Is Better For You Food and Drink Good For Restaurant Industry Growth?

March 11th, 2013 Posted by Uncategorized 0 comments on “Is Better For You Food and Drink Good For Restaurant Industry Growth?”

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Hudson Institute study confirms better for you is better for business

By Bob Wheatley

The $660 billion restaurant industry juggernaut, accounting for nearly 47% of all food dollars spent outside the home is witnessing first hand the shifts in consumer preference towards healthier choice. What’s more turns out this sea-change is good for business and in a manner of speaking “bad for business” for those who failed to dial in and promote better-for-you choices on their menus.

The Hudson Institute in Washington DC recently released results of a study among 21 of the largest quick-service and sit-down restaurant chains — analyzing business results from 2006 to 2011. What they uncovered is truly remarkable.

Restaurant chains emphasizing and growing their better-for-you menu items delivered class-leading growth, due to the increased sales of healthier items. While chains sticking with traditional fare or decreasing their better-for-you options showed declines in both servings and traffic.

Across the board, chains increasing their lower-calorie choices posted superior results in three key performance measures:

  • Same store sales growth
  • Store traffic
  • Total servings

A similar 2011 study of 14 top consumer packaged food and beverage companies showed the same outcome: companies putting more investment and strategic effort behind better-for-you products outperformed the competitors who did not follow that path.

Is America moving towards healthier choice?

Prevailing evidence suggests the recent spate of quantitative studies, including the 2012 consumer research report from the Academy of Nutrition and Dietetics (AND), are accurate in their assessment that the vast majority of consumers want to have a healthier lifestyle. AND’s national study revealed that over 90% of consumers want to eat healthier. That’s nine and zero.

Advances in natural low or no calorie sweetening technology such as stevia and monk fruit, sodium solutions and other moves to add nutritional value in areas like protein and fiber, are finding resonance in the market.

Consumers are voting their preferences at the cash register. Even lower calorie beverages are outperforming their sugary counterparts. What’s going on here?

You are indeed what you eat…

For one the media preoccupation with ingredients and the nation’s obesity crisis has helped usher in a palpable sensitivity that food and beverage choices have a direct impact on the quality of a person’s health and life.

The Hartman Report study entitled “A Cultural Approach to Food Quality for a New Era,” casts this as consumer shift to embrace “symbolic choice.” According to Hartman, if a brand is perceived to be contributing to a consumer’s healthier choice ambitions, thus helping them stay in control of this goal, then the product stays in the shopping cart. On the other hand if it’s perceived to be contributing to a lack of control over healthy lifestyle based on nutritional profile or troubling ingredients, then the consequence may well be brand rejection.

So what’s not to like? We have evidence now that better for you is indeed better for business outcomes. The challenge ahead is to optimize the menu, determine the right connections to brand positioning and the right communications to deliver on what consumers say they want.

What about indulgent brands?

Some may say, yeah but we’re not trying to be a health food option. I don’t think that’s the point necessarily. Healthier choice can co-exist with other choices that lean towards the indulgent end. Even the most credible voices in health and nutrition believe in a balanced view of consumption — and recommend that consumers balance the more indulgent choices with healthier options. Just watch the portion sizes!

Starbucks is an indulgent player. Yet they have earned the respect of many of the best-known experts in the nutrition and diet community based on their efforts to provide options, to interact with the nutrition influencer world credibly, and to use portion size as an effective tool to address lower-calorie interests.

More than anything else, the data seems clear: optimizing the menu to address better-for-you interests isn’t just a good thing to do. It is directly connected to delivering improved sales and margin performance.

Now’s the time to address this… do you agree?

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