Twas a week before Christmas, when all are shopping and eating without care. Not one person thinks about New Year’s resolutions, why dare? Full-bellied consumers sit snug in their beds, while daydreams of new menu items dance in their heads. Menu predictions have been reported closely with care, in hopes that 2017 lives up to our foodie prayer.
The holiday countdown begins at PadillaCRT, each of us spilling over with glee. All year-end reports are wrapped and tied with a bow, but one last task remains, c’mon let’s go! A year in review – what’s old, what’s new. Together, let’s say farewell to 2016 and see what’s next for our beloved cuisine.
The Dining Out Decline
Let’s face it – the landscape is changing. We’ve all heard the casual dining category, which makes up roughly 31% of the restaurant landscape, is hurting. In fact, since the beginning of 2015, this sector has experienced traffic growth trending down at an increasing rate, according to TDn2K.
Casual dining isn’t the only one suffering. In fact, the restaurant industry as a whole is feeling the slowdown, according to the “Outlook 2017: U.S. Retail and Restaurants” report. While 2016 was the first year restaurant spending exceeded grocery spending, it seems 2017 might just reverse that trend.
The industry has continued to expand resulting in a plethora of dining options for consumers, though dining at home is becoming more appealing with the growth of prepared foods and lower grocery prices. Looking ahead to 2017? Economic data suggests consumers have more to spend with a confident economic outlook. Thus, restaurants must capture consumers’ share of stomach amidst heavy industry competition in 2017.
Reward Loyalty with Social Media
With so many dining options available, it has become increasingly important for foodservice brands to counter the oversaturation and erosion of loyalty. How? Social media. Delivering exclusive promotions, the latest announcements or premier access to prizes or unique experiences to your fans and followers increases the chance of repeated business.
According to research by the IAB (Internet Advertising Bureau), 57% of people who receive targeted and relevant rewards via mobile in the form of discounts and special offers will redeem them on the spot.
While the definition of VIP treatment has changed over the years, it still works like a charm. Making customers feel like their business really matters is a skill that has been mastered by salesmen since the very beginning of trading. Savvy foodservice operations understand that using social platforms to deliver personalized messages and elicit an “exclusive” feel leads to the kind of loyalty that’ll keep your customers coming back for more.
LTOs are the Menu Strategy
Limited time offers (LTOs) are on the rise. Since 2015, the annual average of LTO’s executed by chains has more than doubled. What was once a strategy for testing permanent menu items, is now a menu strategy in and of itself. In fact, 85% of operators develop LTO’s with the goal of just limited time use. (Source: IFMA “Winning with LTOs” webinar)
From reoccurring seasonal promotions to new, outlandish ingredients, LTOs have become more about sparking interest, raising brand awareness and driving traffic. To appeal to consumer’s rapidly changing tastes, LTOs allow operations to serve more options with quicker turnover.
According to Datassentials, the golden rule for reaching LTO success is to find the balance between uniqueness and purchase intent. Here’s how:
- Be Approachable – The title of the dish is instantly recognizable and easy to understand.
- Tell A Story – The description of the dish reveals the uniqueness.
- Experiment Safely – Something new that is rooted in the familiar. Not a huge risk to try.
From the Krispy Kreme cheeseburger to the waffle taco, how are consumers responding to LTOs? Datassentials reports 38% find an LTO more interesting, while 45% see it as a marketing ploy. When in doubt, add bacon – which typically raises purchase intent of an item from 48 to 66.
Strong outlook for C-Stores and Grocerants
Convenient stores (c-stores) have capitalized on a small need every consumer needs today – convenience. Rooted in its name for goodness sake, these operations satisfy the need for speed for those living on the go. And we mean on the go – the average time it takes a customer to walk in, purchase an item and depart is between 3 to 4 minutes.
While c-stores’ convenient locations, extended hours, variety of merchandise and fast transactions are a bonus, many consumers are actually seeking out the food. With fuel and tobacco products no longer bringing in as much revenue, c-stores are seeing foodservice becoming their most profitable category. In fact, convenience store foodservice is roughly a $61 billion industry contributing 21.2% to in-store sales in 2015. (Source: NACS State of the Industry Report of 2015 Data)
Another venue for convenience? Grocerants. This year, we’ve witnessed the rise of supermarkets offering prepared, ready-to-eat, affordable meals for customers. Since 2008, in-store dining and prepared foods have grown nearly 30 percent in groceries — accounting for 2.4 billion foodservice visits and $10 billion in consumer spending in 2015. Facing competition from companies like Blue Apron and Hello Fresh that’ll deliver groceries directly to you, supermarkets have found a way to increase their food sales through fresh, quality food at a quick, ready-to-eat pace. What’s next for convenience? Telepathic food delivery, perhaps?
Government Meddles in Menus
From soda tax to menu labeling to sodium & sugar reductions, we’ve seen a number of government measures “guiding” what’s being served on menus.
Everyone’s familiar with the “should we tax soda?” debate since Bloomberg’s unsuccessful attempt to enforce in 2014. But the tide has turned – this past election day, U.S. voters in Boulder, Colorado, and in three cities in California approved new local taxes on soda.
Then earlier this year, NYC moved toward a new rule requiring chain restaurants to post warning labels for menu items that are high in sodium. The aftermath? Roughly 10% of menu items exceed 2,300 mg of sodium and will require a warning label.
And if you work in a foodservice establishment, May 5th is a date approaching too quickly. No, not Cinco de Mayo – the deadline of menu labeling compliance. Per FDA requirements, restaurants and similar retail food establishments with 20 or more U.S. locations must provide calories on menus and nutrition information for 10 additional nutrients at the point of sale.
So if Panera’s Italian Ciabatta Sandwich is your favorite, might want to order now before you find out it’s 1,000 calories, 41 g fat and 2,810 mg sodium. Goodbye menu ignorance. Hello nutritional awareness.
From social media to sugar regulations, grocerants to government, there’s a lot to learn from 2016 and even more to look forward to in 2017. Share with us your new year predictions!