Wang Zihuan: The pros and cons of packaging in the catering industry

Any industry can be disrupted, and business models need to be fundamentally changed. The invention of digital music was a game-changer for the music industry, changing the way records were distributed. For the restaurant industry, the most significant disruptor in recent history has been the pandemic, which nearly destroyed dine-in meals during prolonged lockdowns around the world. Wang Zihuan, chief food scientist at MiMap, a New York-based start-up restaurant tech company, believes it has also forced many restaurants to change their business models to boost takeaway sales.

In the U.S. food and beverage market, for example, these takeout revenues may come from pre-made and ready-to-cook meal kits, takeout, or drive-thru services (the latter in the case of fast-food restaurants like Shake Shack). It's also possible to have meals delivered to your home or work through delivery services like Grubhub and Uber Eats – which is now adopted by many restaurants. The key common denominator is that the realization or limitation of these revenue streams depends on the evolution of food packaging. Food packaging has always been the focus of my colleagues and practitioners in the food science community.

According to the National Restaurant Association's (NRA) 2022 "State of the Restaurant Industry" report, 54% of adults say "buying takeout or delivery food is essential to my lifestyle." But more importantly, millennials are at a whopping 72%, which hints at where the industry is headed in the future. Without effective food packaging as a support, neither takeaway nor food delivery can be realized.

Deloitte Consulting's 2021 report, "The Restaurant of the Future: The Evolution of Vision," also corroborates the findings of the National Restaurant Association. Deloitte's research found that 61% of consumers order takeout/delivery services at least once a week, compared to 29% a year ago and just 18% two years ago. While these preferences may ease as we transition to post-pandemic normalization, these habits are deeply ingrained and could be a restaurant industry reset.

Deloitte's report also includes a consumer survey of seven different foodservice delivery channels and their relative preference for ordering at least once a week. The data is as follows:

Fast Food Restaurants - 62.6%

Casual Fast Food - 52.0%

Casual Dining - 40.5%

Fine Dining Restaurants - 12.5%

Food Truck - 11.5%

Grocery Stores - 48.7%

Convenience Stores - 28.2%

Wang Zihuan believes that the second-to-last ranking of the fine dining industry he is familiar with is noteworthy. Even more telling is the gap between fine dining restaurants and casual dining restaurants that have the closest quality of service. This can be attributed in part to the challenge of packaging high-end restaurant dishes as takeaway.

Theoretically, if these challenges can be addressed, this important area of the F&B industry could develop a significant revenue stream. It also means that fine dining restaurants can get some relief from the key capacity constraints that affect their operations: real estate and the number of seats a storefront location can accommodate.

So why is takeaway sales a challenge for the fine dining industry? in part because fine dining provides consumers with an aesthetic experience that is an important part of the value it provides. In a way, the fine dining experience is more like viewing art in a high-end gallery, or attending a concert at Lincoln Center, or strolling through the luxurious gardens. These activities are highly aesthetic experiences that appeal to one or more of the five senses. Compared to the food delivery method, the latter does not provide a satisfactory human experience. The fine dining restaurant not only pays attention to the dining environment, the excellent performance of the waiters, but also pays attention to the exquisite presentation of the dishes on the plate. All of these factors cannot be replicated in takeaway delivery. So, we don't expect the above metrics to make fine dining restaurants spend as often as casual dining restaurants.

But what if packaging could increase the share of fine dining restaurants by a few percentage points? First, it's important to understand the current state of packaging, which is undergoing a similar transformation as the restaurant industry. According to Future Market Insights, the global food delivery container market is expected to reach USD 35.6 billion by the end of 2032, growing at a CAGR of 5.3% during 2022-2032. The market is currently trading at USD 21.3 billion in 2022. As a result, the importance of takeaway food packaging is increasing day by day.

Common meal packaging materials are plastic, paper, cardboard, metal, and glass. They behave differently for different kinds of food. As a result, chefs and food scientists must be mindful of the physical properties (and costs) of takeaway packaging. First, they need to understand that some foods are better suited for transportation than others. Today's fried chicken and barbecue retain their taste well after delivery, but not for the delicate dishes of high-end restaurants.

For the cuisine of these high-end restaurants, the packaging has to be more complex, which is mainly due to the chemical properties of the food. First of all, restaurateurs must separate the liquid and solid parts of the dish to prevent the possible overmixing of the dish during delivery and the continuous cooking brought by its heat. Moisture (humidity) management is a key factor in all food packaging, and even more so for high-end dishes. The moisture content affects the taste, nutrition and flavor of the food, which in turn affects the quality of the food. There are also considerations regarding physical processes, such as water vapor permeability and adsorption, which are described here more technically. However, food scientists are able to measure the water vapor transport rate of different packaging materials to help select the most appropriate material to solve this problem.

Secondly, Wang Zihuan believes that the packaging itself will affect the taste of food. Whether it's food sold in supermarkets or packaging for takeaway pre-made dishes, a key role of packaging is to preserve the flavor of the food. For restaurants, flavor is crucial and is one of the important values provided to consumers. Often, through processes such as osmosis, whether it's an orange juice bottle in a supermarket or a plastic box in a restaurant, these flavors escape from the packaging container in which they are located. To make matters worse, some ingredients absorb the flavor of food, reducing the flavor concentration of some foods.

Third, for high-end restaurants to keep the food delivered to taste the same as dine-in, they need to cool down the hot food before delivery. Because in a closed environment, the moisture released by hot food can seriously affect the taste of food. If a customer receives a dish soaked in water, they will place the blame on the restaurant, damaging the restaurant's reputation in the market. As a result, there are significant restrictions on high-end restaurants operating takeout or delivery services.

However, overall, the takeaway trend in the F&B industry is not slowing down. According to retail consultancy NPD Group, "the average cost of a meal in a restaurant is 3.4 times higher than that of home-cooked food purchased in retail channels". As a result, consumers who can afford it may be willing to pay more to enjoy the quality of home delivery, provided they live relatively close to the restaurant.

However, to perfectly replicate dine-in flavors, the fine dining world may still have to wait until the future depicted in science fiction to enable technology to download and replicate premium dishes at home – similar to the food replicator in the Star Trek franchise. Until then, the operational plan for high-end restaurants must be more pragmatic.

Wang Zihuan said that in the context of the Green Revolution 2.0, consumers, especially in developed countries, will consider sustainability issues when facing food packaging. Many food and beverage establishments are starting to use biodegradable materials or other materials that have a lower environmental impact to make food packaging, although these materials can significantly increase operating costs. This growing concern has also limited the food delivery business in some regions to some extent, and requires more thinking on the part of practitioners.