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Barbecue chicken wings, chili peppers, and chili flakes

August 15, 2023by David Klemt David Klemt No Comments

Top-performing Menu Items in the US

Top-performing Menu Items in the US (So Far)

by David Klemt

Thanks to a recent mid-year report from F&B intelligence platform Datassential, we now know the top-performing menu items in the US.

For the low, low price of filling out a handful of fields, you can download a copy of Datassential’s “Foodbytes: 2023 Midyear Trend Report” for yourself.

There’s plenty of useful data packed into this short report. You may find some of the top food items a bit surprising.

But First…

Datassential does more than just list the top mid-year menu performers in their latest report. There are also a couple of interesting datapoints for operators to consider.

The first piece of information is an alarming statistic: 54 percent of consumers are of the belief that “tipping culture has gotten out of control.”

As we’ve reported earlier, it’s likely that a major driver of “tip fatigue” comes from retail. The expectation for consumers to tip at a restaurant, bar or nightclub is ingrained deeply in American culture.

However, consumers throughout America are being prompted to tip after just about every transaction they’re attempting to complete. In fact, it’s not just retail that has been encouraging (in some cases, guilting) people to tip. Some contractors are also adding tip lines when handing over tablets to clients so they can pay their invoices.

One result is that servers and bartenders are reporting lower tips; guests are so over tipping that they’re pushing back against the practice in venues where they’d traditionally have no problem doing so.

Of course, tip fatigue isn’t the only reason consumers are pushing back against tipping. Many people feel that operators should increase what they pay staff. Indeed, some people feel that operators are asking them to subsidize their employee pay. Whether they’d be happy to pay higher prices remains to be seen.

Fads Aren’t Bad?

Whenever we cover trends or discuss them with clients, we caution against chasing too many (or the “wrong” trends). And fads? It can be even riskier to hop on the bandwagon of something that may never even reach the trend stage of its lifecycle.

However, likely due to the ubiquity of TikTok, consumers expect restaurants to embrace fads. According to Datassential, 67 percent of consumers overall “want to see more fads at restaurants and retail.”

That number jumps to 74 percent when focusing on Millennials and Gen Z.

So, while we still caution operators about jumping on fads (or “micro trends”) and trends, that doesn’t mean be too cautious. If a fad or trend works with your brand and won’t cost much to feature, at least give it consideration.

Not sure you’re great at identifying fads that will work for your business? Ask your staff which fads and trends are hot at the moment.

Speaking of Hot…

Alright, let’s take a look at the F&B items Datassential identifies as popular at the midway point of 2023.

Again, I encourage you to download the report in its entirety. You can do just that by clicking here.

But for those who want instant gratification, check out these menu items:

Super Duper: Let’s kick things off with the hottest chain LTO, the Denny’s Super Slam. Per Datassential, restaurant chains have already featured in excess of 2,000 LTOs in 2023. The F&B intel agency tests them all, and the Super Slam is wearing the LTO crown at the moment.
Chef Chatbot: Datassential tapped ChatGPT to create a burger recipe and had Midjourney create an image for the resulting Caprese Avocado Burger. More than half of consumers surveyed—57 percent—want to try it at a restaurant.
Big Winner: Datassential asked consumers a simple question: Which would you rather eat for the rest of your life, a hamburger or a hot dog? A staggering 87 percent chose hamburgers, meaning just 13 percent of consumers would choose a hot dog over it’s burger buddy.
What a Pickle: Back in March we checked out Slice’s Slice of the Union report, and it predicted pickle pizzas would be a hot trend this year. Well, Datassential has crunched the numbers and says 40 percent of consumers are aware of this pizza style already. Looks like Slice may be proven right by the end of the year.
Speed Demon: Curious about the fastest-growing menu item on the US? Well, wonder no more: Datassential says it’s the barbecue chicken wing. Over the past year, they’ve grown 373 percent on menus across the States. Datassential posits the overall growth of chicken and the embracing of flavor trends like Carolina gold barbecue sauce are contributing factors.

There’s a lot to unpack here, so I’ll leave you to it. Just remember that when it comes to fads and trends, there’s a fine line between what’s hot, what’s not, and jumping on the wrong one. Good luck!

Image: Ahmed Bhutta on Pexels

February 22, 2023by David Klemt David Klemt No Comments

Do Super Bowl Ads Work on Consumers?

Do Super Bowl Ads Work on Consumers?

by David Klemt

One of the biggest Super Bowl ad winners is Pepsi Zero Sugar.

Brands spent hundreds of millions of dollars to advertise during Super Bowl LVII, but do their ads actually translate to demand for their products?

A week ago we shared our ten favorite beverage-focused Big Game ads. Along with those ads we shared some numbers.

