According to a Recent Study/Survey … June 2016 Edition

As part of our mission to be the go-to resource for on-the-go restaurant industry professionals, Modern Restaurant Management magazine (MRM) offers highlights of recent research. This June edition will get your summer reading routine off to a fine start.

Opportunities in Business Dining

Business dining is one of the more undermanaged areas of the corporate expense budget, according to a study conducted by Dinova LLC, along with The BTN Group. The business dining spend represents roughly 10 percent of the average annual T&E spend, which offers the opportunity for significant cost savings efforts on the part of corporations nationwide. According to the survey, 40 percent of respondents reported that his or her company spent $1 million or more on meals and entertainment in 2015. With the high amount of money rolling through corporate T&E on business dining spend, there’s an opening to better manage the expense.

Despite economic conditions that show consumer dining spend has decreased or remained flat, 39 percent of travel managers responding to this survey indicated that their business dining spend had increased in 2015. Forty-one percent of respondents said the increase in business dining spend was due to more volume of business meals purchased. And 19 percent of respondents also noted among buying trends, increased use of catering or large group carry-in orders.

The business dining expense comes in a variety of ways, including out-of-town travelers, marketing and events, client entertainment, internal business catering and private dining. When asked which restaurants are most frequented by business employees eating on expense accounts:

• 33 percent said fast-casual
• 34 percent said independent restaurants
• 16 percent said chain-dining establishments
• 14 percent said quick-service restaurants

When asked what percentage of meals and dining expenditures occur in employees’ home market(s) versus business travel, only 10 percent of respondents indicated that 50 percent or more meal expenses are at home while 29 percent indicate less than 10 percent of meal spend is in home markets.  In fact, 55 percent reported that the increase of travel to new destinations was one of the contributing factors for increased business dining spend.

Curiously, more than half of the organization’s respondents reported they have yet to focus on dining spend as an area of savings significance. And when it came to how often meal expenditures are reported to management:

• 39 percent said as requested by management
• 33 percent said monthly
• 14 percent said quarterly
• 6 percent said annually
• 20 percent said never

Be Transparent

Consumer demand for product transparency is driving the evolution of the food industry, requiring brands and manufacturers to understand and capitalize on delivering the in-depth product information consumers crave, according to  the 2016 Label Insight Food Revolution Study from Label Insight. Currently, only 12 percent of consumers rank brands as their most trusted resource for information about what is in their own food, but 67 percent of consumers believe it is the brand or manufacturer’s responsibility to provide consumers with this information, demonstrating a clear gap between consumer expectations and the information brands are providing.

 As an overview:

• Consumer Confusion: The majority of consumers (81 percent) have consumed a packaged product with an ingredient they didn’t recognize at some point in the past month.
• Informed Purchase Decisions: Nearly all respondents (94 percent) said that it is important to them that the brands and manufacturers they purchase products from are transparent about what is in their food and how it is made.
• Added Value: More than two-thirds (83 percent) say they would find additional value in having access to more extensive product information.
• Consumer Loyalty: More than a third of consumers surveyed (37 percent) said they would switch brands if another brand shared more detailed product information.

Rise of the Grocerant

Supermarkets are raising the bar on their foodservice offerings and by doing so are attracting the attention of the coveted Millennials, finds recent research by The NPD Group. Restaurant-quality and fresh food, chef-driven menus, in-store experiences have given rise to the Grocerant and inspiration to Millennials to visit and spend, finds a recently released NPD report, A Generational Study: The Evolution of Eating.

In-store dining and take-out of prepared foods from grocers has grown nearly 30 percent since 2008, and accounted for 2.4 billion foodservice visits and $10 billion of consumer spending in 2015, based on NPD’s ongoing foodservice market research. Over 40 percent of the U.S. population purchases prepared foods from grocery stores, and while Millennials use grocery stores less than other generational groups, retail foodservice is gaining traction with them, according to the study that examines the influence of age, generation, life stage, and values on current and future eating behaviors

Consumers rate visits to Grocerants higher than traditional quick service restaurants (QSRs) on variety and healthy options. These attributes are among the most important motivators of purchase and customer satisfaction to prepared foods consumers. Grocery prepared foods are also rated higher on freshness and quality, which are attributes particularly important to Millennials. According to the NPD generational study, which examines how eating behaviors of key generations are set to change as they move through life stages, freshness will remain an important factor in Millennials’ eating behaviors as they go through their life stages.

Another way in which Grocerants are appealing to Millennials is by offering them an experience. Many grocers now offer restaurant-quality food at a lower cost than full service or some fast casual restaurants, and specialty categories like Asian, seafood, Italian, Mexican, and barbeque. Grocery stores are aiming to cater to all dining needs, including hot, custom-prepared grilled meat, food bars, soups, and sushi. A growing number of grocery stores provide comfortable, casual seating for in-store dining and some a full-service restaurant.

The Millennial Effect Continues

The Millennial generation is the largest in U.S. history and will heavily influence the fortunes of commercial real estate and the retail sector for the next half century, according to The Age of Experience-Based Retail, a new study by the research arm of MetLife Investment Management (MIM).

The Millennial preference for acquiring experiences and memories over material goods will play a significant role in determining which retail formats will outperform in the future. The study concludes that high-quality malls and lifestyle centers are best positioned to capitalize on the shift toward experience-based spending.

An analysis of expenditure data from the U.S. Bureau of Labor Statistics shows that Millennials spend almost 15 percent more of their disposable income on experiences than generations past. As Millennials grow older and more financially stable their spending power will rise, likely increasing the impact of this trend on the retail landscape.

