Customization, Healthful Foods Top 2012 Restaurant Trends

Healthful menu items, local foods and customization will be key sales drivers for restaurant operators in 2012, according to a forecast released last week by Chicago-based market research firm Mintel.

Mintel made predictions on menu and operations trends:

• Since consumers are more interested in where food comes from, restaurants will focus on American regionalism. Among geographic claims on restaurant menus, however, "New York-style" showed up the most last year, followed by "Texas." For the first time, "Philly-style" surpassed "New England" in menu mentions.
• Menu labeling will lead more operators to offer "double-sided menus," offering something for everyone in terms of both nutrition and price. Customization will continue to drive consumer satisfaction, as guests are offered more opportunity to control their selections. The barbell approach to pricing will morph into a more consumer-focused tiered pricing approach, Mintel said.
• With an emphasis on fresh, unprocessed food, restaurants will offer and promote more "handmade-just-for-you" items.
• As restaurant chains grow globally, they will also develop more expertise in international flavors and methods, allowing for the import of ideas. McDonald's Chicken McBites came from Australia, for example, and both McDonald's and KFC are using self-serve kiosks in Europe. KFC is also offering espresso and Lavazza brand coffee in the United Kingdom.
• Steak and Caesar salad remain the top menu offerings, and they are still growing in popularity. Among burgers, cheeseburgers are climbing; sushi is losing ground to salmon; and quick-service operators are enhancing their breakfast sandwich lineups.
• What do customers want? About half of respondents said they'd like to see lower prices, and 29 percent want smaller portions, followed closely by the 28 percent who want more healthful menu options. The descriptors "fresh" and "made from scratch" were also of interest to the majority of restaurant goers, but the term "artisan" does not resonate. Only 28 percent said they were interested in the latter.

QSRs to lead industry sales growth

Sales growth in the foodservice industry will increase 2.8 percent this year to $416.4 billion, with limited-service restaurants leading the charge, Mintel said.

Adjusting for inflation, the increase will be nearer to 1.5 percent.

This year, limited-service restaurants are expected to see sales rise 4.1 percent to $219.1 billion, or a 2.8 percent inflation-adjusted increase.

Full-service restaurant sales are expected to increase 1.5 percent -- or an inflation-adjusted 0.2 percent -- bringing that segment to $197.2 billion, Mintel said.

In 2011, the overall foodservice industry grew 1.4 percent to $404.9 billion, or a decline of 0.2 percent when adjusting for inflation.

Limited-service segment sales rose 3.4 percent last year, or 1.8 percent with inflation. Full-service restaurants saw sales decline last year 0.7 percent, or a decline of 2.2 percent with inflation.

Although the economy remains challenging, the report noted improving unemployment trends, as well as increased disposable personal income levels and a more optimistic consumer sentiment.

And although menu-labeling laws are expected to come into play for restaurants in 2012, many chains have already developed more healthful options that aim to appeal to increasingly health conscious consumers, the report found.

Mintel surveys indicate that 41 percent of restaurant goers said menu labeling would not impact how they dine out, while 33 percent said they will order menu items that are more healthful overall and have fewer calories.

Looking at January, a survey by Mintel found that 65 percent of respondents who visited a restaurant that month said they plan to spend the same amount at restaurants in 2012 as they did last year.

About 12 percent said they plan to spend more, while 23 percent said they plan to spend less.

Still, 63 percent of respondents said it's too expensive for them to dine out regularly.

Of the 12 percent who said they will spend more, 59 percent said they would spend more at casual dining restaurants, followed closely, at 57 percent, by family dining.

(Source: Nation's Restaurant News, 03/13/12)

St. Patrick's On Saturday: A Mixed Blessing

With St. Patrick's Day looming, retailers, restaurants and bartenders all over the country are thinking green, and hoping that the holiday landing on a Saturday this year will boost bucks.

A survey by the National Retail Federation predicts that 54.4% of Americans plan to celebrate the traditionally Irish holiday this year, the highest in the nine years the NRF has been conducting the research. On average, the NRF forecasts that each of these leprechauns will spend $35, for a total of $4.6 billion.

Eight out of ten say they will wear green, 28.2% plan to go to a party at a bar or restaurant, 19.1% plan to go to a private party, 23.8% will decorate their home or office, and 32.3% will make a special dinner to celebrate.

But for restaurants, having the holiday fall on a weekend may be a bit of a bummer. "Weekends are typically busier than weekdays for restaurants, so it's actually better for the restaurant operator when holidays fall on a slower day of the week, like Monday or Tuesday, for a traffic boost," says a spokesperson for the National Restaurant Association.