One of those numbers was $7 million, the cost of a 30-second Super Bowl ad on Fox. Other numbers? $500 million and $700 million, the range of revenue it’s estimated that Fox generated this year from Super Bowl ads.

At this point, these ads and the Halftime Show have essentially become their own entities. Some people watch the Big Game for the ads, some for the show halfway through. It stands to reason that brands are well aware of this development. So, they try to create the most impactful ad possible in the hopes of generating consumer demand.

In other words, these brands aren’t spending all this money just so they’re commercial can be deemed cool. Sure, brands want that buzz. But they also want an ROI on the millions they spend.

The big question is, then, are they seeing a return? Well, it just so happens that behavioral insight platform Veylinx has a data-driven answer to that question.

In short, the answer is yes. Of course, it’s a nuanced yes. For example, it appears Gen Z doesn’t care much about Super Bowl ads, as you’ll see below. Also, non-advertisers in the same categories as Super Bowl advertisers appear to see a benefit from the ads.

You’ll learn more from the Veylinx press release below. It’s an interesting read with valuable data for restaurant, bar, and hotel operators.

NEW YORK, Feb. 22, 2023 — A new study from behavioral research company Veylinx determined whether or not Super Bowl commercials boost consumer demand for the products advertised. The results show that 2023 Super Bowl advertising fueled a 6.4% increase in demand among viewers.

The overall increase in consumer demand was driven by women, who accounted for a 21% increase in demand growth. The commercials had minimal impact on men, yielding just 1% demand growth for the brands tested. Gen Z viewers were largely unimpressed by the Super Bowl ads, with demand among 18 to 25 year olds actually shrinking by 1%.

“It’s not really a surprise to see that Super Bowl ads improve sales, but the short term bump alone may not be enough to justify the $7 million price tag,” said Veylinx founder and CEO Anouar El Haji.

Using Veylinx’s proprietary methodology—which measures actual demand rather than intent—the study tested purchase behavior during the week before the Super Bowl and again the week after. The research focused on measuring the change in consumer demand for eight brands with Super Bowl ads: Michelob Ultra, Heineken 0.0%, Hellmann’s Mayo, Downy Unstopables, Crown Royal Whisky, Frito-Lay PopCorners, Pringles and Pepsi Zero Sugar.

Super Bowl Advertising Winners Overall

Michelob Ultra – 19% increase in demand

Pepsi Zero Sugar – 18% increase in demand

Frito-Lay PopCorners – 12% increase in demand

Heineken 0.0% – 11% increase in demand

Super Bowl Advertising Winners Among Women

Pepsi Zero Sugar – 45% increase in demand

Michelob Ultra – 40% increase in demand

Heineken 0.0% – 40% increase in demand

Crown Royal Whisky – 26% increase in demand

Halo Effect for Non-Advertisers

The biggest winners were arguably brands in the same product categories as Super Bowl advertisers. Non-advertisers in those categories appeared to benefit nearly as much as the advertisers: demand grew by 4.2% percent for the study’s control group of non-advertising competitors. Corona Extra, Kraft Mayo and Lay’s STAX were the greatest beneficiaries in a control group that also included Budweiser Zero, Arm & Hammer Clean Scentsations, Canadian Club Whisky, Popchips, and Coke Zero Sugar. Notably, every non-advertiser saw at least a slight increase in post-Super Bowl demand.

“The goal of our study was to look specifically at how consumer demand is affected by running a commercial during the Super Bowl,” El Haji said. “It’s possible that the non-advertisers deployed other marketing efforts to offset or take advantage of the Super Bowl advertising—or they simply benefited from increased exposure for their categories.”

Additional Findings

Study participants also answered a series of follow-up questions about their preferences, perceptions and how they watched the Super Bowl. More than three-quarters watched at home through various platforms, the most popular being the live cable/satellite broadcast (38%), followed by YouTube TV (15%) and Hulu (10%). When asked why they watched, it’s no surprise that participants were all about the game (64%)—but the commercials were the next most popular reason for watching (39%), followed by halftime (35%), the social aspect (26%) and fear of missing out (13%).

About the Research

Veylinx studied the behavior of 1,610 U.S. consumers pre- and post- Super Bowl LVII. Unlike typical surveys where consumers are simply asked about their purchase intent, Veylinx measures whether consumers will pay for a product through a real bidding process. Consumers reveal their true willingness to pay by placing sealed bids on products and then answering follow-up questions.

For more information about the study and the Veylinx methodology, visit info.veylinx.com/super-bowl

About Veylinx

Veylinx is the most realistic behavioral insights platform for confidently answering critical business questions during all stages of product innovation. To reliably predict demand, Veylinx captures insights through a Nobel Prize-winning approach in which consumers have real skin in the game. This is a major advance from traditional market research practices that rely on what consumers say they would hypothetically buy. Veylinx’s unique research methodology is trusted by the world’s largest and most innovative consumer goods companies.

