Odd Lots - How Instagram Turned Into a Giant Market for Food

Episode Date: May 12, 2017

Avocado toast, unicorn frappuccinos, and kale salads. Taking photos of your food and putting them on Instagram is a now a huge trend that's transforming markets in more ways than one. In this edition of the Odd Lots podcast we talk about how photogenic foods are impacting commodities prices, and how the retail market is actively courting Instagram 'influencers' who can promote their business. We speak with Amanda Topper, a food blogger who works as associate director of foodservice research at Mintel, as well as Julie Verhage, a Bloomberg reporter who's written about the impact of Instagram on commodities prices.See omnystudio.com/listener for privacy information.

Thanks for listening to OddLots. Follow the show on Amazon Music for more future episodes or just ask Alexa play the podcast, OddLots on Amazon Music. Put knowledge to work and grow your business with CIT. From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and treasury management services for small and middle market businesses. Learn more at CIT.com. Put knowledge to work. We want to take a quick moment to let you know about something really new that's cool. from Bloomberg. Starting right now, you can use our iOS app or Google Chrome extension to scan the news, look at any story on any website, and instantly bring up news and information from Bloomberg relevant to what you're reading about. Yeah, it's pretty cool. So it means that no matter where you're reading the news, you can basically bring all the data and information

that's on the Bloomberg with you. It's kind of fun to test out, right, Joe? Right. So if you're reading a story about Tesla or Microsoft or Apple or Facebook, you can immediately bring up news and data from Bloomberg. And of course, we have all the news and data in the world. It's really awesome. You should check it out by downloading the iOS app or search the Bloomberg extension on the Chrome store to try it out. Yeah. And it's called Lens. We should probably say what it's called, right? Oh, right, right. It's called Lens. Learn more at Bloomberg.com slash Lens. Hello and welcome to another episode of the Odd Thoughts podcast. I'm Tracy Allaway. And I'm Joe Wisenthal. The other day I was walking home and I saw this huge line outside of a new store slash restaurant that was about a block away from me. And it was just this massive line around the block. And I was saying, oh, what's this line for?

You know, are people, is it sneakers? Is it some celebrity inside? It turned out that everyone was buying this ice cream that was wrapped in a gigantic fluffy waffle and had all these sprinkles and other crazy toppings on it. And I was just certain that the only reason people were standing in line to buy it, because it just looked like ice cream and a waffle, was because it was going to look really good on their Instagrams, and they were going to rack up a bunch of Instagram likes. And that was a reason that people were lining up in a fairly chilly day

for what looked like a line that probably lasted about them. hour? Yeah, well, you don't need to tell me. When I lived in New York, I lived right next to the Dominic Ansel Bakery, the place where they sell cronuts. And I got to witness the craziness every morning firsthand. So I would see the people lining up at 6 a.m. in the freezing cold. I would see the people that those people hired to wait in line for them and then deliver cronuts. That was interesting. But the reason we are talking about this slightly random subject is because we are actually devoting this entire episode to, I guess we could say, like the economics of Instagram. Is that a good way to put it? Yeah, or Instagram is sort of this

food marketplace. You know, the other fascinating thing about the Kronut phenomenon to me was not just that people that essentially a food went viral and all these people lined up to buy them, But then it happened globally almost instantly. So all around the world, whether it's other parts of the country, London, Korea, everyone had their cronut knockoff within a matter of days or weeks. And I really think that the sort of Instagram phenomenon is indispensable to understanding what's going on in this new world of viral foods. Yeah, indeed. And I mean, I have so many questions. my major question is like what makes your picture of avocado toast better than the millions of

pictures of avocado toast that have come before you and why do human beings seem to have this like relentless interest in pictures of food on Instagram? And Joe, before we start, I'm just going to give one big caveat, which is that this subject might make me slightly grouchy, as you know. Wait, I thought you were really, I thought, I thought, I don't. Well, we'll see what part of it sets you off and makes you grouchy, but we'll leave everyone in suspense for that. All right. So we actually have two people who are joining us today to talk about this subject. We have Julie Verhage. She's a reporter at Bloomberg, and she's managed to turn herself into a little bit of the hipster slash Instagram correspondent.

