Healthy Hoagies Subbing In

August 6, 2014

getimageCanadians crave quality ingredients, ethnic twists on beloved meal of the masses, study suggests

Vancouver Sun

Copyright © 2014 Vancouver Sun

Almost everyone in Canada – a whopping 94 per cent of us – eats at least one sandwich a week, with 35 per cent eating a sandwich at least every other day.

But according to a new report by Technomic Inc. – a research and consulting firm focused on the food industry – healthy options are more important than ever.

The Canadian Sandwich Consumer Trend Report found today’s shoppers place more importance than ever on the quality of the sandwich, from the bread to the meat, cheese and condiments.

The majority of us say healthy sandwich options are a priority at lunch (57 per cent) and dinner (56 per cent).

And just 44 per cent say they’re satisfied with the “healthfulness of sandwiches away from home.” Which, in a way, is good news for all those café owners out there: there’s room for growth. “Operators need to focus on the quality of their sandwiches to help drive traffic and steal share,” Darren Tristano, executive vice-president of Technomic Inc., said in a release. “Certain concepts can emphasize sandwich quality and improve health perceptions at the same time through better-foryou sandwich claims, such as fresh, artisan or made-from-scratch.” A growing number of shoppers also say they like to try new or unique flavours on sandwiches: 27 per cent, up from 21 per cent in 2012.

 

HERE’S WHAT ELSE THE REPORT FOUND:

Canadians eat, on average, 3.3 sandwiches per week

35 per cent of Canadians eat a sandwich at least every other day

39 per cent of the sandwiches we eat are not made at home, but purchased elsewhere

60 per cent of the sandwiches we buy are takeout meals

48 per cent of us buy grab-andgo sandwiches

44 per cent would like healthier sides with our sandwiches

21 per cent of us – and 32 per cent of 25- to 34-year-olds – would like more ethnic sandwich options at restaurants

 

WHAT WE’RE EATING

Top 5 on the menu

Sandwich/wrap Appearances

Chicken 834

Veggie 406

Steak 204

Mixed protein 181

Pork 179

Source: Technomic MenuMonitor survey of 4,747 menu items in Q2 2014

 

How many of us order a sandwich away from home once a month or more for the following:

Our Top 3 lunch sandwiches

Burger: 23%

Sub/hoagie/hero: 19%

Deli: 10%

Our Top 4 dinner sandwiches

Burger: 32%

Sub/hoagie/hero: 22%

Chicken-breast sandwich: 7%

Deli: 7%

Fastest-growing condiments/sauces

Honey 55%

Tartar sauce 25%

Jam 22.2%

Caesar 20.3%

Tomato sauce 20%

Marinara 16.7%

Sauerkraut 15%

Pico de gallo 12.5%

Horseradish

mayonnaise 12.5%

Mango salsa 11.1%

Source: Technomic MenuMonitor survey of 2,058 menu items from Q2 2013 to Q2 2014


10 INTERNATIONAL CONCEPTS FINDING SUCCESS IN THE U.S.

June 2, 2014

Darren Tristano and Lauren Hallow

Some of the United States’ largest restaurant chains, including McDonald’s, Starbucks and Applebee’s, conduct a significant amount of business overseas. So what are some of the larger international chains that are enjoying success in the U.S.?

Several global chains are capitalizing on U.S. consumers’ appreciation for authenticity by bringing international fare, such as TOUS les JOURS Korean pastries and 100 Montaditos Spanish sandwiches, to the States. However, these concepts aren’t just offering a taste of their native countries—chains like Maoz Vegetarian and Coffee Culture Café & Eatery offer a different spin on concepts (health-focused eateries and coffee cafés, respectively) already popular in the U.S. Below are ten international chains that have successfully entered the U.S. and are looking to expand stateside:

Pie Face

Pie Face interior

Who: Founded in Sydney in 2003, Pie Face is an Australian limited-service chain known for its savory pies marked with cartoonish faces. The fun concept also offers a range of sandwiches, wraps, pastries and coffee. In 2012, Pie Face opened its first location outside of Australia in New York City.

U.S. Development: Shortly after Pie Face opened its first site, Wynn Resorts Ltd. CEO Steve Wynn invested $15 million into expanding the concept in the U.S., leading Pie Face to launch seven additional units in New York City over the next two years. From 2012 to 2013, Pie Face’s U.S. sales jumped 150% to $5.5 million.

Why it’s worth watching: Pie Face has flourished in New York City thanks to its sweet and savory handhelds and 24-hour service. The concept is an ideal spot for on-the-go urban consumers looking for everything from a sweet breakfast to a convenient lunch to a late-night snack.

Nando’sNando's exterior-1

 

Nando’s is a fast-casual chicken chain specializing in Portuguese-style peri peri chicken. Since launching in 1987 in South Africa, Nando’s has expanded to more than 1,000 locations in about two-dozen countries, but it’s especially popular in the U.K. The concept first expanded to the U.S. in 2008 with a unit in Washington, DC.

U.S. Development: Nando’s continued expanding in the Washington, DC, market and now operates 15 units in DC, Virginia and Maryland. From 2012 to 2013, Nando’s opened five locations in the U.S., propelling a nearly 40% increase in U.S. sales to $21.4 million. The chain plans to launch its 16th U.S. location soon in the District’s Tenleytown area.

Why it’s worth watching: Nando’s offers patrons a worldly experience, with Portuguese-style chicken and a mix of Portugal and South African wines served in units decorated with African artwork. The chain also showcases the best qualities of a fast-casual concept—lavish decorations make for an inviting place to dine, while speedy service attracts on-the-go patrons.

Giraffas

Giraffas exterior

Since launching in 1981, Giraffas has become one of the most popular limited-service chains in Brazil with its traditional Brazilian plates along with build-your-own burgers. There, the concept is quick-service, but when it expanded to the U.S. in 2011 with a location in Miami, Giraffas adopted a fast-casual service style and added more American-friendly menu items like pastas and salads.

U.S. Development: Giraffas now operates 10 units in the U.S., all in Florida. From 2012 to 2013, the chain launched five Florida units, helping its U.S. sales to triple to $11.1 million. Giraffas recently sold its U.S. company-owned locations to franchisees to raise funds for additional U.S. expansion. The chain aims to operate 200 U.S. locations by 2020.

Why it’s worth watching: Giraffas successfully mixes authentic Brazilian fare with American-style options. Units offer a different take on the American create-your-own-burger concept with Brazilian picanha steak burgers instead of traditional beef patties.

100 Montaditos

100 Montaditos interior

Inspired by traditional Spanish tapas taverns, 100 Montaditos was founded in Spain in 2000. The chain, whose name translates to “100 Sandwiches,” menus at least 100 varieties of crunchy snack-sized rolls made to order and topped with traditional Spanish ingredients like Serrano ham, chorizo and Manchego cheese. Over the years, 100 Montaditos expanded throughout Spain as well as internationally. In 2011, the chain launched its first U.S. location in Miami.

U.S. Development: Since 2011, 100 Montaditos opened about a dozen more Florida sites as well as launched locations in Iowa, New York and the Washington, DC, market. From 2012 to 2013, the chain more than doubled both its U.S. unit count and sales. 100 Montaditos plans to continue expanding in the U.S., recently announcing plans to launch 28 units in New York City over the next three years, five of them before the end of 2014. 100 Montaditos also has additional Florida and Washington, DC-area locations in the pipeline and is seeking sites in new markets such as Texas.

Why it’s worth watching: With its variety of options, along with an adult beverage menu that includes sangria and Spanish wines, 100 Montaditos offers patrons a chance to experience a traditional Spanish experience in a fun, casual setting. The menu includes something for everyone with sandwiches ranging from traditional Spanish options, like Serrano ham, to American-style choices, like Philly steak, to dessert montaditos, such as hazelnut spread on chocolate bread.

WagamamaWagamama-1

 

Although it hails from the U.K., Wagamama takes its inspiration from traditional Japanese ramen bars. The casual-dining Asian/noodle chain offers made-to-order ramen and modern Asian fare in a hip, casual setting. In 2007, Wagamama crossed the pond and launched its first U.S. unit in Boston’s Faneuil Hall.

U.S. Development: Thanks to the popularity of its first U.S. location, Wagamama opened its second U.S. site later that year in Harvard Square in Cambridge, MA. A third location opened in 2009 in Boston’s Prudential Tower. In fall 2013, Wagamama opened its fourth U.S. site—and most suburban location—in Lynnfield, MA. From 2012 to 2013, sales at Wagamama’s U.S. units increased 17.8% to $7.6 million. The chain plans to continue growing in the U.S., with more locations expected to open in the coming years.

Why it’s worth watching: With its large portions of piping-hot ramen along with open kitchens that allow patrons to view their meals being prepared, Wagamama offers customers a taste of the authentic Japanese ramen experience. The contemporary concept is also popular for Millennial-friendly features like fresh juices and complimentary Wi-Fi service at all units.

Hakkasan

Hakkasan Las Vegas

Another U.K.-based concept, Hakkasan actually comes from the same people who founded Wagamama. The fine-dining chain serves upscale modern Cantonese fare in large, opulently decorated units. Since launching in London in 2001, the concept has expanded to several major international cities; it opened its first U.S. location in Miami in 2009.