Main article image: PepsiCo / Article body images: Veylinx

December 14, 2022by David Klemt David Klemt No Comments

Top 10 US Metro Areas by Inflow, Q3 2022

US Metro Areas with Greatest Outflow and Inflow, Q3 2022

by David Klemt

Real estate brokerage Redfin identifies the top ten American cities in terms of inflow and outflow, according to Q3 data.

Interestingly, a quarter of people appear to be searching for homes in cities different from where they currently live. Also compelling: one state, per the brokerage’s data ending in the month of October, is a clear favorite.

Obviously, this is important data for operators to have. When it comes to labor and guest pool changes, inflow and outflow information can be quite useful.

Top Inflow Cities: August to October 2022

Review the list below to see the metro areas experiencing the greatest inflow.

Orlando, Florida
Dallas, Texas
North Port, Florida
Cape Coral, Florida
Phoenix, Arizona
Tampa, Florida
San Diego, California
Miami, Florida
Las Vegas, Nevada
Sacramento, California

Did you spot the big trend? The state of Florida represents 50 percent of the list. Per Redfin‘s interpretation of the data, home buyers want leave expensive coastal cities behind.

Interesting to us in particular, two cities—Las Vegas and Orlando—are key KRG Hospitality markets. Also interesting is that Nevada and Florida are on the back half of Forbes’ best cities for starting a business in 2023.

However, we’ve seen strong hospitality industry recovery in Las Vegas this year. In fact, even the entertainment industry in Las Vegas is exploding. Additionally, we continue to gain clients in Orlando.

Top Outlow Cities: August to October 2022

Below are the metro areas seeing the greatest outflow.

Philadelphia, Pennsylvania
Seattle, Washington
Denver, Colorado
Detroit, Michigan
Chicago, Illinois
Boston, Massachusetts
Washington, DC
New York, New York
Los Angeles, California
San Francisco, California

If we compare Redfin’s Q2 data to the list above, it’s mostly the same. In fact, the top four outflow cities are identical. Spots five through nine are simply a reshuffling of Q2 and Q3 data.

However, Minneapolis, number ten in Q2, is replaced by Philadelphia in Q3. According to Redfin data, those Philly residents searching for homes elsewhere are showing interest in Salisbury, Maryland.

Consider how expensive it can be to move to and live in LA and San Francisco. It makes sense that California is the only state with two cities on the list above, doesn’t it?

Per Redfin, San Francisco residents are searching Sacramento and Seattle. Those in LA are looking at San Diego and Las Vegas.

Takeaway

It’s important to know where people are moving to and what cities they’re leaving behind. And it’s interesting to get a data-driven view of which states may be best for starting a business.

However, it’s far more useful to know how feasible a given ZIP code may be for a specific concept. So, while these types of lists are helpful, they’re not as practical as a targeted feasibility study.

Moreover, the dust doesn’t appear to have settled when it comes to migratory patterns of home buyers. It’s quite possible that Redfin’s 2023 inflow and outflow data will change once again in Q1 and Q2.

Image: Stephen Leonardi on Unsplash

November 21, 2022by David Klemt David Klemt No Comments

Traffic Up but Margins Thinner

Traffic Up but Margins Thinner

by David Klemt

The One Table 2022 report from Datassential focuses on the state of the operator and what the industry can expect moving forward.

This informative report shares survey results from 801 operators across America. While some of the findings are positive, it’s clear many operators are enduring significant challenges.

For some, traffic and sales are up. However, that’s not the situation others find themselves in.

To download and review the Datassential One Table 2022, please click here.

The Respondents

For this report, Datassential shares the survey answers from 801 respondents.

Most survey respondents are independent operators. In fact, they account for 71 percent of the participants. Making up the rest of the field are chain operators (15 percent) and franchise operators (14 percent).

As far as segment types, the majority of survey participants operate in the fast-casual space (18 percent). Unsurprisingly, fine dining is the smallest group of respondents at six percent. Thirteen percent operate midscale restaurants, and 12 percent are at the helm of casual-dining concepts. Somewhat surprisingly, just ten percent of participants operate QSRs.

Interestingly, the service format is fairly even among survey participants. Fifty-three percent of operators are full-service and 47 percent are limited-service.

Similarly, survey respondents represent the country’s regions pretty evenly:

South: 30 percent
Midwest: 29 percent
Northeast: 21 percent
West: 20 percent

In terms of market type, most respondents operate in the suburbs (49 percent). Following somewhat closely are urban-market operators, at 31 percent. Just 20 percent of survey participants operate in rural markets.

Traffic, Sales and Margins

At first glance, Datassential’s survey reveals positive news.

