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NPD predicts top restaurant trends


January 18, 2012
By Canadian Pizza

January 18, 2012, Chicago – Pressure to improve the healthfulness of kids meals and the influence of growing Asian, Hispanic, boomer, and millennial populations will shape the restaurant industry, The NPD Group reports.

NPD’s foodservice market research forecast of U.S. commercial foodservice traffic projects consumer demand for restaurant-prepared meals and snacks to rise slightly above 2011 levels this year.

Kids meals have been the focus of legislative and health advocacy activities over the past few years and that focus is expected to continue throughout the year. The continuing pressure on restaurant operators to improve the healthfulness of kids meals combined with increasing health consciousness among moms has resulted in children eating more better-for-you foods like fruit, non-fried chicken, wraps and cereal, and less of the not-so-good-for-you foods, like French fries, desserts, frozen sweets, regular size burgers, and fried chicken. In general, healthy and lighter foods are faring better than other foods.

Another major influence in the industry is the rapid growth in the Hispanic and Asian population in the United States. This will continue to drive demand for more ethnically diverse foods this year and into the future. Tastes will evolve and consumers will seek spicier and more flavourful foods.

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The large millennial and boomer age groups will also influence restaurant foods. Juice drinks are likely to grow, particularly among younger adults, along with food items popular among boomers, like coffee, fish, seafood, and breakfast foods.

Other factors will also influence the restaurant industry this year:

  • Retail competition will increase. Convenience stores are capturing more dashboard-dining occasions, delivering the benefits of fast, on-the-go, one-stop shopping. Supermarkets, on the other hand, are making inroads with prepared foods being taken home to eat.
  • Work-related visits and lunch will experience a turn toward recovery. Unemployment has hit the work-related lunch occasion most heavily, and recent positive economic indicators, such as reduced unemployment and increased consumer confidence, are encouraging. Some turn toward recovery of that meal occasion is anticipated this year, providing broad benefit to commercial and non-commercial operators.
  • Higher beef and chicken prices will affect restaurant offerings and menu prices. There will be a shift away from high-cost beef and chicken items. Those items under less price pressure will be promoted, similar to what happened with chicken in 2011, when beef prices rose. Coffee is also anticipated to be under cost pressures in the near term.
  • Social media will continue to stimulate trial, especially at full service restaurants. Social media is still evolving, but it’s clear that leveraging it has the potential to benefit restaurants, especially in the full service segment. Expect innovation in harnessing social media to continue. Social media will be important in stimulating consumer trial and restaurants will use discounts, loyalty and other programs to convert these consumers into regular customers.
  • Beverages will continue to be a focus of quick service restaurants. Successful recent tactics to drive traffic and boost profits include beverage loyalty programs, promotions to build off-hour demand for specialty drinks, an influx of new and non-carbonated options, and offerings that appeal to the aging population. Finding new ways to promote beverages will continue to be a successful strategy for restaurants.

“We’re forecasting a continued slow recovery for the restaurant industry in 2012,” said Bonnie Riggs, restaurant industry analyst at NPD. “Still, there will be pockets of real growth, behaviors supporting traffic that will outpace overall demand. To tap into that growth, however, operators need to understand what influences will affect consumer behavior and drive traffic in the next 12 months.”