Healthy Fast Food: Industry Analysis

Industry Description

The fast food industry has existed for many years. It is believed that the modern system of fast food franchising started in the 1930s when Howard Johnson contracted his second location to his friend during the Great Depression with the aim of expanding operations (Grad, 1992). In 1951, “fast food” was included in the Merion-Webster dictionary. The healthy fast food industry is a highly profitable business that was founded in the 1990s as people regarded health as a primary concern when purchasing foods (Grad, 1992). People became more worried about their health, thereby increasing the consumption of organic foods. As a result, fast food companies are now franchised in more than 100 countries internationally. In America alone, fast food restaurants make over 200,000 of the total number. The revenue through fast foods alone has increased every year (Daniells, 2014).

Currently, there are emerging markets for healthy fast foods. Even with this increase in growth, the healthy fast food industry has some challenges. These challenges include the high cost of foods, recession in the economy, and changing health perceptions (Corporate Accountability International, 2014). The industry has been adopting some new practices to face the challenges that contain offering new products. Modern society has raised the demand for a quick healthy bite at any time of the day. There are existing opportunities to eat unique healthy fast food instead of traditional pizza and burgers. The focus of fast food companies is on high volume, low cost, and products made at high speeds. Food is mostly precooked or preheated and served for take-aways (Daniells, 2014). However, there are some other fast food locations or outlets that offer on-site eating. Food is usually standardized and shipped from central locations. Consumers are free to get familiar meals from each location. Menus and marketing are normally similar in all places (Daniells, 2014).

In recent years, the healthy fast food industry has been faced with challenges that have pressured profit margins (Nestle, 2013). Even though the industry has proven to be robust enough to face and withstand the challenges, some players have handled them better than others. There is an increased focus on the quality of foods provided in the fast food outlets each year. The industry started with foods that were highly processed and industrial in preparation. The foods contained high fats that have been shown to increase consumers’ body mass index (BMI), thereby causing weight gain (Nestle, 2013). There has been increased public awareness of fast foods’ negative health impacts through popular books like “Fast Food Nation” (Schlosser, 2001). In turn, the industry has responded by adopting healthier choices that have increased its successes. Organic foods are cultivated with no synthetic additives, pesticides, and fertilizers. Other than natural or organic foods, there are food supplements like vitamins and herbal products that make up a large part of the healthy food industry. However, bad media is still causing challenges for fast food (Levinstein, 2003).

The prices of most of the commodities are rising, thereby affecting the fast food franchises. The increased prices of the commodities have made it necessary to force an increase in price for customers. In America, for example, the recent economic recession lowered the price of commodities but had other complications that led to an increase in the prices for commodity inputs (Levinstein, 2003). Compared to the traditional restaurant choices, people choose to go for cheaper fast food options. People are often busy and will continue enjoying quick meal options. From traditional unhealthy fast food options, the industry players are now offering healthy choices, with the majority of the restaurants focusing on fresh and organic products. More focus is laid on salads, healthy wraps and other lower-calories options. The healthier menu has made willing consumers make better choices (Schlosser, 2001).

In addition, the industry focuses on expanding its product lines. Many companies in the industry are exploring other meal times like mid-afternoon and breakfast snacks to increase real estate utilization and growth opportunities (Belasco, 1993). The fast food industry is diverse and extensive, with many opportunities. Consumers look for new ways to eat healthy and fast. This challenge is being answered with innovation as the industry responds with strategies that will surely attract customers back. Fast food franchises are expanding, and some require minimal capital to start.

Healthy Fast Food Globally

Globally, the fast food industry has increased, and there are many opportunities in every town and city. There has been a growing preference for fast food in all countries, which has already shown an impact on the health of the consuming populations (Starling, 2012). Many consumers of traditional fast foods are more at risk of diabetes and heart diseases. The fast food industry has faced a health challenge as there are potential links between fast foods and health issues.

In 2010, the fast food industry had revenue of more than $180 billion and is estimated to increase significantly by 2017 (Starling, 2012). This industry is a powerful force in the global economy. However, giant corporations like McDonald’s, Burger King, and Wendy’s have had business practices that undermine consumers’ health and well-being (Starling, 2012). Currently, the healthy fast food industry is seen as one of the most profitable in the market. The global market provides sizeable opportunities for expansion of this industry. This opportunity is driven by increased concerns that people have towards their health and food safety.

The healthy fast food industry is expected to grow every year as people become more aware of the effect junk food has on their health. This awareness will force players in the industry to adopt consumer preferences. The demand for healthy fast food is increasing as many families purchase organic foods. As fast foods go healthy, there are many opportunities that await food companies. Many existing and new upcoming companies will focus on healthy food and will enhance their menus with those foods that feature lower fats, cholesterol, and sodium. The whole idea will boost their sales and invite a new demographic that cares about its health into the restaurants. The publicity around the effect of traditional, unhealthy fast foods is damaging and has significantly contributed to declines in sales.