Now, I’m sure people find the terms “pandemic, “pre-pandemic,” and “post-pandemic” exhausting at this point. However, there’s no denying we continue to feel the aftershocks sent through the industry by the pandemic.

So, how do things look now in comparison to pre-pandemic traffic and sales levels?

First, the positives. Nearly half of survey respondents—47 percent—say their traffic is up in comparison to where it was pre-pandemic. Add to that the 14 percent who say their traffic is the same and 61 percent of operators appear to be in good shape.

In terms of sales, 51 percent of survey participants have good news. That news is that their sales are higher in comparison to pre-pandemic levels. Again, add the 14 percent who don’t see any change. So, that’s 65 percent of operators who appear to be performing well.

But with the good there’s bad. Unfortunately, 39 percent of respondents report lower traffic than pre-pandemic levels. And sales are lower than they were before the pandemic for 35 percent of survey participants.

Operator margins are lower for all respondents. Generally speaking, the profit margin for operators before the pandemic sat at 21 percent. Now, the average is 13 percent. QSRs and fast-casual restaurants are a bit higher among survey respondents: 17 percent and 15 percent, respectively.

On paper things do look up for many operators. However, the industry is still suffering, with a third struggling to rise to even pre-pandemic levels of traffic and sales.

Image: Daniel Bradley on Unsplash

November 18, 2022by David Klemt David Klemt No Comments

Is There Demand for Non-alcohol?

As the Holidays Approach, is There Demand for Non-alcohol?

by David Klemt

There’s no denying that non-alcohol is a growing beverage category, but does the data support the hype and operator consideration?

A report by behavioral research firm Veylinx offers compelling insight into non-alcohol and consumers.

By now, there’s really no excuse for failing to give non-alc serious consideration. When planning menus, operators should treat non-alc as much more than an afterthought.

Admitting fully that I’m repeating myself, giving alcohol-free beverages the same attention as their full-proof counterparts is crucial. Doing so is smart business; non-alc is capable of driving traffic and revenue.

And then there’s the guest experience element of the non-alc equation. Hospitality is about service, about ensuring every guest is comfortable. Giving guests who are abstaining from alcohol consumption a different experience than others isn’t hospitality—it’s alienation. Not only is that the antithesis of hospitality, it’s bad business.

Reviewing Veylinx data shows that non-alc is worthy of operators’ time and consideration. In my opinion, it’s even more important that non-alc menus and offerings be dialed in now. After all, the end-of-year holidays on our doorsteps.

The infamous Busiest Bar Night of the Year is nearly here. From November 23 through New Year’s Eve, people will be meeting up with family and friends. Many will also be seeking an escape from the stress of those gathering and the holidays.

Non-alcohol by the Numbers

One of the most important points made by Veylinx is this: Abstinence from alcohol isn’t limited to “social media” events like Dry January and Sober October.

Rather, consumers are choosing to abstain from alcohol throughout the year for myriad reasons. Specifically, Veylinx data reveals that more than 75 percent of Americans have abstained from alcohol consumption at some point for at least one moment.

Further, 46 percent of Americans plan to reduce their consumption of alcohol “right now.” As in, the holidays may be upon us but they’re actively working on a plan to drink less, not more.

Two major factors motivating this behavioral change are mental well-being and physical health. In service of those factors, more than half of LDA drinkers in America plan to replace beverage alcohol with non-alc beverages.

Interestingly, Veylinx finds that these consumers will pay more for non-alc alternatives in comparison to the general population.

Drilling down further, this shift in consumer behavior appears to be driven by a handful of consumer types:

21- to 35-year-old consumers;
“light” drinkers; and
consumers who have set aside alcohol consumption for one month or more.

Speaking of the first group, demand for RTDs is 48 percent greater in comparison to those aged 35 or older. Add CBD to RTD and the demand among the 21 to 35 cohort grows by 18 percent.

However, not all non-alc growth comes from the 21-to-35 group. Non-alc beverages with mood boosters see an increase in demand from the 35-plus group of 29 percent.

In short, if an operator is ignoring the non-alc consumer, they’re harming their own business and reputation. Alcohol-free RTDs, cocktails, beer, and wine are growing.

Savvy operators will leverage that growth.

Image: Helena Yankovska via Unsplash

Newfoundland and Labrador during daytime

November 16, 2022by David Klemt David Klemt No Comments

These are the Happiest Provinces in Canada

These are the Happiest Provinces in Canada

by David Klemt

If you’re wondering which province in Canada is the happiest, Statistics Canada has the answer—and the happiest may surprise you.

Of course, those who live and work in the happiest province won’t find it shocking. After all, they’re largely happy to be there.

However, if you expect the happiest province to be the home of Toronto, Vancouver, Montreal or Canada… Well, you’re in for a surprise.