U.S. Development: Hakkasan now operates five units in the U.S., including a location in New York City that holds one Michelin star. In 2013, the concept launched two U.S. units—one in Beverly Hills, CA, and a 60,000-square-foot restaurant and nightclub in Las Vegas’ MGM Grand Hotel & Casino. In January of this year, parent Hakkasan Ltd. acquired in a majority stake in San Diego-based Enlightened Hospitality Group, whose portfolio includes acclaimed concepts Searsucker, which offers new American fare, and Herringbone, which specializes in seafood. The company plans to continue expanding Hakkasan and Enlightened’s brands in the U.S.

Why it’s worth watching: Although the other Asian chains featured in this blog are more casual, Hakkasan proves that Americans are also seeking upscale Asian fare. While all U.S. sites feature a full-service bar and lounge, Hakkasan’s latest U.S. location in Las Vegas was the first to incorporate a nightclub, suggesting the chain could delve more into the nightclub business in the future.

Coffee Culture Café & Eatery

Coffee Culture

Coffee Culture Café & Eatery is a Canadian quick-service coffee chain. Although grab-and-go options are available, the concept leans toward a more relaxing coffee experience—units are designed to be cozy and inviting, with plush furniture, exposed brick walls, plasma TVs and free Wi-Fi. In 2009, the chain began expanding into the U.S., establishing a U.S. headquarters in Buffalo, NY, for affiliate Coffee Culture New York Inc. and opening units in Williamsville and Ellicottville, NY.

U.S. Development: Over the years, Coffee Culture has continued expanding in New York and has also opened units in new U.S. markets. The chain now operates 13 U.S. locations in New York, Pennsylvania and Florida. Several sites opened in Erie, PA, thanks to a 2010 franchise agreement with Lake Erie College of Osteopathic Medicine. From 2012 to 2013, sales at Coffee Culture’s U.S. locations increased 28.3% to $5.9 million. At least two more U.S. units are in the pipeline for Amherst, NY, and Miami.

Why it’s worth watching: Coffee Culture differentiates itself from other coffee-café chains by offering patrons a welcoming, unpretentious place to relax, study or work while enjoying an all-day menu of specialty coffee drinks, sandwiches and pastries. Unlike other coffee chains, Coffee Culture serves breakfast fare like bagels and egg sandwiches all day, and also menus a variety of sandwiches, wraps and salads for lunch and dinner.

Maoz Vegetarian

Maoz salad bar

As its name suggests, Maoz Vegetarian specializes in vegetarian fare with a menu that centers on sandwiches, salads and gluten-free falafel. The Amsterdam-based quick-service concept gained popularity for its simple service style—patrons choose a salad or sandwich for a fixed price, then visit the salad bar to add as many toppings as they choose for no additional cost. In 2004, Maoz launched its first U.S. location in Philadelphia.

U.S. Development: Maoz now operates about a dozen units in the U.S. in Texas, Illinois, New York, New Jersey, Pennsylvania and Florida, and the chain is seeking additional U.S. franchise opportunities. In addition to growing its unit count, sales have also been up—from 2012 to 2013, sales at its U.S. units increased nearly 10% to $11.1 million.

Why it’s worth watching: Patrons flock to Maoz for its relaxed service approach that allows customers to add their own toppings to their sandwiches and salads instead of charging by weight, like at other salad bar concepts. Another differentiating factor: Maoz gives out doggy bags to patrons who don’t finish their meal, an amenity typically not offered at salad bars.

TOUS les JOURSTOUS les JOURS-1

 

TOUS les JOURS is a French-Asian bakery café chain. Originating in South Korea, the concept uses high-quality Korean ingredients to make its pastries and breads. The concept’s French and Asian influences are well-represented in its menu, with items that range from French croissants to Korean milk bread to sesame doughnuts. Several years after launching in the late 1990s, TOUS les JOURS began expanding internationally, including to the U.S., where it opened its first stateside location in 2004 in Los Angeles.

U.S. Development: Over the last 10 years, TOUS les JOURS has launched more than two-dozen additional U.S. locations, and now operates nearly 30 sites in California, Texas, Massachusetts, New York, New Jersey, Virginia and Georgia. From 2012 to 2013, the chain opened four units in the U.S. and experienced a 17.9% increase in U.S. sales. TOUS les JOURS plans to open more U.S. locations.

Why it’s worth watching: TOUS les JOURS’ commitment to authenticity and freshness makes it a popular spot for a variety of patrons, from Asian Americans looking for a taste of home to adventure-seeking consumers seeking a different kind of bakery fare.

Max Brenner

Max Brenner

Max Brenner is a concept specializing in all-things chocolate, from hearty desserts to specialty beverages to fondue. The concept’s roots date back to 1996, when it was a small chocolate shop in Israel. In 2001, it was bought by Israel-based Strauss Group, which developed the concept into a full-service chocolate-focused restaurant and bar. The concept expanded internationally, primarily in Australia. In 2006, Max Brenner’s first U.S. location opened in New York City.

U.S. Development: In addition to the original New York unit, Max Brenner now operates four other sites in the U.S. in Boston; Bethesda, MD; Paramus, NJ; and Philadelphia. The chain announced in April that it was moving toward a fast-casual prototype for its U.S. locations in place of the existing full-service format, saying that the fast-casual model better suits U.S. consumers. The Bethesda and Paramus sites— which opened July 2013 and April 2014, respectively—both feature the new fast-casual model. Max Brenner aims to launch about 200 more units in North America.

Why it’s worth watching: In a time when chains are increasingly becoming more health-minded, Max Brenner stands out for encouraging patrons to enjoy one of America’s favorite indulgences: chocolate. With a hip, modern décor and eye-appealing presentations, the novelty concept comes across as more sophisticated than gimmicky, helping patrons feel a little less guilty about enjoying that chocolate pizza or hot chocolate.

CONCLUSION

It would be beneficial for U.S. restaurant operators to pay close attention to these global chains and others that are successfully growing their U.S. businesses. With chains making moves to further cement their U.S. business—from Hakkasan acquiring a stake in a San Diego multiconcept operator to Coffee Culture establishing a U.S. headquarters—it’s likely these chains will be competing with U.S. operators for years to come.


Reaching the Socially Conscious Consumer

March 18, 2014

In the United States, as in the United Kingdom, more and more consumers—especially younger ones—are weighing a company’s efforts in social responsibility when they determine which businesses to patronize. During a presentation at our recent Consumer Trends & Directions conference, Technomic set out to define social responsibility when it comes to the restaurant industry; show how perceptions of social responsibility influence consumers; and look at the impact of social responsibility on business.

Social Responsibility in Restaurants

Social responsibility in restaurants is a complex idea, but has three key aspects:

The environment: This includes recycling programs; packaging (such as disposables made of recycled materials); energy-saving and water-saving practices; and waste disposal and composting. One company doing well in this area is Starbucks. In a growing number of units, the coffee-café chain gives customers the chance to toss paper hot cups into a separate receptacle for recycling or composting.

Community-building: Engagement with the community can involve fundraising; food donation; support of community groups, from providing free meeting space for groups of seniors to sponsoring sports teams; and, particularly in fast-food settings, emphasizing local hiring and offering wages, benefits and advancement opportunities that are better than the industry average. Darden Restaurants, a multiconcept operator whose stable includes The Olive Garden and Red Lobster, among others, brags that its high-profile nonprofit Darden Foundation has awarded more than $71 million in grants to charities since 1995.

Sourcing: Sourcing is simply where the ingredients come from; among other things, socially responsible efforts encompass organic, natural and local items as well as animal welfare (such as free-range poultry and grass-fed beef) and avoidance of hormones and steroids in meat and milk. One chain that has made sourcing key to its brand identity is fast-casual concept Chipotle Mexican Grill, whose “Food With Integrity” promise involves “finding the very best ingredients raised with respect for the animals, the environment and the farmers.” Both suppliers and restaurants must respond to increasing consumer preoccupations with sourcing.

How Social Responsibility Influences Attitudes and Purchases

According to Technomic research, nearly six out of 10 consumers say that when they’re weighing what restaurant to visit, it’s important to them that the establishment be socially responsible.

socialy_responsible_550

Source: Technomic Consumer Brand Metrics 2013

Technomic’s Consumer Brand Metrics program, which tracks how consumers rate 123 leading restaurant chains on a host of experience and reputation attributes, shows that some chains score much higher on social responsibility issues than others. It’s important to consumers that they perceive a restaurant’s values as aligning with their own, so not everyone rates the same chains highest. Nevertheless, there are clear leaders.

When asked to rate chains on the attribute “is socially responsible,” consumers gave ice cream chain Ben & Jerry’s, quick-service chicken concept Chick-fil-A, and coffee giant Starbucks the highest scores. For the attribute “has values that are similar to my own,” Darden’s polished-casual Seasons 52 concept, Ben & Jerry’s, and family-dining chain Cracker Barrel Old Country Stores came out on top. Consumers rated burger QSR McDonald’s, Chick-fil-A, and Ben & Jerry’s highly on the attribute “supports local community activities.” And for “has an excellent reputation,” consumers ranked fast-casual Panera Bread, high-end steakhouse The Capital Grille, and quick-service In-N-Out Burger as the leading chains.

