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Friday, September 10, 2010

Healthier Options Key To Reviving Lunch Business

Healthier Options Key To Reviving Lunch Business


Marketing Daily, Karlene Lukovitz, 09/09/2010, 2:53 PM

After two years of substantial decline, restaurant lunch performance is expected to regain some ground in 2011, according to a new U.S. food service lunch trends report from Packaged Facts.


Restaurant lunch spending among U.S. consumers reached $119 billion in 2008 but dropped 4% last year, and is expected to decline by another 3% this year to $112 billion, PF reports. However, a 1.8% partial rebound to $114 billion is projected for 2011.

While some economic recovery is factored in, the prospects for increased consumer spending on restaurant lunches (or eating out in general) are dim for the near future.

Challenges to reviving lunch sales growth in the near term include unemployment's effect on work-driven restaurant routines, "bargain-minded consumers who weigh the cost of a bagged lunch against the indulgence of eating out, and an industry environment in which players are chasing foot traffic at the expense of guest checks through the extreme push of value meal deals," sums up Packaged Facts publisher Don Montuori.

In fact, thanks to discretionary spending cutbacks and the expectations created by value deals, limited-service formats now account for nearly 75% of all lunch sales, and price sensitivity appears to be the trend across income groups. Packaged Facts' own recent consumer survey found that interest in lunchtime meals priced under $5 and under $10 is stable across household income brackets. (Overall, about 35% of consumers cite a meal priced at under $5 -- and about 31% cite a meal priced at under $10 -- as influencing their choice of restaurants for lunch.)

Young adults, among the hardest-hit by unemployment, are 60% more likely than average to choose a restaurant because it offers meals for under $3, although they spend a higher percentage of their income on lunch than other age groups (and are by far the heaviest consumers of fast food).

Faced with such trends, restaurant operators will continue to rely heavily on limited-time offers, which help attract new visits and also enable testing longer-term menu strategies, according to the report.

However, some chains are also adding "bundled" deals as a means of increasing check sizes without undermining traffic. Examples cited include Jack-in-the-Box's limited-time "Pick 3 for $3" offer and Taco Bell's $2 Meal Deal (one main item, chips and a drink for $2).

At the same time, operators are increasingly attuned to leveraging "better for you" menu offerings. For example, PF cites a March 2010 study which finds that 46% of consumers report that they have been choosing more healthful items when eating out. And while consumers' actual behaviors don't necessarily mesh with their survey statements, restaurant operators are confirming guests' increasing interest in healthier fare, according to the report.

Fresh or less processed ingredients, fiber and whole grains, and more fruits/vegetables and less meat (as opposed to fewer calories or carbs or lower sodium) are the attributes that appear to be most desired in "healthful" meals among consumers. However, some consumers are also attracted by the often lower calorie counts of such meals -- and healthier entrées frequently offer lower prices than meat-based or other more traditional entrées, as well.

Certainly, other operators have noted the trend-bucking success of chains with formats that focus on offering fresh, quality, better-for-you, reasonably priced menus. Examples cited by PF include Chipotle Mexican Grill and Panera Bread, which realized much of its growth last year through lunch sales driven by introducing new salads, according to the report.

Another example: Freshii ("Fresh Food, Custom Built, Fast"), which was started with a single location in Toronto in 2005 and now operates locations in a rapidly growing number of key U.S. as well as Canadian markets, plus international markets including Austria and Dubai.

In addition to its heavy stress on "fresh" and "healthful" selections, Freshii provides customers with a simple system that enables them to see nutritional information and select and customize their items accordingly. The chain also offers fast service options that include simple order forms on mini clipboards available at the counter; phone, fax and online; and a GPS-based app that locates the nearest outlet and enables ordering from phone touchscreens.

1 comment:

  1. Lunch Trends in the U.S. Foodservice Market: http://www.packagedfacts.com/Lunch-Trends-Foodservice-2756365/

    ReplyDelete