Earlier this week we took a look at the happiest cities and states in America. Congratulations Fremont, California, and Hawaii, respectively. To learn where 181 other cities and 49 states rank, please click here.

The Happiness Survey

Or more accurately, the “life satisfaction” survey. For this survey, that’s what Statistics Canada reveals: life satisfaction.

Interestingly, the survey is very simple. Apparently, Statistics Canada simply asked participants to rate the satisfaction of living in their province, zero through ten. For this survey, zero is least satisfied, ten is most.

Ages 15 through 75 (and older) were able to participate. The survey was also broken down to gauge the satisfaction of men and women.

Before we jump into the breakdown of province satisfaction or happiness, some good news. Reviewing the Statistics Canada data, most participants across all age groups are happy. In fact, age groups 65 to 74 and 75-plus appear to be happiest.

On the other side, ages 15 to 54 had the most people who rated their life satisfaction between zero and five. Even so, just over 20 percent of survey respondents rated their satisfaction a five or less.

So, on the whole, Canadians seem satisfied or happy with their lives, regardless of the province in which they live. Personally, I find that to be great news.

The Happiest Province

Okay, let’s dive into the reason you’re here: to learn which province is the happiest.

Newfoundland and Labrador
Prince Edward Island
Quebec
New Brunswick
Manitoba
Alberta
Saskatchewa
Nova Scotia
Ontario
British Columbia

The above rankings are determined by the percentage of survey respondents who rated their life satisfaction eight, nine or ten. So, if you’re in Newfoundland and Labrador, Prince Edward Island or Quebec, wow—you’re apparently one incredibly happy person.

Conversely, below you’ll find the rankings as determined by the largest percentage of respondents who rated their satisfaction a five or lower. As you’ll find, the list below isn’t simply the inverse of the one above.

Ontario
British Columbia
New Brunswick
Alberta
Nova Scotia
Prince Edward Island
Manitoba
Saskatchewa
Quebec
Newfoundland and Labrador

As far as Canada overall, the results of this particular survey are positive. Just 19.4 percent of survey respondents rated their satisfaction or happiness zero through five. And only 28.9 percent provided a rating of six or seven.

More than half of Canadians, 51.7 percent, rate their lives an eight, nine or ten. That’s some great and welcome news.

Image: Erik Mclean on Unsplash

November 14, 2022by David Klemt David Klemt No Comments

Which Cities and States are the Happiest?

Which US Cities and States are the Happiest?

by David Klemt

As an entrepreneur and operator evaluating a market for a first location or expansion, it can help to know where people are happiest.

Equally as helpful: Knowing the cities and states that are the least happy. Not, necessarily, so an operator can avoid these markets.

Rather, one’s concept may be a ray of stress-free sunshine for a given community. Providing a great workplace with a positive culture can work wonders for both the happiest and least-happy places. And as the cornerstones of the communities they serve, restaurants and bars can improve their guests’ quality of life.

We’ve looked at the US cities with the greatest inflow and outflow (which can reveal happiness levels), as identified by Redfin. And we’ve checked out the best US retirement cities, researched by Clever.

Now, we’re taking a look at which US cities and states are the happiest and least happy, according to WalletHub. In case you’re unaware, personal finance site WalletHub researches a vast array of topics. You can browse them here.

Happiest Cities

While determining which are happiest, WalletHub identified the happiest 182 cities. Obviously, that’s a far cry from how many cities are in the US.

According to one source, there 19,495 cities, towns, and villages across the country (per data from 2018). Of those, 4,727 cities have populations of 5,000 or more. A total of 310 cities have populations of at least 100,000, and only ten are home to one million people or more.

So, living in any of the 182 cities WalletHub suggests one is pretty happy. However, these are the ten happiest cities, in descending order:

Fremont, California
Columbia, Maryland
San Francisco, California
San Jose, California
Irvine, California
Madison, Wisconsin
Seattle, Washington
Overland Park, Kansas
Huntington Beach, California
San Diego, California

As you can see, six of the 10 cities are in California. In fact, 29 of the 182 cities on this list are located in the Golden State.

To create their list, WalletHub analyzed several metrics that make up three main categories: emotional and physical well-being; work environment; and community and environment.

Fremont, CA, is number one for emotional and physical well-being. The top spot for work environment goes to San Francisco, CA. And the number-one city for community and environment is Casper, Wyoming, which is number 79 on the list overall.

Least-happy Cities

Again, understanding that there are more than 19,400 cities, towns, and villages in the US alters the context of this list a bit.

Living and operating in one of these 182 cities indicates a person is living in a happy city. Basically, it isn’t the worst place to live if it’s on this list.

At any rate, let’s look at the 10 cities that make up the bottom of WalletHub’s list. Or, the “least-happy” cities, at least as far as these rankings are concerned.

