A&W Canada digs into the Hawthorne Effect to Gamify Food Service

December 12, 2013

aw.kiosk_Thanks to a new gamified app, food isn’t the only thing that’s fast at A&W restaurants in Canada.

In as little as three seconds, burger and root beer lovers can now rate their dining experience using Loop, a mobile app designed to improve customer service at 50 A&W Canada locations across the country.

“Businesses want to be in tune with guest satisfaction and guest experience. This allows A&W Canada to connect with their customers on their terms and capture their insights, all in real time,” says Tony Busa, marketing director at Benbria, the Kanata, Ont. firm that built the app.

Customers can use Loop on iPad kiosks placed in each restaurant (shown above) or download it on their smartphones. The app poses three quick questions to each customer: “Was your meal delicious? Were we fast and friendly? Were the facilities clean?” The ratings are posted in real time on an electronic scoreboard for employees to see. That gamified element is aimed at motivating staff to provide better customer service. (Busa says that in future, A&W may add a competitive element by posting real time rankings of the top performing Canadian locations based on Loop ratings.)

Incorporating mobility, gamification and real time location-based data may seem like a surprisingly high-tech approach for a chain that built its first Canadian restaurant in Winnipeg back in 1956. In fact, 20-year food industry veteran Darren Tristano says Loop is the first app of its kind he’s seen in the restaurant sector.

“We’ve not run across this before,” says Tristano, executive vice-president at Technomic Inc., a Chicago research and consulting firm covering the global restaurant trade. The firm publishes the monthly Canadian Foodservice Digest and also organized the recent Canadian Restaurants 2013 Trends and Directions Conference in Toronto. While some chains display Twitter feeds in their restaurants, run social media contests and respond to reviews on sites like Yelp, “often times it’s too late for the customer to be acknowledged by management,” he says.

“More of this real time, publicly displayed information is very positive,” Tristano says of the Loop approach. “It demonstrates the willingness of the brand to recognize and acknowledge feedback and be able to grade their stores and how they’re doing in terms of how the customer feels.”

Busa says the app is based on principles of the Hawthorne effect, which suggests that people change their behavior when they know they’re being watched. In this case, A&W employees have an incentive to improve or maintain customer service levels because they know their performance is being tracked in real time, he explains.

Customers may also become more engaged with the A&W Canada brand because they know their opinions are being monitored—and potentially acted on—immediately, Busa adds.

“Typically, in many industries, [a comment card] goes to corporate headquarters where they analyze it, and maybe six months down the road something happens from it,” Busa says.

He notes that Loop user participation is highest in A&W locations where scoreboard ratings are displayed for customers as well as staff, suggesting the Hawthorne effect impacts customer behaviour, too.

Loop users also have the option of adding their own specific feedback comments, which are then sent directly to the manager of that A&W store via text or email. Since it all unfolds in real time, managers can potentially address a customer’s feedback before they’ve even left the restaurant.

Does Loop get results? A&W Canada didn’t provide any data to correlate the Loop program with higher sales figures. But at locations where the Loop system is in place, more than 15 per cent of customers are using it. By comparison, the industry-wide participation rate for traditional paper surveys and comment cards is just one per cent.

When it comes to Loop’s “heat map” feature, which gives the store manager at-a-glance metrics about customer feedback from a specific shift (or day or week), there’s at least some anecdotal evidence that the app is effective. Spotting particularly high or low ratings can help managers pin down the reasons and react accordingly. At one A&W restaurant, consistently low ratings on Wednesdays helped managers realize they were understaffed on that day of the week.

“It’s actually boosting staff morale because the majority of [feedback] is positive,” Busa says.

Loop will be rolled out to all 770 A&W Canada locations by early next year. (The Canadian company is a completely separate corporate entity from the U.S. A&W chain.) Other Loop clients include the Intercontinental Hotel’s San Francisco location and BeaverTails Brand Inc., a chain of pastry kiosks founded in Ottawa and now based in Montreal.


