decision factors

new research from

Getting at the WHY New landmark study (currently in progress)

Extremely thorough analysis of:

BEHAVIOR – consumer decisions away from home

MOTIVATIONS – why consumers make those choices

SOLUTIONS – tactics to positively influence consumer decisions

12,000 consumers

Operator perspective

MenuTrends exploration(7,000+ menus; 1.2 million items)

Brand new data

the research process

completed as of 8.7.2012

to be conducted

Traditional QSR

Fast-CasualMidscale Dining

Casual Dining Upper Casual Fine Dining

Lodging Restaurants

Lodging Room Service

C&U Dining Hall

C&U Retail / Hosted

Hospital Cafeteria

Long-Term Care

B&I C-StoreGrocery

PerimeterRecreation & Amusement

Food Trucks & Kiosks

Other

explored segments

The research focuses primarily on segments where consumer choice is most relevant. Prisons, for instance, are not covered.

IFMA CONSUMER PLANNING PROGRAM

Bill McClellan, Dawn Food Products (Chair)

Rick Kirkpatrick, Sweet Street Desserts (Vice Chair)

SPECIAL RESEARCH COMMITTEE

Nelly Bentz, Heinz North America

Andrea Hickman, McCain Foods

Bernie McGorry, Dawn Food Products

Mike Stammer, Hillshire Brands

Donna Surma, Basic American Foods

Devon Gerchar, IFMA

Jim Green, IFMA

Guided by a special research committee

These pages feature just a short sneak peak of this new landmark research.

For more information about the study, please contact IFMA.

venue decisions how and why consumers choose WHERE to eat

Family meal 19%

Quick bite 17%

Casual lunch 15%

Casual dinner 14%

Cheap bite 14%

Running errands 13%

Relaxing at home 10%

Hold you over 9%

Food for energy / fuel 9%

Last minute dinner 9%

Dinner on the way home 8%

Hanging out with friends 8%

Social gathering 5%

Work break 5%

Road trip 4%

Morning commute 3%

Celebration / special occasion 3%

Before a movie / event 3%

Weekend breakfast 3%

Business / work lunch 3%

Date / romantic meal 2%

Brunch 2%

Festive / party-like 1%

Girl's night out 1%

Formal dinner 1%

Guy's night out 1%

Meeting coworkers after work 1%

Impressing someone 1%

Frequency of AFH occasions / dining motivators

Dining occasions are generally ordinary and not event driven. To maximize their business potential, operators should generally ensure that their proposition appeals to everyday life. (there are exceptions, of course)

Why do occasions matter?Because they drive venue decisions.

QSR Fast-Casual Midscale Casual Dining

Cheap Bite Casual Lunch Weekend Breakfast Celebration

Quick BiteBusiness / Work

LunchBrunch Date / romance

Dinner on the Way Home

Hanging Out with Friends

Family Meal Celebration

Morning CommuteBefore a movie /

eventSocial Gathering Casual Dinner

While running errands

Casual DinnerHanging Out with

FriendsSocial Gathering

Top Aligned Occasions by Restaurant Segment*

*within each segment, occasions that align particularly well with that segment

Technology directly influences venue selection for 15 billion occasions annually.

42%viewed menu

online

41%visited place’s

website

25%search engine

21%social media

20%daily deal

site

online photos: 18%restaurant listing site: 13%

user reviews: 13%navigation system: 12%

mobile app: 11%

It starts with the menu, often viewed on that place’s own website.

General purpose search engines and social media are used next most

commonly, along with daily deal sites.

Online photos play an increasingly pivotal role.

Mobile (phone) apps are used less commonly, but may grow as apps

marketplaces mature.

Of those who used technology to decide where to eat, % who used…

resources usedto decide where to eat (last occasion)

However, decisions are still based predominantly on prior experience.

Previous Experience: 66%

Word of Mouth: 33%

Technology: 21%

Consumers are mostly creatures of habit… and are far more motivated to go somewhere familiar thansomewhere new.

72% wanted to go

somewhere familiar

11% wanted to go

somewhere new

This figure drops even further in practice. While 11% wanted to go somewhere new, ultimately only 6% actually did so.

94% of occasions are repeat visits.

the customer acquisition challenge: Introduce New Behavior

Foodservice behavior is often habitual.

Most are inclined to simply visit familiar places, making it hard for other businesses to draw traffic.

To attract new customers, operators must go above and beyond – giving the consumer a real reason to visit.

The goal in this case is to dislodge consumers from their comfort zone.

the flipside: Loyalty

But isn’t repeat visitation a testament to operators’ ability to build a loyal customer base?

Convenience46%

Loyalty54%

Well, only partially.

Nearly half of all repeat visits are driven by convenience rather than loyalty.

