Web Exclusive | December 2010 | By Sam Oches
Yes, Consumers Want Fries with That
Combo and value meal deals are part of the DNA of fast food restaurants, but two researchers find that changes to the meals could help quick serves steer customers toward healthier offerings.
Kathryn Sharpe of the University of Virginia’s Darden School of Business and Professor Richard Staelin of Duke University’s Fuqua School of Business recently coauthored a report published in the Journal of Public Policy & Marketing called “Consumption Effects of Bundling: Consumer Perceptions, Firm Actions, and Public Policy Implications.” The report suggests that consumers perceive bundled, or combo, meals to be better value—and that such meals tend to drive consumers to larger, unhealthier menu choices.
“When people bundle, they end up choosing a meal with a lot more calories,” Sharpe says. “Over the entire population, if you look at what’s the average impact for a consumer when a bundle is offered, it’s at least an extra 100 calories. That can make a big difference.”
Sharpe and Staelin’s study showed participants several menus, including some with a la carte–only options and some with both a la carte and combo meal offerings. A range of entrée options were included on each menu and were bundled with 21-ounce drinks and medium fries in the combo meals. Three sizes of fries—small, medium, and large—were offered a la carte, as were three or four sizes of drinks, with prices varying on each menu.
Participants were then asked what they would order when presented with combo and a la carte options.
The study found that when ordering from an a la carte–only menu, consumers generally ordered smaller portion sizes. And when bundled meal options were available, the number of participants who would order a drink and fries with the bundle increased significantly—even if there was no price difference between the two options.
“[Consumers] have been making decisions the same way over time,” Sharpe says. “If a bundle is offered, they’ll consistently choose the bundle because it’s easier to order and it seems like an average meal.”
Sharpe says the study supports the case that bundled meals encourage unhealthier eating: 15 percent of participants who didn’t order fries in an a la carte–only setting chose to order a bundled meal with medium fries when offered, which was a 380-calorie increase.
Further, 26 percent of participants who chose the small fries option from the a la carte–only menu chose a bundled meal with medium fries when offered, a 150-calorie increase.
That, Sharpe says, is the biggest issue at hand: portion sizes are generally larger in bundled meals and have been going up over time. Whereas a 21-ounce drink used to be the large size at quick serves, Sharpe says it is now the standard medium size in bundled meals.
Sharpe says quick serves can beat their unhealthy stigma not by getting rid of bundled meals altogether, but by offering smaller portion sizes within them. But first, she says, they have to start working with each other.
“I think they have to bundle in some ways because everyone else is doing it,” Sharpe says. “It’s the nature of competition, this is where the industry has gone in order to keep up and they feel the need to offer bundled meals. … There is the caveat that the industry as a whole would have to [change to be successful], because there is that competitive nature to it.”
But industry leaders say they prefer to give consumers a choice—even the choice of larger meal sizes. Mark Hardison, vice president of marketing at El Pollo Loco, says the chain just tested menuboards with and without combo meals, and that consumers resoundingly supported the bundled meals.
“Our inclination, because of our positioning in the [quick-service] space, was that we would be moving toward a menuboard without combos,” Hardison says, noting the chain’s lean toward healthier offerings. “But the results were overwhelmingly positive toward combo meals in terms of how guests rated their order experience and the value of their purchase.”
At El Pollo Loco, bundled meals include the chain’s Flame-Grilled Chicken Meals, which include varying amounts of chicken, sides, and tortillas, and Burrito Combos that add chips and a drink to burrito orders.
Hardison says the combo meals improve operations and speed of service, and boost the bottom line by increasing drink sales.
“As long as our guests are getting a good value out of that, we’re happy to complete their meal,” he says. “It makes business more economically viable and our business performance stronger when we do it that way.”
Still, Sharpe says quick serves have a responsibility to cap the sizes of what they offer in their bundled meals, even if they’re giving customers increased value by hiking the portion sizes.
“Nobody needs 44 ounces of drink; it’s just because you eliminated the smaller sizes [that they order larger],” she says. “I think there is some responsibility for them to really evaluate, are they creating need, or are they meeting need? That is where we get into, is this ethical or not?”
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