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>> Meet the Millennial man>> Meet the Millennial family>> Meet the Baby Boomer >>
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Food quality rules
Whatever the restaurant segment, quick-service included, the higher-income consumer is looking for food made with premium ingredients.
Higher-income consumers visit mass merchant retailers less frequently than consumers overall.
Higher-income consumers typically work and look for the convenience and relaxation of buying dinner out, especially if they have kids.
Dining experience matters
Dining experience is important to higher-income consumers, who look for customized, local restaurant design and useful features, like Starbucks’ phone-charging stations.
Transparency and knowing the story behind the menu item are also important.
Watch out for:
Just because these consumers have more discretionary income doesn’t mean they want to spend it all on food. NPD found that higher-income consumers spend the majority of their restaurant dollars at McDonald’s, Chick-fil-A and Starbucks.
| Her top brands | Her top restaurants |
|---|---|
| Shoppers | Captain Pell's Fairfax Crabhouse |
| BJ's Wholesale Club | Chick-fil-A |
| Walmart | Chipotle Mexican Grill |
| Home Goods | Wendy's |
| Ross Dress for Less | Corned Beef King |
Better-for-you items like Chick-fil-A’s kale salad appeal to higher-income consumers. Photo: Chick-fil-A
1. Food quality is key. Chipotle Mexican Grill has built its brand around the promise of better ingredients. Wendy’s, similarly, has increasingly talked up its premium offerings, like applewood-smoked bacon, fresh beef and sea salt.
Chick-fil-A, likewise, in recent years has rounded out its menu with better-for-you options like grilled chicken nuggets and kale salad. The chain is testing a new quinoa bowl with butternut squash and goat cheese, for example, a leap for a brand known for its fried-chicken sandwich.
Bev visited Chick-fil-A seven times in one month, more often than any other brand, and it accounted for 3 percent of her restaurant spending. The fact that she’s a mom could be a factor, said Dean Small, Synergy Restaurant Consultants president.
“A mom needs to feel confident about what she’s putting in her kid’s mouth,” he said. “But, at the end of the day, it’s about quality, flavorful food and having a more elevated experience.”
2. Think less about income and more about meeting a need state. Like all consumer groups, higher-income diners have certain needs, whether it’s convenience for the time starved or health for the fitness buff, said Aaron Noveshen, president of consulting group The Culinary Edge. Restaurants should identify the need states of the consumers they want to attract and tie that back to what their brand stands for, what their greatest strengths are and how they can best deliver, he said.
“It’s really about delivering on a promise,” Noveshen said. “Everybody wants that 29- to 35-year-old high spender, but not every brand attracts them today. There has to be something in the DNA of the brand that relates to the consumer at a high level.”
3. Make sure the price is right. There are a lot of psychographics that go into pricing, but, fundamentally, restaurants should price menu items in a way that’s affordable, Noveshen said. What that means in practice will vary.
In the fast-casual segment, for example, the sweet spot is the $8 to $10 range, which is “highly inclusive,” he said.
For lower-income diners, it’s “aspirational and achievable.” But higher-income diners will likely see that range as a great value — as long as the restaurant is delivering on quality.
4. Communicate purpose beyond profits. Chipotle puts the spotlight on sustainable ingredients that are better for the planet. Chick-fil-A is closed on Sundays to allow employees time to worship and focus on their families.
These are messages that speak to a brand’s purpose, rather than just selling food, said Fred LeFranc, founding partner of consulting firm Results Thru Strategy.
“Consumers are making decisions to shop and buy and eat at companies that serve a greater purpose, rather than just making a profit,” LeFranc said.
But that purpose has to be genuine, he warned. “You cannot be inauthentic with today’s consumer, because, if you are, they will spit you out.”
5. Be craveable. Higher-income consumers, just like anyone, have guilty pleasures, LeFranc said.
“There’s an emotional attachment to some foods that will force them to go to a place they wouldn’t otherwise be caught dead in,” he said.
But be consistent in messaging, Noveshen said.
“You can’t be pounding out, on one hand, the value meal and some super-high-calorie indulgent decadence, and then on the other hand talk about health and integrity,” he said.
Consider offering customers conveniences like free wifi or phone-charging stations. Photo: Tom Pennington/Getty Images
Corned Beef Kings’ quality reputation. Bev dined out at Corned Beef King, a restaurant in an Olney, Md., gas station where the average check is $20.
Why would a higher-income consumer eat in a gas station? Because it’s the best darned corned beef sandwich around, said Jon Rossler, president of Corned Beef King, which also operates two food trucks in the region’s higher-income neighborhoods. Rossler said his customers are willing to pay a bit more for quality. The meat is made in house and piled high on fresh rye bread, and the menu also includes pastrami, brisket, jumbo shrimp and lobster salad, he said. Corned Beef King doesn’t have to advertise. Put a good corned beef sandwich in the right income area and word gets around, Rossler said. “It’s like Twitter.”
Chipotle’s messaging. Higher-income consumers are also likely to have a higher education level.
“They’re informed to some degree, and they’re looking for quality, sustainability and transparency of food source,” LeFranc said. Chains like Chipotle, for example, have an opportunity to communicate brand differences in a way a less-educated consumer looking for “food for fuel” might ignore. But that message must be authentic, LeFranc warned.
Chipotle has long pledged to reinvent fast food with a menu of sustainable ingredients and responsibly raised meats, engaging regularly with customers on complicated issues like genetically modified ingredients or big agriculture’s impact on food production, for example. But when Chipotle’s foodborne illness crisis hit last year, the brand’s food-with-integrity message was called into question.
Starbucks’, Mendocino farms’ focus on diner experience. Starbucks offers user-friendly phone-charging stations and free wifi, as well as a combination of tables and soft seating to allow customers to linger with their laptops. Those factors add to the overall experience, which is a key factor for higher-income consumers, Small said. A big part of customer experience is restaurant design. With each new restaurant, Los Angeles-based Mendocino Farms has upped the ante on design, tapping architects that typically build high-end, full-service restaurants. The chain’s co-founder and CEO Mario Del Pero invites them to interpret the brand for each specific neighborhood.
“We have continued to spend more on build-out, but each time, we’re getting even better gross sales, so it increases ROI, despite increased initial costs,” Del Pero said. “Our high-end consumer really appreciates these cool, hip environments that don’t feel chain-like.”
