MRM Research Roundup: Mid-September 2020 Edition

In this edition of MRM Research Roundup, we feature the latest from the National Restaurant Association, hot breakfast spots, fried chicken adoration and some top vegan trends.

An Industry in Limbo 

Six months following the first shutdown of restaurants for the coronavirus pandemic, the restaurant industry is in limbo. According to a new survey released by the National Restaurant Association, nearly one in six restaurants (representing nearly 100,000 restaurants) is closed either permanently or long-term; nearly three million employees are still out of work; and the industry is on track to lose $240 billion in sales by the end of the year. 

The survey, which asked restaurant operators about the six-month impact of the pandemic on their businesses, found that overwhelmingly, most restaurants are still struggling to survive and don’t expect their position to improve over the next six months. The findings include: 

• Consumer spending in restaurants remained well below normal levels in August. Overall, sales were down 34 percent on average. 
• Association analysis shows that the foodservice industry has lost $165 billion in revenue March– July and is on track to lose $240 billion this year. 
• Our research estimates that for 2020, at least 100,000 restaurants will close, but the initial scope of closures won’t be known until government statistics are released in the months ahead. 
• 60 percent of operators say their restaurant’s total operational costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. 
• On average, restaurant operators say their current staffing levels are only 71 percent of what they would typically be in the absence of COVID-19. 
• In a recent consumer survey, 56 percent of adults said they are aware of a restaurant in their community that permanently closed during the pandemic. 

“For an industry built on service and hospitality, the last six months have challenged the core understanding of our business,” said Tom Bené, President & CEO of the National Restaurant Association. “Our survival for this comes down to the creativity and entrepreneurship of owners, operators, and employees. Across the board, from independent owners to multi-unit franchise operators, restaurants are losing money every month, and they continue to struggle to serve their communities and support their employees.” 

The survey also found that 40 percent of operators think it is unlikely their restaurant will still be in business six months from now if there are no additional relief packages from the federal government.

“This survey reminds us that independent owners and small franchisees don’t have time on their side,” said Sean Kennedy, executive vice president of Public Affairs for the Association. “The ongoing disruptions and uncertainty make it impossible for these owners to plan for next week, much less next year. Congress is about to leave Washington for the elections – we need them to focus on the short- term, basic solutions that have secured bipartisan support and passed one or both chambers. We urge immediate passage of these while we work with lawmakers on the comprehensive elements of our ‘Blueprint for Restaurant Revival.’ 

“The foodservice industry was the nation’s second largest private sector employer and pumped more than $2 trillion into the economy right up until our sudden shutdown,” Kennedy continued. “Making an investment in an industry that consumers love and that powers the economy is a good business and economic move for Congress as they search for the biggest bang for their recovery buck.” 

Learn more about the Association’s recovery proposals in the Blueprint for Restaurant Revival. 

Even as lockdown restrictions are eased and restaurants find innovative ways to welcome customers back, many Americans remain hesitant about dining in during Covid-19 and are instead turning to takeout for their favorite meals.

How Diners Feel 

Bid-On-Equipment found that 43 percent of Americans feel unsafe dining inside a restaurant currently and that 65 percent are spending more than ever on takeout.  

Here's what they found: 

• The average American is ordering 2.4 takeout orders each week – and spending $67 per week.
• Local and small business support has increased during Covid-19 with 59 percent of Americans ordering more from local restaurants instead of large chains.
• Only one in three have dined inside since restaurants have reopened and 43 percent say they don’t feel safe dining inside.

Read the full report to learn more.

The Future of Quick Service Restaurants

The COVID-19 pandemic has influenced consumer sentiment and behavior as it relates to dining and quick service restaurants in a way we have never seen before; and with that, ThoughtWorks interviewed a diverse group of consumers in the U.S. to get their perspective on the state and future of the QSR industry for its latest report, The Future of Quick Service Restaurants. 

Key insights, include:

Customers fall along a “continuum of concern” when it comes to COVID-19 (from cavalier and laissez-faire to hyper-vigilant) and this influences their current behavior and future expectations. Interestingly, location did not seem to be a defining factor. In ThoughtWorks’ research, people in states with looser restrictions reported similar levels of discomfort to those in states with stricter rules.

Consumer conversations revealed eight main themes related to the restaurant experience in the “next normal”:

• Earn My Trust
• Contactless Everything
• Comfort Food
• Superior Service
• Family Size It
• Save the Local Store
• Entertain Me
• New Value Meals

ThoughtWorks also identified five principles that should influence how quick service restaurants approach the “next normal” in the post-COVID-19 reality:

• Over-deliver on the basics
• Foster trust
• Cultivate community
• Expand choices
• Reward loyalty

 View the full report here.