Social responsibility is more important to certain consumers, including ethnic minorities; younger consumers, including Millennials and Generation Z; and, most importantly, heavy restaurant users, who are visiting restaurants more frequently and having a greater impact on total sales. Younger consumers, especially, perceive social responsibility as part of the value equation in a restaurant experience; they see it as worth something because it makes them feel they are spending their money in a way that lets them feel good about themselves.

Base: 1,500 consumers aged 18+ Consumers responded on a 1–6 scale where 1 = not important at all and 6 = extremely important  Source: 2013 Value and Pricing Consumer Trend Report, Technomic

Base: 1,500 consumers aged 18+
Consumers responded on a 1–6 scale where 1 = not important at all and 6 = extremely important
Source: 2013 Value and Pricing Consumer Trend Report, Technomic

Looking at specific efforts, around six out of 10 diners say they’re more likely to visit a restaurant that makes charitable donations of leftover food. Almost as many say they would also be willing to pay more for menu items at restaurants that make food donations. Consumers don’t mind the idea of restaurants promoting their food charity programs. In unaided recall, they were most likely to remember Panera Bread, McDonald’s, Applebee’s, Chili’s, Starbucks and local independent restaurants as donating food.

Waste disposal is another key issue. More than six out of 10 consumers believe that composting of organic waste is so important that it should be mandated by legislation. Recycling programs for non-food waste are also important to many and can be a strong traffic driver; 47% said they’d be more likely to visit a fast-casual restaurant if it offered recycling, and 43% said the same about fast-food restaurants and coffee cafés. Most of those consumers also said they’d be willing to pay more at restaurants that offered such programs, particularly coffee cafés.

Social responsibility initiatives can deepen a brand’s alignment with its customers and thus build sales, as leading restaurant marketers have attested. In a recent letter to shareholders, Panera Bread wrote “[The Live Consciously, Eat Deliciously initiative] is intended to drive a deeper affiliation between Panera and our customers, and we believe such an effort has the potential to deliver a greater, long-term return on investment from advertising than more promotional messaging.” And Starbucks CEO Howard Schultz said, “I think that the rules of engagement for a public company are changing…I believe strongly that there’s a new movement to recognize that we have to serve the communities, that’s about keeping the balance between profitability and social consciousness.”

Case Study: Roti Mediterranean Grill

As part of the Socially Conscious Consumer session at Technomic’s Consumer Trends & Directions conference, Peter Nolan, chief brand officer of Roti Mediterranean Grill, an emerging fast-casual chain based in Chicago, spoke about how Roti makes social responsibility part of its brand positioning.

In the old days, Nolan said, healthy eating and socially responsible practices “didn’t work,” but now consumers—particularly younger generations—want to live in sync with their values. He argued that “real” trumps “wow.” Authenticity, transparency and trust are important, Nolan said. Initiatives must be true to the brand’s identity and the values of its executives and employees; socially responsible practices based on marketing research will come off as false. Roti—whose motto is “Food that loves you back”—chooses initiatives that are relevant to its healthy menu, such as in-restaurant cooking classes for low-income kids. Burger restaurant Meatheads, in contrast, supports high school football.

Nolan suggested that packaging is a great way to start. Roti replaced its disposable plates with compostable plates made from sugarcane fiber. Roti composts food waste and lets customers know it donates food to a food bank.

Today’s consumers associate fresh, organic, local and sustainable foods with quality. Nolan noted that smaller companies may believe their distributor wouldn’t supply these ingredients, but if a number of customers ask, the distributor may find a way to accommodate requests.

Finally, he suggested that companies make it a mission and get the word out. Patrons want to get personally involved in charitable activities. For example, if a restaurant is raising money for literacy, it can promote the initiative as giving customers a chance to teach people to read. Restaurants can promote their initiatives via integration with customer loyalty programs, email messages, social media, and even simple in-store signage.

Key Takeaways

Social responsibility can be multifaceted. Environmentally friendly sourcing, a community presence and other aspects may be important to different consumers when they are deciding which restaurant to visit. Consumers respond to and perceive value in social responsibility. A restaurant that’s seen as socially responsible has the opportunity to increase price thresholds as well as traffic.

Marketing opportunities are expanding. Restaurants should leverage the positive vocabulary of social responsibility, communicate their values and programs to their customers, and pursue long-term consumer engagement with social issues, rather than seeing them as mere promotional opportunities.


On the Horizon: Five Trends for U.K. Restaurants

January 24, 2014

The trends driving restaurant growth and innovation are driven by consumer demands for transparency, quality, flavour, and flexibility.

The U.K. foodservice scene continues evolving in unique and interesting ways. Looking forward to next year, Technomic’s analysts and consultants have identified five key trends that expected to play major roles at British restaurants.

Catering to the Millennial customer

As the influence and collective spending power of the U.K.’s Millennial generation grows, expect to see restaurant operators amplify efforts to target these consumers via foods and brands that appeal more directly to a Millennial demographic.

For instance, consumers aged 18–34 display the strongest interest in ethnic flavours. And a greater proportion of younger than older consumers indicate that it is important to them that cafés offer a variety of side options and seasonal menu items, according to Technomic’s U.K. Café Consumer Trend Report. Further, 31% of consumers aged 18–34 strongly agree that they would order limited-time offerings (LTOs) at cafés, compared to just 22% of all consumers polled.

Also watch for new mobile apps and digital tools that integrate seamlessly into Millennials’ lifestyle. Offering free WiFi in-store and letting customers place orders online are great starting points for connecting with these on-the-go, always-connected guests. Leading operators are also going beyond these steps.

Last spring, Wagamama partnered with Blippar, an image-recognition mobile application, to introduce augmented-reality place mats. Guests who downloaded the free Blippar app could hold their mobile device over (aka “blip”) the special place mats to access promotional information about the Wagamama Lounge, a pop-up concept featured at London-area summer music festivals.

Domino’s last September rolled out the free Pizza Hero app in the U.K., giving customers the chance to play professional pizza maker, rolling out pizza dough virtually, adding tomato sauce and then sprinkling on cheese and assorted toppings. A direct link takes users to the ordering page on Domino’s website.

And Apple’s Passbook lets iPhone users group their coupons, loyalty/rewards cards and more in one quasi mobile wallet—giving them quick access to their most-used or most-important passes. Last fall, casual-dining chain Harvester Salad & Grill became one of the first U.K. restaurant concepts to offer Passbook integration, and gave diners who used the app at Harvester £5 off when they spent £30.

The evolution of pubs

Classic British pubs will push even harder in 2014 to transform and grab market share from conventional restaurants by focusing more attention on creating upscale, premium food and drink (particularly speciality coffee and American craft beer); launching repositioned outlets in nontraditional sites; introducing web-enabled ordering systems that emphasise convenience and speed of service for guests; and promoting low-price-oriented menus and new loyalty programmes designed to spur customer traffic and strengthen the value perception.

Die-hard traditionalists might scoff at the idea of having a coffee and working on a mobile device at the pub, but a customer-centric evolution can help pubs maintain their relevance with a new generation of consumers.

Throughout 2013, we’ve seen examples of how pubs and pubcos are tackling the task of serving consumers who have higher expectations for food/drink, amenities and service at pubs. We expect the focus on this imperative to be that much keener in the year ahead.

For example, Orchid Group—whose approximately 250 pubs are now up for sale—realised that those establishments best positioned for success in Ireland and some U.S. cities after smoking bans took effect there were those that emphasised attractive food offerings. Orchid re-evaluated its menus and added pizza and Thai food, among other items, driving increases in food’s share of the sales mix. The company also took efforts to appeal to women.

Similarly, Marston’s PLC announced at the beginning of the year that it would install free Wi-Fi at about 550 pubs under its managed pub estate, Marston’s Inns & Taverns. The Prince George pub in Brighton, East Sussex, offers an all-vegetarian menu and a vegetarian-friendly wine list. And in August, Wetherspoon announced a new initiative pairing craft brewers from the U.S. with U.K. brewers, as part of an effort to seize upon U.K. consumers’ heightened interest in craft beer. The U.S. brewers produce their beers in the U.K. for sale at Wetherspoon pubs.

Honest chicken

Thanks in part to the recent crop of “better chicken” concepts opening in London, emerging chicken-focused concepts will flourish in 2014, a trend closely tied to growing consumer interest in sourcing, preparation and menu transparency. Pret a Manger, for instance, touts that its chicken is starch-free, phosphate-free and sourced from a higher-welfare supplier in Suffolk. Expect to see chicken increasingly described as “free-range,” “locally sourced” and “hand-battered.” We’ll also see more American influences in the form of barbecue chicken and buttermilk fried chicken, as well as simpler cooking techniques that let the quality of the chicken speak for itself.

KFC in the U.K. touts that its chicken on the bone comes from only British and Irish chickens, and that chicken goes from the refrigerator to a breading of flour and the chain’s 11 signature herbs and spices and then to the fryer within two minutes. Little Chef touts that its Crispy Chicken Platter features 100% chicken breast fillet.

