The race is on for the consumer's food dollar. Use this report to understand what consumers want and how you can meet their needs. If you don't, they have many other options. Get the full report>> Consumers have more choice, less money>> Don't forget these diners: Lower-income consumers>> Meet the Millennial family>> Meet the Millennial man>> Meet the higher-income woman>> Meet the Baby Boomer >>
October 21, 2016
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Ed Valle, chief marketing officer, El Pollo Loco
What customer group is your target, and why?
We target what we like to call the “Main Street Foodies” on the go that crave fresh, flavorful meals that are better than typical fast-food options. They focus on getting a quality product that is priced right when making their dining choices. We resonate well with this type of customer because we freshly prepare our authentic, Mexican-inspired entrees in all of our restaurants every day, and provide healthier, wholesome and craveable meals.
What do you think they want the most?
This group is driven by the need for flavor, variety and healthier alternatives to traditional food on the go. They want great-tasting food, prepared fresh, with options the whole family can enjoy, without breaking the bank or feeling guilty about eating it.
How do you give that to them?
We are committed to providing our guests authentically prepared, Mexican-inspired dishes fresh from the El Pollo Loco grill. To do this, we focus on four brand pillars: great food, excellent service, a warm and inviting atmosphere, and a good price. We go to great lengths to prepare our signature, citrus-marinated, fire-grilled chicken, which is the core of everything we do. This addresses their need for healthier, flavorful and better-for-you choices. We deeply marinate our fresh, whole chickens in a special recipe of herbs, spices, fruit juices and garlic, and then fire-grill them on open-flame grills. Then, our chicken is hand-cut into their favorite Mexican entrees, like burritos, salads, soups, tacos and quesadillas.
What brands do you watch and why?
We are always looking at trends in the industry and keeping an eye on shifting consumer needs and preferences. What might be surprising to some is that we follow trends in the supermarket as much as we follow restaurant trends. This allows us to have an all-encompassing perspective on shifting consumer needs, which of late has begun to shift the typical food tiers (casual, fast casual, QSR), and led us to our QSR positioning. We define QSR as offering the quality of food typical of fast-casual restaurants while providing the speed, convenience and value typical of traditional quick-service restaurants.
What customer group is your target, and why?
Our target is guests who want to eat real food, served by team members who desire to make a positive emotional connection. The standard demographic make-up is not as important as identifying with how our guests use Sharky’s Woodfired Mexican Grill to fit their lifestyle.
What do you think they want the most?
We firmly believe they want to feel good about eating. They want to know their food is real, prepared with care and that they can trust us to deliver on our promise of wholesomeness, quality and flavor.
How do you give that to them?
We ensure that we buy ingredients that meet our exacting standards. We buy local and organic when we can, and wild-caught fish. And food is always freshly prepared to order.
What brands do you watch and why?
In terms of restaurateurs, there are some very fun concepts out there, which are beginning to gain scale. Urban Plates is one we have seen grow in our neck of the woods [in Southern California]. Greenleaf is also gaining traction. But overall, the dining hall trend is pretty hot right now, and has been sizzling for about two years. While not new in concept, the recession gave birth to the real estate need, and it is exciting to watch. We’ll see what it looks like in the next five years.
In terms of new food suppliers, I am keeping my eye on and speaking with Josh Renfro and what he is doing with Local Roots Farms [an indoor vertical-farming company in Los Angeles]. If you have not seen his operation, you should.
What customer group is your target, and why?
We target Millennials and Gen Z, yet we throw a tent wide enough for young children to senior citizens. Blaze is a lifestyle brand focused on meeting the needs of Millennials in terms of food transparency, customization, speed, convenience and a hip design that speaks to them. Millennials and Gen Z will shape our nation over the next 25 years.
What do you think they want the most?
Millennials and Gen Z want food transparency and authenticity. That is a big reason why our pizza ingredients contain no artificial colors, flavors, preservatives or additives. They also want customization, speed, convenience, and place to “hang” with soul and energy. They find value in the experience that encompasses so much more than price.
How do you give that to them?
We are perfectly situated to deliver on these notes with our clean ingredients; our build-your-own, down-the-line set-up; our simplicity leading to speed; our enlightened hospitality to meet the needs of our guests on their terms; and, finally, how we design each restaurant with a soul and local community connection.
