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Where will the quick serve industry be one year from now? That’s never been an easy question to answer, but these days it seems harder then ever.
The economy continues to lurch wildly back and forth, sending stocks (and consumer confidence) up, down, and then up and down again. Tax laws, healthcare costs, and minimum wage requirements are beginning their classic election year dance. And Apple and Google are ensuring that whatever mobile technology quick serves adapted to last week will be obsolete by this Thursday—at the latest.
Wendy’s asked, “Where’s the beef?” but today’s chains are asking, “Where’s the stability?”
Fortunately, even a shifting marketplace has an order to it. We asked several experts what they see coming in 2012. And their answers revealed a new kind of consumer: one still cautious about the recession, but ready to spend again if the value is right.
But value means different things to different people. From artisanal food to clean label products, from responsiveness to new family dynamics to location-based mobile promotions, here’s what you can expect going into 2012.
1. Double-Sided Menus
Some customers are looking for low prices, others are looking for perceived quality. Some are looking for healthy snacks, and others are looking for indulgences. The best way to solve these dilemmas may be to offer options on both sides.
Eric Giandelone is the foodservice director for Mintel Menu Insights, a research company that follows the restaurant industry. He says that the double-sided menu trend will be one of the biggest of 2012.
“A company like McDonald’s has really embraced this idea,“ Giandelone says. “You can order oatmeal or you can get the Big Breakfast. You have two sides of the menu. You have the better-for-you option, and you have the more indulgent option.“
While this strategy is great for healthy vs. indulgent, it also works for pricing. Giandelone singled out Wendy’s as a chain that has taken this approach. Even as its 99-cent value menu offers deals for bargain hunters, its Dave’s Hot N’ Juicy burgers tap into the premium market. Look for more chains to adopt this pricing model heading into 2012.
“This trend is evolving a little bit,” he says. “We’re seeing a little more tiered pricing or stepped pricing. Anybody who has a value menu is going to be there.”
2. Frugal Fatigue
Of course, it’s clear which side of the menu has the higher profit margins. The good news is that consumers will be heading that way in 2012. Stephen Hahn-Griffiths, the Chief Strategy Officer of Chicago-based advertising agency Leo Burnett, says that after so many years in a recession mentality, customers are increasingly giving themselves permission to spend again.
“It really isn’t all doom and gloom,” Hahn-Griffiths says, “it’s really the beginning of a change toward a better time.”
The key concept here is the small indulgence, so don’t expect to see a foie-gras-and-Sauternes based concept anytime soon. Rather, Hahn-Griffiths says that customers will turn to premium sandwiches like the burgers by Five Guys or In N Out to reward themselves without taking out a second mortgage.
“It’s a way of dining out that gives you permission to indulge,“ Hahn-Griffiths says, “And it doesn’t seem like a huge upcharge even for the tightest of wallets.“
Another area to watch is the mini-treat. Dairy Queen’s Mini Blizzards, Cinnabon Minis, and Starbucks Petites offer the same taste in a smaller package and could provide a way for customers to tack on a dessert order without feeling guilty.
3. New Definitions of Family
The demographic changes that have been taking place for the last 30 years are finally reaching a tipping point. 2012 will be the year for stay-at-home dads, grandparents as caregivers, and women as decision-makers. Hahn-Griffiths points to McDonald’s as an example of a chain that has already started moving in that direction.
“We need to recognize McDonald’s in that regard,” Hahn-Griffiths says. “It is a haven for single moms taking care of their kids. It recognizes that there’s sometimes blended or mixed families.”
To capitalize on the new families of today, quick serves will have to do more than change their campaign’s stock images. Instead, Hahn-Griffiths says that traditionally “macho” companies will start to emphasize things other than how many beef patties they can slap on top of a bun. Approaching the man as a connoisseur instead of as an eating machine will give even male-focused concepts broader appeal.
“If you look at In-and-Out Burger, you might even say Five Guys, those are environments where not only masculinity is embraced, but also a sort of more universal quality message,” Hahn-Griffiths says.
4. Clean Ingredients
Fine-dining culinary trends tend to filter into the quick-service industry, and the Slow Food movement is no exception.
Chipotle spokesperson Chris Arnold says his chain’s focus on fresh, local, and organic foods is still somewhat unique.
“We’re relatively early as a trend—if in fact it is a trend,” Arnold says. “There are, at the moment, not a lot of people doing it in meaningful ways. In the restaurant space you have Chipotle, and no one else at our size and scale.”
But that’s starting to change. In the Pacific Northwest, Burgerville has become popular for locally sourced ingredients like the hazelnuts in its hazelnut chocolate shakes or the beef in its hamburgers.
In San Antonio, EZ’s Brick Oven and Grill recently reworked its menu to get rid of ingredients like high fructose corn syrup and additives. And even major chains like Moe’s Southwest Grill are serving up quality proteins like grass-fed steak and all-natural chicken.
Arnold suggests that as customer awareness increases, this kind of product sourcing will become the norm.
“It’s probably just getting started,” Arnold says. “As consumers become increasingly aware why it matters how food is raised or grown, you’ll only continue to see people wanting better ingredients.”