Data from the National Council of Real Estate Investment Fiduciaries reveals that the benefits of experienced-based formats are already being felt, with malls and lifestyle centers achieving annual income growth more than double that of other retail properties over the last seven years. The attractiveness of high-quality malls and lifestyle centers is further enhanced by their defensive positioning against e-commerce as the experienced-based nature of the goods and services their tenants offer are extremely difficult to replicate online. A retail location’s format and tenant mix remain among the most important factors in its success. Well managed retailers with unique product offerings, high levels of service and quick delivery times will appeal to the Millennial Generation most, driving superior performance at the best centers.

More mPOS

A new study from Juniper Research found that smartphone and tablet-based mobile point-of sale (mPOS) terminals will take on a significant role in businesses, handling 20 percent of all retail transaction value by 2021, up from an expected 4 percent in 2016. Juniper forecasts that the use of mPOS systems will account for more than 1 in 3 POS terminals by 2021, driven by larger retailers adopting mPOS as part of an array of point-of-sale options. The new research found that mPOS will enable retailers to ‘queue bust’ in stores, reducing lines and developing more targeted and situational campaigns as well as offering automatic ordering systems in restaurants.

It’s All Jargon

OpenTable’s menu jargon research survey conducted online by Harris Poll revealed many diners believe some restaurant menus are more confusing than they need to be (29 percent), are concerned that ordering a menu item made with an unfamiliar ingredient will ruin their dining experience (56 percent), or feel they will be wasting their money if they don’t enjoy their meal (74 percent).   

According to the survey,  here are the top 10 menu terms at least half of diners say they do not understand, in ranking order: 

1.      Okonomiyaki (69 percent)

2.      Gochujang (67 percent)

3.      Piri piri (64 percent)

4.      Yuzu (64 percent)

5.      Bibimbap (64 percent)

6.      Gougere (63 percent)

7.      Guanciale (62 percent)

8.      Shiso (62 percent)

9.      En brodo (61 percent)

10.    Ballotine (61 percent)

Waiting for the Weekend

Nearly half of craft beer imbibers say they only drink alcohol on the weekends, according to The Harris Poll® of 1,978 U.S. adults aged 21+ (including 1,384 average drinkers and 405 monthly craft brew drinkers) surveyed online between May 24 and 26.  In fact, eight in 10 drinking-age Americans who drink craft beer at least once a month consider themselves to be health conscious (slightly more than the 76 percent of average drinkers – those who drink any alcohol at least a few times per year). Nearly three-quarters of craft brew imbibers (73 percent) consider alcohol to be an indulgence or special treat, compared to two thirds of average drinkers (67 percent). This is particularly true among younger craft brew indulgers, including 80% of 21-34 year olds and 77% of those 35-44.

Following this trend, nearly half of all craft beer drinkers (47 percent) say they only drink alcohol on the weekends (compared to 39 percent of average drinkers). This is particularly prevalent among Millennial craft beer lovers, with six in 10 (60 percent) saying they only drink on weekends.

What are you Drinking?

In today’s world, cocktail choice is often driven by superficial stigmas and stereotypes that personify one’s manliness.  This summer, Stoli®, THE Vodka, is encouraging millennial men to #DrinkWhatYouWant.  The Stoli #DrinkWhatYouWant campaign seeks to create a movement that celebrates men who challenge the status quo and are confident enough to drink what they want. 

In support of the campaign, Stoli conducted a #DrinkWhatYouWant survey of 1,475 legal drinking age American consumers.  According to the #DrinkWhatYouWant survey, 74 percent of millennial men claim to like flavored cocktails; however, 63 percent claim to avoid them in public due to fear of scrutiny amongst their peers.  The survey findings also uncovered that:

• 64 percent of millennial men feel that previous generations have an influence on what is trendy, cool or interesting
• 53 percent of millennial men care what people think about them when ordering drinks compared to 7 percent of men who are boomers
• 46 percent of millennial men agree that there is a negative stigma associated with men drinking flavored cocktails and that they are seen as a drink for women
• 41 percent of millennial men think that drink choice is a reflection of their masculinity compared to Gen X (32 percent) and Boomer (15 percent) males

What are You Drinking 2?

A new Harris Poll reveals that drinking-age Americans’ preferred alcoholic beverages have a lot do with not only who they are but where they are. When imbibing at home, those who drink at least a few times per year are most likely to tip back a glass of spirits (57 percent) or beer (56 percent) followed closely by wine (52 percent). When out at a restaurant or bar, beverage priorities are largely similar with half preferring spirits (51 percent) or beer (50 percent) and four in 10 choosing wine (41 percent). Looking deeper at demographic differences, however, preferences begin to shift.

Not too surprisingly, men and women have different tastes when it comes to alcohol. While men prefer beer whether at home or out, women favor wine at home and spirits while out, with beer being the least likely choice in either venue. By region, the Northeast, South, and Midwest all have a hankering for spirits or beer both at home and out, while Westerners prefer wine in either setting. LGBT individuals prefer spirits both at home and out, followed by beer, with wine well down the list of their preferences in both settings.

Looking by generation:

• Millennials (age 21-35) turn to beer and spirits at home, but spirits ranks first while out.
• For Gen Xers (age 36-50), beer is king both at home and at a restaurant or bar.
• Baby Boomers (age 51-69) prefer wine and spirits at home, with no clear preference while they’re out.
• Matures (70+), on the other hand, prefer wine no matter where they are.