone. Yes, they could survive, but they were not the best positioned. So right now, not having the right technology, not having access or understanding of the right data is a bit like that doesn't mean you can't survive, but definitely you will be losing ground. So technology is key, if you ask me. Yeah, yeah, that's nice to hear. Of course. And that was also just out of pure personal interest. I was just wondering how a bank looks at technology in the evolution of the industry. But let's focus a little bit on the food service industry at large. We actually had a thing called COVID, corona, a few years ago already or actually it's still amongst us. But, you know when it was the most critical one. The food service industry was hit tremendously, especially restaurants, restaurant businesses. And first of all, how do you think that the industry has recovered from this? Or has it? It depends where you are, but indeed a lot has recovered. But we can't ignore what has happened in the middle. And we are not back to 2019 and we will never be there because we live in a different world. So yes, of course everything was closed. We didn't have much choice but to be at home. Then there were gradual reopenings and gradual setbacks. Even when everything was finally sort of given the okay, people didn't return immediately because they were concerned, they were afraid. And gradually the situation has normalized. But we are in 2023. We are not back in 2019. So what is different? Well, the occasions have changed and that again, depends where you are. But two things that have never returned to where they were. One is hybrid working, working from home. Yes, we are much more often at the office than obviously last year or the year before, but we are not back to be in the office as often as we used to be. That means that the occasions are elsewhere or for another type of food. And the second thing that is different is delivery. Delivery is clearly off peaks, but is still much larger than what it was in 2019, and it may still give up a little bit more of market share, but we will not go back to 2019. So these two are structural changes that, if you want, were already happening at a very slow pace and got a boost from the situation and have settled at a higher level. And of course when we were getting out of the COVID. So let's say about a year ago around the summer. Okay, we are not going to die from it. Everything looks better. Then we got around February, we got the war in Ukraine and we started to have inflation. Exactly. So, again, the situation of the consumer is once again not what it was in 2019 because I don't know for you, but my salary has increased well below what inflation has increased. Well, luckily in Belgium, most employees are indexed. We are indexed. So that for the Belgian employees, the hit was not so hard. For the Belgian companies of course there is a big hit because we need to pay it. But indeed it is something that that indeed didn't pop up into my mind immediately when we were preparing, we were thinking about COVID. But who is talking about COVID? Indeed, the war in Ukraine came. And, you know, how do you see this impacting the food service industry? Well, there are two elements in the food industry. One is what's going on with the consumer, which is what I was referring to right now. And the other, of course, is what is happening at corporate level and what is happening with the cost lines. So if we focus on the consumer and of course in Belgium, you are better off as far as you have a salary that is indexed, if you are not a freelancer or something like that. But in the rest of Europe, salaries are not per se indexed. And what we have seen is that the entry level salaries and the minimum wages have increased a lot, but the average wages are lagging behind inflation. So in other words, in real terms the consumer is poorer than what it was back in 2019. And so they have to make choices. Yes, that was what I was going to ask. So they need to make choices. Absolutely. Is it clear that they cut back on, let's say, restaurant visits or things like that, like maybe luxury a little bit? Well, the funny thing is that the consumer, I mean, when we started to see inflation kicking on, the first thing we did as analyst is just dig in our databases and dig in history and say, okay, what happened last time that the consumer was poorer? And the most obvious period is, let's say 2009, 2014 roughly speaking, in Europe. So the financial crisis. The euro crisis. Absolutely. Yes. And at the time, the consumer did certain things. For example, they went out to the restaurant much less often and they traded down. So they went from going to a high price to a mid price or from a mid price to a low price restaurant. And in the retail they were going from buying branded products to buying private label and from buying more expensive options to buying cheaper options let's say not steak, but let's buy eggs. So okay, that's what we saw. And of course, they eliminated anything that was discretionary spending and superfluous. What we are seeing now is strangely different because what we are noticing is that, well, there is some of that trading down and some of going out less often to the restaurants, but it's questionable how much is just because of the economy or how much is that we didn't really get a full recovery of 2019 