What brands do you watch and why?
We like to watch the up-and-coming fast-casual brands like Sweetgreen, Tender Greens, Mendocino Farms and Hopdoddy.
What customer group is your target, and why?
We target guests that are seeking bold, interesting, Asian-inspired flavors that are freshly prepared, quickly, from wholesome ingredients to support a health-conscious lifestyle. We have found that our brand approach has universal appeal and represents a “One Market” position that transcends all demographics. We hear so much about marketing to Millennials in today’s environment. The Millennial demographic is a broad audience with vastly different tastes and preferences when it comes to food. We think that it is a disservice to ourselves as marketers if we overlook the mindset that drives purchase.
What do you think they want the most?
The reality of this answer is they want it all! In summary, we know our guests are looking for high-quality and great-tasting food in quick, flavorful, nutrient-rich meal occasions that support their busy lifestyles. Our guests come to us for the convenience of quickly prepared, quality, fresh food, but also for the unique Asian flavors that Pei Wei is known for. But they expect easy access to fit their lifestyle with dine-in, takeaway, online ordering and delivery options. What they expect most is a multi-dimensional access to food that fits with the way they live their lives. I believe the entire industry is in the process of reinvention.
How do you give that to them?
We have a philosophy behind our menu that drives our product development. We call it “Flavor with Purpose.” Essentially, we develop each menu item from the highest quality ingredients, selected for their nutritional benefit as well as the overall contribution to the flavor of each dish. We have expanded our flavor profiles to feature dishes from across Asia beyond China to broaden our appeal and meet the demand of the broader definition of Asian cooking. Each item is handcrafted in our kitchens every day to ensure freshness, using artisan cooking methods that are known for maximizing the nutritional value of all of our ingredients. We do this all in a quick-service environment with multiple access points.
What brands do you watch and why?
I believe that the trend worth watching are food halls — think European food halls such those as found in London or Copenhagen. Domestically, we are seeing growth in popularity of these, such as St. Roch Market in New Orleans, the continuing expansion of Eataly, or the new development planned north of Dallas, in Plano, [Texas,] scheduled for 2017. The ability for the introduction of artisan dishes from a variety of chefs in a communal space will continue to revolutionize food trends at an even faster pace than we have seen before.
What customer group is your target, and why?
Our target customer group consists of women and families, many of whom are Millennials. They’re busy moms who seek to lead an active, balanced lifestyle, and feel great about the food they are choosing for their families. Their desire to eat and live well aligns with our passion for “Living Mediterranean.”
What do you think they want the most?
We believe our guests desire high-quality meals, an enjoyable experience and the convenience of fast casual. Ultimately, we believe they desire food that complements their lifestyle and makes them feel great from the inside out.
How do you give that to them?
The Mediterranean lifestyle is known for embracing fresh, wholesome ingredients and for celebrating life. This idea of “Living Mediterranean” is something we are passionate about at Zoës, and it resonates with our consumer. At Zoës, we offer our guests a chance to eat what they love and love how they feel with our made-from-scratch, Mediterranean-inspired menu offerings that we serve each day.
What brands do you watch and why?
We admire what many concepts are doing. Our focus, however, remains on listening to our guests and delivering what they are asking for. This includes unwavering attention to the guest experience by providing high-quality food and excellent service in our restaurants, and through all consumer touch points. We’re confident that our variety of fresh and flavorful selections for Millennials and children will continue to drive our loyal customer base.
What customer group is your target, and why?
The short answer is Millennials, but more specifically it’s ethnically diverse males and Millennial moms. It’s a natural fit because wings are built for social and family gatherings where people want quality and variety in the form of flavors.
What do you think they want most?
The ability to personalize and control their experience is more important to Millennials than any group that came before them. They are digital natives, coming of age in an on-demand universe, and their expectations have been shaped by that experience.
How do you give that to them?
We lean heavily into technology to educate consumers on our product and brand, and to remove as much friction from the ordering process as possible. In the last few years, we upgraded our mobile and online ordering functionality, we put the lion’s share of our marketing dollars into social and digital channels, and we recently launched the industry’s first true social ordering capabilities on Facebook Messenger and Twitter. We are committed to being everywhere our customer is, and to delivering the most highly personalized, convenient and enjoyable experience. To that end, we’ve also upgraded our guest experience tools on the back end, so that we are more effective at reaching out and winning back guests who may not have gotten the experience they deserve.
