Factors Affecting U.S. Restaurants

The restaurant scene is consistently full of evolving trends such as the growth of mobile payments or different flavor profiles. Spicy flavors have been found to be increasingly popular; according to a study by FONA International, consumers have now come to expect a little heat in their dishes. Millenials make up most of this group, perhaps because they have been more widely exposed to Asian and Latin cuisines which have a higher heat level in their dishes. These flavor profiles are also popular in the beverage industry leading craft brewers to experiment with the heat levels in infused spicy beverages such as Aztec coffee, or spiced brown liquor. Also in the beverage industry, spirits are now competing with beer for young adult consumer preferences. A Technomic report showed that these consumers now range beyond beer to include spirits and wine as well which is mostly driven by cost and certain flavor attributes.

Another factor affecting U.S. restaurants is the notion of the governments involvement in food regulations. Food-safety scares and the focus on the nation’s increasing obesity issues have led many Americans to have a shift in their attitude towards the governments role in food. Sullivan Higdon reports that. ’34 percent of consumers believe the government is too involved in food regulation, while 36 percent think it has the right amount of involvement, and 30 percent say the government is too involved in what they eat.’

The mobile app frenzy is also very clearly a factor affecting U.S. restaurants. Restaurants are encouraging diners to download apps before dining to facilitate mobile payment sand exclusive loyalty rewards. Guests with a smartphone are able to pay with their device using mobile wallet or Passbook which stores the guest’s credit card details and payment information. To read more about factors that are affecting U.S. restaurants, click here

Dunkin’s Croissant Donut

The cronut craze arrived in New York last year courtesy of Dominique Ansel Bakery, who still has a line out the door. This caused other food businesses to attempt to copy the infamous cronut such as Crumbs Bake Shop’s Crumbnut and Jack In The Box’s Croissant Donut. Although a bit late to the game, beginning November 3rd Dunkin’ Donuts will begin to offer its own version of the croissant and donut hybrid.

Dunkin’ Donuts told the Associated Press that their version is not a copycat version and that the cross of a donut and croissant has been around for decades. The Dunkin’ locations in Korea were even selling one which they called the New York Pie Donut last summer. The Korean version isn’t glazed, but this new croissant donut in the U.S. will be and consist of 24 layers of dough. If all goes well, perhaps in the future they may offer their croissant donut with cream filling.

According to the press release and similar to Dominique Ansel’s marketing strategy, the croissant donuts “will be made in limited quantities and served each day while supplies last.” To add a sense of uniqueness and ‘luxury’ the pastry will be packaged in clear boxes for $2.49. To read more about the launch of Dunkin’s Croissant Donut, click here

Digital Employee Training

There has been lots of buzz about new mobile payment apps, menu tablets and online ordering but there has been an underwhelming focus on what new technology could mean for staff training. Digital technology can not only help scheduling but can also boost sales, teach employees correct procedures and give valuable insight to human resource departments. A company is able to have full control of online video-based training sessions whereas when an experienced employee trains a new hire, there is no sure way to trust that they are teaching the right things and in a company-approved manner.

Point-of-sale tools can help managers know whether or not servers need extra training based on the record of average sales for each table that is tracked by the POS. “Then it’s the responsibility of management to analyze those numbers and help their staff not only be accountable but also optimize sales,’ says Allan Barmark, whose firm creates custom training programs for businesses. Digital technology also allows for training to take place in a self-paced way because it is available online; there is no need to close the restaurant or hold classes that are difficult to schedule with different locations and shifts.

Food safety training is also made easier by digital technology as it ensures that employees have completed the required training and keeps a record. If there were ever to be an issue, the employer can rest easy knowing there is proof of completed training. Barmak also mentions that digital training technology gives managers and human resource departments new tools to use in identifying employees with the potential to move up in the company and tracking their progress.

To read more about what digital technology can mean for employee training, click here

Aligning Dining Patterns & Needstates

American Express provides restaurants with research-based analysis of key industry developments which is collected and analyzed by Technomic, Inc. Consumers were polled over a seven-day period and asked to describe their most recent restaurant occasion. While Technomic has recently released studies showing an increase in the snacking daypart, the majority of consumers that were polled reported their most recent restaurant occasion for breakfast, lunch or dinner. Dinner occasions were equally divided between weeknights and weekend nights, while lunch was more likely to be a weekday occasion. 60% of pollers who reported breakfast as their most recent occasion ate breakfast or brunch on the weekend.

As for takeout occasions, the poll showed that delivery occasions were twice as likely to have been a weekday purchase, of which 60% were for dinner and 30% for lunch. A very small percentage showed breakfast as their last restaurant takeout or delivery occasion. Consumers in the survey were also asked to estimate what percent of their restaurant occasions had been for each daypart in the past year. This led to some insights into generational differences; for example, while 12% of consumers aged 18-25 reported snacks or happy hour as their most substantial foodservice purchases, only 4% reported this for those 45 years or older.