And we also have Amanda Topper. She is a food blogger and a prolific Instagram. so she'll be able, hopefully, to tell us all about how this works. Welcome to you both. Hey there. Thank you. Good morning. Julie, why don't we start with you? You've been covering this.

And, you know, we talk about taking pictures of food as this kind of funny, amusing thing that's been happening for a while now. But you actually wrote an article the other day about how this trend is, impacting physical commodities prices. Right. Everything from cauliflower prices to cream cheese to vanilla even, it's all skyrocketing up. Some of them even hitting record highs. And it's a bunch of these what you kind of dubbed hipster foods.

So everybody wants to have fancy looking avocado toast and stuff like that. And because everybody is so eager to photograph themselves eating various ingredients, that's having a real world impact on commodity prices, basically. Yeah, I mean, when I bought avocados this past weekend, it was $3.50 per avocado, which just seems outrageous. And that was on sale. Normally, it'd be like $4.450 apiece. Amanda, give us a little introduction who you are. You're a food publicist. You also are a influential food, Instagrammer, and blogger. How did you get into this industry and how do you actually make a living? Sure, yeah. So my life is kind of all-encompassing around food. So my day job. if you will, is predicting trends in the food service industry. So I am an associate director of food service research at Mintel. And then we also have a lot of work with agencies and brands.

So at my day-to-day job, I'm kind of helping brands navigate some of this territory with social media. But kind of on the side, I also write a Chicago-based food blog where I'm reviewing restaurants. And then I also have a food Instagram where I'm covering local. dishes, local events, restaurant openings, and kind of am fully immersed in this whole Instagram world. So can you give us, I realize this is probably going to be a big question, but can you give us like a sort of high level overview of how the rise of social media and Instagram in particular has changed the food industry? That's definitely a big question. I think that especially over the

last few years, we're really seeing Instagram take over as the social media platform to be So it's not relatively, it's not super new. It's been around since 2010. But I think now we're seeing more restaurants really recognize the impact that Instagram and photos of their restaurants food can have on their business. So I think we see the operational side of it where restaurants realize the potential here. And then we also see from the consumer perspective that really consumers and especially younger consumers, including millennials, are seeing the impact.

of how fun it can be to share pictures of their food. And in general, we know that millennials especially just love sharing those experiences and being able to go on their app and search for different restaurants and look at geo tags and see exactly what they're going to get when they order food at a restaurant is really powerful. So we have a resident millennial here in the studio who like sharing photos of food and does exactly what you describe in addition to reporting on it. Julie, explain to us. us the appeal of sharing food pictures as you see it. And you even mentioned this morning that your new

apartment has a really great light for taking photos of toast, which I imagine is now a selling point in apartments. They're like, oh, this has great light for your Instagram photos. So what is the, why the urge to do that? And I do it too, but I'd like you to, you know, elaborate a little bit. Yeah, elaborate. I mean, I even picked out a perfect coffee table for setting the food out and being able to style it that way too. So I really went overboard this time. I mean, in general, like, they do really well on Instagram. You have, like, the right hashtags and everything. You have the right coloring, the right lighting.

I mean, I've always taken really good photos of just scenic shots in New York, too. But food photography just does so well on Instagram. It's crazy. You post French toast. You post the avocado toast with the poached egg. And then you're, like, cutting into the egg and seeing it all goo eat, that's going to do really well. I mean, I think Amanda touched on a lot of it. Having the geotakes and everything, too, always help.

Like whenever I go out to eat, I already know what I'm going to order at their restaurant before I get there. Because I looked on Instagram, Yelp, Forest Square, anything to see what the best food is. And then I just order it that way too. Yeah, I've definitely ordered food based on what I see other people having taken photos of at a restaurant. Amanda, so, you know, we talked about, you know, we talked avocado toast. That's pretty old hat by now. Your job is to find the next big thing. So as a, you know, not in your sort of professional capacity of looking at food trends, how do you figure out what's going to blow up next?