What brands do you watch and why?
When it comes to control, I’m fascinated by the “automat” phenomenon. Whether it’s a food truck, a cupcake ATM or a food hall, entrepreneurs are finding new and interesting ways to deliver their product at a lower cost, while giving guests more control over their experience. I keep a very close eye on this part of the industry.
What customer group is your target, and why?
The Fuzzy’s Taco Shop brand inherently attracts a number of target customer groups, including families (we have something for everyone — margaritas, beer, kids’ meals and kid-friendly environment) and college students (proximity to universities, value-priced menu, alcohol, community tables). But perhaps none more so than Millennial males: We serve large portions; offer a variety of cold beers, including craft at most locations; and feature a large number of large TVs airing sports.
What do you think they want the most?
Generally speaking, Millennials want convenience, speed of service, and a customizable meal and experience.
How do you give that to them?
Fuzzy’s Taco Shop balances the benefits of the fast-casual space, which lends itself to many of those deliverables, with providing a fun dining experience. Our ticket times are short, even though the food is fresh and handmade; the environment is more energetic than typical fast casuals, and tends to draw groups meeting for drinks, to watch sports, etc.; the menu is reasonably priced and fully customizable, containing both basic proteins that are transferrable to many items (tacos, burritos, nachos, salads, etc.), as well as featured items (i.e. The California Heat Taco).
What brands do you watch and why?
Fuzzy’s philosophy has always been that our competition is anything people can put in their mouths, whether it comes from their refrigerator, a vending machine or another restaurant. But there are similar concepts that we have on our radar, including Taco Cabana, Rosa’s Café, Moe’s Southwest Grill and, in some markets, Torchy’s Tacos and Tijuana Flats.
What customer group is your target, and why?
For much of the last 30 years, we’ve been focused on serving the best quality burgers, fries and shakes to families with kids and travelers near our tourist locations. As the brand has evolved, we’re now also focusing on three other important groups: Hispanic families, Millennials and Hispanic Millennials. These groups look for high-quality ingredients and seek out those restaurants that care about food as much as they do.
What do you think that they want the most?
For them, it’s a combination of high-quality food and having a great environment to connect with the people that are most important to them. The new Johnny Rockets (redesign, new logo, etc.) features community tables where large groups of families or friends can come together and share a meal, laughs and stories.
How do you give it to them?
Everything we do — food innovation, our new redesign and even our new logo — was 100-percent developed through customer-driven research. We really listen to our guests and ask them repeatedly what they want from Johnny Rockets and what we’re “allowed” to do to improve the brand, while being respectful of where we’ve come from.
What brands do you watch and why?
The “better burger” segment continues to be very competitive, but now we’re starting to see some of the quick-growth concepts beginning to falter. Unlike them, Johnny Rockets has always been consistent to our strategy, and we’ve spent the last few years continually improving every ingredient on our menu — from our beef to chicken, to our fries and shakes. We know that people are counting on us to give them the best burger they’ve ever had, and we’re committed to making sure that we deliver on that expectation.
What customer group is your target, and why?
Millennials who are looking for non-processed, chef-driven, fast“er” food at a good value, as well as foodies and fitness freaks who are looking for a healthier fast-casual alternative to beef and chicken.
What do you think they want the most?
Best bang for their buck. They want the highest quality at the best price. They are willing to spend more for quality, but there still needs to be a value proposition there.
And how do you give that to them?
Sacrifice COGS [cost of goods sold]. In order to provide higher-quality food, in a good quantity, at the right price for Millennials, you have to give up a few points on COGS and make up for it in other areas. For example, Millennials are driven by social media, which is typically free, so I don't mind trading 2 points from marketing to COGS and running a grassroots campaign at 1 percent of sales, as opposed to between 3 percent and 5 percent of sales.
What brands do you watch and why?
Obviously we look at Whole Foods, because I am still trying to figure out how they get people to pay $4-$5 for a bottle of water with a piece of cucumber in it. We sell a two-handed, high-quality fish taco for $6 and get beat up. Beyond that, I look at casual restaurants making waves and try and isolate their "lightning" to package in a fast-casual environment.
