News

5 consumers restaurants can’t afford to ignore

The influence of Hispanics, millennials, aging Baby Boomers, smaller households and consumers demanding fresh and non-processed foods are some of the top factors driving the shift in what and how consumers eat.

May 8, 2015

Sluggish restaurant traffic growth proves that U.S. consumers’ eating behaviors are evolving, according to the NPD Group, a firm that tracks how consumers eat in- and away-from-home. It reported this week that the growing influence of Hispanics, millennials going through life stages, aging baby boomers, smaller households, and the need for fresh and non-processed foods are among the top factors driving the shift in what and how consumers eat.

“Visits to U.S. restaurants are forecast to grow less than 1 percent a year over the next decade, slower than the 1.1 percent a year growth in the country’s population,” said Bonnie Riggs, NPD restaurant industry analyst. “A greater share of visits will source to those 50 years and older in 2019, but as consumers age they become less frequent restaurant users. This means the restaurant industry will have heavier dependence on lighter buyers.”

That means restaurants need to change their offerings and marketing tactics to entice the following groups:

Hispanics

In 2014, U.S. Hispanics grew restaurant visits while non-Hispanic visits declined. In-home, the Hispanic population combined with their adherence to dining traditions is beginning to influence national consumption patterns, NPD said. Fresh and from scratch are the most common food forms during Hispanic meal preparation. Stove top preparation dominates Hispanic meals more than non-Hispanic meals due to the types of dishes being prepared.

millennials

The millennial generation has officially surpassed the baby boomers as the the nation's largest living generation, according to the U.S. Census Bureau. It makes sense that millennials are driving changes in this country’s eating behaviors with their approach to food choice and preparation. They like fresh, less-processed food, which has played out in their preference for fast casual restaurants that offer freshly prepared. Although these young adults are in a life stage when they would, historically, visit restaurants more often than other age groups, they have cut back to the point where 50+ year-olds go out more often than them. In addition, 65 percent of U.S. Hispanics, a growing population base, are millennials or younger, NPD said.

Aging boomers

The baby boomer generation is aging, considering retirement, becoming empty nesters, and developing health ailments, all of which are typically associated with major changes in the way we approach food and beverage consumption. While shrinking in size, this generation is still too large to ignore especially given their expected lifestyle change, NPD said. This group will be less driven by the latest fad and more by what they need to sustain their health and lifestyles. Foods that are healthful, such as high in whole grains, protein, and calcium, or low in saturated fat, cholesterol, and sodium. Boomers’ restaurant visits have surpassed those of younger adults, who have cut back on visits over the past several years.

Smaller households

Consumption behaviors in the U.S. have become less household-oriented and more individualized than previous generations, according to NPD. More than 50 percent of eating and beverage occasions happen when consumers are alone. Also contributing to consumers dining alone is that 27 percent of households now consist of just one person — the highest level in U.S. history, according to the U.S. Census Bureau.

Fresh-food seekers

From 2003 to 2013, consumption of fresh foods — fruits, vegetables, meat, poultry, fish, and eggs — grew by 20 percent to over 100 billion eatings. It’s no surprise that the two youngest generations, generation z and millennials are driving the trend. In addition to eating more fresh foods, these younger consumers are also interested in eating more organic foods. In terms of foodservice visits, millennials prefer fresh ingredients and freshly prepared items – key differentiators among many fast casual vs. traditional quick service restaurant formats. An aspect of freshly prepared that suits millennials are menu components that are made to order or that can be customized.

“Macro food and beverage consumption behaviors are slow to shift akin to the movement of the continental plates. If you sit and stare at the plates along a fault line you’re not going to observe any discernible difference from one moment to the next,” said Darren Seifer, NPD food and beverage industry analyst. “However, if you put a stake in the ground on both sides and return some time later you will see that a small but definite movement occurred. Food manufacturers, foodservice operators, and retailers need to be aware of these slow changes in behaviors or they will be caught off guard.“