pace because some people have got new habits, but it is indeed a little bit happening. Sales at supermarkets are remarkably hit compared to what we would expect when we look at restaurants in the sense that people are adjusting a lot what they buy and they are buying more private label, they are buying less expensive things, they are adjusting their shopping basket. And what they are not adjusting. But the opposite is their budgets for going out on holidays. If you follow the news, you will see that bookings are doing extremely well. Transportation is doing extremely well. So the consumer is making different choices. So they cut back a little bit on, let's say, basics and buy maybe more white label products, but they don't cut back on pleasure and leisure. They are more selective. And holidays is right now this year a priority in terms of leisure and pleasure, where they are ordering less meals through delivery because they'd rather go out. The restaurants with table service are recovering nicely, not all of them at the same pace, but for example, depending on the country, we observe that the consumers are spending less in bars, they are spending less in cafes. So if you think about what your intake on a day is often the restaurant is a meal, is the replacement of a meal at home, whereas bars, for example, are an additional expenditure. And that's where we observe that they are also cutting down. Again, it is a country by country basis, but we notice that in general terms the more superfluous expenses are being taken care of or they will go to one bar but not two. So I can give you an interesting- Yeah, go on. No, no. And of course there is also a bit of trading down. So people are saying, okay, I go out for a dinner, but I will not go to this restaurant. I will switch to one that is a bit cheaper. So we observe also a bit of that going on. All right. So can I conclude then that, you know, even though that indexation is there or not in the sense inflation is there for sure that, you know, the restaurant industry seems to be safeguarded from big hits in this period? I think that, of course, as I said, it's a country per country segment by segment and almost side by side cases. In some countries we have recovered excluding inflation. So what is traffic and mix? We have recovered pre 2019 levels in others. We are not there yet, but with a different mix. We are seeing a bit of trading down. But again, keep in mind that what you look at, let's say fast food, there you have a lot of pizza delivery and pizza delivery is doing less well because they did so well in 2020 to 2022 that now people are sort of rolling and perhaps their sales are a bit lower than last year because people are shifting to other fast food that is equally affordable. But they didn't overindulge in the last couple of years. So it's very mixed. Yes. We see a little bit also of polarization. So very affordable segments doing well, very premium, also doing well. And that also happens. And then about the location, if you are in a location where people are no longer there because they are working from home, you may not recover fully your revenues of 2019 or at least in deflated level. So we see different patterns. You have to analyze almost on a case by case. And of course, Belgium is different because you are still receiving a salary increases that are above the average of Europe. All right. But okay, I understand that it's difficult to look at the macroeconomic trend in this case. But let's say that I don't hear any very negative, let's say trends in the sense like people are cutting back hugely on spending there. The spending is switching a little bit. What's a bit cheaper, maybe a bit more expensive, a bit less. But in general, I think I can conclude that, you know, restaurant industry could have been hit much harder because of the inflation than it's actually been doing, or you would expect this. But you are right in saying we don't hear anything dramatic. That's clear from the demand side. And also, of course, the food service industry was not coming out of a normal year but was coming out from very challenging times. Of course. So that makes also a big difference when compared to other recessions that when the world was sort of normal and suddenly it started to be more challenging. Now we are coming from very difficult years. Yes. So if you look to the year on year trend, of course, 2020 to no surprise was very good. When we look at the year on year growth for 2023, it will be positive again at the industry level. First of all, because for the first quarter, it seems eight years ago, but a year ago we were still coming out from the Omicron variant epidemic. So the comparative base for this first quarter is quite comfortable. Then we have the impact of inflation in the sense of higher menu prices which have been increased along 2022, but also a little bit the year before. So overall, the the industry sales in 2023, I would be surprised if they were lower than 2022. So basically they should be higher in any case. But that doesn't mean that the performance of each individual operator will be equally successful. There will be some of them that will benefit a lot. Others will struggle more. And of course, when we were speaking about the war, we have to mention what is going on with the cost line of the restaurants. Exactly. That was going to