Article

Value reinvented: What the industry will teach us next

The trickle down effect has blurred foodservice-segment lines in regard to value with menu development becoming more focused on value-driven culinary platforms.

June 19, 2011

By Phil Daniels, president, Food IQ

The recession of 2007 rocked the foodservice industry. Value became top priority for consumers, which brought about new stressors for restaurant operators across the country. Mom and pop shops didn't struggle alone — even large-scale commercial restaurant chains hurried to develop product solutions in response to the increased consumer demand for value.

Those of us within the industry have noticed the blurring of the lines between commercial restaurant segments. No longer are there clearly-defined differentiators between quick-service and fast casual or casual and upscale dining chains. In recent years, chains across all segments have evolved their menu development and operational approaches, seeking out new solutions and creatively bending their own rules to earn more consumer food dollars.

Consumers expect more value than ever before. They aren't willing to sacrifice food quality, authenticity, or speed of service. These changes to the foodservice segment landscape have created an interesting phenomenon: the emergence of a New Value Platform. We call this solution "upscaling the downscale" — a reworking of operations' existing menus or the opening of new locations under existing brand umbrellas. Both solutions share the common goal of showcasing more upscale culinary interpretations using more downscale pantries...a trend toward upgrading flavor and product authenticity at downgraded prices that has grown rapidly in response to consumer demand for value.

At one end of the industry, casualization is a proven strategy. Leading high-end chefs are opening more casual-style diners, sandwich shops, taquerias, and burger joints. Others have gone mobile, using food trucks to bring their culinary talents (and maximum value) to a more mainstream audience.

At the other end of the spectrum, the fast casual and quick service segments are also using upscaling ideas to satisfy their customers' demands for greater value, flavor, authenticity, and quality. Here, operators are upgrading existing ingredients and menu items to heighten value perception. Fast casual operators are showcasing high-end ingredients while quick service is flexing its culinary muscles, tapping into more premium-branding strategies to enhance quality.

Several basic menu items are emerging as the culinary cornerstones of this new value model: Burgers, tacos, sandwiches, pasta, pizza and ice cream all represent upscaling opportunities for fast casual operators. These platforms offer "menu elasticity" for any menu from QSR to fine dining, while helping customers feel comfortable with the menu.

Premiumization of a well-known item is a great starting point for a value approach. Burgers are leading the way — and for good reason: The burger is the perfect platform for premium by using better meat grinds, artisan cheeses and breads, premium bacon or secondary meats such as sliced prime rib, and signature condiments and quality fresh toppings.

For tacos, sandwiches and pizzas, it's the ever-important carrier that gives customers their first glimpse into an item's authenticity. Consumers notice the yeasty aroma coming off a hand-crafted pizza crust, the char marks on double stacked corn tortillas, or fresh-from-the-oven cornmeal-dusted hoagie roll. Add unexpected combinations, unique sauces, premium proteins and artisan cheeses, and you're helping to create a memorable dining experience.

California Pizza Kitchen was probably the first chain to capitalize on the idea of making the pizza occasion more authentic and premium. They continue to excel in this category. Today, you can find pizza varieties ranging from Pear and Gorgonzola to Thai Chicken to Roasted Artichoke and Spinach — just a few of CPK's pizza offerings. Likewise, in the sandwich arena, Potbelly is growing fast through their attention to detail: Here, it's fresh-sliced authentic meats like mortadella, capicola and salami, natural cheeses, handmade chicken salad, fresh breads and real oven toasting that sets them apart in a crowded category.

Authentic pasta is a hot new platform for the limited service fast casual arena. New to NYC is Hello Pasta, offering imported, organic Italian pastas and a choice of 11 "Italian-American" sauces, including arribiatta, vodka, and mac and cheese sauces, all made with natural, locally-sourced ingredients, and all for under $10. Noodles and Co. is a unique chain offering a globally-inspired pasta menu featuring three distinct cuisines: Asian, Mediterranean and American, including big bowls of rich and hearty mushroom stroganoff, Bangkok Curry and Whole Grain Tuscan Linguini.

Ice cream is another culinary comfort that chefs all over the country are taking to the next level. Ice cream has always offered a sense of familiarity and comfort — now, new adaptations emphasize flavor and ingredients. Hip new self-serve frozen yogurt chains such as Pinkberry and Red Mango even tout the probiotic health benefits of their frozen concoctions, along with sweet and salty flavors like salted caramel; unique and upscale toppings like mochi, crunchy granola, and sour candies offer abundant chances for experimentation.

In this new age of blurred battle lines within our industry, keep in mind that the New Value Platform is about adding value up and down the chain in commercial foodservice. Any operator can now be your competition. For fast casual operators, putting this new value model in play involves taking culinary inspiration from casual and fine dining segments and returning it to consumers through their limited-service format. Build in value across all day parts and menu categories with flavor, quality and authenticity. And remember: Sometimes rules are meant to be broken.

At Food IQ, we excel at helping you create food with impact. Food that starts with true insight into your business, its customers and its competition. Ideas with the culinary skill, experience and vision that help you connect with your audience. For food that's truly relevant. Effective. Ownable. And smart.