The Customer Habits Foodservice Operators Can't Avoid
By Dwayne Reno
Across Canada many fast food chains are trying to shake their unhealthy public image. Earlier this year A&W got a huge boost in sales by shifting their focus to higher quality ingredients. Don Leslie, A&W's chief financial officer said “we saw a real uptick, in quarterly sales figures after introducing the higher-quality beef,” HERE.
But what is at the root of these changes and why are so many of the large chain operators so interested in showing customers they are a sustainable option?
This week I would like to look at how changing customer habits and government legislation are compelling the foodservice industry into change, wanted or not.
Why the push for sustainability?
It starts at the consumer level. Most businesses are operating because they have a customer base that enjoys one of two things, a good or service they provide, in some cases both.
What we are starting to see in the foodservice industry is a change in consumer habits; this is not a trend…. Consumer habits are evolving due to changes in their work schedule, health and social life. To keep up with these changes the large fast food chains have started to implement menu options that alight with their customer’s habits and values.
Earlier this year at an annual meeting with shareholders in Oak Brook, Illinois, McDonalds CEO Steve Easterbrook stated that McDonald’s Corp. is “fundamentally changing perceptions.” This comes at a time when McDonalds, who doesn’t have the most heath conscious image is reporting very disappointing sales figures even with the roll-out of their all day breakfast menu, HERE.
What is fostering the change?
Over the course of the last 5 years we have seen foodservice customers:
Order smaller meal portions, more frequently
This is called a snacking occasion by the industry. The 2016 Canadian Snacking Occasion Consumer Trend Report conducted by Technomic stated that “bundled mix-and-match snack options could drive sales; 34% of consumers say they're likely to order these options at restaurants," HERE.
With the popularity of snacking occasions on the rise fast food chains have started to offer big box or bungle options with great success, HERE.
Becoming more aware of the food they eat
Many Canadians are seeing the link between what they eat and their health. The University of Toronto has recently stated it will cut ties with its current foodservice provide citing a growing demand for fresh food among students as the cause. Also U of T's Dalla Lana School of Public Health stated that “Canadians under the age of 65 have a greater risk of developing diabetes if they live near a high number of fast-food restaurants with few healthier dining options," HERE.
Governments running interference
Over the years governments have put vast amounts of pressure on foodservice operators and vice versa. The tit for tat will continue as the regulation for menu labeling comes into effect under the Healthy Choice Act. As of January 1, 2017, it's mandatory for all foodservice operators or owners who are part of a chain with 20 or more stores to include their caloric intake on all menus and display items.
Earlier in March of 2016 the Cote-Des-Neiges-NDG borough in Montreal limited fast food operators to three specific operating zones which has since been challenged in court by Restaurants Canada.
Furthermore newly-elected Prime Minister Justin Trudeau called for restrictions on the marketing of unhealthy foods to children earlier this year. The province of Quebec has already banned the marketing of all products to children under the age of 13.
What does this mean for the foodservice industry?
Changing consumer habits are hard to ignore and will result in many changes in the years to come. The larger chain operators seem to be the prime focus for much of the changes at this time. But remember these larger chains do most of the advertising that draws foot traffic to restaurant populated areas, so just like ripples in a pond it’s only a matter of time before independent operators must change to remain competitive.
Until next time your customers want to know why they should spend money at your restaurant, bar or cafe. So give them the goods!
Dwayne Reno CEO & Founder
Social Chat Blog
Once a month, Building Block Associates serves up some food for thought with our foodservice Social Chat Blog.