be my next question, actually, because I hear a lot of, let's say, moderate positive feedback from, let's say, the consumer side of things so people are willing to spend. How are businesses managing, and especially then food service businesses managing and making sure that they can keep going without losing out on the cost side? Well, one last thing about the consumer. Yes, the consumer and the overall trend is stable, is not I don't see a deterioration. But what we have to say is that the consumer has become much more critical. So at the time of the reopening, everybody was so happy to go out that, you know, they were happy to take anything. Yes. Okay. It's a long waiting time. The service is less good or the assortment has become, the menu is a bit short, but okay, I'm here. I'm out. I'm sitting at the restaurant. So the consumer would put up with a lot of things because they were happy to return. But now the consumer is much more critical. So if I'm going to spend my money and I feel my budget a bit shorter, I want to have really a top experience from it. And the top experience can be just the speed of the service or the portion or the quality, depends where the consumer is. Of course, nobody expects the same from a fast food site than from a white tablecloth site. But the experience related to expectations has to be better now than what was acceptable, let's say, a year ago. So a lot of pressure on the restaurants, actually. Absolutely. That's why I flagged that, because if you say, okay, the overall revenues are slightly up but is not booming and at the same time, the consumer is more critical, more demanding, and on the top of that, my costs are going up because food and beverage prices have gone up a lot. At commodity level, we are seeing a decline, but there is also a clear time to market. That means that when we look at the commodity market and we see prices going up or down, but it takes some time for those commodities to become the price that the restaurant is paying for the food they buy and the price that the consumer is paying. So there is a time to market. That means that for operators, the food that they are buying is still going to be expensive for quite some time, at least a few months, and then we will see. So actually, you are saying maybe rising revenues, but with the problem of the consumer being much more critical and demanding and maybe also the restaurants being, you know, having high costs and not enough people in the restaurants and the staff. It's a dangerous cocktail. It's a challenge. That was going to be my second. So food has become more expensive. Probably it will be peaking this year, but we don't see prices coming down drastically. And, you know, food will remain expensive for quite some time, at least the first half of the year. But there is also the energy prices. Luckily, energy is off peaks. We are very far away from the extraordinary levels of last year. But again, depending on the country, the way that these commodity prices translate into your energy bill takes a lot of time and depends on when your contract comes for renewal, you will be hit or not. So if you ask me at a personal level, my contract for electricity will expire in June. So, so far I was paying the same energy bill. But when in June I get the new tariffs they will be much higher than the older ones because my old ones were from 2020. Of course, so way before. Depending on the country and on the system. This can also be a case. Luckily, energy is much cheaper than what we thought it would be, but still more expensive than historic levels. And you have the issue of personnel in particular in the north of Europe is just not available. And when it is available, it is more expensive. Exactly. And it's a challenge to hire and it is a challenge to retain. And it's just more expensive. So, yeah, food service operators have to be sharper than ever. Absolutely. And you know, from an analyst perspective, how do you get out of this as a restaurant business? What are the steps you need to take? Well, it depends. I mean, a restaurant business is first of all, they normally, they understand their situation better than what I can tell them or what we can understand. They live from it every day. So they know what they are confronted with and they know at an individual space what are the actions that they can take. But in general terms, it all boils down to being more efficient. So it boils down to analyzing your menu, analyzing your opening times, analyzing your supply chain and and just seeing where you can cut costs. Some of the wins, some are very quick wins, which is okay. Should I be open on a Tuesday or not? What makes more sense? Should I have all these options in my menu or not? Because if I have a shorter menu, I also have less waste. Exactly. So there are many elements that the restaurant operator knows better than what I can tell them. But there are also some other challenges. Like, for example, if labor is going to be an ongoing issue, maybe I should switch and replace some of the labor by fixed assets. So have better equipment that helps me more. But for that I need to have CapEx to have access to funding, for example, which is something that may be a difference in the near years. And I'm not saying they should put technology everywhere, but they should make a critical investment on technology and