Detroit, Michigan
Gulfport, Mississippi
Memphis, Tennessee
Huntington, West Virginia
Montgomery, Alabama
Cleveland, Ohio
Augusta, Georgia
Fort Smith, Arizona
Mobile, Alabama
Shreveport, Louisiana

Happiest States

WalletHub also ranked 50 states to determine the happiest and least happy. I checked, and, yep, that’s all of ’em! I will say it’s a bit disappointing they didn’t include Puerto Rico, but it isn’t the 51st state (yet).

WalletHub focused on 30 metrics to rank the states, which make up three main categories: emotional and physical well-being; work environment; and community and environment.

In descending order, the happiest states in America are:

Hawaii
Maryland
Minnesota
Utah
New Jersey
Idaho
California
Illinois
Nebraska
Connecticut

Hawaii doesn’t just take the top spot overall, it also claims number one for emotional and physical well-being. Utah takes first for work environment, and community and environment.

Rounding out the “happiest half” of the US are:

Virginia
South Dakota
North Dakota
Massachusetts
New Hampshire
Iowa
Delaware
Florida
Georgia
North Carolina
Wisconsin
Washington
New York
Maine
Wyoming

Least-happy States

Conversely, the following are the least-happy states, starting with the unhappiest:

West Virginia
Louisiana
Arkansas
Kentucky
Alabama
Mississippi
Oklahoma
Tennessee
New Mexico
Missouri

Filling out the least-happy half of the country are:

Alaska
Michigan
Ohio
Indiana
Texas
Nevada
Vermont
South Carolina
Kansas
Arizona
Colorado
Montana
Rhode Island
Pennsylvania
Oregon

In terms of the three metrics WalletHub analyzed, West Virginia is ranked last for emotional and physical well-being. Unfortunately, Mississippi is last for work environment. And Texas comes in last for community and environment.

Image: chaitanya pillala on Unsplash

October 26, 2022by David Klemt David Klemt No Comments

F&B in Canada: Top Menu Items

F&B in Canada: Top Menu Items

by David Klemt

Those wondering what food and beverage menu items are performing best among consumers throughout Canada need wonder no more.

And why is that? Well, Restaurants Canada has the answers, revealing the top ten food and top ten beverage items.

Further, the organization compares each item’s performance. In this instance, Restaurants Canada analyses the percentage of orders that contained each food or beverage item from January to April 2022 in comparison to 2019.

These insights (and many more) are available in Restaurants Canada’s 2022 Foodservice Facts report. In fact, you can find our reviews of several of the restaurant advocacy group’s report topics via the links below:

For your own copy of this year’s Foodservice Facts report, click here.

Top 10 Canadian Drink Menu Trends

As you’ll see below, coffee is outperforming nearly every other beverage category. Specifically, Hot coffee is at the top, while Iced or frozen coffee is ranked third.

Unsurprisingly, Carbonated soft drinks / Pop / Soda split the two coffee categories. According to Restaurants Canada, the Carbonated soft drink category can credit its performance in large part to QSRs.

Milk: 1.8% (2019) to 1.8% (2022)
Iced tea: 2.9% (2019) to 1.6% (2022)
Milkshakes / Smoothies: 2.1% (2019) to 2.0% (2022)
Fruit juice: 3.8% (2019) to 3.0% (2022)
Hot tea: 5.5% (2019) to 4.5% (2022)
Alcohol beverages: 5.1% (2019) to 5.7% (2022)
Water: 6.6% (2019) to 5.0% (2022)
Iced or frozen coffee: 5.3% (2019) to 7.5% (2022)
Carbonated soft drinks / Pop / Soda: 19.7% (2019) to 20.2% (2022)
Hot coffee: 40.9% (2019) to 41.9% (2022)

Compellingly, Alcohol beverage performance in restaurants fluctuated by age group between 2021 and 2022. Alcohol order shares in restaurants, per Restaurants Canada:

Legal drinking Age (LDA) to 34: 46% (2021) to 43% (2022)
35 to 49: 17% (2021) to 21% (2022)
50-plus: 37% (2021) to 36% (2022)

Alcohol order shares in bars, according to Restaurants Canada:

LDA to 34: 35% (2021) to 35% (2022)
35 to 49: 17% (2021) to 19% (2022)
50-plus: 49% (2021) to 47% (2022)

Overall, the 35 to 49 age group appears to be consuming less alcohol in bars and restaurants in comparison to the LDA to 34 and 50-plus cohorts.

Top 10 Canadian Food Menu Trends

As Restaurants Canada notes, the Sandwich / Sub category has grown in 2022. Interestingly, the category just below it in growth, Chicken, is partially responsible for boosting Sandwich / Sub performance.

As far as entrees or “main attractions,” the Burger category remains at the top, beating out Breakfast, Sandwich / Sub, Chicken, and Pizza menu items.