How do you find the next cauliflower or the next kale or whatever ingredient restaurants need to start serving? Well, I think it's really important to look at not only what is happening in restaurants. So a big part of what we do is we look at menus and we analyze menus. But at the same time, we also see a lot of trends stemming from recipes and even. recipe bloggers. So I think in the beginning, we saw a lot of these food trends really start in the fine dining restaurants of the world and kind of trickle their way down into your fast casuals and your fast food and even retail as well. But now it's not necessarily following that same trajectory. So we kind of look at a 360 perspective, really, of what's going on in food

service, but also retail. And also kind of just seeing what kind of pops on social media. It's definitely a big part of that. How quantitative are the techniques? So I could imagine if you're doing recipes or menus, you could theoretically just download massive word clouds or word databases and theoretically see which ingredients are rising and falling over time. Do people do any stuff like that? Yeah. So basically my day to day is we actually have a database that collects menus from 1,500 restaurants across the U.S. So it's very quantitative. So we're looking at menus. So we're looking at menu mentions of every little thing on the menu from the ingredient to the preparation method to the flavor. So we can really get a good read on what is trending over time.

How do you guys find different food bloggers or Instagramers that you want to work with too? How do you decide? Because there's so many of them out there. Well, that's kind of more falling in line with what I do outside of work. So I kind of play both roles. I'm kind of on both sides of this. So I think that personally I've worked with a lot of major brands that are really doing a good job of targeting who their audiences, who that core audiences that they're trying to reach. So I think one great example of a brand that's doing this really well recently is Taco Bell. So when they're launching new food products, they are really focused heavily on not only what that food is going to look like on Instagram,

but also how they want to get that message across or that introduction across. So I think a couple months ago, they released the naked chicken chalupa taco, and instead of doing or using traditional media, they went the Instagram route. So they specifically targeted millennial food Instagrammers in a few key cities across the country and had these launch events to really create authentic buzz around this product without having to pay for a single ad spend. Okay, I have a question on that because you say authentic buzz around a food product. That stood out to me. too. But like it's so coordinated. Like everything about this is so coordinated and like planned in many ways. You know, Julie just spoke about how she's picked out a coffee table that'll look good.

I've seen some of the setups of her food. Like clearly a lot of effort has gone into this. And I bring up the subject as well because we just had a kind of controversial thing happen with social media, which was of course the fire festival, this music festival that was going to be held in the Bahamas, and that relied on getting a bunch of social media influencers to advertise that thing before it happened. It turned out to be a disaster, and now some of these influencers might be in hot water because they violated some rules on sponsored content. So how exactly does this work, and how authentic can it be, given that ultimately, you know, you're reaching out to specific people, you're targeting specific people, and you might even be paying them or at least giving

them free food. I think we found what sets Tracy off. Sorry. Yeah, I think it definitely works in a variety of ways. So there's definitely that very direct communication where a brand reaches out to an influencer and offers a certain amount of money for a post. But there's also other events like the Taco Bell event where they'll invite influencers and encourage them to post, but they won't require them to post. So really kind of relying on the Instagram or if they like it and want to post about it, then they'll go ahead and do that. And obviously that's the end goal. But it can vary. And I think there's, there can be a lot of issues, as you said, with being transparent about sponsored posts. I think lately as well, there's been a lot of focus on like FTC guidelines regarding this type of thing.

So I think people are kind of treading lightly in this area, knowing that there could be consequences for not fully disclosing posting a sponsored post. Let's take a quick break now for a word from sponsor. Put knowledge to work and grow your business with CIT. From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and treasury management services for small and middle market businesses. Learn more at CIT.com. Put knowledge to work. We're back talking about the role of Instagram and social media in the modern food industry with us as Bloomberg reporter Julie Verhage, as well as Amanda Topper, Associate Director of Food Service Research at Mintel News and a food blogger and Instagrammer in her own right. Amanda, in the beginning of the episode,

we were talking about the cronut, which I think of is sort of one of the first examples of this era of food sort of literally going viral in a way that has become more commonplace. What are some of the most extraordinary things you've seen where some restaurant introduces a new dish or a new product and you just see it copied instantly everywhere around the world? I think one that kind of jumps to mind is the black craft milkshakes or black tap milkshakes in New York. So I think those kind of rose to popularity. And then in Chicago, we saw a bunch of restaurants trying to recreate the same thing. But What's really interesting is there's a similar dish called the Instagram Sunday at a restaurant here in Chicago. And I think that just shows you that restaurants aren't really shying away from the fact that they're specifically creating these menu items for the sole purpose of having diners come in and take a picture of them.