Another part of the poll involved asking consumers to identify the needs or emotions they typically associated with each major daypart and weekpart.  While snacking and lunch were mainly associated with the basic need to satiate hunger, convenience was the biggest reason for consumers to use foodservice for weekday breakfast, weeknight dinner and even weekend lunch. Different dayparts showed to be more or less associated with different kinds of get togethers:  family get-togethers (weekend dinner) , friendly get-togethers (weekend dinner, happy hour) , and celebratory occasions (weekend breakfast). Other factors revealed in the poll were emotional needstates; for instance which occasions were associated with relaxing or as a treat/reward.

This data can be used to show operators the prime opportunities available to extend their daypart usage by meeting consumers’ needstates for each occasion. The data also shows where operators can get a competitive share for high-traffic meals or dayparts that are underutilized. Other business implications can be drawn from consumers’ ideas about what constitutes a ‘meal’ vs. a ‘snack.’ For example, offering items in various portion sizes and in a wider variety of combo options will satisfy a larger variety of needstates; offering lunch and dinner fare at the breakfast daypart can also help this.

To read more about the poll and the business implications that can be drawn from it, click here 

 

 

Increasing Speed of Service

Innovations in mobile payments lead to a more efficient and seamless experience which will increase restaurant traffic, however, as an operator you need to be equipped for the influx of guests and know how to keep a speedy service. Leaders from across the fast casual segment discussed solutions to drive the speed of service at the ninth annual Fast Casual Executive Summit held in Denver and came up with nine main solutions:

1) Adding a second line.  The addition of a second line that focuses solely on catering, online or mobile orders and carry out will help break up the line and lead to speedier service.

2)Encourage guests to break the line. Hand in hand with number 1, tweeting that online ordering lets you go in the second line will also help manage flow.

3)Choose adequate online software. Choose a software that knows to space out online orders to allow for increased efficiency.

4) Off-site phone orders. The advantage of moving phone orders from the cashier to a call center is that they can be handled as mobile orders socustomer data can be captured which opens up another segment for marketing.

To read more solutions and suggestions on how to increase the speed of service in the fast casual segment, click here

Starbucks’ 2014 Holiday Initiatives

The Starbucks Leadership Experience conference was held this past weekend in Seattle where over 2,000 district managers shared customer initiatives to elevate the Starbucks holiday experience. Having noticed that during the 2013 holidays many brick-and-mortar retailers experienced a decline in foot traffic compared to a growth in online shopping, Starbucks experts began focusing on redefining the retail experience with digital innovations.

Howard Schultz, president and CEO of Starbucks Coffee Company states, “Customers researched, compared prices, and then bought the brands and items they wanted online, frequently utilizing a mobile device to do so. Since that time, we have been focused on radically redefining the Starbucks retail experience for our partners, customers and stores. As a result of the work we’ve done, Starbucks is poised for a great holiday—our innovation pipeline is strong and we have a number of initiatives ready to launch during the holiday and into calendar 2015 and beyond.”

Aside from the holiday changes which take place every season, such as the red cups and seasonal flavors, Starbucks will be introducing new customer incentives such as ‘Starbucks for Life” which lucky customers will be able to win by paying with their smartphone or by using their Starbucks card. Starbucks will also be launching Mobile Order and Pay in stores within the Portland area before the end of the year which will allow customers to place orders in advance for pick up in store. The nationwide launch for Mobile Order and Pay is planned for 2015 which will hugely increase the company’s presence in the mobile commerce scene.

Other holiday initiatives include the 30th anniversary of Starbucks Christmas Blend and the first new holiday beverage crafted in the past five years, the Chestnut Praline Latte. The loyalty program will have added value and benefits (including access to special events and sneak previews of new products) for customers using their mobile devices. The company will also be taking initiatives to expand the Starbucks Reserve coffee line by opening an interactive Starbucks Reserve Roastery and Tasting Room which will dedicate itself to roasting, coffee education and selling the small-lot Starbucks Reserve coffees.

To read more about Starbucks’ holiday initiatives for this season, click here

 

Healthy Snacking On The Go

There is a growing opportunity for restaurants to provide guests with healthy menu items that can be eaten regularly. Since snacking has essentially created its own day part, and more people are also focusing on adapting more active and healthy lifestyles, it is beneficial for operators to provide the guest with healthy grab and go snacking options with good nutritional value. A market research firm called The Hartman Group showed in their 2013 “Modern Eating: Cultural Roots, Daily Behaviors” report that snacking represents half of all eating occasions.

