A Bright Future

    What kind of changes will QSR cover in the next 200 issues? Here’s where experts expect the industry to go.
    Growth | December 2014 | Tamara Omazic

    QSR magazine; iStockphoto/Wavebreak, Erdosain

    Experts predict that the future of quick service will include more customization opportunities and consumer-focused technology.

    It’s 2029 in Albany, New York—your average American city. A family of four stops by the corner sandwich shop for lunch, and the glass doors automatically slide open as they enter. A brand ambassador greets the family by name at the door, a tablet in her hand displaying the date and details of their last visit. She guides the family to an open table, fitting them each with a head-mounted display, which transforms the tabletop into an assembly line of fresh meats, cheeses, and vegetables. Motioning with their hands, each customizes a sandwich in his or her augmented reality, a virtual experience complete with sourcing and nutritional information for every ingredient selected. Digital pop-up ads prompt them to upgrade their meal or take advantage of lunchtime deals and promotions. Once the ordering process is complete, the family of four partakes in a branded, kid-friendly gaming experience through their head-mounted displays as they wait for their food.

    Across the restaurant, a pair of white-clad chefs work behind the same assembly-line counter pictured in the augmented reality. One grills, steams, bakes, and slices in the open kitchen as the other puts together orders on sleek steel trays, which are slid to the brand ambassador for delivery once complete. On a wall beside the counter and kitchen is a digital menuboard, highlighting signature sandwiches, lunchtime specials, and information about the unit’s freshest proteins and produce, including the farms from which they were sourced and the date of delivery.

    Behind the scenes, a centralized machine collects information from all of the unit’s tech touch points, tracking inventory, sales, customer information, and more. Offsite, the restaurant’s manager analyzes the data, using it to inform his weekly food purchases and to compare his unit’s performance with nearby competitors and the chain’s top performers.

    This might be a far-out scene, but it does illustrate one indisputable fact about the future of fast food: quality, experience, transparency, and technology will reign as defining cornerstones, whether it’s 10, 20, or 50 years out—or, say, 15 years out, when QSR’s 400th issue will theoretically come out. It’s also likely that the lines between the industry’s segments will continue to blur, perhaps disappearing altogether.

    It’s already happening in limited service: Fast-food legacy brands continue to add premium menu items to compete with fast casuals, and fast casuals are exploring platforms like the drive thru that were once considered hallmarks of fast food, says Matt Andrew, founder and CEO of Uncle Maddio’s, the six-year-old customizable pizza chain based in Atlanta.

    “The traditional dining and fast-casual segments are growing more toward each other, and it’s going to be very important to stay out in front of that if you want to continue to be relevant,” Andrew says. “Perhaps some day, these two categories merge into one … and it’ll all be called something else.”

    As the industry evolves in this way, it’s also likely operators will see the menu-trend pendulum swing back and forth, perhaps blending fine dining’s upscale flavor profiles with fast food’s speedy preparation.

    “Think about 50 years ago or so, when major chains like McDonald’s started,” says Maeve Webster, senior director for Datassential, a foodservice market research company. “The trend then, and the major desire, was for consistency, reliability, and knowing that you’ll get the same thing at these units no matter where you were.”

    Since then, she says, the pendulum has swung in favor of the localized, regional dining experience, both in terms of food offered and restaurant design. Consumers seek consistency in a different way and are eager to try new things. “It’s hard to predict how far back the pendulum will swing or if another trend will send it in a completely different direction, but trends won’t continue on a straight line, moving instead in the opposite direction to satisfy those who are left behind as the new trends emerge,” Webster says.

    Freshii founder and CEO Matthew Corrin acknowledges it’s hard to look far into the future of menu trends in the quick-serve space. Just five years ago, Corrin and his Freshii team couldn’t predict brown rice and spinach would be replaced by quinoa and kale as permanent menu fixtures. Today, the Toronto-based brand boasts ingredients like chickpeas, falafel, sriracha, edamame, and goat cheese, available in globally inspired salads, wraps, burritos, and bowls. “Whatever is on the menu, though, it will continue to be really fresh,” Corrin says.

