Given today’s economy, everyone is looking for value in their purchases. Restaurant expenditures are no exception--the price/value relationship in foodservice has always been a critical factor in an operation’s success.
Value is in the eyes of the beholder and can be very subjective. To many, a large portion--a la The Cheesecake Factory--represents a second meal, and that makes the menu price a very good value.
To others, all of the “hype” about sensible eating and health issues has made them more conscious of their food intake. For years, dietitians have been preaching about asking for a doggie bag for half the meal, before it is served. Consumers have not exactly followed the words of wisdom.
Call it paranoia or simply a guilty conscience when it comes to obesity, but restaurant patrons are far more aware of their intake. They are asking for nutritional information, even at McDonald’s.
The Economy of Health TrendsWhen considering the economy and health trends, a logical conclusion is that smaller portions will translate into smaller prices and make consumers feel good about their eating habits. McDonald’s and many other QSRs have found that snack wraps are a popular way to attract consumers--and not only for snacks! The price is attractive and can often induce the purchase of two wraps as a single meal.
Many restaurants have been observing customers ordering appetizers rather than entrées for several years. There is great variety, and prices are not nearly as intimidating. A $30 or $40 entrée can be a turn-off, particularly if the restaurant patron is unfamiliar with the contents of the dish. The menu, or even an inadequate description of the meal by the waitstaff, also can be unconvincing.
Small portions are definitely on-trend today. At no time in our history has food been such a hot topic. Food-away-from-home is a social staple. People are dining out more than ever before, with nearly 50% of our food dollars being digested by foodservice.
Dining DilemmasEating out is a way of life. It is a primary social event, as well as a necessity in most people’s lives. In leisure times, the entertainment aspects of dining lead to experimentation and sharing. Choices are a necessity in everyone’s lives. If one person wants steak, another may want crab or shrimp. Someone may want a spicy dish, while someone may want a bland meal; the variations are endless.
One solution to these issues is sharing foods. When diners experiment together, they create lasting memories and a bonding effect. Many people enjoy discussing the last meal they shared together, along with the latest movie. Smaller portions such as tapas, finger foods, snacks-- whatever the name--create interest. There is also usually little risk involved.
There are times, however, when being a trend leader can lead to big trouble. This is exactly what happened to Ruby Tuesday--a casual dining chain based in Tennessee. Captivated by the health and nutrition wave in 2004, Ruby Tuesday’s decided to cut portion sizes, but leave menu prices the same. Customers reacted quickly, and the chain suffered a 5% drop in sales in short order and still has not regained its momentum.
Even though the economy was good in 2004-2005, consumers were looking for value. The clear lesson learned is that taking away value results in loss of business. Whether consumers plan to eat everything on their plate or not, they want to see it on their plate.
Portion ProportionThe exception to the rule is that, if the portion size is reduced, then the price can be lowered; this is becoming an attractive alternative for many operators. Many chains and independents are offering smaller portions, often through the afternoon, but not at dinner. Smaller entrée salads are popular, especially with women.
Mini-dessert portions are all the rage, due largely to the inexpensive price tags. A small indulgence does not hurt the wallet or the waistline! Lettuce Entertain You has used this strategy for a few years, while P.F. Chang’s recently introduced this feature.
Small portions of anything are great for smaller appetites, but they also allow for sharing and experimentation. Just as tapas started a hot trend a few years back, small plates allow patrons to try new things. Often, this can lead to higher check averages, as consumers will try two or three items, because they are comfortable with smaller prices. Particularly with larger parties, sharing and socialization play important roles.
Since McDonald’s introduced its snack wraps, smaller portions have helped build business in all segments of foodservice. Quizno’s has its smaller “Sammies,” and Wendy’s just introduced a new line of three “Chicken Go” Wraps, designed to meet consumers’ growing demand for high-quality, portable snacking options at a reasonable price.
Applebee’s has its “Ultimate Trios” and a special “Pick ‘N Pair” program for lunch. One can get 60 different combinations of two items starting at $5.99. The variety includes soups, half-sandwiches and selected pastas. The chain also introduced the “Dessert Shooter” program. With nearly 2,000 units, Applebee’s is the largest casual dining chain in the country, so its interpretation of trends is not to be taken lightly.
One of TGI Friday’s programs, featured at 582 units, offers center-of-the-plate items at two-thirds of the regular portion size. The side dishes are the same as those offered in regular-size portions. Friday’s recently announced six new entrées for the new “Right Portion, Right Price” menu ($6.99-$8.99): Asian-Glazed Chicken with Field Greens, Cedar-Seared Salmon on Field Greens, Cedar-Seared Salmon with Pasta, Bistro Sirloin Salad, Jack Daniel’s Chicken Alfredo and Dragonfire Chicken. In addition, diners can choose from four classics--Bruschetta Chicken Parmesan, Cajun Shrimp & Chicken Pasta, Half-Rack Baby Back Ribs and Shrimp Key West.
Ruby Tuesday, obviously sensitive to the portion-size issue, is featuring “Fresh Combinations” on its new menu. Two mini-burgers (turkey or beef), fries and a salad are being offered at all 950 units. This feature is not really a portion-size strategy, but it is designed to compete for consumer business.
Reasons to Dine OutFoodservice usually drives food trends, and smaller portions are among the hot trends right now. Overall, the tight economy, customers’ perception of value, their emphasis on health and eagerness to experiment are the drivers of this trend.
Most economists view the foodservice industry as a “FIFO” (first in, first out) industry. When dollars become tight, people cut back on eating out. When the economy relaxes a bit, consumers will be more willing to spend their disposable income on food-away-from-home.
Right now, restaurants want to give people compelling reasons to eat out. Like any other purchase, when value is perceived, it is a good inducement for purchase. Whether a McDonald’s snack wrap or a petite filet at Ruth’s Chris, value means different things to different people on different occasions.
Based on the menu items being introduced in the foodservice segment, it would seem logical to think that consumers want similar dining experiences at home. Smaller portions with value pricing will create new business. If the logistics of how to offer these attributes successfully can be worked through, it can mean a winning combination. It might not seem easy, but it could create demand. pf