The produce industry is focused on the idea of marketing to kids — and thus, hopefully, building a growing adult consumer base as the children get older. The latest of many efforts in this regard is PMA’s effort to encourage the industry to use Sesame Street characters, which we discussed in pieces including IMAGINE-NATION: Will First Lady’s Sesame Street Campaign Reduce Produce Consumption? and When Elmo Is Crying – Will The Sesame Street Brand Be Used To Market Sub-standard Product? Is The Legal Minimum An Acceptable Food Safety Standard When Promoting To Children?
What about Foodservice? In Pundit sister publication PRODUCE BUSINESS we discussed what appears to be an abandoned initiative to double consumption in fruits and vegetables in pieces such as Is NRA Really Serious About Doubling Produce Usage?, Two Cheers for Bacon and Five New Priorities For Increased Foodservice Sales. Is there a possibility of using restaurant offers to children as a way to grow produce consumption?
NPD, a global market research and business solutions company, has released a study focused on the question of what drives families with children to frequent restaurants. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:
Bonnie Riggs
Restaurant Industry Analyst
NPD Group
Port Washington, New York
Q: What does NPD’s latest foodservice market research reveal that could be strategically helpful to the produce industry? Our interest was sparked by your news release, Families with Kids: A Lost Opportunity for the Restaurant Industry. You point out that restaurants are leaving money on the table by not capturing more families-with-kids’ visits.
How much money are we talking about? [Editor’s note: NPD’s report, “Parties with Kids: Motivating More Visits”, uses an in-depth custom online survey with a completed sample of 4,352 families with kids aged 2-12. Most respondents visited a quick serve or full serve restaurant in the past 3 months].
A: The losses have been significant. Parties with kids (those including children under age 13) made slightly over one billion fewer visits to U.S. restaurants over the past six years [2008-2014]. Families with kids represent 32 percent of U.S. households and $83.7 billion of total restaurant sales. No restaurant segment was left unscathed.
Seventy percent of all traffic declines stemmed from full service restaurants. Many visits shifted from full service to traditional QSR and fast casual. Visits dropped across all meal periods, with half of all visit losses occurring at dinner.
Q: Why have declines continued year over year through 2014? Hasn’t the economy gradually improved? Wouldn’t visits gradually increase in tandem?
A: It has been a very slow recovery and the restaurant industry has had continued declines from families with kids. While we have almost recovered total industry losses it has come from adult only parties, mostly boomers. Millennials 25-34 with kids have yet to increase visits to restaurants.
Millennials got hit particularly during the recession and have learned to do without. Many are cooking at home and saying they love or like it. So one of the bigger challenges the restaurant will face will be getting them out of the home and back into restaurants, especially when they believe that preparing food at home is better than restaurant foods from a healthy perspective.
Q: Despite these declines, you say there are solid tactics that operators can employ, with the help of manufacturers and producers, in attracting families back to the restaurant dining table. Could you delineate these tactics in the context of opportunities for the produce industry?
Is there a way to reverse the trend with produce-related solutions — for instance, reinventing menus to include more fresh fruits and vegetables, and produce-inspired cuisines? What kinds of marketing strategies and restaurant venues have the best chance of success? How do parents define value? Do parents value healthier, nutritious choices on the menu for their children?
A: I’m going to focus on the healthy and customizable part of our research. How can operators improve kids’ menus? What types of menu items will have the biggest impact on attracting parties with kids? Families want more flexibility in what they order from the menu, and not just the kids’ menu. The younger kids are fine with the kids’ meal. However, once past the age of five, kids start to think they’re all grown up and soon want to order from the adult menu.
Parents desire healthier choices and more choices for their kids. At the very top, 63 percent of respondents wanted healthier options; 57 percent said that instead of a restricted kids’ meal, they preferred customizable menu items. They also wanted more side options available, and more than just French fries, a selection of healthier items. In addition, they were looking for less expensive menu options, and more entree options.
Q: How does the age of the child come into play?
A: Kids start ordering for themselves at the age of 5 so operators, with the help of manufacturers, must also focus on creating a kid-friendly menu. Once past 6, 7, 8 years old, kids want to eat from the main menu. Children’s palates change as they get older as well, desiring more flavorful “adult-type” menu items.
Q: Isn’t there a substantial price jump switching over from the kids’ menu to the adult menu?
A: What’s happening is a family of four comes into the restaurant with kids that want to order entrées from the regular menu. That gets very expensive for families. Parents are looking for something in between the size of an adult menu portion and a kids’ menu portion.