Vegetables Grow on U.S. Restaurant Menus

December 9, 2013

American consumers have been telling restaurants for decades that they want to see more healthful options on menus, but historically they have rarely purchased better-for-you dishes. That long-term trend has been shifting slowly, and consumers are beginning to place greater importance on their eating habits.

Part of the change has to do with the way consumers define “healthy.” While there are any number of ways to describe healthful options, many consumers have shifted their definition from “low fat” and “low calorie” to “fresh” and “locally grown.” Vegetables have benefited from this evolution, as both consumers and menu developers alike have discovered creative uses beyond salads and side dishes—though those have certainly grown more creative as well.

This piece will examine the consumer trends driving vegetables’ growth on menus before quantifying the increases in menu incidence and providing current examples. U.K. operators and their suppliers can use the findings and restaurant examples as they develop their own new products.

What’s Driving Demand

As mentioned above, consumers are placing greater pressure on restaurants to offer flavorful, healthy fare. A majority of consumers, 65%, now agree that “restaurants can offer healthy food in a way that will still taste good,” according to Technomic’s recent “Category Close-Up: Vegetables” report. In fact, many restaurant-goers say they are more likely to visit an eatery that offers some healthy options, even if they don’t end up ordering a healthy choice. Almost two-fifths (38%) of consumers said as much, a figure that is up from 33% two years prior.

veggie_1More than nine out of 10 consumers agree that menu items containing a full serving of vegetables are more healthy. Interestingly, nearly half (48%) of consumers think that having a full serving of vegetables makes a dish more tasty, compared to only 8% that think vegetables make a dish less tasty.

The rise in vegetarianism and, more so, flexitarianism has also played a role. Technomic found that two-thirds of consumers agree at least somewhat that vegetarian meals can be just as satisfying as meat-based meals. When we asked consumers what percentage of the meals they eat, both at home and away from home, include some type of meat, poultry or seafood and what percentage do not, we found that 18%, or nearly one out of five meals, do not contain meat.

And even consumers who are not necessarily interested in healthy or meatless meals are likely to be interested in foods described as local, natural and organic. In a 2012 Technomic survey, 56% of consumers said they consume “local” foods at least once a week (a figure that is up from 47% who said the same two years prior). Fifty-five percent said they eat “natural” foods weekly (up from 44%), and 35% said the same of “organic” foods (up from 28%).

veggie_2More Vegetables on Menus

These consumer demands have restaurant operators across the board adding vegetables to the menu in salads, sides, main dishes and appetizers. “Category Close-Up: Vegetables” used Technomic’s MenuMonitor online trend-tracking tool to analyze the menus of 683 of the top restaurant chains, emerging concepts and independent operators over five years.

As the “Total Menu Incidence of All Vegetables” chart illustrates, incidence of all vegetables (including produce such as tomatoes and peppers, which are technically fruit but used by culinarians as vegetables) has increased by 13% since 2009. Year-over-year, the increase was 2.3%.

veggie_3veggie_4

What follows is a look at different categories of vegetables and some insights from the report.

Root Vegetables: This category includes some of the most widely consumed vegetables—white potatoes, carrots and sweet potatoes—as well as the less-common beet. Within this group, sweet potatoes and beets have shown the most notable increases (each up more than 75% over the five-year period). Both of these vegetables have sweet flavor characteristics, a fact that operators can exploit by offering diners options that are at once sweet and healthy. For example, casual-dining chain Claim Jumper pairs sweet with spicy in its Jamaican Jerk Chicken Sweet Potato.

Leafy Vegetables/Lettuces: While many of the vegetables in this category are used as a salad base, the most innovative restaurant operators have taken iceberg, cabbage, arugula, kale, spinach and Brussels sprouts past the salad realm and into center-of-the-plate options. The darling of the category is kale. While the total incidence of kale remains relatively low, it grew by almost 400% over the past five years. Operators have found a variety of uses for kale, ranging from salads to “chips” to a replacement for the more traditional sautéed spinach. For example, Rosa Mexicano Restaurants’ Salmon Con Salsa de Frutas is served with a Kale-Pancetta Ragu.