    The trend pendulum, however, could also swing the opposite way in terms of freshness, Webster says. She imagines a very diverse field of restaurant operators that includes high-tech experimental concepts and menu items that range from “ultra local and healthy ingredients to almost ultra-fabricated ingredients.”

    In fact, there are already scientists and engineers adapting technology to fabricate food. 3D printing is one such example, says Jason Siko, professor of educational technology at Grand Valley State University in Grand Rapids, Michigan, and strategic foresight consultant. Companies like Brooklyn, New York–based Modern Meadow are on the forefront of applying 3D printing technology to fabricating edible meat in response to worries about the sustainability of animal farming for food production. The applications in the restaurant space are numerous, Siko says. Leading companies in 3D printing have already produced food items built on layers, like pizza, ravioli, and candy. He says this technology offers unique opportunities for customization and marketing in particular.

    “An example of how that could be used is if a [brand] printed a cupcake and when you bit into it, you see the [brand’s] logo inside,” he says. “It’s a cutesy thing, but it demonstrates how we can take proteins, fats, and carbs, and generate food from it because these printers can inject molds at various temperatures to cook something on the spot.”

    Whichever way the trend pendulum swings, experts say, consumers will continue to want to know more about the food they’re consuming. The industry has already seen the effects from consumer demand for local sourcing and more transparency, says Hudson Riehle, head of research for the National Restaurant Association (NRA). Riehle points to GS1 US, the national branch of the international GS1 standards organization that develops and maintains supply chain standards across many industries, as an example of how technology is innovating tracking information. The organization’s system identifies products shipped with a Global Trade Item Numbers (GTIN) that lets suppliers and operators track items throughout their journey.

    “Since growth rates will be more moderate in the future, it will focus operator attention to having a much more efficient and integrated supply chain,” Riehle says. “The ability to track product throughout the supply chain [also] lets a restaurant have a smaller footprint, as that’s related to not storing as much inventory in a unit.” Increased supply chain transparency is also making waves in the industry, Riehle adds.

    Technology will be at the heart of many changes as the industry moves forward, impacting ordering, food preparation, delivery, marketing, and venue selection, says Datassential’s Webster. It’s not a stretch to assume more restaurant operations could become automated, decreasing the need for a large staff, she adds.

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    The dining experience will also be affected greatly by interactive technology. Already, more quick-serve chains have turned to kiosk and tablet ordering systems to provide these high-tech touch points to guests. Earlier this year, Pizza Hut tested an interactive table that allows diners to customize a virtual pizza to their liking in the comfort of their own restaurant booth. The table, created by Chaotic Moon Studios, also features gaming apps.

    “Technology is particularly important to the Millennial age group—their basic expectation is that their restaurant experience incorporates some type of technology,” Riehle says.

    All of this new technology will also offer operators integration opportunities that could potentially change the entire dine-in experience. When Corrin opened his first Freshii unit in 2005, his restaurant relied on a traditional cash register. Now he can monitor the sales of every unit in real time, in a remote location, thanks to advancements in POS systems. “If you can’t measure it, you can’t manage it,” he says, adding that integrated data is the wave of the future for restaurants that are looking for a competitive edge.

    Anthony Pigliacampo, cofounder of Denver-based Modmarket, says operators should stay on the cusp of all technology, not just restaurant-specific innovations.

    “iPhones and tablets weren’t created for the restaurant space, but they’re changing how the industry does business,” he says. “How do we get a new payment system that integrates with every other piece of technology we have and make it all play nice together? That’s the future of technology for us. This significantly changes how you operate a restaurant.”