assess for each individual case where it helps them. And the same goes for not only hardware, but also for software. Because some restaurants, some individual operators that have been on the same location their whole life can very sharp decide, okay, now I know Monday is a bad day and I know I should have four people helping me out on Wednesday evening, but I need eight on Sunday. Yeah, they have the, you know, life history knowledge. However, that is not the case often for multi site operators or, you know, moderate sized chains or even large chains that are expanding into new areas. So to have a good access to data and a good capability of switching this data to information is crucial to take the right decisions. Exactly. And make sure that we optimize revenues with costs. So technology and the capacity to change data into information is very important to optimize the business model, in particular for a growing share of the total business that is not the family owned site with a track record of multiple decennia at the same place. So yeah, that is a very big tool. Quick gains obviously is better understanding of your needs, investments in particular in anything that helps save energy and anything that helps retain your labors, your staff, because you facilitate their course and you let them focus on what adds more value is also crucial. I'm personally very, very interested on the technology that back of the house that helps them with all the processing. Front of the house, some features make a lot of sense. Others okay, maybe cute for a day, but I've seen in person these serving robots and they may make sense in some locations, but in some other locations they just are a potential risk almost because they are sort of moving slowly there and the added value is limited. So to have a good understanding of the technology at all levels that can help is very, very important. Yeah, I can't agree more. Of course, I have to stress that we didn't talk about this beforehand. This is purely your own vision because it could be almost as if I told you what to say, because this is of course, at Apicbase we believe the same thing. So that's very cool to hear. And can we move into the, let's say, the food service industry at large? And how do you see this growing or declining in the next months? I mean, what is the belief that is going to happen in, let's say, in a more macroeconomic situation? It's really, I mean, this is a very difficult question because the consumer is acting so differently that what we could predict a year ago to predict what will happen in the next year remains very, very difficult. But I would insist on what I said. With what we know now, the consumer probably will not cut down more on eating out. So we don't predict massive growth, but we predict in general terms and for Europe, stability with a little bit of upside coming from inflation, the consumer has got a bit more used to higher prices. They don't translate inflation in 100% into what they spend. It's very simple to understand. We are consumers, all of us. So if you have a certain budget for going out and everything is more expensive, let's say you may increase it by 5%, but if inflation is 10%, 15%, you will not probably keep all the same attitude, but you will cut down what we mentioned, perhaps a bit less of visits less frequently, or when you go out trade for a cheaper wine or perhaps skip the dessert or the starter. So these kind of strategies will continue. But because we are in many cases not fully back at 2019 level, the downside from where we are now is very limited. What we may not see is the the further recovery at the same pace that we were expecting to see a year ago because of the war, has triggered the inflation and has made consumers in Europe slightly poorer and at the same time they want to go on holiday. I sound like a joke, but this is a reality. Consumers are cutting down their daily expenses a little bit to see if they can manage to go on holidays a bit more. So where do I see the food service industry in the next 6-12 months as an industry? Well, with very moderate growth. But, I don't foresee a contraction from the current cruising speed. Of course there is seasonality, but I mean, you know, neutralizing seasonality, slightly better, but not necessarily significant growth. All right. Maybe people that are thinking of opening a new business or especially, you know, scaling businesses. Is it a good time to start in the food service industry or is it too hot in the kitchen? No, there's always a good time if it's the right concept. And there are, I mean, there are also, of course, a lot of opportunities because what we are seeing is a rotation in the portfolios and we are noticing that, of course, again, it's a country by country, market by market situation, but a lot of operators received a lot of support during COVID. It's time to repay it. The support is over. So quite a bit are just having a critical look at what they are doing and deciding it's time to quit. Yes. So that opens white spaces for others to come and start a new business. So that is sometimes a voluntary choice, in others it is not so voluntary. It's just simply the financial model doesn't work for them anymore. So we see still closures going down across the board, predominantly affecting independence, but not necessarily all of them. We also see