That's not a very subtle name, is it, the Instagram Sunday. How fast did that happen? So after the milkshakes were introduced in New York, how quickly were similar milkshakes popping up in Chicago? I think within a matter of weeks. I think people are very well traveled, especially that millennial generation and even restaurateurs. So I think they go out, they see these trends. And obviously with the power of Instagram, you don't have to be in New York to see

what's going on in the food scene in New York. So I think it's a matter of week sometimes where these trends kind of evolve and emerge in different major cities. Another example of that, though, is that Starbucks just did that unicorn for Rappuccino, which I just looked, and it has 158,000 hashtags on Instagram right now. But there's a coffee shop in Brooklyn that's been making a unicorn latte for, let's see, a few months. It says December of last year it started, and they're actually suing Starbucks for copying their idea. Have you seen something like that happened before where a smaller chain is doing something and some big conglomerate like Starbucks copies it?

I did just see that article as well. No, no other examples really come to mind. And it'll certainly be interesting to see the outcome of that. I think the issue there was that both beverages do not contain coffee, even though one was called a latte. But no, I haven't seen a ton of other examples of that now. Okay. So here's my major question with all of this and with food Instagramming in particular. So you create something like an Instagram Sunday, which is clearly made to be photographed. Why the endless fascination with the same thing over and over and over again? Because there are only so many variations you can have of a picture of an ice cream sundae or a cronut or some avocado smeared on toast.

Why do we keep consuming that? Well, I think a lot of the types of food photos that perform very well on Instagram are foods that are really relatable. If you post some really fancy plate from a five-star restaurant that might not resonate with everyone in your audience, but something like an avocado toast or a milkshake or ice cream sundae is something that people can relate to. And even with the Sunday, for example, they do a great job of innovating constantly from month to month by just shifting that Sunday just a little bit. sometimes it's a matter of incorporating a seasonal element or flavor or incorporating a holiday-themed candy or cupcake on top of it.

So they're kind of making it a little bit different, but still kind of riding the wave of the popularity of that particular dish. But I really think it has to do with food being relatable and especially things like the egg yolk corn. Like that is something that people can relate to. It's something that they could do at home. And it's kind of this interactive experience that people want to look at and people want to share themselves. That reminds me my friend Derek Thompson, he's a writer at the Atlantic, and he recently wrote a book called Hit Makers, which is all about what becomes popular.

And he was talking about it in the context, mostly of sort of music and entertainment, but one of his key ideas is that the most successful things have a high element of familiarity. with them. So they don't push the boundary too much. They innovate. They do something new, but there's a strong element of, I've seen this before. So it's interesting is, you know, it's, I've seen, I have friends who have, you know, post images from extraordinary five-star restaurants, but they clearly don't get the same level of likes as a really over-the-top Sunday or milkshake. And there's probably an element where the, the milkshake feels at the same time new and interesting, but also familiar and something that I could relate to exactly as you say it. Yeah. And I think it's not to say that we are not adventurous eaters. I think that when it comes to trying new flavors, those flavors are

really well executed in familiar format. So like you said, we're interested in trying something new, but not if it's completely out of the realm of something we've had before. So it's got to have that sense of familiarity with it. So this leads into my other pressing question on the matter, which is what's the ultimate end game in Instagramming all your food? You know, everyone talks about turning themselves into a personal brand, but so few of these personal brands are actually able to turn it into a moneymaking thing. And I was actually reading some first person accounts from people who have kind of managed to do that. And they were saying that it's super difficult to monetize their social media presence,

partly because people want them to be relatable. And as soon as they start making money from being a social media celebrity, that seems to go away a little bit. So there seems to be a catch-22. So maybe, Julie, maybe you have some insight into this because you've been Instagramming for a long time now. Like, what's the ultimate goal? I mean, I think I would be more worried about traditional advertising versus advertising

