BY: ANGELINA SCHIANO

Ever wonder why your favorite latte from your local coffee store was removed from the menu? Why that burger place on the corner keeps adding new items?

When we think of food trends, it’s easy to think of Unicorn Frappuccinos and Rainbow Bagels – flashy items that have made waves by going viral. But in reality, these big trends are relatively rare. Most cultural shifts in food consumption are subtle (like the gradual rise in popularity of cold brew over iced coffee), so it can be difficult for small businesses to reliably track and take advantage of trends.

Businesses may know when to add or remove menu items due to experience, the news, or listening to their customers. Refining their offerings, however, is hit or miss and can be an expensive endeavor.

The solution may lie in a type of technology already utilized by every small business. Point of sale (POS) technology refers to the systems businesses used to accept payment from goods and services. In the past, a POS system only included a register and cash drawer. Today, POS technology is changing rapidly. New tech such as Square and ApplePay offer superior convenience and security, as well as an even bigger boon to small business – data.

This new technology may help restaurants, bakeries, coffeehouses, and other local food businesses leverage consumer data to stay on top of food trends and adjust their menu offerings accordingly.

Imagine you walk into your local coffeeshop and purchase an almond milk latte. The digital POS system will record your purchase, how much you paid for it, and when you purchased it, among other information. This data could be used on an individual level (think a virtual punch card to give you your tenth latte free), but it could also be aggregated into a report by the coffeeshop to show how many almond milk lattes were sold vs. regular lattes.

In that scenario, one business uses a POS system to get a better handle on their individual data. But these systems also provide the ability to easily pool the anonymized data from many establishments, leading to previously unavailable market insights.

Let’s go back to your local coffeeshop. They’ve heard oat milk is popular, but they have no idea what effect adding oat milk to the menu would have. They already offer almond milk, but will the demand for the two milks be different?

Your local coffeeshop can’t answer this question with their own data. But the data collected from POS systems around the country could answer it – assuming someone collects, aggregates, and interprets all that data.

When it comes to the food industry, trade organizations such as the Specialty Coffee Association (SCA) are taking advantage of these data opportunities, partnering with POS tech companies to make the resulting consumer research available to their member businesses. A recent collaboration with POS provider Square resulted in four freely downloadable, fact-loaded infographics detailing consumer coffee trends in the US, Australia, Canada, and the UK.

These infographics just scratch the surface of the data available, but nevertheless offer helpful insights on topics such as latte prices, tipping practices, and the average amount of “add-ons” per coffee order.

Thanks to this infographic, your local coffeeshop can know oat milk sales have increased by 425% since June 2017. But Pennsylvania, as it turns out, is the only state that prefers oat milk to almond.

This isn’t the only data partnership of its kind. The National Restaurant Association has partnered with American Express to create an overview of restaurant technology trends. While it doesn’t involve a trade organization, UberEATS’s Restaurant Manager Program gives participating restaurants access to actionable data and advice on “specific adjustments to improve their business.” According to UberEATS, many restaurants are using the app to rapidly and cost-effectively test and tweak new menu offerings.

So what’s the value of these reports to small food businesses? Does it really matter if we know, for example, that cold brew coffee orders were 42% higher than iced coffee orders in 2018?

Source: SCA x Square 2018 USA Coffee Report: Most Ordered Coffee Beverages

Access to large-scale market research on consumer trends can help food industry small businesses make key decisions about their pricing and product offerings. By combining agglomerated data into easily accessible reports, these businesses can draw on a shared pool of knowledge for these critical choices.

In the example above, an independent coffee shop could use this data to change their cold coffee offering from iced coffee to cold brew, potentially resulting in better product positioning and more sales.

Meanwhile, these tech companies draw in new clients through the value these insights provide. They may also discover new revenue stream by offering more in-depth reports or additional consulting services.

In my opinion, data partnerships with tech companies such as Square or UberEATS offer trade associations a unique opportunity to provide their member businesses with otherwise unattainable market research. As methods for handling big data become increasingly sophisticated, it becomes ever easier to collect data from point of sale systems and other apps and present it in a usable format. While tech companies provide the agglomerated data, trade organizations can provide the industry-specific insight and guidance needed to turn this data into truly valuable reports.

Big data will always have a place in the food industry, especially as it relates to supply chain management and food safety within large corporations, but many exciting applications of big data for small businesses may still be untapped. Strategic data-based partnerships between trade organizations and data-producing companies could provide a win-win for both parties – while expanding small business access to market research and consumer insights research.