chains looking more critically at their portfolios and thinking, okay, that doesn't make sense anymore with these new consumers. So there is a lot of rotation going on in the market. So that means that there are also opportunities and there are opportunities, but you need to analyze your business model and say, okay, does it mean with today's consumer attitude that I can succeed? Is it a good fit? Do I have access to the finance, to the funding necessary? And another very important thing nowadays in Europe is if I have those opening plans, will I have the personnel I need to open in good conditions? Absolutely important indeed. If you look at opening up restaurants and one of the things we also discussed or you touched upon a bit earlier, is the, let's say the delivery part. And, you know, it's booming. It's very popular. Everybody has ordered online. Deliveroo. Takeaway. All of those are very big. But also there competition is massive. I mean, everybody is on these platforms today. So, I mean, there's a thousand different pizzas to be ordered from a thousand different locations in each location in the world. But how do you look on that perspective? If you open a new business or if you are in the food service business, how much sense would it make to only open up a, let's say, a virtual brand or a dark kitchen? Or how important is having a physical location with a restaurant front of house part where you serve people and where you can build your own brand? Or do you say, no, no. If you would go into the industry, maybe preferably as a virtual brand or really as a true brand. There's no good answer to that question. Right. But like everything we do as humans, we tend to exaggerate a lot. So there is a place for everything. But, you know, go backwards from time two years and it seemed that the whole world was going to be virtual and nobody was going to ever visit a restaurant and we were going to be doing all through delivery and you could have infinite brands that didn't exist except for delivery everywhere. And obviously that has proven not to be the case. Delivery, as I already said, is coming off. So it will be much bigger than in 2019, but it's not growing anymore. A lot of these business models were set up assuming a growth for much longer and a scale that hasn't been reached. So the assumptions were wrong is not that nobody wants the food delivery anymore, but it's just that there's no eternal growth in there. And with regards to what the consumer wants, it depends what the choice is, because if you are in a city where the choice is abundant it is different than if you are in a small place where your choice is very restricted. But what I noticed is that although only virtual brands make sense, in some cases, often brands that have started as delivery only and are successful actually choose to open also a bricks and mortar restaurant with seating places. So there must be something that makes the the combined business more attractive. And of course, if you are a brand new brand not known anywhere and now there are competitors that are on the high street, maybe those have an, you know, an advantage because even if eventually the food is delivered from a central kitchen somewhere else, the consumer already has seen that and associated with a real restaurant. So there is and for what I observe that the industry is doing. There seems to be an advantage of having a mixed business. Doesn't mean that virtual brands don't have a future anywhere. Of course they have, but it's much more selective than what it seemed to be. I don't know, only one and a half years ago or two years ago. And so that is something. And then we mustn't forget that the balance between on premises and delivery and takeaway is nowadays shifting a little bit back towards a bit more on premises on the street. Yeah, and you know, before COVID there was one mantra when you were opening a restaurant and there were, in terms of a joke, there were three main topics you needed to take into account. It's location, location, location. If you open a new restaurant, is it still the case today? Is location still the main driver of success of a restaurant, apart from the concept and the food, of course. But I mean, is location still driver? Um, I think it remains important, but I think before location, location and even before the third location, it is to understand your customer. Yes. What does your customer want? Because you know your customer from your concept. What kind of quality, what kind of food, what kind of service they expect? Yes. Because location only will not make your restaurant success. Of course it's important. It's important to be accessible to the public, it is important, but it will not make a bad concept success. And I'm looking through the window for everybody to know if you are listening from the Benelux, I'm sitting in Utrecht, very close to the Utrecht Central Station. If you know the place and it has adjacent to it a big shopping mall. And just there in this hub, there are plenty of restaurants, most of them chains. Plenty, plenty. Well, location couldn't be better. Utrecht is one of the stations with the biggest traffic of the country as a hub. And guess what? Not all the restaurants here are doing well. Yes. Some are doing well, some aren't. Because also location has a cost. Exactly. A location is not an excuse for bad