Consumer Trends | December 2012 | By Barney Wolf

12 for ’12

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New Yorkers protested a city wide sugary beverage ban in 2012.
Many New Yorkers were opposed to the sugary beverage ban. flickr/Bonnie Natko
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Ethnic Flavors Gain More Exposure

Americans have made Italian, Mexican, and Chinese cuisines their own, so why not something like Vietnamese or Indian?

Pho, a noodle soup, and banh mi, a sandwich typically made with French bread, are some of the latest cultural dishes to hit the mainstream, often with a U.S. twist.

“People were drawn first by the pho, but now banh mi is very popular, especially as a reimagined American sandwich,” says Melissa Abbott, senior director of culinary insights for The Hartman Group, a research and consulting firm in Bellevue, Washington.

“You have a sandwich on really good French bread filled with really fresh ingredients,” she notes. “It has a flavor that is heightened by various fresh herbs and vegetables.”

Tin Drum AsiaCafé, which has 11 units in the Atlanta area, serves cuisines from around Asia, including pho. Owner Steven Chan says the chain had banh mi on the menu a decade ago and may bring it back “because it’s getting popular again.”

Giving an American twist to Indian food is what Qaiser Kazmi is doing in Washington, D.C. His restaurant, Merzi, features Indian-inspired cuisine with U.S. touches. For example, Merzi serves tandisserie chicken, which is tandoori chicken cooked rotisserie style.

“Our cuisine is not directly from India,” Kazmi says. “We would never leave skin on chicken back there. But I fell in love with rotisserie chicken and wanted to combine that with something that has Indian flavors.”

The Reverse Food-Truck Trend

For Kim Ima, opening the Treats Truck Stop in Brooklyn last year was the logical next step for the owner of a popular food truck.

“I like that I had established my business before opening the storefront,” she says of her truck, the Treats Truck, which has served treats and drinks since 2007. The restaurant offers homey comfort food for breakfast, lunch, and dinner.

Food-truck operators across the country, from Boston to Los Angeles and Houston, are similarly turning to brick and mortar.

In the five years since the gourmet food-truck phenomenon began on the coasts, thousands of these vehicles have hit the nation’s streets, giving budding restaurateurs a relatively inexpensive entry into the business. But it’s not easy.

“You’ve got this small space, gas costs, repairs, weather, licensing—all kinds of issues,” says David Weber, president of the NYC Food Truck Association. “So a lot of food-truck entrepreneurs, once they develop a brand, are looking for more stability. It’s logical to take their concept and give it a home.”

The Future of Social Media is Here

Now that many restaurants have found ways to take advantage of Facebook, Twitter, and YouTube, they’ve moved on to other, newer social media platforms, such as Pinterest.

Pinterest is akin to a visual bulletin board, where images can be “pinned” to virtual boards. They can be downloaded to the board or can be taken from (and linked to) other websites.

Dunkin’ Donuts, for example, uses photos on Pinterest to link to various events, as well as products, including limited-time offers.

“Pinterest seems a way for the social media strategy to involve more of the customer and the community,” Tristano says. “Instead of pushing out from the company, this is trying to draw customers in to be part of it, to have a shared experience.”

Don’t Forget Boomers

While focusing on Millennials is all the rage, many restaurant operators also understand that Baby Boomers still make up a lot of the nation’s buying power. Members of the generation are looking to dine at places that feature unique flavors and provide plenty of value.

“It’s really the Boomers and those over 65 that are keeping the [restaurant] industry from experiencing a decline,” NPD’s Riggs says. “Boomers are increasing their visits to all restaurant types, but particularly quick service … and fast casual.”

Of course, younger diners typically will be the first to hear about new and exciting limited-service restaurants.

“The Millennial kid knows where the cool stuff is and will tell mom and dad to try it,” Abbott explains. “They are more tapped into the social network. But the parents are increasingly curious to try new places. In the past, that may not have been so.”

Exploring the IPO

One major quick-service restaurant company went to market this year with a big stock deal, while another chain’s plans to go public didn’t get off the ground.

Burger King took its crown back to Wall Street. The Miami-based company’s shares began trading publicly through an unusual deal in which investment firm Justice Holdings paid $1.4 billion to acquire a 29 percent stake from owner 3G Capital.

CKE Restaurants, the Carpinteria, California, parent of Carl’s Jr. and Hardee’s, had planned a $200 million public offering but delayed it. Concerns were raised about the impact of required health-care costs and rising commodity prices.

“The market was willing to give restaurant companies a premium valuation early in the year,” says R.J. Hottovy, restaurant industry analyst with Morningstar in Chicago. “A lot of them were operating at peak margins. Since then, there have been some concerns about the industry’s fundamentals.”

Brand Evolution Continues

Quick serves are always tweaking their images, but there were some major changes in store for menus at some larger chains in 2012.

One of the most notable chains to do this was Burger King, where an array of new menu items, including smoothies, salads, chicken wraps, and specialty coffee drinks, were added to broaden the brand’s customer base. That was the first part of a four-pillar, $750 million strategy Burger King announced in the spring.

Taco Bell also welcomed major menu innovations. The Irvine, California–based brand launched the highly successful Doritos Locos Tacos, featuring shells made with the taste and flavor of Doritos snack chips. Then the chain rolled out a Cantina Bell line of upscale burritos, bowls, and sides created by noted chef Lorena Garcia.

Taco Bell also introduced breakfast at about 800 West Coast locations.

“What Taco Bell has done is a testament to product innovation,” says restaurant analyst Hottovy. The chain “remains in its core competency, broadens its appeal, and takes the pricing point upward.”

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