What Americans Love About Fried Chicken

DoorDash commissioned a survey* to better understand just what Americans love the most about KFC, fried chicken, comfort food, sauces and more. After surveying 1,000 chicken-eaters here’s what the findings say:

• 92 percent of Americans said fried chicken is their go-to comfort food, with 94 percent of respondents agreeing they typically get comfort food when ordering in.
• 85 percent of Americans say they order extra food when ordering delivery or take out in order to have leftovers. What’s more, 61 percent of Americans eat their fried chicken leftovers warmed up on a plate, while 19 percent of Americans eat them cold from the fridge.
• 43 percent of Americans say they could eat more than 10 chicken tenders in one sitting; and 9 percent say they could eat more than 20 chicken tenders in one sitting – with Westerners and Northeasterners being most likely to say they could eat more than 20 tenders in one sitting.
• 75 percent of Americans say their meal isn’t complete without sauces; 20 percent say sauce is the single most important part of a great fried chicken meal with 81 percent saying they have asked for extra sauce (55 percent do so often or almost always). KFC lovers are more likely to order extra sauces with their meal every time. 
• Honey BBQ Sauce ranks #1 as Americans favorite sauce, followed by Buttermilk Ranch and Honey Mustard.
• Over half (54 percent) of Americans admit to battling it out for the last piece of chicken in the bucket.
• Women are more likely to prefer ‘extra crispy’ style fried chicken (43 percentF to 32 percentM).
•  Southwesterners are the only region to rank Buttermilk Ranch over Honey BBQ as their favorite sauce (26.9 percent vs 21.6 percent).
• Fight For the Final Piece: Over half (54 percent) of Americans admit to battling it out for the last piece of chicken in the bucket.
• Plant-Based Chicken: 71 percent of Americans say they would or already have tried a plant-based chicken substitute. Compared to older respondents, Millennials/Gen Z are more likely to be willing to try a plant-based chicken substitute (78 percent to 66 percent).
• Sides on Sides: Mashed potatoes are Americans’ favorite side dish to pair with fried chicken (42 percent). This is followed by mac and cheese (24 percent).
• “Any Leftovers?”: 85 percent of Americans say they order extra food in order to have leftovers, with 1/4 always ordering extra for leftovers. 
• 61 percent eat their leftover fried chicken warmed up on a plate, 19 percent eat them cold from the fridge and 12 percent opt for heating up their leftover fried chicken in a sandwich.
• Compared to older respondents, Millennials/Gen Z are more likely to avoid eating leftover fried chicken cold from the fridge.
• Chicken Lovers: 80 percent of Americans who’ve eaten KFC in the past year have an even stronger affinity for fried chicken than the 20 percent who have not. KFC-goers are also nearly 1.5x as likely to say they LOVE fried chicken (61 percent compared to 38 percent). 
• As for the favorite piece of chicken, 38 percent of Americans say “Breast” is their favorite cut. This is followed by wings (18 percent) and legs (16 percent).
• Chicken tenders are the top ranked chicken style in the Southwest (17.2 percent)
• Compared to older respondents, Millennials/Gen Z are more likely to say chicken tenders are their favorite chicken style.
• Compared to older respondents, Millennials/Gen Z are more likely to have fried chicken delivered (62 percent to 45 percent).

Female respondents are more likely to….

• Prefer ‘extra crispy’ style fried chicken (43 percent to 32 percent)
• Avoid a struggle for the last piece of fried chicken because they plan ahead to ensure they get it (52 percent to 39 percent)
• Say they order delivery/takeout because they’re too tired to cook (69 percent to 52 percent)

Males are more likely to…

• Say ‘watching a big game’ is the best occasion for KFC (19 percent to 7 percent)
• Rate the sauce as the most important part of a fried chicken meal

Those who eat KFC are more likely to…

• Prefer ‘fried’ as their favorite chicken preparation (64 percent to 42 percent)
• Prefer wings over those who have not eaten KFC recently
• Prefer their fried chicken “extra crispy”
• Believe their meal is ruined if the sauces are forgotten (78 percent to 67 percent)
• Fight over the last piece of fried chicken in a bucket, and win (30 percent to 11 percent)

Breakfast Diversity
 

 If you're looking for a new place to grab some takeout from, this new interactive map from CashNetUsa features 144 of the best breakfast restaurants across the country.