service, bad quality or overpriced food. So it's a delicate mix between concept, food, service, place. It's a delicate mix. Yeah, it has always been. It has always been. Yeah. This podcast is going very, very fast for me. I find it extremely interesting. I wanted to touch one last topic before we call it a day, and this is sustainability. This is a new thing also coming up, a very important one. What's your take on this? Well, it is a complex one because sustainability is like saying, let's talk about food. It's so broad and there are so many sub features that can even be contradictory with each other that is very complex as a topic. I think what we have to understand is that if it is very complex for professionals, for the average consumer, it is also very complex. So we shouldn't take anything for granted. The consumer in all research and surveys, says they are very keen to pay for more sustainable concepts, when they open their wallet they are less keen to pay for it. But, they are very fast to run away from any case of negative publicity. So the message is very clear. They may not be prepared to pay for it. They may not reward you for flagging how sustainable you are. However, if the week after there is some negative news that affects you, they will just run away from you. So it is very important to keep that in mind and not overlook sustainability, even if the consumer is not prepared to pay or does not seem to be prepared to pay. It is also becoming more and more a license to operate within the corporate world. So the pressure to be sustainable and I'm talking here environmental sustainability, by the way, will not only come from the consumer directly, but will come from the entire value chain, because your suppliers and your off takers and your location providers are engaging and committing themselves to be more sustainable. And they expect the food service operator to tag along. So the pressure is coming from everywhere. So huge pressure, but no rewards. Well, the reward is to stay in business, so it's quite a good reward. Yeah, yeah. I work for a bank. And guess what? The central banks are putting pressure on the banks to scrutinize our portfolios, which is basically the money we lend with the perspective of sustainability. So sustainability is a license to operate with the pressure coming not only and not necessarily from the consumer but from everywhere else. And the environment. Maybe if I can be a bit provocative, is this a fad or is this something that will stay? I think it will stay. So the world is changing here. The only thing that may be adjusted is the speed of change and the number of new features that get incorporated and the speed at which they can be implemented but it is not a fad. It's not a fad. And if you start to look at the history of food service operators there is a very nice analysis, just have a look at the listed companies and go back in time to start to look at what they said on their annual reports. The industry has a very long track record of looking and focusing on sustainability elements and perhaps more on the social side, on the people side and in the planet side, but not only on that. So it is not a fad. It is a structural and it's accelerating. All right. So we are making a better planet and we are taking it for granted, actually, and we are not willing to pay for it. We just want the food service industry to be more sustainable. Well, if it was only the food service industry, but I think it's everywhere the same. And of course there is always, it is perhaps to negative to say that the consumer is not prepared to pay. There is a portion of the consumers that are very proactive and selective and they accept to pay more for it, but is not necessarily 100% of the population, but they will quit if gross mishappenings take place. Yes, and of course the sensitivities are different depending on the place. And don't forget that sustainability is the people and the planet not only the environment, but also the social aspect of the business. And at the end of the day, food service is a people's business. Yes, indeed. And they are very good. Quick, quick gains. Just waste reduction is a win win. It is helping to reduce costs and it is helping to improve the environment. Yeah. And depending how you do it, it has a social aspect to it. So what else do you want? Yeah, when you are building a new restaurant, of course, that is something that everybody does nowadays. They look at the whole building structure to make it the most sustainable possible. So it is happening. All right, Maria, this was a fantastic conversation. We are already at the end of this conversation. We try to keep it at a 45 minute time frame. So it's a car drive long. So thank you very much for joining us and for being here with us today. I think this was a very, very good insight in a lot of topics in the food service industry. Thank you very much for being here and see you next time. Thank you for having me, Carl. And I hope that was helpful to at least part of your audience. I'm sure it will. This brings us to the end of the show. My name is Carl Jacobs, and I hope you enjoyed this episode. The Food Service Group Show is all about growing your brand into a profitable and healthy business. Subscribe to this channel for more hands on interviews and insights. Until next time on The Food Service Growth Show.