Here there is an opportunity for operators to offer a smaller type entrée with accompanying price. In addition, there is a need for better value items. Some want larger portions for their kids because for kids 11 or 12 years old, portions are too small on the kids menu. Also, they would like nutritional information shown.
Q: In the end, does nutritional information help or scare off restaurant patrons?
A: You bring up a very important point. We did an earlier concept taste test among NPD online panelists to evaluate the appeal, believability and the importance of “healthful” attributes. We introduced a breakfast sandwich described in the regular way, and then as healthier, using a range of words such as natural, hormone-free, organic, locally sourced, etc., and what came back to us right away was they just didn’t think the healthful option would taste good.
Despite the fact that the sandwiches were virtually the same, far fewer selected “tasty” as an adjective to describe the sandwich with “healthful” attributes. The expected taste and being a satisfying sandwich that is filling and hearty are challenges for the “healthful” breakfast sandwich. Our concept test showed that without having tasted the sandwich, far fewer consumers thought the healthier sandwich would be “tasty.”
Beyond convenience, taste often is one of the strongest influencers in consumer preferences. Healthy menu introductions will need to address this perception to build adequate trial.
Q: Was there any discussion about calories, fat, sugar, salt, etc.?
A: Surprisingly, without any mentions of calories, fat content, or health claims, a greater percentage of consumers thought the “healthful” sandwich was healthy, nutritious and of high quality. In this regard, healthy menu items have high potential for earning halo benefits around health and diet concerns, but also for high quality.
Q: Did you ask participants what they mean by healthy?
A: When consumers define healthy when going out to eat, it’s not as much about fat and calories, which is a concern when cooking at home. Although that comes into play, they’re a bit more indulgent when they go out to eat, looking for freshness, quality, prep methods, grilled rather than fried, and food that’s good tasting. If restaurants use too many words that describe something as good for you, kids and even adults think it won’t taste good. Operators have to position how to verbalize it.
Q: How does this information translate to the different restaurant channels — fast food, fast casual, full service, etc.? What types of venues offer the most promise for the produce industry?
A: These findings apply to different types of venues. The issues cross all types, not just full service. Parents also are looking for more customizable choices and more healthy options for their kids from fast food operators.
Q: How does this connect back to the value/price equation? Are parents willing to pay more for that flexibility and the healthy alternatives?
A: The other issue of contention: consumers say restaurants put healthier menu items on the menu but charge more for them, so how operators price healthier menu items is critical.
Q: Do you consider discrepancies on what survey participants say they want on the menu and what they actually end up ordering? Especially when people speak about eating healthy, even the best of intentions don’t necessarily correlate to actual eating behavior; hence the obesity problem…
A: As we all know, we don’t always do what we say we are going to do. Many consumers have the best intentions when going out to eat but then change their mind. Most items on menus, especially fast foods that are considered healthy options, have very low order incidence. I have a few charts of a report I did on healthy eating and how consumers describe what they are looking for in terms of healthy eating when they go out to eat. It is definitely very different from what they do at home. How Consumers Define Healthy Eating at Foodservice Channels When They Go Out to Eat; p.2, p.3., p.4.
Q: What about the supply and demand argument: if customers at restaurants were ordering and demanding healthier, more nutritious items, and shunning the high-caloric, sugar- and fat-laden choices, operators would accommodate? Could you provide more feedback on this?
A: Operators have accommodated but, as I said, order incidence is very low on what would be considered “healthy options”. I really believe they think they are not going to taste good. We need to get that mindset changed and prove that healthy options can really taste good and are not any more expensive than other menu items. Then we will make progress.
Q: In doing this research, were there any results that surprised you or that were different than what you expected?
A: I was not really surprised. Back in the 80’s when we had the low fat craze and we had these low fat items on menus, they did not taste good. So consumers remember and have the mindset that if it is healthy, it is not going to taste good. In general, consumers eat healthier when they are at home; they want to indulge a bit more when they go out to eat.
Q: In addition to the in-depth custom online surveys, does your research also involve restaurant visits/observations, speaking with foodservice operators, etc.?
A: We do not speak to restaurant operators. However, we have on-going tracking of consumer behavior as it relates to restaurants. We have been tracking the restaurant industry since 1976 via consumer panel. Currently, we go out to 3,000 consumers every day, asking them about their restaurant experience yesterday. So we know everything about what consumers do when they go out to eat. The custom studies get at the “why”.
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This discussion touches on several important points:
1) We now have extensive evidence that highlighting specific dishes as “healthy” or having a separate “healthy” menu is pretty much the kiss of death in a restaurant environment. This is not because people do not want healthy foods; it is because the translation that consumers hear when they read these things is something like this: “Here is the menu of items that do not taste good enough to be placed on our regular menu.”