% of repeat visits attributed to…

80%

75%

73%

64%

62%

59%

58%

58%

53%

48%

40%

18%

Fine Dining

Upper Casual

Fast Casual

Casual Dining

Delivery

Coffee Shop

Buffet Restaurant

Midscale

Supermarket deli

QSR

C-Store

Cafeteria

[repeat visits]

% visiting out of

LOYALTY

True loyalty is more common to certain industry segments.

Fast-casuals, for instance, draw far more loyalty traffic than do QSRs.

the customer retention challenge:Promote True Loyalty

What may be perceived as customer loyalty is often just the manifestation of a need for convenience.

True loyalty is rarer, and is generally associated with higher-end segments.

Despite their high re-visitation rates, QSRs, C-Stores, and Cafeterias are the segments least likely to foster true loyalty.

Yet Fast-Casuals show that this need not be the case –that limited service venues are indeed capable of building true loyalty.

menu decisions how and why consumers choose WHAT to eat

82.3

90.3

92.6

97.996.4 96.1

93.4 93.3

2005 2006 2007 2008 2009 2010 2011 2012

Average Menu Size(items per menu)

[excludes beverages; “all day menus” only]

Following several years of increase, average menu size began to decrease following 2008’s economic downturn.

During this time, operators became more guarded in

their approach to introducing new items – often favoring

nostalgic old-time favorites.

a little context about the menu

A big menu is neither good nor bad…

It’s all in how it’s positioned to the consumer

39% want a big menu

with lots of choices

35% want a

smaller, focused menu

The two points above need not always be mutually exclusive.

If organized well, even a large menu could potentially appeal to consumers who normally prefer a smaller, more focused offering.

76%

Menu decisions are often pre-meditated…

already had something in mind before entering the venue

88% ordered what they had in mind

and of them…

But that’s not to say that menu decisions can’t be influenced.

In the next phase of this research, we’ll explore specific strategies to build check averages and promote menu items more effectively.

12.3

12.8

13.1

13.313.4

13.6

13.7

2005 2006 2007 2008 2009 2010 2011

Menu Descriptiveness(average word count; Casual Dining Entrees)

For instance:

Although menu sizes have shrunk since 2008…

Restaurants have continued to improve how they describe their dishes during this time.

30%

52%

Without bread basket

With bread basket

Appetizer Incidence

(FSR’s)

16%

32%

Without bread basket

With bread basket

Dessert Incidence

(FSR’s)

Consider too the case of the bread basket.

Meals that include bread baskets are actually MORE likely to also include appetizers as well as desserts.

While presentation and ambiance also play a role, the bread basket can help set the stage for a fuller dining experience.

Food that's fun to eat 41%

Made to order 38%

Classic American food 37%

Eaten with one hand 31%

Large portion size 29%

Piping hot 27%

Only uses fresh ingredients 27%

Signature dish 25%

What SPECIFIC attributes do consumers seek in their food?

Food that’s fun to eat tops the list, edging out even “made to order” and “large portion sizes”.

Beyond quality and freshness

Beyond quality and freshness

Popular dish 24%

Free refills 23%

Hearty foods 22%

Scratch made 20%

Balanced meal 20%

All-natural ingredients 20%

Fried food 19%

Vegetables 17%

Not fried 17%

Can dress food up further 16%

High protein 16%

Low in fat 16%

Enough for leftovers 15%

Low in calories 15%

Something spicy 14%

Beautiful food 13%

No MSG 12%

Some like it HOT!

Consumers are just as interested in spicy foods as they are low fat or low calorie offerings.

What SPECIFIC attributes do consumers seek in their food?(middle tier attributes)

Beyond quality and freshness

Multiple courses 12%

Local ingredients 12%

Low in sodium 11%

Authentic ethnic dish 10%

New menu item 10%

Interesting / new ingredients 10%

No HFCS 9%

“Americanized ethnic dish 9%

Whole grains 8%

Made by a true chef 8%

Trendy foods 8%

Organic ingredients 8%

Antioxidants 6%

Gluten free 5%

Fancy dish 5%

Wine pairings 3%

What SPECIFIC attributes do consumers seek in their food?(lower tier attributes)

Despite all the media attention and rush of new products promoting it, gluten-free still appeals to only a small portion of the overall population.

A greater percentage of consumers want products made with no HFCS, whole grains, or even organic ingredients.

next steps building solutions to influence behavior

Coming up NEXT

Test of tactical initiatives to sway VENUE as well as MENU decisions

Areas of exploration include:

o New business attractors

o TRUE loyalty enhancers

o Check average builders

o Menu strategies

o Promotion & merchandising tactics

o Consumer-based definitions of “fun foods”, “signature dishes”, and more

Operator insight into what works, what doesn’t work, and why

Do you have a venue or menu solution you’d like to test?Contact IFMA to include your ideas in the research.