Consultant's Corner
Consumers Drive Menu Changes in the Age of Disruption

American consumers have weathered a very difficult decade in which they have grappled with uncertainty on several fronts. The Great Recession caused the middle class to shrink and forced a shift in attitudes, expectations and spending patterns. The steady move to technology as the basis of the economy hastened the ongoing decline in manufacturing-centric cities like Detroit, and left workers scrambling to adopt new skill sets. What’s more, social and cultural norms have been upended as 75 million Baby Boomers find themselves displaced by 80 million Millennials--an ethnically diverse, tech-savvy bunch with their own ideas about the foods they consume.

These multiple macro trends have converged to create a perfect storm of disruption, and consumers have responded by hunkering down and going back to basics. They have embraced an everything-old-is-new-again mindset, as they value farms over factories, reject processed foods and believe that smaller restaurant operations are invariably better than major chain brands. This point of view gives corporate-dining operators a strategic advantage over large restaurant chains, many of which are struggling with significant loss of market share. But these changes in attitude have had a disruptive impact on menu R&D, too, as menu developers find themselves challenged to keep pace with evolving customer expectations.

Consumers want real food, which they believe tastes better and is better for them. There are no formal standards of identity that define real food, which opens a wide window of opportunity for corporate foodservice. A great example of this real-food trend has been the unexpected boom in broth; appearing everywhere, it is often described as “bone broth” to underscore its natural appeal. Panera Bread made a splash this spring with the introduction of a line of Broth Bowls that combine global ingredients like soba noodles or edamame steeped in an umami soy-miso broth. More surprisingly, operators in some major cities have successfully positioned broth as a grab-and-go beverage option, a good-for-you alternative to coffee; and they often follow the Starbucks model of customization by offering a range of mix-ins like fresh herbs and spices.

Consumers also demand menu transparency or so-called “clean” foods that are free from artificial ingredients, antibiotics, hormones and steroids, and, increasingly, free from GMOs. The clean-foods movement has caught fire very rapidly. Major brands like Taco Bell, Pizza Hut and Papa John’s have vowed to eliminate artificial flavors, colors and additives, Panera Bread has published a no-no list of ingredients being phased out, and, in what may be a real tipping point, McDonald’s has vowed to phase out chickens treated with shared-use antibiotics. This is old news for many corporate dining operations and management firms, who embraced menu transparency early on, but these collective, aggressive initiatives by chain competitors will reverberate throughout the entire segment and can be expected to impact both procurement and patron choices.

Consumers value authenticity, another hot-button trend that is tough to define. Today’s diners want to know more about their food, which gives corporate dining operators a unique marketing opportunity to promote both their ingredients and their preparation techniques.  Locally grown or farm-sourced foods are in vogue and highly merchandisable, but many other sources also score with customers and suggest authenticity, like cheese from Wisconsin or seafood from Alaska. The key is to tell the story on the menu, to communicate the provenance. This is even more impactful with preparation: house-made, made from scratch, made to order, baked fresh daily and other similar promises are totally in tune with what patrons demand, and when smartly promoted in the dining room or cafeteria, they make a powerful customer connection and give corporate foodservice a real leg up on the competition. 

This month's Consultant's Corner written by Nancy Kruse with Larry Joyner of Larry Joyner & Associates, Inc.

Nancy Kruse, President of The Kruse Company, is the best-known and most widely quoted menu analyst in the restaurant industry. She authors The Kruse Report, a column on trends that appears monthly in Nation’s Restaurant News and blogs regularly on food-related topics on the Linked-In website.