There is little we will more eagerly share than the restaurants we love and the meals we eat. A quick scroll of any social media feed makes it: personal dining experiences are now a public affair.
With consumer consciousness on the rise, the restaurant industry has to be increasingly public about everything it does. Supply-chain transparency, product delivery, trends, tech, and customer experience: these are most industries’ concerns in 2016–2017, yet nowhere are those more out on the table than among restaurants. The challenge for restaurant brands is how to achieve longevity and customer loyalty in this ever-expanding and trend dependent field.
The following shifts in food service are under way, presenting opportunities for restaurants to use their brands to both differentiate themselves and navigate this ever-changing marketplace.
Globalization is changing culinary tastes. This is especially evident in the US, the longtime number one exporter of fast food. While US brands—e.g., McDonald’s, KFC, Starbucks—continue to expand, especially in Asia where they are popular among the rising middle class, Asian brands are now gaining ground in the West. Already in Boston, the Japanese noodle chain Wagamama (based in the UK) makes its NYC debut in late 2016. And in 2017, Filipino fast-food giant Jollibee, which has 32 US locations, will bring its spaghetti, pancake sandwiches, and halo-halo desserts to Australia.
This trend presents a two-fold opportunity for established players to expand and test their repertoires while zeroing in on their strongest offerings to drive differentiation. For some, it also means bolstering the existing brand by creating new, distinct ventures that excel in the realm (see Shophouse and Maple below).
The rise of fast casual
Fast casual is loosely defined as take-out cuisine that emphasizes fresh, quality ingredients set at a budget price point that is higher than traditional fast food. The popularity of fast-casual food, spread most conspicuously in the US by Chipotle, is proving especially solid ground for Asian-style chains spreading West. Chutney Joe’s, a fast-casual Indian concept with two Chicago outlets, plans to expand to other markets through franchising within the next few years; same goes for Merzi in Washington, DC; Noodles & Company, a Colorado-based fast casual restaurant, plans to further develop the Asian section of its multifaceted menu; and Yo! Sushi, the conveyor-belt sushi chain (where customers pick and choose from color-coded dishes as they slowly roll by) just opened its first spot in the US, aiming to have between 50 and 70 locations by 2017.
In a strategic move we’re likely to see replicated, Chipotle co-CEO Steve Ells founded ShopHouse Southeast Asian Kitchen, which features a short menu of fast-casual Asian dishes like bowls of meat with toppings and sandwiches with green papaya slaw. It launched to tremendous acclaim, and Chipotle’s stock price shot up as a result.
Going clean and conscious
While today’s customers are quick to post pictures of a well-composed plate, they also care more than ever about what’s really in it—and how it got there. “Healthy” means vastly different things to different people: everything from the ingredients and additives to sourcing, transport, processing, and packaging. Currently, claims to non-GMO ingredients and grass-fed and free-range animals are overtaking “organic” as customer magnets—to many customers, “organic” is too loosely defined. People don’t want to be duped; they want brands to be transparent about what they’re feeding them.
Sweetgreen has made its name as an alternative to traditional fast food that serves little-to-not-processed, sustainably sourced food, made to order in an ever-growing number of takeout locations around the US. Its design-your-own meals, ethos-first message, transparency (the brand pointedly discusses it sourcing and makes its meals in front of customers), and focus on community has made a lasting impression in the fast-fresh category.
Today, conscious consumers are clamoring more than ever for better products—from the old guard and the new. In 2016, McDonald’s updated its global food packaging, with the goal of sourcing 100 percent of its fiber-based material from recycled or certified sources by 2020. This year, the packaging across its 38 European markets (170,000 tons of wood fiber annually) is chain-of-custody certified. The chain has also made a high-profile incremental commitment to cage-free eggs: another grand proposition, especially in light of its upcoming All Day Breakfast option.
The delivery revolution
A valuable term to describe a well-executed brand experience is seamless. It’s also the name of the Web- and app-based service that, along with GrubHub, has grabbed and shifted the meal-ordering market. With these experience-centered services’ rise, we’re witnessing the next shift: chef-delivered meals. These online- and app-only services include Munchery, which delivers restaurant-quality food from a commissary kitchen, cutting out brick-and-mortar restaurants completely.
NYC restaurateur David Chang has embraced Maple, a delivery service in Manhattan that features professional chefs working from a single kitchen to offer flexible menus at affordable price points. Maple emphasizes transparent, local sourcing and high-quality ingredients along with ultra-convenient, Uber-style service: $12 per lunch, tip and delivery included.
Clearly, customers seek flexible accessibility and they’re getting it. Convenience brands looking to stay relevant know this: in 2016, Restaurant Brands New Zealand (which operates KFC, Pizza Hut, and Starbucks in that country), has developed home-delivery options for KFC, which previously offered only takeaway service. Tech and service options are changing, and, within an industry that centers on expediency, few if any brands can afford to ignore customers’ demands. Those that reliably fold convenience into their brand experience at every customer-facing moment will stay ahead.
The experience is still key
With this year’s trends focused so much on what’s not in food and how to best enjoy the experience of not being in a restaurant while eating, you might think the dining experience has been put on the backburner, but that’s not so.
Starbucks continues to successfully open bricks-and-mortar locations and has emphatically introduced high-end dining cafes with its new Roastery, of which the company’s Chief Executive, Howard Schultz, recently said, “I want to show the world what an incredible retail experience it is in terms of theater, the romance, and the sense of discovery.”
McDonald’s is focusing on creating connected experiences along its customers’ journey, leveraging its brand to build customer loyalty both in stores and online. It’s partnering with mobility management company SOTI to create an “Experience of the Future,” bringing Samsung tablets into UK restaurants. McDonald’s also launched a new mobile app, which has scored more than two million downloads since launch.
By establishing consistent, seamless connections between the in-store and online experiences, established brands can reap exponential returns rooted in what customers already know and trust in their brands, heightened by these new, advanced services.
All united in brand
While shifts in the industry are apparent, some brands are growing within their niche by bucking “trends.” KFC has made a profound cage-free commitment, but the brand still staunchly embraces its classic menu. Its popular “Real Meals” campaign takes a humorous swipe at trends and has put some pluck into differentiating the brand’s profile amid the healthy-eating arms race.
Ultimately, the companies that respond to consumer demands, take advantage of new tech, and serve not just food, but food experiences, will be best prepared for growth. The consumer market is growing, not just in size, but in knowledge and demand. The biggest players in the restaurant industry are challenged to keep their brands fresh while remembering their core offerings, in order to keep moving up in the food chain.