Cake / Squares / Muffins: 3.7% (2019) to 3.3% (2022)
Salad: 4.3% (2019) to 3.8% (2022)
Donuts / Beignets: 3.0% (2019) to 3.8% (2022)
Breads: 4.3% (2019) to 3.4% (2022)
Pizza / Panzerotti / Calzone: 4.1% (2019) to 4.3% (2022)
Chicken: 7.6% (2019) to 8.5% (2022)
Sandwich / Sub: 8.0% (2019) to 8.5% (2022)
Breakfast: 10.8% (2019) to 11.4% (2022)
Burger: 9.0% (2019) to 10.9% (2022)
French fries / Potato / Sweet potato / Onion rings: 15.0% (2019) to 16.1% (2022)

Image: Nathan Dumlao on Unsplash

October 18, 2022by David Klemt David Klemt No Comments

Your Guests are Likely Ready for More Tech

Your Guests are Likely Ready for More Tech

by David Klemt

After the past few years of innovation and implementation in our industry, guests are probably ready to use even more technology.

Driven in large part by operator adaptation to ever-changing restrictions in 2020 and 2021, guest-facing tech is far more prevalent than ever. This is particularly true in the quick-service restaurant space.

Of course, tech has certainly become a crucial operational component in the full-service space as well. However, operators many FSR operators find themselves walking a fine between tech innovation and providing personalized service.

Restaurants Canada addresses QSR and FSR tech implementation in their 2022 Foodservice Facts report. Click here for your own copy of the report.

QSR vs FSR Implementation

One benefit of updating a given operation’s tech stack is automation. After all, more tasks handled automatically via tech solutions means a reduction in labor costs.

In theory, removing mundane tasks from front-of-house team members should equate to guests receiving more personalized service. Equally as impactful: Many guests would rather have more control over their visit in the names of convenience and speed.

A couple of examples are placing orders and paying via tablet or other table-side device. For some guests, this is more convenient than the traditional method.

As stated above, QSRs have been quick to embrace and implement tech innovations. And according to a Restaurants Canada survey, nearly three-quarters of QSR operators will wade deeper into tech waters within the next two years. Almost half—49 percent—of QSR survey respondents “probably will” increase their usage of technology by April 2024; a quarter “definitely will.”

On the FSR side, operators are a bit more cautious in their approach to their tech stacks. Of these survey respondents, 37 percent will probably adopt more tech within the next two years, while 15 percent say they “definitely will” do so.

Per Restaurants Canada, the three main concerns of operators relating to implementing more tech are:

cost;
guest acceptance; and
people being able to relate to the equipment (which to me seems directly tied to guest acceptance).

However, FSR operators have also indicated another concern: the perception from guests that tech innovations are leading to a loss of personalized service. So, individual operators must decide not just what tech solutions to embrace but how they may impact the guest experience in negative ways.

Guest Expectations

When Restaurants Canada looked into tech in the restaurant space, they didn’t just focus on operators. The restaurant industry advocacy organization also surveyed consumers.

Perhaps unsurprisingly, the 18 to 34 age group appears to be the most eager to embrace new tech in restaurants. However, they’re not that far ahead of the 35 to 54 group. Interestingly, the 55-plus demographic is less tech-resistant in at least one area than one may assume.

Let’s take a look at Restaurant Canada’s survey results, broken down by tech solution.

Order and pay via tablet at FSR: 18 to 34 (55%), 35 to 54 (54%), 55+ (41%)
Place an order for food that’s prepared by automated method, either robots or other systems: 18 to 34 (27%), 35 to 54 (17%), 55+ (11%)
Order food that’s delivered on-premises by an automated system or a robot: 18 to 34 (32%), 35 to 54 (28%), 55+ (18%)
Place an order through a ghost or virtual kitchen: 18 to 34 (34%), 35 to 54 (26%), 55+ (13%)
Order food that’s then delivered off-premises via robot or self-driving car: 18 to 34 (36%), 35 to 54 (29%), 55+ (19%)

Considerations

Looking at the above data, most guests are already comfortable placing orders and paying through a tablet. Interestingly, the age group people think of as most tech-averse seem to be open to the idea of robots preparing and delivering their orders.

The keys to implementing tech solutions are deceptively simple: initial costs, subscription costs, maintenance fees, ease of use by staff, and ease of use by guests.

With inflation driving costs up, operators are likely most concerned with what it will cost to add to or upgrade their tech stacks. However, there may be a significant reduction in labor costs that justifies the initial costs. Additionally, some solutions can be leased rather than purchased up front.

But the comfort levels of guests must also receive careful consideration. If a solution is going to alienate or drive away a significant portion of guests, it’s likely not worth the time and cost of implementing it.

Your guests likely want more tech in your restaurant, but it has to be the right tech. Solutions need to deliver convenience and speed without failing to deliver on hospitality.