on social media because there's still, as long as you're someone that's posting from these brands, but you still engage with your followers, such as replying to their comments on your post or going to their profile and liking different things on their page, you're always going to have that follower base. And then the brands are still going to want to continue to work with you rather than paying some traditional advertiser, like way more than what they end up paying you. But there is a struggle of like the advertising business keeps changing. There's people that were blogging five years ago and blogging five years ago is way different

than what it is now. There's fewer ads on the actual blogging page that you can make money from. So it is pushing more towards working with brands versus just letting the brands advertise on your profile. Amanda, where do you see all this going? What is the end game here in terms of like, are people going to burn out? Are they going to get tired? Are they eventually, do people worry that they're just, people are going to stop, just turn their phones down when they're at the restaurant and just enjoy the food as sort of a backlash to all this?

I don't know if we'll see that anytime soon. I think we're kind of always looking at what's coming up next. And I think, so I started as a blogger in 2010. And so now I sort of see, as Julie said, that that's kind of shifting away from what it was. It's definitely more short form content now. And I think we're looking at Instagram and deciding, okay, what's going to be next? And I think a lot of that is related to video and shorter videos. So I don't know. I think it's too early to see. say like what's going to be next, but I will definitely say that we're kind of looking at what's going to be that next platform. And I agree that it is really hard to monetize your Instagram page because there is so much competition. But I think the accounts that do perform well are ones that kind of found an interesting hook. They're very open about their personal lives and really try to form unique connections with their followers. And I think there can be a little bit of that catch-22 when these Instagrammers are working with a lot of brands and posting continuous sponsored content. It makes it a little bit hard to trust them. And you wonder if they're

really supporting this brand or if they're just doing it for the compensation. But at the end of the day, if those people don't want to follow that person, they're not going to. And we're not really seeing people drop off a ton. So I think that there is kind of that balance between maintaining a unique identity, but also working with brands to kind of help elevate yourself and push your personal brand forward. I'd say another example of that, though. There's one girl I follow. She's actually used with my former neighbor, but she has 220,000 followers on Instagram, Rachel Mansfield. And something that she does that I think really has helped drive her business is that she hosts different sort of meetups. So one that I went to, it was like a bar class,

plus you got like these amazing goodie bags with a bunch of food from the brands that works with. There was a little Q&A afterwards. And, you know, if I'm going through my profile saying that I follow too many people and I want to get rid of some, she's not going to be one because I've engaged with her. She takes the time to actually know who her followers are, understand what they want to see on her profile. And really, she's done a great job of just turning this into a business. Okay, I have another big question. Sorry. Which is, I mean, the food trend on Instagram, Amanda, would you say that broadly it's been good for the industry? Or are there some people who have lost out because maybe, this is kind of a loaded question, by the way, but like maybe there's

some like tiny kitchen somewhere and they do amazing food, but it's not that photogenic. Like, has this changed the food industry so much that the way something looks is now more important than the way that it tastes? I don't think so. I think, though, that Russia's are realizing the importance of what their restaurant looks like and what the food looks like, and they're taking that into account. I know that Julie was saying, you know, she has this coffee table and this natural light, and I think that restaurants are doing the same thing. They know that when an influencer is coming in, they want to have that table by the window

reserved for them, and they want to have that natural light. But at the same time, I think the restaurants that are doing a good job with social media are ones that are recognizing that they're able to leverage those images that their diners are posting. It's basically, in a way, free marketing for them. And so they can utilize those images and promote them. And it's kind of a win-win situation for the diner and for the restaurant. So I don't know. I don't know if it's going to necessarily go the route of food having to look better than a taste.

But I think both sides of it, the diner side and the restaurant side, are seeing the impact and the potential for the business. All right. Final question here. So I am really into food. I like posting pictures of food, particularly Chinese food, which is my favorite cuisine on Instagram. So give me your top two tips, Amanda, for becoming a Chinese food Instagram influencer.

Well, I would definitely make sure you have a good place set up. to take your images. So if it's either at home, if we're cooking Chinese food or if you're in a restaurant, make sure you get that natural light and a great background. I think that's kind of the majority of the battle is really the lighting situation and the background. And I also think posting maybe dishes from some of those off the beaten path Chinese restaurants that maybe your friends haven't heard about and then they might tend to see you as an authority in kind of these off the beaten path Chinese spots. Well, I will try to do that.