Other takes on fried chicken include Scream’s Southern-Fried-Style Chicken fillets served with barbecue seasoned chips, Jubo’s Chicken Roll with Korean fried chicken fillet, kimchi slaw and gojuchang mayo, and Clutch’s Love Me Tenders, fried chicken tenders in a peanut and chilli crust.

These dishes also illustrate U.K. consumers’ growing appetite for spicy heat, also evidenced incurries that pack a little more punch than chicken tikka masala; the rising popularity of Mexican cuisine; and the cult-like following of London-based Nando’s, the fast-casual concept specialising in flame-grilled piri-piri chicken. Neutral-flavoured, food-cost-friendly chicken offers an ideal protein platform for showcasing the vibrant flavours and colours of chillis from around the globe.

Migration of street food

Fueled by younger consumers’ demand for authentic and unique offerings, chefs are looking to global street foods for menu inspiration for their brick-and-mortar restaurants. Trendy street-inspired dishes starring on menus include Venezuelan arepas, Chinese jian bing and bao, Taiwanese hirata buns and Italian arancini.

KFC U.K. got in the game last year, introducing a limited-time Streetwise Sweet Chili Wrap featuring a chicken mini-fillet, sweet chili sauce, lettuce and cheese wrapped in a tortilla. And London-based fast-casual chain Leon introduced a Thai Green Chicken Curry box, featuring slow-cooked shredded chicken thigh, roasted aubergine and bamboo shoots served on brown rice.

Looking ahead, ethnic beverages like Mexican aguas frescas and horchata will carve out a wider niche on the menu. Also watch for dynamic flavour mashups from different cuisines and the continued growth of food trucks serving ethnic and fusion street foods.

Telling the sourcing story

Transparency is now top-of-mind for operators who want to keep customers confident in their brand. Use of eco-friendly food packaging, such as recycled or reusable cups or stemware, is increasing along with a growing commitment to ethical food sourcing. Next year will bring a surge in brand campaigns communicating quality and traceability. Watch for package logos denoting animal welfare standards, in-restaurant signs documenting supplier sourcing, and marketing initiatives focusing on the use of British and Irish products.

A good example is the Olive Branch Pub in Clipsham. Its website highlights a story about head chef Sean Hope’s recent lobster fishing trip, to source the freshest lobster for dishes such as grilled lobster Thermidor and a fresh lobster claw and tail meat with lobster tortellini. The site also provides a list of the pub’s suppliers and producers—not just the names of the farms but also the actual farmers with whom the Olive Branch works.

For its part, McDonald’s U.K. invited three young British farmers to get a behind-the-scenes look at operations inside McDonald’s stores as the part of its Progressive Young Farmer Training Programme. The mentoring-focused programme, according to McDonald’s, “aims to help young people looking to work within agriculture kick-start careers in the industry by providing them with the blend of farming and business acumen needed to succeed in today’s modern farming sector.”

The programme has the added benefit of providing a fresh, interesting supply-chain story that McDonald’s—which also announced in April that it was switching to serving 100% Freedom Food pork raised on farms that meet strict animal-welfare standards—can share with consumers.

Similarly, fast-casual burrito specialist Chipotle, whose Food With Integrity philosophy/sourcing model has won acclaim in the U.S., notes on its U.K. website that it uses Freedom Food chicken, Farm Assured beef and free-range pork.

Key Takeaway

The trends driving restaurant growth and innovation are all driven by consumer demands for transparency, high-quality and -flavour, and flexibility. Restaurant operators should examine and pay attention to these trends but follow the lead of their own customers and those they are trying to attract.


Eating Ethnic: Traffic Drivers & Attitudes

June 26, 2013

For ethnic fare, U.K. consumers seek restaurants and menus that offer both an authentic taste and authentic ambiance.

It’s no surprise that consumer interest in and demand for ethnic foods at restaurants and other foodservice locations is on the rise. One quarter of all U.K. consumers (26%), and two-fifths of consumers aged 25–34 (40%), polled for Technomic’s 2012 U.K. Flavour Consumer Trend Report are more interested in trying ethnic cuisines and flavours than they were a year ago. Further, consumers call for more ethnic fare at restaurants. Fully 22% of consumers agree and another 30% agree somewhat that they would like to see more ethnic options at restaurants. This data signals greater opportunities for operators to differentiate their menus through globally influenced offerings and gain an increased share of consumers’ foodservice spending.

This piece will examine what is important to those seeking ethnic items as well as their willingness to try new cuisines.

Authenticity Is Key

A majority of U.K. consumers—71%—cite authentic taste as one of the most important factors in their decisions regarding ethnic foods. And it seems to be more important to older than younger consumers. Three-quarters of consumers aged 55+ (74%), compared to 60% of consumers aged 18–24, choose a restaurant for ethnic foods based on the authentic taste of the food.

Two-fifths of consumers feel it is very important that ethnic food be prepared by someone from that country or region. Again, older guests feel more strongly: 50% of consumers aged 55 or older place high importance on the food being prepared by someone from the country or region, compared to only 32% of consumers aged 18–24. Ethnic restaurants are limited in their ability to hire and retain staff from other countries, so operators of restaurants that base their appeal on authenticity of the fare may want to consider establishing apprenticeships allowing their chefs to train other cooks in order to maintain the authenticity of menu offerings.

Servers who are from the same country or region as the restaurant’s cuisine may also drive ethnic purchases at restaurants. Patrons may consider these servers to be more knowledgeable about the menu. Nearly half of consumers choose an ethnic restaurant based upon the staff’s knowledge about the menu. These consumers may be seeking menu suggestions or thorough answers to their questions about an unfamiliar ethnic ingredients or preparations.

Ambiance also plays a key role in creating an authentic experience. Almost three out of 10 consumers decide which restaurant or foodservice establishment to visit for ethnic foods based at least in part upon the authenticity of its ambiance or décor.

Interestingly, while more men (45%) than women (36%) feel that it is important that their ethnic food be prepared by someone from that country or region, more women than men place high importance on authentic ambiance (30% of women vs. 25% of men).

Some consumers also choose an ethnic restaurant based on general restaurant amenities. Three out of 10 consumers choose a restaurant to visit for ethnic fare based on the availability of takeaway, and 28% place importance on customisation at ethnic restaurants.

Base: 1,000 consumers aged 18+Source: The U.K. Ethnic Food & Beverage Consumer Trend Report, Technomic Inc. 2012

Base: 1,000 consumers aged 18+
Source: The U.K. Ethnic Food & Beverage Consumer Trend Report, Technomic Inc. 2012

Menu Attributes Can Drive Purchases

Consumers may not be familiar with some ethnic dishes available at restaurants, and in fact, many consumers choose ethnic foods to discover new flavours. Various menu features could aid consumers in choosing an enjoyable meal.

More than half of consumers (53%) feel it is important that the menu include descriptions of ethnic dishes. As we have seen, consumers place high importance on authenticity when choosing an ethnic restaurant, suggesting that these restaurants may use traditional ethnic names for menu items that may be unfamiliar to many consumers. So it’s no surprise that 37% of consumers prefer that menus at restaurants that offer ethnic items present their fare both in English and in the language corresponding to the cuisine.

Similarly, consumers place a high importance on a menu that includes ingredient listings and photos of ethnic dishes. More than a third of consumers feel it is important that a menu provides a list of ingredients in ethnic dishes, and a quarter would like to see photos of ethnic dishes.

More women than men report that descriptions and lists of ingredient for ethnic dishes are among their top five factors in deciding where to eat ethnic foods. This could be related to the fact that more women than men say they eat ethnic foods to discover new flavours and to try something new, suggesting that these women may be less familiar with the ethnic foods they are considering.

Consumers want to explore and discover new flavours through ethnic foods. However, some may not have much knowledge about ethnic dishes, particularly less familiar options. Operators may find that highlighting their popular dishes, ingredients or flavours can help consumers choose an appropriate dish. Additionally, operators can train their staff not only to be knowledgeable about the menu in order to answer patrons’ questions, but also to ask customers if they have questions. Without enough knowledge to make informed choices, consumers may skip over items they would enjoy.

Base: 1,000 consumers aged 18+ Source: The U.K. Ethnic Food & Beverage Consumer Trend Report, Technomic Inc. 2012

Base: 1,000 consumers aged 18+
Source: The U.K. Ethnic Food & Beverage Consumer Trend Report, Technomic Inc. 2012

Importance of Ethnic Beverages

Offering ethnic beverages native to the particular cuisine served at a restaurant can add to consumers’ perception of authenticity. Forty percent of all consumers polled agree that restaurants should provide ethnic beverages that are associated with the cuisine offered.

While about equal proportions of men (40%) and women (41%) agree that restaurants that offer ethnic foods should also offer ethnic beverages, differences emerge by age. Consumers aged 18–44 are more likely than those 45+ say that restaurants should offer ethnic beverages along with ethnic foods. Further, consumers aged 25–34 are the most likely to agree with this proposition, with half saying that restaurants that offer ethnic foods should also offer ethnic beverages native to the particular cuisine.

