!- Google Analytics ->
Dave Thomas, the founder and president of Wendy’s International who died at 69 last month, was one of those rare entrepreneurs who not only sees over the market horizon, but also aptly builds on the vision. He recognized that consumers want good food, value, variety, and consistency.
From the beginning, he insisted on fresh, not frozen, hamburger, a choice of toppings, and on-demand sandwich assembly. Prices were higher than for its rivals, but so was perceived value. He added fresh salad bars and baked potatoes, more like casual-dining restaurants, as well as drive-through convenience. He also introduced fixed-price value items.
With Dave’s departure, the fast-food business has lost one of the last pioneers at a time when market demands are incredibly tough. The U.S. market is saturated, and revenue growth is focused overseas. Growth must come from increased speed, higher, more consistent quality, and new menu hits. American consumers are on the move, with less regard for brand loyalty and more insistence on superior products and services.
This trend has successfully blurred the distinction between long-time reliable food-segment definitions such as at-home, away-from-home, take-out, fast-food, and casual dining—even foodservice and retail distinctions are blurring to the point where they lack relevance. New terms like “fast casual” are emerging.
At-home dining, for instance, could involve take-out from an upscale restaurant, traditional fast food, prepared food delivered, prepared food assembled from a supermarket deli, convenience food from the freezer, speed scratch cooking, or a full home-cooked spread.
Away-from-home doesn’t mean just sit-down in a restaurant anymore—fewer than half of all foodservice meals are eaten in a restaurant. Sit-down today means sitting in a car, a train, a park bench, or at an office desk for most diners. And because so much of the American diet is dependent on speed, the demand for quality and variety is growing. In response, menus are changing and delivery systems are accelerating—on all levels from fast food and casual dining to the home meal replacements offered by supermarket delis. In fact, most casual-dining chains are now in the process of revamping units to accommodate take-out and drive-through customers.
For instance, Outback Steakhouse will walk packaged meals to the car for phone-in orders. Chili’s Grill & Bar is revamping most of its units to accommodate drive-through pick-ups. Carrabba’s Italian Grill, Olive Garden, and Bennigan’s are making investments to build to-go sales. By doing so, the category is encroaching on the traditional fast-food domain. The trend is putting a renewed emphasis on food science and packaging, in an effort to assure restaurant quality in a faster, more mobile format.
In an effort to regain its footing, Burger King announced a major revamp of its menu last fall. In the wake of its failed 1997 French fry makeover, the company announced a combination of new products, like a sourdough bacon cheeseburger, and product upgrades, including better-tasting coffee and shakes.
McDonald’s, which hasn’t had a blockbuster new product success since the 1983 introduction of Chicken McNuggets, also announced changes. The company has fared better with its casual-dining units. Boston Market was bankrupt when McDonald’s bought it a few years ago. Today, it’s profitable, with drive-through, take-out, and dine-in, as well as an expanding menu that includes open-flame–grilled chicken and enhanced dining rooms in some markets. It is one of the rising hybrid formats that epitomizes the current trend in faster, better-tasting fast food.
Arby’s has introduced Market Fresh deli sandwiches, Subway has upgraded its deli meats and expanded fresh-baked bread varieties, Hardees recently introduced a gourmet half-pound hamburger that it says is equivalent to a $6-dollar burger from a casual-dining restaurant. Taco Bell also has a spate of new products and upgrades, including all-white-meat chicken, improved taco shells, heartier beans, and more flavorful taco seasoning.
This trend will only intensify as the economy rebounds. The U.S. food market is mature, mobile, and very picky. Consumers want food fast, fresh, and flavorful, and they want to eat where and when it’s convenient. The challenge for food product development professionals is to find formulations that deliver and hold up well in transport and reconstitution, and design both cooking and packaging systems that maintain product integrity. And do it fast.
by PIERCE HOLLINGSWORTH
President, The Hollingsworth Group, Inc.