Alex Blair, franchise owner of Chicago’s fast casual concept, “Freshii” notices there is an increased rush of guests mid morning and after lunch for healthy snacks and fresh juices and smoothies. As more people try to incorporate fresh juices and vegetables in their diet, Blair has noticed an increase in sales for fresh juices. “Post-gym, people come to us for our smoothies,” Blair says. “There’s a huge following for recovery foods, and lots of customers are big on small, healthy meals. Often, we see the same customer several times a day.” This has led Freshii to partner with big name gyms such as Equinox and place their stores in the gym.

According to the National Restaurant Association, 72 percent of consumers are more likely to visit a restaurant with healthy items on the menu. Being that the snacking day part continues to grow at the same rate that people are making healthier eating habits, it is a great time to add healthy fast food snacks as menu items. To read more about incorporating healthy grab and go items, click here

 

José Andrés to Enter Fast Casual Segment in D.C.

José Andrés, the Ferran Adrià prodigy who popularized Spanish cuisine in the U.S., will be launching a vegetable-focused fast casual concept. The first location of ‘Beefsteak” (play on the tomato variety), will open on campus at George Washington University in Washington D.C. early next year. José Andrés, aside from having his own course on food at the university, also serves as an advisor on food initiatives and has been testing dishes with his staff for months.

José Andrés would like to clarify that his concept is not “vegetarian,” it is vegetable-centric. As Jose says, “We don’t like to call it vegetarian. We want to call it tasty, fun, sexy, good-looking.” Vegetables has been around forever, so this concept is not about ‘the next big thing,’ so much as it is re-inventing and converting people’s ideas about vegetables. Roy Choi, the Los Angeles food-truck chef, recently posted on his Instagram about the future of vegetables and how he is, “trying to make vegetables relevant to a new generation by just making them fun.” Batali and Bastianich also have a portion of Eataly dedicated solely to dishes prepared with vegetables, and world famous chef Rene Redzepi of Noma is always preaching the virtues of vegetables.

Vegetable restaurants do exist, such as Vedge in Philadelphia, where chef Richard Landau reaffirms that vegetables are beginning to ‘move from the side of the plate to the center.” Jose Andre’s Beefsteak will be the first of its kind in Washington D.C. and if it is successful, will expand and open more locations. Before opening his now wildly successful Jaleo, people had their doubts about tapas and small portions; now small plates are a nationwide phenomenon. José Andrés is confident that despite the doubts about a vegetable-centric fast casual, he will be successful in giving the people “what they don’t know they are craving.”

To read more about the new fast casual concept and other vegetable-focused eateries, click here

Data-Enhanced Pricing Strategies

Small nuances and discrepancies in like-item prices are very common in the foodservice industry; this is often the result of two pricing models: cost-plus and value-based. These strategies, which have been used for years across the industry, do not fully allow for the integration of consumer behavior data that is now so much more accessible to operators and so relevant to pricing menu items. While the old methods are by no means incorrect, it is important to stay ahead of the curve and innovate at the same pace as the industry; not taking massive amount of data into consideration may be causing operators to miss out on opportunities to increase check averages.

Systems can be built to leverage large amounts of data and new technology to understand purchase behavior. Amazon has created algorithmic systems that alter millions of prices multiple times throughout the day based on e-commerce purchase behavior based off of region, time of day, aggregate consumer behavior and individual consumer behavior. Amazon is an example of how sophisticated pricing systems can be, and while the foodservice industry might not need as extreme of systems, it could definitely use an update that could borrow similar strategies.

QSR Magazine will be publishing a series of articles that explore alternative pricing strategies that can be applied to the industry using hypothetical restaurants with menu items and prices. The goal by the end of the series is to “determine quality inputs, analyze the data, optimize prices based off that data, and then do it all over again with a different set of inputs.” To read more about enhancing pricing strategies and to follow the series, click here

 

Crumbs Bakery Is Back!

Crumbs filed for bankruptcy earlier this summer upsetting cupcake lovers across the nation. Come next Tuesday Crumbs will be reopening! A grand reopening celebration will be taking place at their 1385 Broadway location in the Garment District which has recently been repainted for the event. There are twenty five over locations including L.A, Chicago and Boston that will be having celebratory opening blowouts over the course of the next 20 days.

One of Crumbs Bakery’s new partners, TV host Marcus Lemonis, is eager for the relaunch to showcase his new bagel-croissant hybrid which is meant to encompass the “new, modern Crumbs experience.” This new fusion pastry coined “baissant” with be found in stores next to the “Crumbnut,” a reinterpretation of the Cronut. The idea of introducing these new pastry mash-ups was to diversify the product mix beyond just the scope of cupcakes. There will also be some new cupcake flavors though such as salted caramel and key lime. A few other new non-cupcake offerings will include frozen desserts, cookies, gluten-free options and Crumbs chocolate bars.

To read more about the reopening of Crumbs and it’s new product mix, click here