    Some time in the next 50 years, he predicts, operators will rely solely on cloud technology to store data, and integration will connect the back of the house, the front of the house, and consumers’ mobile devices. “And in 50 years, if you want us to know who you are when you walk up, we will,” Pigliacampo says. “With zero prompting, we can see a person’s name, order history, and all of their interactions with our brand.” That is to say, data won’t just extend to internal restaurant operations, but will also provide highly specified demographic insight and targeted marketing opportunities.

    While the public isn’t too keen on big data collection today, Siko says, that should change in the near feature. Why? Convenience, he says.

    “While we’re very concerned about transparency and giving up our information, there are a lot of times we’ll give it up for convenience’s sake, and that’s where I think marketing and technology will merge to make us more likely to share that information,” he says.

    Siko believes restaurants will benefit when appliance companies like General Electric partner with companies like Google to provide consumer data on the frequency and use habits of consumers who purchase their refrigerators, stoves, and more. “You could see something like a refrigerator being able to communicate how full or empty it is, and if that information is available to a restaurateur, it could provide a targeted marketing opportunity,” Siko says. “It’s comparable to targeted social banner ads on sites like Facebook today.”

    For its part, social media will only grow in importance for restaurants, Riehle says. As competition increases and growth lags, generating direct demand will be key to survival, and social media allows an operator to target promotional messages to specific geographic locations and certain demographics, he says. In the future, smarter social media marketing could allow operators to send messages directly to potential diners within the vicinity of a specific restaurant location or push certain promotions to guests with a purchase history that suggests they would take advantage of the deal.

    For all these innovations that could increase business, restaurant operators can expect just as many challenges to growth and prosperity, especially legacy brands. The old fast-food experience won’t cut it in the future, Webster says. Some brands have gotten the hint: 45-year-old Wendy’s and 50-year-old Arby’s both revamped their systems this year, modernizing design, menu, and operations.

    “We’ve seen legacy brands branch out from their original identities to leverage new eating patterns and consumer demands. McDonald’s McCafé is a great example,” Webster says. “I think, in 50 years, these changes will probably be more extreme and more fundamental, but there’s no reason not to believe most legacy brands will still be around—they may just look radically different to future consumers than they did 10, 20, or 50 years ago.”

    Freshii’s Corrin says legacy brands have an advantage in their large numbers, one they can lend to more upstart brands by creating shared-space concepts. “Rent will continue to rise, which means that restaurants will have to be more efficient with their space and consider smaller storefronts,” he says, adding that such a relationship, while not quite a cobrand, offers mutual benefits.

    Regardless of a brand’s size or age, all restaurant chains should expect to face increased governmental regulations in the coming decades. Within the next few years, chains should expect nutritional information disclosure to be standardized and regulated, says Scott DeFife, the NRA’s executive vice president of policy and government affairs. Up next, local government will impose more environmental regulations that have an impact on waste disposal and energy-efficient equipment, he says.

    “Ten years down the road, we need to concern ourselves more with water supply,” DeFife says. “Water as a commodity is not taken for granted, and there certainly could be more water and waste-water restrictions.” According to the U.S. Environmental Protection Agency, while the national population doubled between 1950 and 2000, the demand for water tripled during the same time frame.

    To address the issue, the NRA launched the Conserve Program, aiming connect restaurant operators with best practices and training tools to increase the sustainability of a restaurant operation. To promote water conservation, the Conserve Program helps operators implement a tracking program to measure how much water a unit uses and evaluate opportunities to reduce use. The program also focuses on energy conservation, recycling, and waste reduction.

    Regardless of what plays out over the next several decades, restaurant operators should expect all changes and trends to emerge faster than ever. Datassential’s Webster points to how the food-trend cycle has reduced from 10–15-year cycles to 5–6-year cycles. And she expects that cycle to average 1–3 years in the near future.

    “To say it’s critical for [quick serves] to stay on top of trends is a serious understatement now,” she says. “In 50 years, it will mean, likely, the life or death of a restaurant operator. … Operators that want to stay ahead and be cutting edge will need to be incredibly nimble when it comes to picking up and applying trends extremely quickly.”