You may remember the famous scene in Pulp Fiction where Samuel L Jackson says to John Travolta: “You know what they call a Quarter Pounder with Cheese in Paris? …They call it a Royale wit’ Cheese”. Jules and Vincent are Americans eating the produce of an American brand but, despite being on their way to carry out a ‘job’ for a mob boss, they are more concerned with the regional and local variations on an international product.
For Samuel L and John in 1994, it was all about the subtle name changes for the same product from country to country. Now, we are seeing much bigger efforts, with brands creating tailored recipes for each locale. From the Japanese McDonald’s Ebi Filet-O, crispy coated shrimp served on a steam bun to the Dutch version of a pasta carbonara, which is served in a puff pastry bowl at Domino’s, big brands are aiming to make their menus as recognizable and relatable to local communities as their logos. After streamlining the supply chain with globalization initiatives, why are they doing this? And how does this affect sales?
1. For familiarity – and exclusivity
Eating foreign food in a chain restaurant can make the customer feel alienated, which fractures the brand/consumer relationship. This can be mended by bringing a little bit of Italy to an American restaurant in Rome, like McDonald’s. By adding an Italian recipe with a McDonald’s spin to the menu the customer also experiences a sense of exclusivity knowing that only they and others in their country can get the McDonald’s pennette pasta salad. It also attracts tourists: this American brand is now an integrated part of Italian culture and a proud provider of ‘local’ cuisine.
2. To gain an awareness of local culture
Food culture is a fascinating thing. Photojournalist Peter Menzel published a project called ‘What the World Eats’, which compares the weekly food shop of families across the globe. Among other things, it shows just how nation-specific our diets are. By introducing localized options to an otherwise globalized menu, big brands can get invaluable insights into the eating habits of different markets, and learn about the trends that will help boost sales.
3. To promote ethical purchasing
Procurement staff need to source ingredients as ethically as possible, particularly in the wake of the horse meat scandal that hit the food industry earlier this year. However, it can take heavy marketing efforts to let the consumer know their burger is all beef and procured from the farm down the road. Some companies use their packaging and branding to spread this message, while others join the Supplier Ethical Data Exchange (Sedex), a not-for-profit organisation that allows suppliers to share responsible trading data online. By making the supply chain more transparent to consumers, as well as using ingredients they are familiar with, the message arrives with them subconsciously. Furthermore, buying local produce slashes the company’s carbon footprint.
4. Because it makes economic sense – both for the country and company
As well as supporting a green initiative, buying ingredients locally allows a global brand to show its support for local economies. This helps the individuals working in target communities and leaves a pleasant taste in the mouth of the consumer. For the company, the costs saved on shipping aren’t insignificant; but it is the sales generated from localized menus that deliver a strong ROI.
There are many reasons for big businesses to localize their brands, and it is no doubt a growing trend; but we must consider the impact it has on the supply chain. Complexity increases with the addition of local dishes, and one supply chain model or process may not work everywhere. Countries might require different delivery methods for certain types of foods, and regulations around the storage of fruits, grains and meats will certainly differ across borders. Supply chain optimization is therefore key, and businesses must equip themselves with the right tools that can help deal with these intricate new elements of the supply chain process. Demand planning systems, for example give more flexibility and visibility into the process providing managers with accurate demand forecasts, which can prove to be imperative with these variations along the supply chain.
Globalization and big business go hand in hand; but the consumers’ priorities are changing. They want to buy and eat different meals, and expect retailers to do what they must to make their preferred recipes available. Market-savvy food brands know that it’s not enough to just plaster a logo around cities, towns and villages. A key ingredient to a lasting local relationship is a relatable menu and a collaborative relationship with nearby suppliers.
Food chains are waking up to the fact that ‘localization’ is imperative to real globalization; but could local sourcing have a similar effect on other industries as well?