ROSEMONT, Ill. -- The traditional foodservice dayparts are stepping aside for consumers' newest focus, snacking. That's the word from Technomic Inc.'s Restaurants 2008 Trends & Directions conference, which brought together more than 150 limited-service restaurant (LSR) and full-service restaurant (FSR) operators for discussions on the state of the industry and employee empowerment.
The top 100 chains generated more than half of the industry's $350 billion in 2006 sales, Technomic reported, with total restaurant sales up 5.9% from the year prior. [image-nocss] Leading the charge: beverage conceptsincluding coffee chains, smoothie shops and tea shopspushing up 21%. This was followed by bakery-cafes such as Panera Bread with a 13% leap in sales.
And while sales growth for LSRs and casual dining slowed between the first quarters of 2006 and 2007, LSRs continued to post a modest increaseup about 2%thanks to consumer downtrading from casual, which saw sales slip nearly 1%. Rising menu prices, market saturation and perhaps simple consumer exhaustion with the casual concept are beginning to take their toll on the segment.
With burger, pizza, chicken, Mexican and sandwich chains expected to post only single-digit sales growth in 2007, many LSRs are gunning for breakfast and snackingor the fourth daypartfor a shot in the arm. According to CREST data from NPD Foodworld, customer traffic for breakfast and a.m. snacks rose 5% in 2006 and 4% for p.m. snacks, while lunch and supper traffic remained flat.
Witness the deluge of snacking options such as KFC's Snacker and McDonald's Snack Wrap, which provide a portion-controlled option for consumers with the midday munchies.
It also explains LSRs' renewed focus on coffee, with both McDonald's and Burger King heavily promoting iced coffee. Indeed, traditional LSRs are hoping that the elevation of coffee beverages to snacksa formula that has paid of handsomely for Starbuckswill generate sales from consumers looking for a refreshing pick-me-up in the mid-morning and afternoon.
Coffees and smoothies are now snacks, said Joseph Pawlak, Technomic vice president. It's hitting a new daypart or subdaypart.
Many LSR segments are also attempting to pique consumer interest with upgraded ingredients and fresh appeal. Burger chains are serving up Sirloin or Angus beef patties, pizza operators are offering gourmet toppings and artisan crusts, while Mexican chains are offering fresh salsa and premium proteins, such as naturally raised chicken and pork.
Like c-stores, the restaurant industry is wrestling with how to best serve the demand for healthier fare when consumers have proven frustratingly schizophrenic and confused about what healthy means to them. Organic has become interchangeable with natural. Technomic argues that the best way to meet the trend head-on is with a focus on fresh.
Consumers want better', said Sara Gillis, a project analyst with Technomic. They know more about food than they ever have. But operators don't need to make daily runs to the farmer's market to deliver on a fresh promise. Freshly prepared foods featuring high-quality ingredients will pack a powerful fresh impact, even if they incorporate components that have seen the inside of a refrigerator.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.