Botanical Fruits, Culinary Vegetables: This category includes a number of ingredients commonly recognized as vegetables, although their botanical definition classifies them as fruits, such as avocado, bell pepper, eggplant, tomato, tomatillo and zucchini. Over the past five years, almost all of these vegetables have shown positive trends on menus (with the exception of eggplant). Many of these are commonly found in ethnic (primarily Latin-inspired) dishes. To wit, avocados and tomatillos have posted the largest five-year growth rates of the vegetables in this category.

Other Vegetables: This category contains mainstream vegetables that do not fit neatly into the other categories, such as onions, asparagus and broccoli. Broccoli fared well on restaurant menus over the past five years, with gains of nearly 30% in incidence. Broccoli’s strong performance can partially be attributed to the interest in healthier kids’ meals, as 14% of all broccoli mentions are kid-centric. While kids’ menus deserve some focus, operators are also expanding the ways adults get their daily serving of vegetables. For instance, quick-service chain Golden Krust Caribbean Bakery’s Vegetable Patty packs broccoli with carrots and cabbage into a whole-wheat pastry (combining the whole-wheat, portable and ethnic trends into a single menu item).

Key Takeaway

While many consumers will still consider restaurant visits a treat and a reason to indulge, many restaurant operators are building traffic by creating options that incorporate healthful elements in an innovative, appealing and even indulgent manner. In addition to imparting a “healthy” element, fresh vegetables allow operators to add vibrant flavors and colors, which both reinforces the freshness of the dish and makes it appear even more appealing.

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.


Custom-Made Burgers Reach McDonald’s

December 4, 2013

McDonald’s, a company that pioneered uniform, assembly-line hamburgers, is now experimenting with a somewhat antithetical concept: Custom-made burgers. The chain is currently testing them in Laguna Niguel, Calif., where diners make selections on an iPad; the burgers cost more than Big Macs, are grilled-to-order, and come with a choice of more than 20 toppings and sauces. The beef patty isn’t cooked until you order, so the sandwich requires extra time to prepare. It’s a head-scratching departure from the burger-factory model that has allowed the chain to serve food quickly, inexpensively, and profitably. “It goes against what they stand for: speed, convenience, price, and value,” says Darren Tristano, an executive vice president at food industry consultancy Technomic.

On the other hand, McDonald’s isn’t exactly killing it lately. Same-store sales have slowed in the U.S. (They were up only 0.7 percent last quarter and slowed to 0.2 percent in October.) That’s not all: The chain has been plagued by complaints of slow service and inaccurate order responses. In response, McDonald’s has tried to pare its sprawling menu and will redesign its drive-thrus next year to shorten waiting times.

A widespread introduction of custom-made burgers wouldn’t help these issues. What it might do, though, is help the chain stay relevant as consumers—twentysomethings in particular—express interest in customization, Tristano says.

McDonald’s spokeswoman Lisa McComb said in an e-mail that it’s too early to comment on the custom-made burgers, although the test will offer valuable consumer insights. “With these tests, we will have an opportunity to hear directly from our customers in real-time on what they expect from McDonald’s in terms of the overall restaurant experience and their ability to further customize their menu choices,” she said. Even if McDonald’s doesn’t go down the Chipotle road, letting customers say what they want on their burgers—”Hey, everyone really likes burgers with guacamole!”—could shape menus in the future.

While the option to customize could help McDonald’s look less like a mechanized food factory, Tristano says most customers would probably continue ordering from the regular menu. “It’s more of a promotion, and marketing, and trying to change its brand image,” he says. Even as McDonald’s expands its premium offerings, its bigger promise to customers is still speed and price.


