Posted: Wednesday, December 31, 2014
On Trend: Six Ways Foodservice Brands Will Engage Millennials In 2015
Copyright 2014 Forbes
Jeff Fromm Contributor
December 31, 2014
Sales in the $680 billion restaurant industry will be positive in 2015, thanks in part to many restaurants changing everything from their menu items to service models in an effort to indulge the 80 million millennial consumers. Knowing that this cohort yields $1.7 trillion in direct spending power is too much for any industry, especially food service, to ignore.
The research firm, Technomic, predicts that the restaurant sector will see a three percent growth next year. The brands that adhere to the six following trends, however, will see the highest uptick in sales.
1. Unique flavors
Millennials crave adventure in all their experiences – including where and what they eat. Restaurants hoping to gain millennial attention will embrace their “restless palate syndrome,” by offering not only new dishes, but also twists on traditional culinary classics. Wingstop, for example, has seen great success with both its mango habanero and chili-lime flavored chicken wings, and Pizza Hut recently launched several new re-imagined pizza flavors, including its Cock-a-Doodle Bacon pizza, featuring a new garlic Parmesan sauce.
Look for even more flavor innovations over the next year, especially when it comes to Asian flavors. Technomic expects the breakout of Korean flavors, the mainstreaming of Vietnamese cuisines and the up-scaling of spicy ramen noodles.
Restaurants will also test new menu items this year, including celery roots, parsnips and kohlrabi, according to Baum+Whiteman. The food consultants also predict that restaurants will replace the standard potato side (think mashed potatoes, French fries, potato salad etc.) with more unique and adventures options like pureed root vegetables with smoked honey and cured pork.
There will also be an emergence of new protein. Turkey, for example, which is typically associated with lunchtime sandwiches and Thanksgiving dinner, will find its way onto more dinner menus replacing other staple proteins.
2. Imitating fast casual
After witnessing the fast casual industry increase its sales by 11 percent in 2013, it’s only natural that QSRs and causal dining concepts are trying to rebrand themselves as fast casuals, said Technomic’s EVP Darren Tristano.
“Watch for even more menu and concept diversity in this sector,” Tristano said. “Also look for more quick-service restaurants and full-service restaurants to realign their formats and develop new fast casual concepts to compete more aggressively.”
In alignment with this trend, Taco Bell is testing a new fast casual concept, called U.S. Taco Co. and Urban Taproom, in California, and Wendy’s and McDonald’s are transforming menu and service models.
McDonald’s, which hasn’t had a monthly gain in sales at established U.S. restaurants since October 2013, said this month that its striking several items from its U.S. menus and using fewer ingredients in an effort to compete with more popular fast casuals like Chipotle. It’s also testing lower-calorie items in six markets and is rolling out a new menu that enables consumers to customize their orders. The “Create Your Taste” sandwich will be available in 2,000 of its 14,000-plus U.S. restaurants by the end of 2015.
Wendy’s is also trying to stake its claim in the fast casual space. QSRWeb.com reported earlier this year that the chain spent most of 2014 improving menu items and restaurant décor in order to offer a better fast casual experience at a QSR price.
Once reserved for fast casuals, customization is quickly becoming a trend embraced by all restaurant categories. Technology, including kiosks, online ordering systems and mobile apps, have made it easier than ever for customers to choose exactly what they want in their food. Chipotle, which has cornered the “build your own” market, is brining the customization process to its new Asian fast casual counterpart, ShopHouse. The new restaurant allows consumers to pick from a variety of Asian-flavored meats, veggies and rice to create their own favorite customized bowls.
Chipotle’s customization model, which allows customers to create their own burritos (or bowls at ShopHouse) at a consistent price point no matter how many ingredients are added is quickly becoming a trend that QSR brands are attempting to emulate. A variety of other food chains are popping up that also include “build-your-own” options. Fast casual chains, including Pie Five, Blaze and Uncle Maddio’s, are already racing to become the “Chipotle of the Pizza Industry.”
4. Still going mobile
Mobile checkout and ordering are nothing new, but restaurants are just starting to embrace the trend. Hoping to imitate the success of the mobile payment apps at Starbucks’ and Dunkin Donut’s, many restaurants, including Burger King, have recently made it possible for customers to pay via apps on their smartphones. The big winners will be the brands that are able to utilize mobile engagement strategies beyond just providing ways to pay with a mobile device.
Look for many more brands to start implementing systems that bridge the physical interaction to a more mobile convenience-driven experience.
5. Sustainability Story
According to the 1,300 American Culinary Federation chefs interviewed in the National Restaurant Association’s annual “What’s Hot Culinary Forecast, ” most sustainability efforts today are related to locally sourcing food. This is a huge millennial trend that really started to take shape in early 2014 and will remain a huge theme in 2015. Locally sourced proteins and produce, which made the number one and two spot in the report, will also continue to gain popularity and space on menus in both the QSR and Fast Casual industries.
Thanks to millennials’ passion for healthy living, restaurants must also focus on waste reduction and process management. Young consumers want to know about the entire product lifecycle, a demand that Chipotle already understands and has marketed to its advantage. Its customers are proud to spend money there because the company tells them how they are dedicated to minimizing the environmental impact of its real estate through energy efficiency, material recycling and reuse, water management, better indoor air quality and post-demolition impact.
6. Drinking up
Millennials have turned boozing into an art form, which is forcing bars and restaurants to up their games. Gone are the days of stocking a couple beers and offering White Zin as the wine option. Millennails are all about craft beer, signature and hand-crafted cocktails and flavored spirits. The American Culinary Federation predicts that the New Year will see much more of the following:
1. Micro-distilled/artisan spirits
2. Locally produced beer/wine/spirits
3. Onsite barrel-aged drinks
4. Regional signature cocktails
5. Culinary cocktails (e.g. savory, fresh ingredients)
Millennials, who love variety and sharing with their friends, are also attracted to restaurants and bars that offer sharable drinks. For example, San Francisco’s Rickhouse offers the Pimm’s Berry Punch bowl, which includes strawberry-infused bourbon, lemon juice, ginger beer and bitters, for $42. The drink is meant to be shared with friends and creates a more inclusive and communal environment.
Baum+White agreed that original alcohol offerings would be huge in 2015, writing that “brown whiskey” is finally starting to outsell vodka because millennial drinkers want more body in their cocktails. Millennial drinkers are also turning to darker liquors because they come with the assumption that they were made in smaller, locally owned whisky distilleries.