Others are betting that the weekend timing will extend festivities, and mean bigger spending all around. In Philadelphia, for example, where the Irish are the second-largest ethnic group, "every bar, restaurant, and practically every street corner is packed, even if St. Patrick's Day falls on a Tuesday," says Denise Foley, editor of Irishphiladelpia.com. "Having it fall on a Saturday is going to be like Black Friday after Thanksgiving for local merchants and bar/restaurant owners. It's a day when anyone selling anything Irish is going to make their profit for the year. It's all good."

Some cities are worried that crowd control will be a greater issue than usual. Organizers in Hoboken, N.J. actually cancelled its parade after they were told it would have to take place on a weekday to manage the mayhem. (The city is still delaying bar openings, bringing in extra cops, and adding 50% more portable toilets than in years past.)

(Source: Marketing Daily, 03/08/12)

5 To-Do's When Activating Digital Shopper Marketing Programs

Digital shopper marketing tools are clearly enhancing the consumer shopper experience, both for the marketer as well as the shopper. However, the dizzying array of tools available can make it a bit challenging to discern which ones will provide the most bang for the buck for marketers.

A new survey on digital shopper marketing from Catapult helped provide the following five considerations when activating these programs:

1. Leverage the Proven Winners

To date, only three tools have captured shopper hearts and minds: Self checkout, printed coupons from the Internet, and online circulars, all of which are previously-existing tactics translated digitally. These tools are easy for shoppers to understand and easy to use and should be integrated where possible.

Brand Examples: Kellogg's, P&G and General Mills all have robust programs on Coupons.com and MyWebGrocer. Publix's circular integrates lifestyle images and recipes on the cover rather that just product shots with price.

2. Beware of the Bright and Shiny

Know the facts and understand where fatigue has set in. Tools such as Foursquare, QR codes, and social media are not shopper motivators, while other media darlings such as Shopkick and Checkpoints have very low shopper penetration. Evaluate the facts, and ensure you've selected tactics that deliver against your higher-level objectives.

Brand Examples: QR Codes on Heinz Ketchup bottles in restaurants and Walgreens Foursquare program.

3. Understand the Balance of PR Drivers vs. Those With Utility

The way many digital shopper-marketing tools have been leveraged to date -- such as augmented reality and location-based check-ins -- have provided good public relations opportunities for brands, but lack a real use for the shopper. Be sure you are clear with your objectives, and rethink how you leverage moving forward.

Good PR Drivers: Foursquare
Good Utility: Grocery IQ

4. Early-on vs. add-on

Deliver Integrated digital shopper solutions vs. tactical add-ons, and understand how to re-leverage national/brand assets and activity across the path-to-purchase at retail.

Brand Example: Pets Lovers Love Walmart -- a category program that extends Pedigree's National Pet Adoption program into a retail-specific environment.

5. Leverage the Full Spectrum of Shopper "Need States"

Digital shopper marketing tools do more than just "save me time" and "save me money." The tools "make me feel smarter," "make Shopping Fun," and "support my values," among other benefits. Determine where and how digital can best deliver against these need states, and leverage the tools whose need states align with brand, product and target needs as well as program objectives.

Brand Example: Kellogg's Share Your Breakfast Program -- "Supports My Values"

(Source: Promo Magazine, 01/10/12, by Brian Cohen, Director of Digital Shopper Marketing, Catapult)

Customers Remain Loyal to Independent Restaurants

Independent restaurant operators may face a tough road these days, but they may have one advantage over chain restaurants: many consumers prefer them.

According to a report from market research firm Mintel Group, 43 percent of American consumers who have visited an independent restaurant in the past month said they make a point of seeking them out over chains.

Independents, however, could do a better job of offering promotions and limited-time offers to compete with chains, Mintel said. Meanwhile, chains could borrow a page from indies by offering more unique menu items.

More than half of consumers surveyed -- 52 percent -- said they visit independent restaurants to support their local community/economy, while 51 percent agree that independent restaurants do a good job of supporting their local communities, according to the report. By comparison, 37 percent said the same of chain restaurants.

"People take pride in their communities and will often reward local businesses that make their community a better place," Eric Giandelone, director of Mintel Foodservice, said in a statement. "The primary way indies underperform in relation to chains is through a lack of promotions and limited-time offers -- two things that could be easily addressed with social shopping and social networking sites."

Most consumers, 56 percent, said they were willing to pay more at an independent restaurant, the report found. However, of those who had not been to an independent restaurant in the past month, 22 percent said it was because they deemed indies too expensive.

"While chain restaurants are able to offer up a big helping of value and convenience, they need to focus on areas of opportunity where independents are rated better, such as unique menu items and local flair," Giandelone said.

According to 42 percent of those surveyed, independents are superior to chains when it comes to food quality and the ability to customize orders, Mintel found.

However, 21 percent said chains are better when it comes to convenience, and 20 percent said chains offer faster service.

(Source: Nation's Restaurant News, 09/26/11)