 Food Safety Supply Chain

Zebra Technologies Corporation announced the results of its Food Safety Supply Chain Vision Study. The study highlights the views of consumers as well as food and beverage industry decision-makers worldwide from distribution and warehouses to grocery stores and restaurants around safety, traceability and transparency.

Surveyed consumers reported their top food safety concerns include restaurant kitchen and wait staff hygiene, foodborne outbreaks, illness from contaminated food, and food and beverage recalls. Consumers can be quite unforgiving if they experience a food incident as approximately six in 10 reportedly would never eat at a restaurant again if they contracted a foodborne illness or food poisoning. Slightly more than 80 percent of surveyed consumers said companies have an important role to play in implementing food safety solutions and an ethical responsibility to ensure the safe handling of their food. Most consumers (70 percent) said it is important to know how their food and ingredients are manufactured, prepared, and handled, while 69 percent agreed knowing how their food is sourced is also important.

Given recent food safety incidents and an increased focus on health and wellness, it’s unsurprising both consumers and industry decision-makers are showing a great level of interest in the source, quality and safety of their food. However, a disconnect exists between what consumers believe and what industry decision-makers think. Almost seven in 10 (69 percent) decision-makers say the industry is prepared to manage food traceability and transparency, but only 35 percent of consumers agree. Furthermore, only 13 percent of consumers felt the industry was extremely prepared today to manage food traceability and be transparent about how food travels through the supply chain, whereas 27 percent of decision-makers reported feeling this way. Unfortunately, this is not just a short-term challenge as approximately half (51 percent) of surveyed food and beverage decision-makers said meeting consumer expectations will remain a challenge in five years.

“Findings from our study show that while the industry is taking measures to ensure a more transparent supply chain, more work needs to be done in order to increase consumer confidence and improve food traceability,” says Mark Wheeler, Director of Supply Chain Solutions, Zebra Technologies. “Businesses naturally have more information available to them but can improve consumers’ faith in their food sources by providing them access to the same information.”

One bright spot identified in the research is the role that technology can play in closing both these gaps in both the short- and long-term. An overwhelming majority (90 percent) of decision-makers acknowledged that investments in traceability-focused solutions will provide them with a competitive advantage by enabling them to meet the expectations of consumers. When asked about the top benefits that technology-based track and trace solutions would provide, nearly six in 10 decision-makers cited risk reductions with proper handling, transportation and storage and tracking product perishability. Forty-one percent of industry decision-makers reported RFID tags improve food traceability within the supply chain more than any other technology, yet only 31 percent currently use them within their own organizations.

Mobile computers, mobile barcode label/thermal printers, rugged scanners and specialty labels and tags will also be key enablers in winning consumer trust and delivering more transparent information to consumers. Approximately 90 percent of surveyed industry decision-makers expect to use rugged handheld mobile computers with scanners, rugged barcode scanners and mobile barcode label/thermal printers within the next five years to digitally manage and track food products and related information.

Among the regional findings: 

Asia-Pacific

• Ninety-three percent of surveyed food and beverage decision-makers believe their companies have an ethical responsibility to ensure the safe handling and management of food.
• Nearly three-quarters (73 percent) of consumers listed illness and deaths caused by contamination as their biggest concern for risks posed by the food supply chain.
• Eighty-nine percent of industry decision-makers believe investments in traceability-focused solutions would provide their companies with a competitive advantage.

Europe

• Only 15 percent of surveyed consumers completely trust food and beverage distributors to ensure the food and beverages are safe for public consumption.
• More than six in 10 (62 percent) consumers listed a foodborne outbreak as their top concern for food-related issues.
• Approximately half (53 percent) of surveyed industry decision-makers completely agree their companies have an ethical responsibility to ensure the safe handling and management of food – the lowest of any region.

Latin America

• Almost nine in 10 (87 percent) consumers cite restaurant kitchen staff hygiene as their top concern for food-related issues.
• The vast majority (97 percent) of surveyed industry decision-makers believe investing in food safety and traceability technology will provide their companies with a competitive edge.
• Seventy-nine percent of consumers responded that having access to accurate information on where their food came from was important to them.

North America

• The average trust level in companies and brands to ensure food and beverages are safe for public consumption is two and a half times higher in industry decision-makers (45 percent) than consumers (18 percent).
• Ninety-one percent of surveyed food and beverage decision-makers believe their companies have an important role in implementing food safety solutions.
• More than six in 10 (64 percent) consumers cite fear of foodborne illness/disease as their primary reason for wanting more information about their food source.

