By Leslie Brian and Graham Humphreys.
Today’s eater is stuck at a crossroads; they want more and more from the menu, but they also want it for less and less. It’s a classic paradox. But perhaps never more so today as pent up demand in our post-COVID world collides with a cost-of-living crisis.
On the one hand, we see a post-COVID world in which guests are flocking back to dining rooms. In fact, a recent report from Deloitte cited that 55% of customers said their rate of in-person dining was actually the same or higher than it was before the pandemic. But they don’t just want your average pizza party. They want spectacle. Excitement. Novelty. Dinner theater is a top trend for 2023 and with it comes a slew of new restaurants that cater to guests’ desire for once-in-a-lifetime experiences. (Google “underwater restaurants” and be prepared to be drowned in results.)
On the other hand, we see wallets tightening as guests are faced with a seemingly endless list of price hikes. Guests are saying “No!” to menu price increases, delivery fees, and tipflation. They are trading down to less expensive restaurants and menu options and eating at home more often.
What’s a restaurant operator to do? Here are three ways that we see operators succeeding today:
- Serve value at every price point – Restaurants that succeed today are able to deliver value for every budget. Value is more than price - it’s about what you get for that price. Even when consumers are tightening their wallets, they are reluctant to compromise on quality and flavor. That means that a $6 mac & cheese bowl needs to be just as flavorful and craveable as a $16 surf & turf bowl. Guests that order a lower price point still want to taste the quality they have come to expect from restaurant food. But although taste should unite all menu items along the pricing barbell, each pricing tier claims value in different ways. For that $16 surf & turf bowl, guests expect a fair portion of the ingredients they are paying a premium for. Restaurants can take note and plate those ingredients front and center to make sure they are getting credit from customers. And for that $6 mac & cheese bowl, guests may not expect premium ingredients, but they do expect to receive a hearty satiating portion. By thinking through what defines value at every price point, restaurants can ensure guests are satisfied no matter their budget.?
- Design for specific needs – wellness has always come with a premium price tag. And while guests may be tightening their belts in other areas, food that fulfills specific lifestyle or functional needs still commands a high perceived value, and a price to go with that. Restaurants can continue to drive check with this subset of guests by designing options that meet these needs (e.g. plant-based meat and dairy alternatives, gluten-free substitutes) and by keeping a quality message front and center (e.g. clean label ingredients, quality meats, scratch cooking). One form of value that we see consistently under-exploited by operators, especially in scratch cooking, is getting full credit for the effort put into preparing the food. Value perception can be driven by stronger customer-facing messaging that touts a quality proposition.???
- Phone a friend - oftentimes as operators, we need to come at a problem from every angle. Sometimes, that solution is outside our four walls! Instead of trying to squeeze every last dollar out of your pantry, there are solutions that start before the product walks in the door. For example, Kronos
, a custom pre-seasoned meat provider, offers premium protein solutions that allow you to cut labor and costs while maintaining a high value and quality product. Similarly Ingredion
, a global food and beverage ingredient solutions provider, has focused their innovations on cost savings (ingredient replacement, food waste reduction, labor savings, etc). Recently, they were integral in co-developing a cost-reducing veggie burger that is taking QSR by storm.?
This year's Black Friday sales show us that, to consumers, value is a number, but even more, it's an idea; of having gotten something better for the same price, or having gotten something just as good for a lower price. Winning in value means working equally in the realm of dollars, and also of consumer perceptions.