2) Since this not new, the interesting question is why restaurants continue to do it, to promote items as healthy and to have separate “healthy” menus/sections and menu pages? There seems to be three explanations:
a. Many restaurants do it for political and reputational reasons. They have plenty of business off their normal menu. But if ever challenged — by the media or at a Congressional hearing — that its breaded chicken cutlet, covered with cheese and served on a pound of spaghetti along with a loaf of garlic bread, means the restaurant chain is contributing to America’s obesity problem, the chain can quickly whip out its “healthy menu” or its 10 highlighted “healthy options” and switch the conversation. Now it is not that the restaurant chain is on the side of the devil in getting Americans fat; it is that consumers are making bad choices.
b. The healthy options help with the “veto factor” — when Dad and the boys want chicken fried steak with onion rings and Mom says no because she is on a diet — the guys can remind her of the “healthy” options available and avoid Mom vetoing the trip to their preferred restaurant.
c. Finally, restaurants do it because they haven’t figured out how to square the circle. Although Bonnie Riggs acknowledges the industry has to be careful how it “verbalizes” the healthy aspect of foods, it may be a more serious problem, specifically that the healthy options are, in fact, not as tasty or satiating as the standard fare. We ran a piece titled Food “To Die For” May Do Just That… Seminal Study Encouraging The Eating Of Bitter Vegetables For Health To Be Unveiled At New York Produce Show And Conference by an Italian professor, who also made a presentation at the New York Produce Show’s IDEATION FRESH Foodservice Forum, that the only solution is to change taste perception and that this has to start with young children… maybe even en utero!
3) The issue of pricing healthier items is important and with special relevance to the produce industry. The produce trade has always focused on the fact that produce is generally cheaper than protein as a selling point in persuading the foodservice industry that it ought to feature more produce. There is truth here, but there are complications. First, many foodservice operators prefer to use frozen or canned items — these may come from producers in China and are almost a completely separate industry. Second, although produce is less expensive than protein, it is more expensive than starch. So the cheapest way to satiate the customers is to load them up with a mountain of mashed potatoes, rice or a big bowl of pasta.
We are not certain that the issue of families with kids eating out less has much to do with restaurant offers. NPD is comparing 2008 to 2014. The more recent set of years corresponds with the “Great Recession,” and the pattern NPD notes — trading down from Full Service to Fast Casual and Quick Service and trading down from restaurants to eating at home — are precisely the patterns we would expect if unemployment rises, meaning that family incomes shrink and adults try to save money by shopping and cooking themselves.
We do think parents want restaurants to offer kids healthy options. Many children enjoy carrots, peas, green beans and other vegetables, and quite a number enjoy fruit and melons as appetizer or dessert. Certainly the day is past when offering chicken fingers and French fries, a hot dog and French fries and a burger and fries is doing a good job with a children’s menu.
Yet in our personal experience, most restaurants have plenty of items children will eat. The issue is more flexibility in the kitchen. Can they do things without sauces, etc.? It is also an issue of menu clarity — selling without explaining that the vegetables will be served drenched in butter etc.
Price is a big issue for many families and a difficult one for restaurants. Parents hate to pay to buy food when their seven-year-old will eat two bites. Yet smaller portions don’t fully solve the problem.
Bottom line… that little child is taking up a seat in the restaurant and someone has to pay that seat’s share of the rent, staff, insurance, etc. If the restaurant serves one scrambled egg or two ounces of pasta and charges for all the atmospheric and service elements, it will be seen as a rip-off joint. But these costs must be covered. So many restaurants feel it is better to give eight ounces of pasta. The added food cost is minimal — but the total bill looks more proportionate.
One issue is that as America grows more ethnically diverse and as travel becomes more common, restaurants that focus on “kids meals” can pass up a lot of business. One of the most interesting parts of the interview is the point that kids don’t like to feel like little kids and want to order from the adult menu at a young age. Grandma Pundit took the Junior Pundit Segundo, aka Matthew, out for his last birthday and he ordered two of his favorites, escargot and mushrooms – he was just turning 12!. His then 13 year old brother, Jr. Pundit primo, aka William, ordered a burger — kids fare you might say, but he ordered it topped with Manchego cheese!
So kids are people too with diverse tastes and interests. The real issue is whether kids’ menus are best used as a kind of loss-leader to draw parents into the restaurant or are they supposed to be profitable all on their own. That depends more on the nature of the restaurant than the nature of children… or their parents.
Many thanks to NPD’s Bonnie Riggs for sharing this study with the industry.