  

Breakfast is Hot

An interesting trend appeared in RMS’ data report — breakfast saw a huge jump. Back to school, perhaps? 

Breakfast sales are up nearly 20 ppt from a low in early July. Sales are now up between 20 percent and 25 percent YOY, traffic remains down between five percent and 10 percent YOY.

Otherwise, behavior has somewhat normalized.  

QSR performance entered its fifth consecutive week of stable traffic, trending at negative 10 percent to 15 percent YOY. Sales remain flat to positive five percent YOY.

TSR traffic and sales are also stable, in the negative 30 percent to 35 percent YOY range.

New England continues to outperform. Traffic for the region is negative five percent to 10 percent YOY and sales are positive five percent to 10 percent YOY.

Pacific, South Atlantic, Middle Atlantic and West South Central are still down with traffic between five percent and 10 percent YOY and YOY sales trending between positive five percent and negative five percent.

Also:

Dinner is outperforming lunch.  YOY traffic is slowly and consistently improving after a dip in late July — down just five percent YOY compared to declines of 10 percent back in June. Sales are up 10 percent YOY.

Lunch YOY traffic also improved slightly from negative 10 percent in June to negative eight percent in August. Lunch sales are growing now at five percent to eight percent YOY, in line with July trends.

Late night continues to lag other dayparts but is showing improvement. Traffic for the segment improved about  five ppt from a low in late July and is down 18 percent YOY. Sales are down five percent to 10 percent YOY.

Chicken remains the most popular food category, though overall growth has slowed. Traffic for chicken concepts is flat to negative five percent YOY. Sales continue to grow at 18 percent to 22 percent YOY.

Popular Places for Veganism

Chef's Pencil released its annual study on the most popular countries and cities for veganism.

They used Google Trends, a reliable source of big data, to analyze the search interest level for veganism across the world. Searches in the Veganism category, which comprises vegan-related searches made in any language (e.g. “veganism”, “vegan restaurants”, “vegan rezepte”), were at an all-time high in 2020, surpassing the prior all-time high registered in 2019.

To put things into perspective, veganism is now twice as popular as it was just five years ago, and it doesn’t show any sign of slowing down. 

Portland ranks second worldwide among the most popular cities for veganism. Portland has been the undisputed vegan capital of the world for more than a decade. Knocked from number one in 2018, Portland remains the US capital of all that is off-beat, including top spot in the nation for vegan-friendliness.

The US ranks a more modest 12th place in the countries table, though interest levels in everything vegan are still at very high level, just slightly off last year's peak levels.

Top Cities
1.        Bristol,UK (Popularity Score: 100)
2.        Portland,US (Popularity Score: 76)
3.        Edinburgh,UK (Popularity Score: 75)
4.        London,UK (Popularity Score: 69)
5. (tie) Amsterdam, NL (Popularity Score: 67)
5. (tie) Berlin, DE (Popularity Score: 67)
5. (tie) Hamburg,DE (Popularity Score: 67)
8.        Manchester,UK (Popularity Score: 63)
9. (tie) Leipzig,DE (Popularity Score: 62)
9. (tie) Vancouver,CA (Popularity Score: 62)

A link to the full study, which includes interactive charts, can be found here.

Top Countries
1.        United Kingdom (Popularity Score: 100)
2.        Australia (Popularity Score: 87)
3.        Israel (Popularity Score: 84)
4.        Austria (Popularity Score: 82)
5.        New Zealand (Popularity Score: 81)
6.        Germany (Popularity Score: 77)
7.        Sweden (Popularity Score: 68)
8.        Switzerland (Popularity Score: 65)
9.        Canada (Popularity Score: 64)
10.      Ireland  (Popularity Score: 63)

Studying Restaurant Repairs 

86 Repairs released a comprehensive study covering key insights and never-before-seen data about the state of repairs and maintenance in the restaurant industry. The full study can be accessed here(registration required).

The report is based on a sample of customer source data across 250 quick service, fast casual, casual dining, and fine dining locations. The State of Repairs includes actionable insights and recommendations that operators can implement today to positively impact their R&M strategy. 

A few categories covered in the report include:

• Understanding overall R&M spend and equipment repair spend by restaurant category
• Frequency of repairs by service category
• Timing of repairs by day of week and week of year
• Actionable tips for making the most of your R&M budget

"This year's State of Repairs report just scratches the surface of the amazing data we're able to gather on behalf of our customers," said 86 Repairs CEO, Daniel Estrada. "Our data isn't just for show – it provides true insights that have never existed before in the industry, saving operators thousands of dollars per store every year."