Any excuse to try new restaurants I'm into, so I really like that. Second tip. The first one, I might be too lazy to set up good photos, but I could definitely do the second one. Really appreciate you both coming on. Manda Topper, she's a associate director of food service at Mintel. And she's a social media food maven in her own right and Julie Verheag of Bloomberg News. who is a millennial and post Instagram of food and other things.

Really appreciate you both joining us. No problem. Thank you. So, Tracy, I kind of have a feeling that your anxiety about all this isn't exactly a leaves. Well, I feel like I have a love-hate relationship with all this because I do the same thing, right? Like I have two Instagram accounts now and I do take photos of food. but I just, like, the whole thing strikes me as slightly ridiculous, particularly when I've been in the position that Julie was describing where, you know, I'm arranging my plate on a table,

trying to get the best light. And I've also been sitting in restaurants where I've seen people do nothing but take photos of their food for about an hour. And the topic seems slightly ridiculous, but sometimes I wonder if, you know, when people talk about, the productivity paradox in the economy. Like sometimes I wonder if it's social media. If we're all just like spending more of our time taking photos of our food and that's

kind of where it's all going. I don't know. I've definitely had moments in restaurants while I'll order something and then I'll bite into it. And then as soon as I bite, I'm like, oh, shoot, I should have taken that photograph first. And now the plating of the dish is completely ruined and I should have taken a photograph. And then other times I'll be like, wait, wait, or if it's a family style and everyone's is eating out of the same dish, I'll be, wait, wait, I got to take a photo of this and everyone's

just sitting there waiting for me while I stand over the dish really loomingly trying to get the perfect light and also not have the phone cast a shadow onto the food, which is a recurring problem. That's tough. I just don't think I have the discipline to really take the great photos that you have to take because I just want to sort of take them for posterity more than influence, but maybe that's my problem. I don't want it bad enough. The other thing is like it is, is actually shaping tastes about food and restaurants. So, you know, you say you like Chinese food. I'm sorry to tell you, Joe, but a lot of Chinese food isn't that photogenic.

You should really start liking ice cream and donuts and cookies and cakes because people love those photos. It's also just a fascinating example of the way that the medium shapes what's conveyed over the medium. I mean, that's essentially what we're talking about. But it's a recurring phenomenon, you know, it's, you have, you know, take everything else, take Twitter where once you start to, you know, at first it becomes this place where you sort of dash off short messages, then everyone's doing it. And then suddenly everyone just sort of thinks in short messages and likes to make weak arguments that just fit well in 140 characters, but aren't that sound.

And so essentially the medium starts to redefine the underline the underline. lying thing you're trying to get across. I think you see example after example of that. Oh, absolutely. Yeah, it's a fascinating, it's a fascinating phenomenon and the fact that it literally is driving prices of avocado and vanilla and cauliflower certainly makes it a market story. And you can see it in the broader consumer spending figures, right? So I was actually reading a city group note before we came on the show. And they say that restaurant spending is up, let's see, more than 30% over the past five years and food spending is up about 10%. So this is the classic, you know, people are spending more for experiences than for goods.

But I often wonder if they're spending on experiences because a lot of those experiences allow them to take nice photos. Yeah, I don't think there's any question that that's a big part of it. All right. We should probably stop before I get really worked up. I'm also getting hungry. Yeah, that's true. Let's go get some cronuts, maybe.

I don't know. Unicorn fracchinis. I don't think we have them in the Bloomberg pantry, unfortunately. Anyway, this has been another episode of the Odd Lots podcast. I'm Joe Wisenthal. You can follow me on Twitter at the stalwart. And my Instagram is at the stalwart. I'm the same name.

And I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway. And you can follow me on Instagram at Tracy. allaway. And you can follow our guest Amanda Topper on Twitter at Amanda Topper and Julie Verhag on Twitter at Julie Verhag. Thanks for listening. Put knowledge to work and grow your business with CIT. From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and treasury management services for small and middle market businesses. Learn more at cIT.com. Put knowledge to work.