Base: 1,000 consumers aged 18+ Consumers responded using a 1–6 scale where 1 = disagree completely and 6 = agree completely Percentages may not equal cumulative percentage due to rounding Source: The U.K. Ethnic Food & Beverage Consumer Trend Report, Technomic Inc. 2012

Base: 1,000 consumers aged 18+
Consumers responded using a 1–6 scale where 1 = disagree completely and 6 = agree completely
Percentages may not equal cumulative percentage due to rounding
Source: The U.K. Ethnic Food & Beverage Consumer Trend Report, Technomic Inc. 2012

To Try or Not To Try?

Consumers’ attitudes toward trying ethnic foods largely fall somewhere between adventurous and conservative.

Technomic asked consumers about their attitudes toward trying mainstream and unique ethnic foods and flavours. Generally, consumers are neither particularly adventurous nor especially conservative about ethnic foods. More than two-fifths of consumers say they try both mainstream and unique ethnic foods from time to time.

On one end of the spectrum, 5% of consumers report that they prefer traditional foods and rarely try ethnic fare. These consumers are likely less adventurous eaters in general. Beyond these highly conservative eaters, more than a quarter of consumers (28%) enjoy ethnic foods and flavours but tend to try only those that are mainstream, such as Chinese, Indian and Thai.

On the other hand, some consumers are more enthusiastic about trying new ethnic foods and flavours. Seven percent of consumers say they actively seek out mainstream ethnic foods, and another 4% actively seek out unique ethnic foods.

Base: 1,000 consumers aged 18+ Source: The U.K. Ethnic Food & Beverage Consumer Trend Report, Technomic Inc. 2012

Base: 1,000 consumers aged 18+
Source: The U.K. Ethnic Food & Beverage Consumer Trend Report, Technomic Inc. 2012

Key Takeaway

Consumers want to try new ethnic flavours and appreciate authenticity in the global cuisines and influences that they grew up eating. Restaurants and other foodservice operators can help build traffic and loyalty by offering authentic dishes and experiences while educating consumers about the cuisines’ flavours, ingredients and preparations.


Loyalty Programmes Drive U.S. Restaurant Visits

May 16, 2013

Smart restaurant operators have always endeavored to take care of their most frequent visitors. That may have taken the form of a server simply knowing her customers’ names and whether they took cream in their coffee. Some restaurant managers kept a Rolodex or card catalog of customers, with notes about favourite tables, anniversaries, kids’ names and other key data points. These are still valid tactics, but they require staff and managers with a keen sense of hospitality and a long memory.

Punch cards put the loyalty programme into customers’ hands. Customers carry a card that gets signed, hole-punched or stickered each time they make a purchase. The customers need to keep coming to get that 10th sandwich for free.

Restaurant loyalty programmes evolved with the digital age, and swipe cards or keychain fobs replaced many punch cards. Today these programmes collect valuable data on consumers’ purchases and behaviours, what they like and when they visit. Online and smartphone-based programmes are even more convenient for consumers and enable more data collection on the part of operators.

Consumer Insights on Loyalty Programmes
Current restaurant loyalty programme participation rates in the United States suggest that opportunities are going untapped, and there are lessons to be gleaned for U.K. operators as well.

Technomic’s recent “Market Intelligence Report: Loyalty Marketing” found that while only about one-third of consumers (36%) say they participate in a restaurant-based loyalty programme, 72% say that if the restaurant they visit most often offered a programme, they would sign up. This indicates that there is opportunity for more restaurants to offer loyalty programmes. It is possible that some of these favourite restaurants do have loyalty programmes already; here, the opportunity exists in building awareness about the programme and its benefits.

The prevalence of restaurant loyalty programmes and consumers’ willingness to participate begs the question of why someone would be reluctant to join. Consumers say they are concerned about privacy, and they demand to know how their personal contact information will be used.

  • Fully 70% of consumers say they would be more inclined to sign up for a rewards programme if they could be guaranteed that the restaurant would not pass along their information.
  • Two-thirds of consumers want to know how restaurants intend to use the personal information provided.
  • Forty-six percent say they are concerned about receiving spam or junk mail after signing up with loyalty programmes.
  • And 39% are concerned that restaurants might share their personal information with others.

Technomic asked consumers specifically which personal information they would be willing to provide to join a loyalty programme. While 60% would share an email address, only 43% would provide a home address and only 30% would provide their phone number.

At the same time they explain what their loyalty programme’s rewards are, restaurants should let customers know what they will do with their information. Such transparency can help build trust, which is a good step toward building an emotional connection.

loyalty_chart_1_450

Base: 1,000 consumers age 18+
Consumers indicated their opinion on a scale of 1-6, where 6=agree completely and 1=disagree completely
Source: Technomic 2012 Market Intelligence Report: Loyalty Marketing

Operators will also want to consider who their customers are—or who they are trying to attract as customers. Our research has found that the more income consumers make, the more likely they are to participate in restaurant loyalty programmes. This may be because higher-income groups want to be recognised for the money they are spending.

However, don’t neglect “aspirational” diners, those who go out to eat at restaurants that are just out of their reach for most occasions but are used for special occasions. These consumers may not be your key demographic, but they add up, and you would miss them if they didn’t come at all. Programme tiers could offer different rewards to different customer groups. Aspirational members may be attracted to a reward that simply makes them feel included, such as an offer to try a new menu item and give their opinion. It would tell them that even though you don’t see them every week, you value them and their input.

Developing Programmes That Lead to Loyalty
Technomic recommends three steps to moving toward emotional connections.

  • Set up a loyalty programme, offering enough of an incentive for customers to provide personal information.
  • Use the data gleaned from those users to provide compelling and relevant rewards.
  • Speak to what is important to them to build real loyalty.

Initial communications should focus on free or discounted food or beverages or other giveaways. As the following exhibit shows, the relationship will probably begin as a materialistic one, dependent on regular coupons and discounts and immediate benefits for signing up. Being invited to sign up by the restaurant’s staff or being welcomed by one’s favourite restaurant are incentives that begin to build the relationship between the consumer and a favourite brand.

loyalty_chart_2_450

Base: 358 consumers age 18+ who participate in restaurant loyalty programmes
Source: Technomic 2012 Market Intelligence Report: Loyalty Marketing

Customers don’t want to have to work hard—or at all, really—for their perks. Even when they are willing to sign up for a loyalty programme, they want restaurants to make it as painless as possible. Seven in 10 consumers (71%) would be more likely to sign up for a programme if perks were “effortless,” 59% don’t want to have to print coupons, and 39% don’t want to have to carry a physical card in order to receive loyalty-club benefits.

loyalty_chart_3_450

Base: 1,000 consumers age 18+
Consumers indicated their opinion on a scale of 1-6, where 6=agree completely and 1=disagree completely
Source: Technomic 2012 Market Intelligence Report: Loyalty Marketing

Compared to other consumers, loyalty club members are more likely to be active social media users. While 53% of all consumers “like” restaurant brands on Facebook at least occasionally, 62% of those who participate in restaurant loyalty programmes do the same. Similarly, 19% of all respondents read and/or write restaurant reviews on sites like Yelp, but 29% of loyalty-club members do so. This speaks to the importance of two-way communication with frequent diners.

To successfully communicate with frequent diners, operators must also speak the correct language and use the correct medium. Fully 78% of consumers who have smartphones and participate in restaurant loyalty programmes use their phones to access information or discounts from the programme. It’s no surprise that younger people use their smartphones more often than older consumers. It’s interesting, though, that a majority of consumers 45 and older also use their smartphones to access their loyalty programme. Savvy loyalty-programme operators will use this information and input from their own members to determine the best means of communication.

loyalty_chart_4_450

Base: 230 consumers age 18+ who have smartphones and belong to restaurant loyalty programmes
Source: Technomic 2012 Market Intelligence Report: Loyalty Marketing

Loyalty Membership Drives Restaurant Visits
The good news for restaurants with rewards programmes is that a majority of consumers who participate in loyalty programmes are likely to decide which restaurant to visit based on whether they are a member of that restaurant’s programme. And, just as higher-income consumers are more likely to join such a programme, they are also more likely to base their decision on where to eat on their membership.

Being in a loyalty programme does appear to put the restaurant in consumers’ consideration set, which helps get them in the door. It’s a good first step toward building those emotional connections.

loyalty_chart_5_450

Base: 358 consumers age 18+ who participate in restaurant loyalty programmes
Source: Technomic 2012 Market Intelligence Report: Loyalty Marketing

Darren Tristano is Senior Managing Director of Technomic Inc., a Chicago-based foodservice consultancy and research firm. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations. For more information, visit http://www.technomic.com.

