Product Managers Want People To Eat At Home [The Accidental Product Manager]

Packaged food product managers need more of us to eat at home
Image Credit: Mark Levisay

Quick quiz: where have you been eating your meals lately? Perhaps a better version of this question would be: how many times have you eaten at home lately? If you are like most of us, your answer is going to be mixed. Yeah, you might grab a breakfast at home, but do you take your lunch to work? How about dinner – do you eat at home or go out? Since you are not eating at home as much as you should, you are starting to cause problems for packaged food product managers.

Where Do We Eat?

Ok, so let me just come out and say it: it turns out that people just do not like to cook any more. How we eat is changing. Americans have always been ones to go out to eat. What is starting to change is that the number of meals that we can get at a restaurant and then eat at home is increasing. At the same time, the availability of meal kits is also reducing the number of times that we cook at home. The people who keep track of where we spend our money are telling us that spending for food prepared at home grew by less than 2% for the last three years. That’s not going to look good on anyone’s product manager resume. While at the same time, our spending on meals that were prepared elsewhere grew by more than 20%.

In America, people tend to spend roughly 13% of their income on food. However, last year, they spent almost 44% of their food dollars on food prepared elsewhere. This level of spending is very close to the amount that was spent on this type of food over a decade ago during the housing boom. Just a few years ago this share of our food spending was below 40%.

Although this kind of change can be somewhat startling, we also need to understand that it can be cyclical. When America was experiencing a recession, spending on restaurants fell sharply. What we have learned is that when consumer confidence rises and consumers start to have more disposable income, they become willing to allow someone else to do their cooking for them. What the packaged food product managers need to realize is that they have to change their product development definition because convenience is becoming increasingly important to consumers. We can see this in the new meal kit and web-based restaurant services such as Blue Apron and Grubhub. What we are starting to see is that the food preparation model is starting to both shift away from home while still remaining at home.

What Does The Future Hold?

If you take a look at where all of our spending on food is going, it seems as though its all still going where it has always gone. The changes that we are seeing are fairly small. However, it turns out that changes of even a small number of percentage points which may not be all that big of a deal for the big packaged food companies (Heinz, Kraft, etc.) or the big food sellers (Walmart, Kroger, etc.) is still a very big deal because of the size of the market. Even more important is the fact that the shifting of spending patterns is something that we can expect to see continue into the future.

Where things can get really interesting is when we take a look at exactly who among us is eating out more. The people who study such things have found that the millennials are spending 6.5% more per week than baby-boomers on eating meals away from home. What makes this even more interesting is that the millennials have overall lower incomes than the baby-boomers. Where things continue to get interesting is that as the baby-boomers age, they will end up spending less if the current demographic patterns hold.

What does the future look like? It is believed that today’s 35-year olds do not spend a great deal of time cooking for themselves. What this means for them is that as their families start to grow larger and they find that they have less and less free time, they will start to spend more and more on food not prepared at home. You would think that the prepare food product managers would be benefiting from the restaurants who are now starting to purchase more and more of their products. However, the problem with selling to restaurants is that they tend to squeeze their suppliers in a similar fashion to how grocery stores tend to squeeze their suppliers. Supermarket product managers realize that they too are facing a problem with their customers. They are responding to their challenges by starting to act more like restaurants. They have started to create more prepared foods and some are even starting to offer in-store seating to allow their customers to eat meals there. As the sales of fresh meat and vegetables start to increase, the thinking is that there may be hope for these stores.

What All Of This Means For You

Product managers for packaged food companies are starting to run in to a real problem. You and I are eating at home less and less. What this means is that we are purchasing less packaged foods because we are doing less cooking for ourselves. Instead, we seem to be eating out more and more. What’s a product manager’s product manager job description tell us to do to fix this problem?

We seem to be picking up prepared food and bringing it home to eat instead of fixing it ourselves. What this means is that the amount that we spend on food for cooking has only grown by 2% while the amount that we spend on eating out has grown by 20%. Americans spend 13% of all of their money on food; however, now they have started to spend 44% of that amount of food that is being prepared outside of the house. When consumers become more confident about the economy and start to have more money, they eat out more. Additionally, convenience is becoming increasingly important to consumers. The amount of money that is being spent on take-out food is a small part of the total amount, but it is growing. When we take a look at who is doing what we see that millennials spend more on eating out than baby-boomers do. In the future we believe that today’s parents will start to eat out more as they have less and less time.

Packaged food product managers have a real problem on their hands. Time stressed customers are looking to have someone else prepare their food for them and are cooking less and less. This is a trend that appears to be continuing. These product managers are going to have to find a way to get restaurants and prepared meal kit firms to use more of their product. If they can find a way to make this happen, then they may be able to still serve us even when we choose to eat out.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills

Question For You: Do you think that there is anything that can be done to convince people to prepare more of their own food?

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What We’ll Be Talking About Next Time

Imagine for a moment that you were a product manager working at Starbucks. The company is growing, everyone likes your product, you would be on top of the world. In fact, Starbucks has opened over 2,000 cafes in the U.S. over the past three years. The result of this rapid growth has been that you can find a Starbucks just about anywhere. However, the downside to all of this growth is that their traffic growth is starting to slow. What is a Starbucks product manager to do?

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