Currently, the companies in the industry are modifying their menus to offer healthier foods. This modification has affected manufacturers of raw and processed goods that supply these companies (Sims, 1998). However, some of these foods that are marketed as healthy are not healthy. There are opportunities for ingredient manufacturers that are willing to work with menu designers to develop low-fat and low-calorie options. There is another significant development in the healthy fast food industry, where cooking oils have been replaced with new formulas that significantly eliminate trans-fatty acids (Sims, 1998).

Healthy Fast Food in Germany

In Germany, there is a rise in the number of fast food restaurants, which have been linked with an increase in overweight people. According to Rosin (2015), there is a direct connection between cheap fast foods and weight gain among consumers. Within the last century, the manner in which people take their meals has changed fundamentally. On average, Germans have three meals a day that include breakfast, lunch, and dinner (Rosin, 2015).

Nowadays, healthy fat foods are becoming an important part of many Germans’ lives as they seek quick lunches over a lunch hour. Their eating habits and food preferences have changed towards healthier and lighter meals. The consumers of fast foods are becoming more health-conscious and want to control what they eat and the sources of their foods. Therefore, there are food alternatives in demand that have fewer calories, less harmful, and healthier ingredients. There have been food scandals such as the horse meat that was drug-infested, which was found in various beef products in 2013 (Grover, 2019). This incident made more Germans to pay more attention to what they eat and sought more education to be aware of food processing and ingredients (Rosin, 2015). Consumers are now demanding a very high level of transparency.

In Germany, fast food is a consolidated channel. In 2013, McDonald’s remained the leader in fast foods, with a unique GBO value share of 33% (Grover, 2019). This fast food company succeeds most of its chained competitors in terms of national penetration, level of brand recognition, and seniority. The company has a large network of outlets and advertisement campaigns that are large-scale. Burger King is McDonald’s main competitor, and it is also well known among German consumers (Grover, 2019). These companies offer a wide range of product portfolio that focuses on healthier options.

Currently, there is a rising demand for healthy, regional, and fair trade products in Germany (Euromonitor International, 2014). Moreover, the consumers are in need of a high level of diversification and individualism and, at the same time, would like to have quick and convenient services of fast foods. Opening a healthy food bar in Munich, Germany, that includes superfoods and green smoothie is a great business opportunity that will have good returns. The bar will be profitable as these foods have health benefits that are in demand for people in Germany.

Conclusion

Many people that are sensitive about their health know that prevention is the way forward. This awareness has become business reality and is the reason why the healthy foods industry is going to outperform the mainstream food industry. With the rising link between unhealthy foods with lifestyle diseases, people have found it necessary to eat in the right manner and the right content. In the past, Germans have had bad eating habits. They have been eating the wrong foods that resulted in an increasing number of overweight and ill people. Many consumers say that they like the trend towards healthier fast foods because they are more concerned about their health and that of their families. Therefore, there are additional opportunities for fast food restaurants that will be keen on providing nutritional foods. Past trends and consumer preferences should be considered before designing any healthy food items. The smoothie bar in Munich will fit in the industry and help people eat healthier as it competes with other existing companies in marketing its products.

References

Belasco, W. (1993). Appetite for change: How the counterculture took on the food industry, 1966–1988. Cornell University Press.

Corporate Accountability International. (2014). Countering fast food’s health effects. https://www.stopcorporateabuse.org/countering-fast-foods-health-effects

Daniells, S. (2014). US organic food market to grow 14% from 2013-18. http://www.foodnavigator-usa.com/Markets/US-organic-food-market-to-grow-14-from-2013-18

Euromonitor International. (2014). Fast foods in Germany. http://www.euromonitor.com/fast-food-in-germany/report

Grad, L. (1992). New foods for the ’90s. Redbook.

Grover, S. (2019). White Castle becomes first fast food chain to serve plant-based impossible burger. http://www.treehugger.com/green-food/first-organic-fast-food-chain-opens-in-germany.html

Levinstein, H. (2003). Paradox of plenty: A social history of eating in modern America. University of California Press

Nestle, M. (2013). Food politics: How the food industry influences nutrition and health. University of California Press.

Rosin, T. (2015). Eating habits in Germany – A critical review. http://www.zess.uni-goettingen.de/wordpress/?p=919

Schlosser, E. (2001). Fast food nation: The dark side of the all-American meal. G K Hall.

Sims, L. (1998). The politics of fat: Food and nutrition policy in America. Routledge.

Starling, S. (2012). Global healthy foods to hit $1 trillion in 2017: Report. http://www.nutraingredients.com/Markets-and-Trends/Global-healthy-foods-to-hit-1-trillion-in-2017-Report