Examples of Successful U.S. Restaurant Loyalty Programmes

Incorporating Social Media
Dunkin’ Donuts held a competition to award the title of President of Dunkin’ Nation. Members earned points for checking in via FourSquare and Facebook, and then selected the winner from among the top visitors.

dunkin_275

Offering ‘Important’ Rewards
Understanding customers creates the ability to offer rewards that customers find important. For example, la Madeleine’s Card for the Cure speaks to the core values of the chain’s regular clientele, who are mostly women. The loyalty card costs $35 up front, and gives the customer 10% off all purchases for a year. Additionally, 1% of sales goes to Susan G. Komen for the Cure. The card can be renewed annually for $25.

lm_275

Making Consumers Part of the ‘In Crowd’
Some successful programmes appeal to consumers’ psychological need to be part of the “inner circle.” The Greene Turtle Mug Club enables the chain’s customers to purchase their own mug at their local Greene Turtle restaurant. The mug is assigned a number and stays on display in the unit until the member comes in and orders a beverage. The company boasts that there is an average of 1,000 members per unit.

greene_turtle_275


February 14, 2013

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Foodservice Interchange 2013

March 4, 2013
Allstream Centre, Toronto

Meet One of Our Speakers

Darren Tristano, Executive Vice President, Technomic, Inc. will share key insights into the evolution of foodservice trends. Learn about trends migrating from the US and Internationally into Canada as well as some home grown Canadian influences making an impact elsewhere.  You won’t want to miss learning about the newest trends for 2013 and what these could mean for your business:

  1. Snacking, small plates and sharing blur traditional dayparts. Changing dining habits are impacting all dayparts. Consumers want their meals and snacks when and where it’s convenient. Expect chefs to get more creative by paring down traditional entrées into creative small plates, looking to street trucks for snacking inspiration, and incorporating more ethnic flavours and ingredients into sharing dishes.
  2. Taking chicken to new heights. The better-burger trend has spread like wildfire across Canada. Building off the burger trend, chefs will turn to the humble chicken as the next workaday food primed for a gourmet update. Look for increasing use of high-quality birds raised locally, naturally and humanely.
  3. Veggies find more prominence on the plate. Expect to see not just more locally sourced, in-season fresh veggies siding up to proteins, but more vegetarian entrées as well.
  4. Asian breaks out. From the burgeoning ramen scene in Toronto to Japanese tapas restaurants in Vancouver, expect to see interest in the multitude of food cultures that Asia has to offer. This includes not just up-and-coming Southeast Asian dishes from Vietnam, Singapore and Malaysia, but regional Chinese and Japanese fusion as well.
  5. Specialty approach to beverages. Artisan preparation and ethnic flavours are not just hot food trends—chefs are exercising their creativity beyond the plate with beverage innovation too. Restaurants are now crafting everything from craveable small-batch sodas to exotic refreshers like South American aguas frescas. Consumers are also seeking more authenticity at restaurants, particularly when it comes to ethnic dining. We’ll see more and more food-and-beverage pairings that complete an ethnic dining experience.

Date: March 4, 2013
Registration and Networking Breakfast: 7:45 a.m. – 8:30 a.m.
Conference: 8:30 a.m. – 1:30 p.m.
register_now
For complete details: contact FCPC – Heather Spencer, heathers@fcpc.ca or 416-510-9050


Trendspotting: Five Trends for 2013

December 10, 2012

stk310224rknConsumer demands for customisation, new flavour, better-for-you food, flexibility and speed will drive industry trends in the coming year.

The foodservice scene in the U.K. continues evolving in appealing ways, with some trends mirroring developments also seen in other parts of the world, while others are distinctly British. Looking forward, Technomic has identified five key trends expected to play major roles in the coming year, each based on consumer demand.

Customisation Encourages Experimentation

For customers, the lure of customisation is control. Restaurant-goers increasingly want more command over nearly everything on the menu, from ingredients and portion size to flavour combinations and healthfulness. They also want value and convenience, both of which are satisfied through a flexible menu. Operators who incorporate a service model of customisation into their concepts will propel themselves ahead of their competitors by creating unique, customer-created food and drink.

Think made-to-order meals à la Chipotle Mexican Grill. Five Guys Burgers and Fries is entering the U.K. from the States, seeing a market for its small menu of burgers that can be customised with dozens of toppings, as well as different rolls and proteins. Home-grown player handmade burger Co. taps the same opportunity, promising “our burgers are made to order, so if you would like to change any of the ingredients in your burger, please let out team know, and they’ll be happy to do that for you.” That’s after guests peruse the 40-some burgers already on the menu.

These operators recognise also that it’s safer for customers to experiment with a new flavour or ingredient if it comes along with something that they are already familiar with. It’s easier to add a chimichurri sauce to a burger, for example, than to select a foreign dish with a name that’s hard to pronounce.

Expect to see more operators branching out with creative approaches to build-your-own dishes, offering mix-and-match combo meals, and even making customisation a cornerstone of their concept.

Ingredients from Two Extremes

The U.K.’s current crop of leading independent chefs is striving to understand and cater to consumers’ disparate desires for both super local foods and authentic global foods on the same menu. Concepts that can satisfy both cravings in innovative ways will be the most successful.

Technomic’s recent U.K. Ethnic Food & Beverage Consumer Trend Report found that eight out of 10 U.K. consumers purchase ethnic foods and flavours away from home at least once a month, and half of consumers who live in London do so once a week or more often. Additionally, three in 10 U.K. consumers say they are eating ethnic food more than they were a year ago.

Younger consumers are even more likely to enjoy global food and flavours. At the same time, we generally find that younger people are also more likely to say they care about issues like sustainability and local purchasing.

Some restaurants are already using local ingredients in global preparations, such as Bohemia Bar & Restaurant, whose Roast Fillet of Local Line-Caught Pollack gets Asian influence from sweet-and-sour purée and hoisin sauce; and The Mistley Thorn, which offers Griddled Local Wild Bass “à la Niçoise.”

Watch for local British ingredients highlighted in street foods such as Middle Eastern falafel and Mexican tacos. Not only will such items excite diners’ palates, but they are also an opportunity for chefs to pioneer new flavour combinations and dishes without spending a bundle.

Stealth Health

Although healthy eating is an established trend, the stealth-health movement—in which chefs replace salt, fat and sugar with healthy, bold flavours without promoting it to consumers—is gaining ground.

On one hand, because consumers now expect healthy options in all restaurant types and segments, chefs need to comply by offering such without sacrificing flavour. Creating healthy yet satisfying meals is chefs’ new battle. On the other hand, there are still many consumers who say they want to eat healthful foods, and even say they do eat them, but when it comes time to order their meal at a restaurant, they don’t consider calories, nutrients or how much the ingredients were processed. In fact, those same consumers may perceive “better for you” items to have less flavour.

Some menu developers have decided that it’s to the benefit of all diners—if not their responsibility—to offer plenty of dishes that are made with healthier ingredients and preparation methods. Thus, even those consumers who neglect their health when eating out will eat healthier.

Next year will bring a surge in stealth-health ingredients, including superfoods like beans, dark-green vegetables, salmon, soya, walnuts, yoghurt, tea and blueberries, as well as standard dishes with a healthier spin.

Keep in mind that many concepts are unabashedly proud of promoting the quality and healthfulness of their food; witness Apostrophe and its Superfood Salad with sprouting broccoli, sweet potato, broad beans, kidney beans, beetroot, red onion, baby spinach, roasted pumpkin seeds, soya and balsamic vinegar. Apostrophe is one of the restaurants that have listened to their consumers in order to provide what they want. Regardless of menu trends, that is a smart tactic.

Snacking Matures

Consumers no longer have three meals a day, seven days a week. They skip meals, nosh throughout the day, and have breakfast food for a late-night snack. Eating patterns are inconsistent by the day and even within each day. And they want foodservice outlets to be prepared to accommodate.

Restaurant operators are expanding their snacking menus to boost traffic between dayparts, particularly from younger consumers. Retailers that have long dominated the snack market are now competing with restaurants to hold share of consumers’ snack pounds. As the snacking daypart grows up, so will the types of snacks on offer. Between-meal bites are maturing into gourmet offerings with the addition of high-quality ingredients and innovative flavour combinations.

More restaurants will be adding full snacking menus while others will look to discounting snacks during off-peak hours. Trends to watch include around-the-clock snacking, ethnic snacks and bite-sized offerings. Some new offerings that have already debuted in the U.K.: Cheddar Cheese Bites from Burger King, Cheese & Onion Bites from McDonald’s, and Jalapeño Bites from Southern Fried Chicken.

Swift-Service Concepts Cater to Hurried Diners

Convenience is top-of-mind for today’s consumer. Fast-paced diners want quick, portable and inexpensive meals that don’t sacrifice quality. Expect to see an upsurge in food trucks, quick-service and fast-casual restaurants increasing takeaway options and meal deals for on-the-go consumers.

Also expect to see a rise in express-version spin-off concepts from established sit-down restaurants. Some examples that we’re seeing already include Little Chef Express from Little Chef; Café Rouge Express from Café Rouge; Ed’s Shakes ‘N’ Hotdogs from Ed’s Easy Diner; and Giraffe’s Burgers & Cocktails by Giraffe, a replacement for its Giraffe’s Guerilla Burgers brand.

Key Takeaway

The trends driving restaurant growth and innovation are all driven by consumer demands for customisation, new flavour, better-for-you food, flexibility and speed. It’s worth noting that it’s a rare restaurant that would follow all of these trends. Trying to be all things to all people is generally a losing proposition in today’s environment. Savvy restaurant operators will examine and heed the trends, but follow the lead of their own customers and those they are trying to attract.


International Imports: Overseas Chains Look to U.S. for Growth

September 7, 2012

Note: This post originally appeared as a Technomic white paper. Download .pdf file.