Two Become One

December 3, 2013

two-become-onelaSeveral quick-service concepts have cobranded with other companies in hopes of leveraging the other brand’s assets, like marketing and menu. But Fatburger is doing something a little different in cobranded locations with its full-service sister brand Buffalo’s Café: It’s adapting much of the latter’s concept, including, in one case, its table-service format.

The 150-unit Fatburger opened three cobranded units with Buffalo’s Café, including one with table service, a full bar, and a patio, and two with a quick-service Buffalo’s Express format.

Andy Wiederhorn, CEO of Beverly Hills, California–based Fog Cutter Capital Group, which owns Fatburger and Buffalo’s Café, says the two brands are a natural fit, especially because they are under the same parent company.

“We have one back-of-the-house kitchen and one cash register system, with two different menuboards and two signs,” Wiederhorn says.

While the full-service unit with Buffalo’s Café offers a casual-dining menu including burgers, steaks, and seafood, the Fatburger with Buffalo’s Express has a limited menu of chicken wings, chicken tenders, and 13 different sauces to go along with the burger brand’s offerings.

Merging the two brands helped spike sales, Wiederhorn says, noting that business at the Buffalo’s Café and Fatburger cobranded units is up 30 percent. “Fatburger had chicken wings on the menu but didn’t have branded wings,” he says. “We’re chicken experts on the Buffalo’s side, so it’s added credibility. Look at how successful KFC and Pizza Hut have been.”

Like with those two Yum! Brands, Wiederhorn says, Buffalo’s Café’s and Fatburger’s menu options go well together.

“You can’t add sushi to a hamburger place. It becomes a great way to differentiate yourself from a competitor,” he says, adding that the quick-service burger landscape is so competitive that Fatburger needed something to set itself apart.

Keeping everything simple and clear in the cobranded units also boosts credibility, he says. The Buffalo’s Express menu, for example, doesn’t deviate from chicken wings, chicken tenders, and boneless wings.

While cobranding skeptics say that merging two concepts can dilute each individual brand’s credibility, Wiederhorn says, adapting two brands like Buffalo’s Café and Fatburger to each other helps draw new customers and can help spike revenue at each brand.

Al Ries, co-author of The 22 Immutable Laws of Branding, says cobranding can be an effective strategy to launch a sister brand.

“To the consumer who likes and admires the Fatburger chain, cobranding will help Buffalo’s Café,” he says. Since many consumers are reluctant to dine at the new eatery on the block, Ries says, “a cobranding arrangement is probably more helpful for a new chain just getting started than it is for established chains.”

Darren Tristano, executive vice president at Chicago-based market research firm Technomic, says pairing Fatburger with a chicken wings concept is a recipe for success.

“Since the wings are complementary and not competitive from a meal perspective, this represents a strong opportunity to increase check average and provide consumers craving wings an opportunity to find them while others are looking for a good burger,” he says.

Moreover, Tristano says, Buffalo’s Express could capitalize on the success of other wing quick serves, like Wingstop and Wing Zone. “The model to open smaller units, either company-owned or franchised, provides a greater opportunity to keep costs low while focusing on a high demand product,” he says.

He adds that some consumers might want to design a meal using the menus of both chains. “They’ll add wings to a burger order,” Tristano says.

Ries says the menu at both cobranding participants must overlap and not clash to make the arrangement successful. When McDonald’s owned Chipotle, he says, a potential cobranding deal would have flopped since McDonald’s reputation for indulgent burgers might hurt Chipotle’s emphasis on locally sourced, healthy dining.

Cobranding has additional traps, Ries says. For example, if a consumer rejects the food at one brand, it might tarnish the perception of the other. Tristano adds that cobranded units can be tricky to operate smoothly.

“Adding new logistics to the ordering and service models can create slowdowns in process and get in the way of customer satisfaction for those who only want a burger,” he says.