Image: Harrison Broadbent on Unsplash

October 12, 2022by David Klemt David Klemt No Comments

The Numbers on Food Delivery in Canada

The Numbers on Food Delivery in Canada

by David Klemt

For most restaurants, delivery is now a crucial service element rather than a “nice-to-have” option a small percentage of guests expect.

This is true whether your restaurant is in the US or Canada. But who’s placing orders? How are they ordering? And will they continue to order for the foreseeable future?

Well, Restaurants Canada has answers to all those questions and more. So, we let’s take a look at what their 2022 Foodservice Facts report says about delivery.

To download your own copy of this informative report, click here.

Who’s Placing Orders?

In their 2022 Foodservice Facts report, Restaurants Canada looks at three age groups:

18 to 34
35 to 54
55-plus

Perhaps unsurprisingly, the 18- to 34-year-old cohort leads the charge when it comes to ordering delivery. It’s also not surprising that 35 to 54 comes in second, and 55 and older is third.

However, the first two groups are closer than some may assume. Eighty-three percent of the the 18 to 34 cohort placed orders at quick-service or full-service restaurants between December 2021 and May 2022.

That number does drop for the same time period among the 35 to 54 group, but not by a significant amount. Of that cohort, 77 percent ordered delivery. Just over half of the 55-plus group placed delivery orders: 52 percent.

Now, those numbers are down a bit from 2021, which makes sense. Things were much more restrictive in 2021 and people were just getting back to a sense of normalcy at the start of this year.

In 2021, the delivery order percentages were:

18 to 34: 89 percent
35 to 54: 81 percent
55-plus: 67 percent

Looking at these numbers, it appears the 55-plus cohort is more comfortable dining out in person. Conversely, the 18 to 34 age group is clearly comfortable making delivery a part of their everyday lives.

How do People Want to Order?

Believe it or not, your website still matters. I’ve been saying this for years but the pervasiveness of delivery and takeout ordering is really driving this point home.

The fact is, a notable percentage of your guests want to support your restaurant and staff directly. Over the past couple of years, consumers have become well aware that third-party delivery services are incredibly costly for operators.

Consumers are also aware of third-party delivery debacles, such as the abysmal Grubhub “Free Lunch” mess from May of this year.

So, direct delivery is something that operators need to at least consider. Implementation is often less difficult than most business owners believe. And many platforms, SevenRooms, for example, make implementing direct delivery simple and affordable.

Interestingly, Restaurants Canada data supports the need for direct delivery. Back in May, the industry advocacy organization asked survey respondents how they prefer to place delivery orders from restaurants.

Preferences for QSR customers:

No preference: 10 percent
Over the phone: 19 percent
Third party: 35 percent
Restaurant website or app: 36 percent

Full-service customer preferences:

No preference: 8 percent
Over the phone: 28 percent
Third party: 29 percent
Restaurant website or app: 35 percent

Honestly, I find it surprising anyone calls a QSR to place an order. However, I suppose that makes sense for an office or catering.

At any rate, make sure your website is up-to-date, you offer direct or “last-mile” delivery, and make it easy to navigate your menu and the ordering process.

Is Ordering Here to Stay?

Now, we all know why restaurant delivery has been supercharged the past two years. However, consumer trend data show that delivery was on the rise before the Covid-19 pandemic.

But now that people are eager to return to normal and the industry is on its way to returning to pre-pandemic levels, is delivery really here to stay?

According to another question asked of survey respondents by Restaurants Canada, more than half of QSR and full-service restaurant customers plan to stick with delivery.

For their 2022 Foodservice Facts report, Restaurants Canada asked back in May how often consumers planned to place delivery orders in the next six months.

Order frequency for QSR customers:

Never placed a delivery order and don’t plan to now: 29 percent
Order less often: 20 percent
Will order with the same frequency: 45 percent
Will order more often: 7 percent

Frequency of orders for full-service customers:

Never placed a delivery order: 24 percent
Order less often: 23 percent
Will order with the same frequency: 44 percent
Will order more often: 9 percent

Here to Stay?

Of course, there are multiple factors feeding the numbers above. Some people simply don’t like ordering and waiting for delivery. For these consumers, the practice doesn’t just seem convenient.

There’s also the consumer demand to return to in-person dining, socializing with family and friends. And, of course, meeting new people while dining out.

We must also consider inflation and rising costs. Often, restaurant spending is among the first to be reduced when consumers need to be more frugal. Rising menu costs are sure to curtail some delivery spending.

That said, it’s clear delivery is here to stay and must be considered a crucial element for most restaurant operations. QSR and full-service operators need to bear in mind is placing orders; how often they’re placing orders; and get them in the habit of placing orders directly.

Image: Oliur on Unsplash