In Japan’s busy city centers, the line for McDonald’s queues out the door. The Sphinx sees KFC as it looks across the desert. Restaurant chains are a prime export for the United States, as companies see an escape from the crowded domestic market.

But at the same time U.S.-based chains look to global markets for growth, many chains from outside our borders are finding ample opportunity to expand their concepts and compete in our homeland.

U.S. operators ignore these international imports at their peril. In their effort to stay ahead of the competition, operators must identify and monitor their competition—both domestic chains and global concepts—examining performance data, menu and marketing updates, and expansion plans.

Growing List of Imports
Over the years, as Technomic has been building its intelligence on international markets—now including Canada, the U.K., Brazil, France, Germany, Italy, Spain, Australia and Mexico—and the restaurant brands that lead those markets, it continues to uncover concepts that are looking at the United States for expansion opportunities. Chains such as Tim Hortons, Le Pain Quotidian and, more recently, Red Mango have led the way for a growing list of contenders eyeing the U.S.

What they see when they examine the U.S. market is a consumer who spends almost half their food budget at restaurants, and one who is eager to try new ethnic flavors. U.S. consumers are also ethnically diverse themselves, and many are well-traveled and already familiar with global foodservice brands.

Overseas operators also see large cities and small, some of which may look a lot like the markets in which they successfully operate at home. The real-estate experts in this group will spot the many good locations left by domestic operators and other businesses that couldn’t make it through the economic downturn and slow recovery.

Challenges and Opportunities
There are certainly challenges to overcome to opening in a new country, especially one as saturated as the United States. Beyond the usual complexities of offering a compelling point of differentiation at what consumers feel is the correct price point and keeping up with their busy and demanding lives, an overseas operator is at a disadvantage simply by being located outside the country. A new country’s supply chain methods, legal and governmental regulations, and human resource issues have to be understood and addressed. This means the operator must find partners, franchisors or trusted employees to handle Stateside business and operations.

But there are also opportunities for concepts that feed consumer needs, stay ahead of food and dining trends and manage unit economics. Those with a strong brand and niche, well-defined menu and value proposition have a chance of capturing the attention—and eating-out dollars—of American consumers.

Concepts to Watch
Following are profiles of 10 concepts in varying stages of expansion within the United States. We didn’t select them based on size or seniority. They are merely a diverse group of concepts from around the world that offer something different that gives them the potential to thrive in America. Some have achieved success through the authentic cuisine of their homeland, but others are making leaps with models that they believe are primed for success with U.S. consumers.
What they have in common is attention to consumer trends, such as better-for-you cuisine, a convenient and flexible format, or focus on authentic or innovative flavors.

AFRICA
Nando’s Peri-Peri, formed in Johannesburg, South Africa, in 1987, is a quick-casual chain specializing in peri-peri chicken, a Portuguese-style preparation of poultry basted with a spicy, vinegary sauce that gets its heat from the African Bird’s Eye chile. Portuguese beers and wines provide an authentic accompaniment. Units, averaging 3,800 square feet, operate primarily in high-visibility sites that often have multiple levels. Nando’s restaurants are uniquely constructed and designed, often reflecting the country in which they operate. Interior design elements typically include natural materials such as marble and antique oak, bold African artwork and large potted plants. Nando’s has entered numerous international markets and made its U.S. debut in Washington, DC, in 2008.

Why it’s worth watching: Nando’s pleases flavor-seekers and has strong global brand awareness, operating in three dozen countries on five continents.

ASIA
Gyu-Kaku, founded in 1995 in Tokyo, is a chain of contemporary casual-dining restaurants offering Japanese-style barbecue. It specializes in yakiniku (Japanese for “grilled meat”), in which guests cook their own marinated bite-sized meats, seafood and vegetables over individual smokeless braziers. Averaging 3,500–4,000 square feet, units are located in urban and suburban areas with heavy foot traffic such as shopping malls and lifestyle centers. Interiors are modern and characterized by Japanese-influenced artwork, dark woods, exposed brick and sheer fabrics. Large dark tables provide communal and private seating. Six years after its Tokyo debut, the chain entered the U.S. market with the 2001 opening of a West Los Angeles location.

Why it’s worth watching: Japanese barbecue is underrepresented in the U.S., and Gyu-Kaku gives it a distinct spin with its cook-it-yourself platform and social element.

Little Sheep Mongolian Hot Pot, established in Baotou, Inner Mongolia, China, in 1999, is a casual-dining restaurant chain with an interactive, cook-it-yourself Mongolian-food focus. Customers dip meat, seafood and vegetarian dishes into hot broth at their table to cook them. Signature items range from lamb shoulder, to shrimp meatballs, to mussels and clams. Units occupy at least 4,000 square feet and feature lustrous and contemporary décor with Mongolian murals, calligraphy and bamboo. After launching in Baotou, the chain expanded further into China as well as Taiwan, Japan and Canada. The first U.S. Little Sheep restaurant opened in 2006 in Union City, CA.

Why it’s worth watching: Yum! Brands Inc. owns a portion of the chain and is looking to acquire a majority stake in the company via a $573 million takeover bid.

AUSTRALIA
Guzman Y Gomez, launched in Australia in 2006, is a fast-casual Mexican taqueria that prides itself on being one of the first concepts to bring authentic Mexican food and Latin culture to Australia. The chain celebrates all things Latin: the region’s music, art, personality and especially the food. It specializes in burritos, mini burritos, tacos and bowls prepared with a choice of meat or vegetables and various toppings. It operates both small walk-up operations in food courts and lifestyle centers and larger units, which have TVs, foosball tables and billiards, and a bold décor heavily incorporating the brand’s yellow-and-black color scheme. Units also typically feature exposed brick, framed black-and-white photos and potted cactus plants. Since its founding, Guzman Y Gomez has expanded across eastern Australia.

Why it’s worth watching: Guzman Y Gomez has carved out a niche in Australia as one of the only chains offering authentic, made-to-order Mexican fare, and aims to compete against fast-casual Mexican leaders.

Pie Face, started in 2003 by an American living in Sydney, is a quick-service bakery-café chain known for its freshly baked sweet and savory pies marked with smiley-face designs on the crust. Popular varieties include chunky steak and Thai chicken curry. Stores are counter-service operations that occupy as little as 160 square feet. Whenever possible, they stay open 24 hours a day. Rows of pies and other pastries are showcased in glass cases, and red and black menu boards list the brand’s offerings. After getting under way in Sydney, the chain opened stores throughout Australia and began franchising in 2009. In early 2012, the chain made its U.S. debut, opening a unit in New York City—the first of many planned for the Big Apple.

Why it’s worth watching: Pie Face is bringing Aussie-style handheld, savory meat pies to American consumers, who may be open to this portable and inexpensive meal option.

EUROPE
PAUL, which traces its roots all the way back to 1889 in Croix, France, is a chain of fast-casual French-style bakery-cafés. The concept is designed to evoke a traditional French bakery, where patrons grab a quick bite to go or sit and relax with friends. Units, typically inline shops located along the high street, feature rustic French décor with the look and feel of a village bakery. Design elements include signature black storefronts, exposed interior brickwork and sculptured woodwork. In its present-day form, PAUL opened in 1963 in France. It eventually expanded into a number of countries before it opened its first U.S. unit in Washington, D.C., in May 2011.

Why it’s worth watching: The bakery-café segment continues to perform well, and PAUL differentiates itself with French-inspired décor and traditional French baguettes.

Pret A Manger, founded in London in 1986, is a grab-and-go sandwich concept emphasizing convenience and speed. Pret A Manger, French for “ready to eat,” specializes in prepackaged sandwiches, soups, salads, sushi and breakfast pastries. Food is made daily in-house with natural ingredients and then stocked in stainless-steel, temperature-controlled cases. Any food that is not sold by the end of the day is donated to local charities. Restaurants seat 20–30 customers, measure about 1,500 square feet and feature a bright, modern décor. Units reflect and preserve their European roots with staff members from Europe and from each unit’s host country. Pret A Manger expanded abroad with the 2000 opening of a unit in the Wall Street area of New York City.

Why it’s worth watching: The chain is in the midst of developing what it calls “Pret Local,” an interpretation of the original concept that offers more of a fast-casual positioning in a suburban setting.

YO! Sushi, which debuted in London in 1997, is a conveyor-belt sushi concept (known as “kaiten” in Japan) that aims to make Japanese food accessible and affordable. Freshly made sashimi, sushi maki rolls and nigiri circulate on a moving conveyor belt, and customers grab their dishes right off the belt. They may also order off the menu. Food is served on color-coded plates, each of which corresponds to a different price point; a staff member counts the plates to tally the bill. Store locations range from urban business districts to high-end department stores and airports. YO! Sushi made its U.S. debut in mid-2012 in Washington, D.C.’s Union Station and is planning 30 additional U.S. locations.

Why it’s worth watching: YO! Sushi’s interactive platform, combined with its exhibition sushi preparation, make for a unique and fun dining experience.