Fatburger has bounced back from declaring bankruptcy in 2009. It’s nearly quadrupled its number of outlets since bankruptcy and has done well overseas, particularly in China, Taiwan, and Singapore. Wiederhorn say more growth is on the horizon. He expects 50 new Fatburger, Buffalo’s Café, and Buffalo’s Express units to open in 2014. About a dozen will be located in Europe, and the rest in the U.S.


Starters Are Moving Beyond the First Course

December 3, 2013

While U.S. consumers most often order starters for consumption prior to a meal, a good portion of them are ordered as main dishes, sides or snacks.

It comes back to giving the customer what he wants, when he wants it. The customization trend has led to the demand for multiple portion sizes, breakfast served all day, and, increasingly, the ability to order appetizers as main dish, side or snack. Technomic’s Starters, Small Plates & Sides Consumer Trend Report examined the dynamics of starter purchases. While the data comes from a survey of U.S. consumers, the opportunities for increasing starter sales are applicable to U.K. operators as well.

Starting Point

Appetizers or starters still are ordered far more frequently to be consumed before a meal than as an entrée, side or snack. On average, consumers say three out of five of all the appetizers they purchase (59%) are ordered as starters before a meal. But 17% of these appetizers are ordered as an entrée or main dish, and more than a tenth are ordered as a side (13%) or as a snack (12%).

Men are more likely than women to order appetizers as starters, while women opt for more nontraditional appetizer orders. For example, more women than men order appetizers as an entrée or main meal, likely because the smaller portion sizes appeal to women who tend to have smaller appetites or who want to control the portion size of their meal. Additionally, more women than men say they order appetizers as a snack.

When you order appetizers, what percent of the time is the appetizer ordered as…?
(by gender, means shown)

Base: 1,500 consumers aged 18+ Source: 2013 The Starters, Small Plates & Sides Consumer Trend Report

Base: 1,500 consumers aged 18+
Source: 2013 The Starters, Small Plates & Sides Consumer Trend Report

Although the majority of appetizers are ordered as starters before a meal, operators should note that about two-fifths of appetizers are ordered as entrées, sides or snacks. Considerable opportunities likely exist to spur add-on sales and boost check averages through appetizers that are positioned as snacks for consumers looking for a light bite during off-peak meal times.

Appetizers tend to be shared among the dining party rather than eaten alone, highlighting the importance of appetizers that can be easily split among a group. Three-fifths of the appetizers (62%) ordered are shared among the dining party. This is especially true among female diners, as women report that a greater proportion of their appetizers are shared with others. This data points to the importance of shareable appetizers that can be easily split among a group of diners.

However, a significant proportion of appetizers is not shared. Two-fifths of the appetizers consumers order (39%) is eaten by just the consumer and not shared with others. Men report that a greater proportion of the appetizers they order is not shared with anyone else. While shareable items are certainly important on restaurant menus, individual items, such as single servings of soups, salads or other dishes, are also key.

Since starters are usually ordered to share, operators will want to make sure they offer a variety of shareable appetizers. Operators could also consider offering multi-item or platter-style appetizers, and give customers the opportunity to pick and choose among different foods in order to make the starter appealing to the entire dining party. On the other hand, many appetizers are not shared; therefore, room still exists to include nonshareable items on the appetizer menu.

Opportunities to Increase Sales

A strong value equation can help encourage consumers to order starters at restaurants. Nearly half of consumers polled (47%) report that happy hours (i.e., a short timeframe in the early evening, during which discounted prices or specials for appetizers would be featured) could spur their starter orders. Roughly two-fifths of consumers say better value for appetizers (43%) and entrée and appetizer deals (38%) could encourage them to purchase appetizers more frequently at restaurants.

