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What's Hot in Food?

Before you decide which food business to start, check out these top industry trends.

Consumers' taste buds can be as fickle as their moods. As businesses race to keep up with the latest food-industry trends, those that successfully adapt their menus keep customers drooling for more. Here are five top trends to consider:

Low Carb: Estimated to reach $30 billion this year, the low-carb industry has many scrambling to join the craze. Burger chains like Burger King, Carl's Jr. and Hardee's have dropped the carbs by dropping the bun; smaller operators have introduced low-carb pizzas and wraps to their menus; and still others have responded by taking out croutons and introducing new types of dressings for their salads.

If business owners want to take part, they need to act fast or may miss the boat. The phenomenal popularity of the low-carb diet has many wondering if it's just a passing fad or indeed a trend that's here to stay. (For more details on the low-carb craze, read "Go With the Low.")

Coffee Franchises: Coffee giants like Starbucks have helped create a coffee culture in which people pay a high price for their daily dose of caffeine. They've also successfully secured a large share of the profits. But the $18 billion territory still leaves room for ambitious, smaller franchises like Dunn Bros Coffee and Bad Ass Coffee Co., which aren't afraid of the competition.

Smaller companies can compete by responding to current coffee trends. Consumers are becoming more sophisticated with the variety of specialized drinks available, but flavors and additives can't make up for the quality of coffee bean itself. "As with wine, people want a very sophisticated blend with their Ethiopian Limu, Mexican or organic fair-trade-certified coffees," says Roger Cohen, president of Van Houtte USA--a coffee roaster, marketer and distributor--and its subsidiary, franchise Filterfresh Coffee Service . "There has been a quantum shift in the market away from the average cup of joe to a much different experience."

Chicken: While chicken and biscuits remains a classic, restaurants with adventurous creations like Hawaiian barbecue and garlic parmesan wings add new flare. Specializing in menu items like these, Wingstop has created its niche within the industry. Chicken can be incorporated into almost any menu, as Papa John's demonstrates with its chicken Alfredo pizza. The versatility of chicken makes room for new entrants into the field, says Hal Sieling , managing partner of Hal Sieling & Associates, a business development firm.

Ice Cream: When it comes to ice cream, franchises like Ben & Jerry's and Cold Stone Creamery get customers to come back for more by offering a rich experience complete with decadent flavors and mix-ins. "When I get packaged ice cream, I'll buy vanilla," says Steven Young, a principal of Steven Young Worldwide , a dairy and food-industry consulting business. "But when I go into a dip shop, I want to play. I think I'm pretty typical."

The ice cream industry is valued at about $20 billion, and it's only getting bigger. "The business overall is growing, but it's sort of growing by its own momentum, because ice cream is ice cream," says Young, who estimates industry growth at an average of 2 to 5 percent per year.

Fast Food: Leading fast-food chains have won back more health-conscious customers by introducing new products. Subway launched Atkins-Friendly Wraps, which are high in protein and low in carbs. Meanwhile, Burger King's Grilled Chicken Baguette offers a healthy alternative to hamburgers. In addition, several of the leading chains have embraced new marketing campaigns to portray a healthier image.

The concentrated efforts of fast-food restaurants are starting to pay off. The NPD Group reports that traffic at fast-food hamburger restaurants between September and November 2003 was up 6 percent from the same period the year before. "There was a great need during the past year for the major chains to attract customers back to their restaurants," says Harry Balzer, vice president of NPD Foodworld , a division of the NPD Group that provides sales and marketing information for the food, beverage and food-service industries. "They took some bold steps and offered new products you wouldn't expect."

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