NORTH AMERICA
Freshii, founded in Toronto in 2005, is a healthy fast-casual concept that offers salads, wraps, bowls and burritos in signature as well as build-your-own varieties. The concept also stands out with eco-friendly initiatives in packaging and paperless marketing. Averaging 150–1,500 square feet, units are in high-traffic urban areas and feature contemporary décor, shelves lined with packaged snacks, and grab-and-go cases stocked with bottled beverages. Rapid expansion began in 2009 with a master franchise deal for the Chicago market. Eventually the chain expanded across Canada and the U.S. before entering Europe and the Middle East. Long-term expansion plans call for 1,000 units by 2015.

Why it’s worth watching: Freshii fills a dual niche within the rapidly growing fast-casual segment: an eco-conscious chain specializing in healthy, fresh fare.

SOUTH AMERICA
Giraffas, established in Brazil in 1981, is a limited-service chain specializing in Brazilian favorites. The family-owned chain’s signature item is a create-your-own burger with a choice of filet mignon, chicken, ground beef or meat substitute, and a selection of sauce and toppings. The concept goes beyond burger-joint fare to offer traditional Brazilian steak and meat entrées at moderate price points. Units vary in size from 750–3,000 square feet and in location from kiosk to freestanding restaurant. Interiors are contemporary and evoke the feeling of an African safari with tufted rugs and giraffe murals. In mid-2011, Giraffas opened its first international unit, a U.S. store in North Miami.

Why it’s worth watching: Giraffas, already well-established with some 350 stores in its native Brazil, has firmly set its sights on U.S. expansion, calling for additional locations to open over the coming months.

Conclusion
Like many industries, restaurant operators have become global in nature. Just as American chains have found fertile ground around the world in which to grow, internationally based chains are looking at the United States as a market to expand their brand and further develop a platform for growth. U.S. operators should view these new entries not as “flash in the pan” concepts but as true contenders challenging them for traffic and dollars.

Technomic currently tracks major chain operators and menu trends in 10 countries including the U.S., Canada, Mexico, U.K., France, Germany, Spain, Italy, Brazil and Australia. Market intelligence for these countries is available through our industry leading online Digital Resource Library and MenuMonitor.


What’s Behind the Flavour Dichotomy?

June 22, 2012

U.K. consumers say they want back-to-basics flavours on one hand, new and adventurous tastes on the other.

Still impacted by the lingering economic recession, today’s U.K. consumers are hesitant about spending, causing restaurant-goers to be more demanding than ever as they actively seek the best overall value. Technomic research shows that flavour is more important than ever before, driving customer traffic, shaping the overall dining experience and helping operators differentiate themselves.

Consumers indicate that they are increasingly driven to try unique flavours. Nearly three out of 10 consumers overall, and two-fifths of consumers aged 18–34, say they are more likely to try new flavours than they were a year ago, according to the latest Flavour Consumer Trend Report. Additionally, 39% of consumers express a preference for restaurants that offer unique or original flavours, up from only 35% of those polled in 2010. On the other hand, our research also highlights the impressive staying power of tried-and-true flavour profiles.

Together these findings signal the need for operators and suppliers to stay on top of flavour trends to reinvigorate classic offerings with innovative twists.

In Search of Flavour

Consumers seek out value, convenience and an overall satisfactory experience when choosing to dine out, but the taste and flavour of the food is arguably the most important factor of all. Differentiated flavour profiles fuel cravings, rouse consumer interest in the menu and most importantly, can help drive repeat restaurant visits.

When asked to describe their attitude towards trying new flavours, two-thirds of consumers (66%) indicate that they like to try new flavours from time to time—the same percentage of consumers in 2010. These consumers likely have a desire to try different flavours occasionally, but also enjoy ordering foods with familiar flavour profiles.

One-quarter of consumers (24%) say they actively seek out new flavours on a regular basis. Comparison data shows that consumers are slightly more likely to often seek out new flavours today than one year ago, perhaps due to a wider availability of ethnic or unique foods.

Base: 1,000 (2010 and 2011) consumers aged 18+
Source: Technomic Inc. Flavour Consumer Trend Report

While men and women are just as likely to actively seek out new flavours on a regular basis, data suggests that females may be more willing to try new flavours. More females (69%) than males (62%) report that they like trying new flavours from time to time. In contrast, twice as many males (14%) as females (7%) report that they prefer sticking to their favourite flavours and rarely try new ones.

Because the majority of consumers enjoy trying new flavours occasionally but do not actively seek them out, operators will want to consider low-risk menu strategies that allow for flavour innovation without ostracising those who are looking for classic flavours. For example, putting an innovative twist on an established favourite is a great way for operators to experiment with new and unique flavours without putting themselves at risk. And operators can explore new flavour profiles with limited-time-only and seasonal offerings. This strategy allows them to easily add and subtract items without making changes to the core menu.

Ethnic Flavours Can Fill the Bill

Although consumers most strongly prefer what is familiar to them, they are increasingly interested in expanding their palates. A quarter of consumers (26%) are more interested in trying ethnic flavours and cuisines now than they were one year ago. This is up slightly from 2010, when just 24% of consumers agreed.

Consumers aged 25–34 are the most likely to indicate a greater interest in ethnic flavours and cuisines compared to a year ago. Further, this group of consumers represent the largest increased interest in ethnic options (33% in 2010 versus 40% in 2011). Consumers aged 45+ also show a slightly greater interest in ethnic options today than in 2010.

Base: 1,000 (2010 and 2011) consumers aged 18+
Consumers indicated their opinion on a scale of 1–6 where 6 = extremely important and 1 = not important at all
Source: Technomic Inc. Flavour Consumer Trend Report

Unique Flavours as a Traffic Driver

Two out of five consumers report that new or innovative flavours influence their decision of which restaurant to visit. This sentiment is especially pronounced among consumers aged 25–34. About half of consumers in this age group say they would be more likely to visit a restaurant that offers new or innovative flavours.

Flavour innovation is slightly more important for operators today than in 2010, when just 35% of consumers agreed that they were more likely to visit restaurants that offer new or innovative flavours. Consumers aged 25–34 are especially more likely to visit a restaurant offering innovative flavours today than a year ago, with a 15% jump over the past year. Operators looking to appeal to this demographic may want to examine their menu to make sure they offer new and unique flavours.

Base: 1,000 (2010 and 2011) consumers aged 18+
Consumers indicated their opinion on a scale of 1–6 where 6 = agree completely and 1 = disagree completely
Source: Technomic Inc. Flavour Consumer Trend Report

The study also found that three out of 10 consumers say they are willing to pay more for a restaurant meal featuring new or unique flavours. Furthermore, this percentage has increased since 2010, when just 28% of consumers agreed that they would be willing to pay more for these restaurant offerings.

For some operators, this signals room to experiment with new and unique flavours. While adding unique flavours to the menu could lead to increased costs, in terms of skill, labour or rare ingredients, these costs may be offset if the flavour is well accepted and the menu item can be offered at a premium price point.

Back to Basic British

Despite consumers’ love for new flavours, national pride has driven up the demand for classic British food and drink, from artisan English food preparations to U.K. wines, beer and cider.

Aside from the revelry of the Jubilee and Olympics, another factor is fuelling this craving for the nostalgic: the global economic downturn. As belts tighten, there’s a return to the simple things, such as foods that evoke home cooking and a comfortable feeling. The comfort-food trend features strong British influences that are reflected in ingredients from meats to produce.

This love of all things British has many restaurant chefs returning to a “back to basics” approach to cooking. This retro sensibility includes a focus on local foods, subtle flavours and natural, artisan preparations that bring out familiar tastes.

Watch for continued exploration of foods and flavours derived from local farms and regional purveyors. Linked to freshness (and thus better flavour) in the minds of consumers, local and seasonal ingredients on the menu can convey a strong message of quality for classic foods. Flavour combinations will be simple, veering away from innovative or unique spice blends, seasonings and sauces to emphasise the traditional and subtle instead.

Look for chefs to also increase their promotion of traditional bread-making, butter-churning, cheese-making, butchery, charcuterie and other hands-on, artisanal preparation techniques. According to Foodwatching.com, some chefs may even own farms or elsewhere grow their own produce, in order to tout the quality and robust flavour of the ingredients that they use to create British favourites like fish and chips and pies.

On the other hand, a literal interpretation of the classics isn’t the flavour route that some chefs are taking; instead, they’re reinventing traditional British foods. For example, Chef Gary Rhodes showcases his love for British cuisine at his namesake restaurants. Rhodes has devoted his career to reinvigorating public interest in British foods by putting new upscale twists on traditional dishes.

Rhodes Twenty Four restaurant in London puts a spin on the conventional, and offers steamed mutton and onion suet pudding with crushed swede; pressed duck foie gras and pheasant terrine with quince and thyme jelly; and free-range English duck with caramelised turnips, buttered curly kale and duck prune gravy. Desserts include warm treacle tart with orange-curd ice cream and warm date pudding with toffee sauce and sticky-toffee ice cream.

Key Takeaway

Emphasising traditional flavours on the menu is a solid trend, but so is consumers’ continuous curiosity to try new foods. To delight those consumers, operators should work to develop flavours that stand out and mark menu differentiation. The bottom line is that inventive flavours—in combination with preparation styles—can create a craving for a particular food item, which in turn draws customers who cannot duplicate the flavour profile in their own kitchen or find in any other restaurant.


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