The data indicates that craveability and menu variety are also factors that can motivate appetizer purchases. Two-fifths of consumers report that a better variety of options (42%) and new or unique appetizer offerings (40%) can encourage them to purchase appetizers more frequently. Further, signature appetizer offerings, seasonal dishes and craveable items can all help encourage them to purchase appetizers more often at restaurants. Operators can also consider pairing happy-hour appetizer deals with adult beverages selected to complement the offerings.

Which of the following would encourage you to order appetizers more frequently at restaurants?
Please select all that apply. (by gender)

Base: 1,500 consumers aged 18+ Source: 2013 The Starters, Small Plates & Sides Consumer Trend Report

Base: 1,500 consumers aged 18+
Source: 2013 The Starters, Small Plates & Sides Consumer Trend Report

Why Consumers Buy

Consumers primarily purchase starters to satisfy their hunger while they wait for their meal. But there are other drivers as well.

Appetizers have strong “entertainment” value and give consumers an opportunity to explore the menu. Sixty percent of consumers order starters as something small to eat while waiting for their meal and 42% do so to share something before the meal with their dining party. Additionally, about a third of consumers order appetizers to try a particular item (37%) or satisfy a particular food or flavor craving (34%). Nearly as many consumers (38%) say appetizers add to the dining experience itself.

Finally, cost and value are other purchase drivers, though it should be noted that cost is not the primary purchase driver for appetizers, suggesting that many consumers are primarily looking for an appetizer that is flavorful and adds to the overall dining experience. Three out of 10 consumers (30%) report that they order these items because of a deal, special or promotion and 27% say they order appetizers because they are part of bundled meals.

Why do you order appetizers from restaurants?
Please select all that apply. (by gender)

Base: 1,500 consumers aged 18+ Source: 2013 The Starters, Small Plates & Sides Consumer Trend Report

Base: 1,500 consumers aged 18+
Source: 2013 The Starters, Small Plates & Sides Consumer Trend Report

As noted, value is an integral part of consumers’ appetizer purchasing decision. Fully 79% of consumers polled say this is important or extremely important when choosing an appetizer. Consumers also want an appetizer that won’t take too long to prepare, with 56% of consumers saying it is important that the appetizer they choose takes little time to prepare and can be delivered to their table quickly.

Considering that the majority of consumers’ appetizers are shared, shareability is important. More than three-fifths of students report that it is important that the appetizer they choose is something everyone can enjoy (64%) and share (62%). Additionally, 41% of consumers say a large portion size is important. Meanwhile, half of consumers (49%) say it is important that the appetizer is not too large to spoil their appetite—likely an important consideration for single-serve appetizers like soups, salads or more.

How important or unimportant are the following attributes when choosing an item you will eat as an appetizer?
(by age, top two box = important and extremely important)

Base: Approximately 800 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important Source: 2013 The Starters, Small Plates & Sides Consumer Trend Report

Base: Approximately 800 consumers aged 18+
Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important
Source: 2013 The Starters, Small Plates & Sides Consumer Trend Report

Starter purchases are also strongly driven by cravings and sensory cues. Three-quarters of consumers (76%) say that it is important that the starter they order looks or sounds appetizing. More than two-thirds of consumers (68%) say it is important that the appetizer satisfies a craving. Consumers also look for unique appetizer offerings. Half of consumers (48%) say it is important that the appetizer is unique to the establishment.

Interestingly, middle-aged consumers are more likely than younger and older consumers to say appearance, cravings and uniqueness are important to their appetizer ordering decision. Meanwhile, younger consumers are more likely than older consumers to say that it is important that the appetizer they choose is something new or unfamiliar.

Key Takeaway                                           

Consumers report that they are purchasing appetizers more frequently than they have in the past. As the economy improves, consumers are likely less hesitant to spend on options they deem to be extras at restaurants. Starter purchases may also be getting a boost from shifts in consumers’ dining behavior that may lead them to purchase more appetizers as snacks. Operators may be able to leverage the improving economy in their marketing message and should strive to offer a wide range of appetizer options, including options that can serve as light between-meal bites.

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.