brands' efforts to connect with on-the-go consumers will accelerate in 2011, as they scramble to leverage evolving mobile marketing/ordering technology and expand mobile units, kiosks and pop-up
The drives to harness social media and technology and go beyond traditional bricks-and-mortar presence are two key industry trends for 2011, according to Chicago-based
foodservice research and consultancy firm Technomic.
The year promises some improvement for the beleaguered restaurant industry, with same-store sales and hiring both starting to inch up,
confirms Technomic. However, given consumer trends and growing competitive threats (such as convenience stores), restaurant brands/operators will need to be more agile than ever in every area,
including concept development and menu offerings.
On the technology/media front, 2011 will bring "constant" changes in applications for marketing and front- and back-of-house operations, as
restaurants introduce and hone capabilities including kiosk ordering, tableside payment systems, couponing Web sites, location-based social media and a burgeoning number of consumer apps. With
continual evolution afoot in the social media and app arenas -- including emerging technologies and formats vying for app users -- investment risks and rewards are high. But "the biggest risk of all
is failure to innovate," stress Technomic's analysts.
Facilitated by social media that let consumers follow their whereabouts, food trucks, vans and carts -- a phenomenon confined largely to key
urban areas such as Los Angeles and Manhattan a year ago -- are now proliferating around the country, spurring the appearance of food-truck districts and "rodeos," reports Technomic. One example:
Washington/Oregon-based Burgerville, which launched its first Nomad mobile restaurant in Portland, Ore. in summer 2009, and is gradually expanding this initiative.
In addition to mobile units,
restaurant brands are using kiosks in airports, schools and corporate hubs -- as well as temporary or seasonal pop-up stores and kiosks -- to extend their brands, test new markets and menu offerings,
and facilitate catering services without heavy capital investment.
Large chains, as well as smaller ones, "want to grow, but don't want to over-invest and expose themselves to risk," Technomic
EVP Darren Tristano pointed out to QSRMagazine.com. "Kiosks are gaining incredible momentum because they provide an incredibly low-cost point-of-entry to nontraditional locations." Starbucks, Cinnabon
and Little Caesars are among the chains that have launched kiosks -- although store-based brands like Healthy Choice and Butterball are also beginning to employ the kiosk concept to compete with
Other key trends on the menu for restaurants in 2011, according to Technomic:
- Frugality fatigue. Americans are tiring of penny-pinching, and
those who can afford an occasional splurge will be dipping back into luxury dining. This will spur some new "flashy, high-end" restaurants and some "extravagant, indulgent specials" even on staid
menus -- although high-end concepts will also continue to push bar menus that attract customers through lower price points, and gastropubs will continue to proliferate, say the analysts. Middle-class
consumers will gravitate to reasonably priced but "high experience value, thrill-a-minute" concepts with memorable menus.
- New variations on deals. Still, consumers
will very much continue to expect price deals on a day-to-day basis. And with restaurants' food input costs on the rise, operators will be looking to introduce deal structures that help preserve their
margins. One option: Adopting retailers' "everyday low pricing" positioning.
- Carefully calibrated brand extensions. As capital spending picks up, full-service
restaurant brands, and even non-restaurant brands, are expected to launch some fast-casual format extensions. In addition, there will be some growth in "ultra-niche" eateries with narrowly focused
menus and concept ambiance. However, new facilities will be smaller, more efficient and sustainably built (and often targeted in nontraditional locations), and the industry's primary focus will
continue to be on "refreshes and remodels" rather than new units.
- More competition from convenience stores. Competition from retailers -- for instance, supermarkets'
expanded fresh, prepared food offerings -- is hardly new, but competition from C-stores is heating up. Consumers are responding positively as C-stores, looking to capture the 40% to 60% margins on
food (versus the 5% typical margin on gas), upgrade their food offerings, variety and ambiance, reports Technomic.
- Balancing health and indulgence. As federal menu
labeling requirements take effect, restaurants will need to feature more "healthy" items (including highlighting lower-calorie and gluten-free options), while staying attuned to consumers' desire for
indulgent options when eating out-of-home.
- Food producers/farmers as celebrities. As part of the fresh/local sources movement, restaurants will feature farmers and
artisan food sources in detailed menu descriptions or special menus, and even have them blog or make on-site appearances. Food safety and product "traceability," as well as local sourcing, will
receive growing attention.
- Action in "adult" beverages. As consumers begin to feel a bit more celebratory, even fast-casual formats (looking to differentiate
themselves from limited-service competitors) will look to capitalize on the growing popularity of "Mad Men"-style retro cocktails, high-cachet gins and bourbons, craft beers and punches such as
- More Korean/multicultural and "comfort" fare. American's interest in fare/ingredients from around the world continues to grow. Korean tacos (Korean fillings
in Mexican wrappings) point to the rise of Korean food in general (including barbeque), as well as more variations on multicultural tacos, and portable small-serving specialties. Meanwhile, consumers'
ongoing cravings for "comfort" foods will be reflected both in family-style restaurant formats and portion sizes and in "back-to-roots" fare such as Southern favorites (from grits to seafood), retro
Italian (meatballs) and "gourmet" donuts and popsicles for dessert.