Welcome!

News Feed Item

Restaurant Chains Globally Face Complex Demands from Today's Health-, Technology- and Value-conscious Diners, According to New AlixPartners Study

Report includes a nine-country consumer survey and more than 60 executive interviews; finds that among those planning to dine out more, Chinese are first and Americans last; uncovers a high-low 'barbell effect' taking hold in dining spending; finds that r

NEW YORK, NY--(Marketwired - October 19, 2016) - Restaurant chains and their suppliers across the world are facing complex, often-conflicting demands from today's ever-more health- and technology-conscious consumers who are also, in many cases, more value-conscious than in recent times. At the same time, though, opportunities await those in the industry who can uncover international growth opportunities, focus on the right technology and maximize supply chains to help them profit from such trends today as more "on-the-go" dining and a growing demand for sustainable ingredients and supply practices. That's according to a new study, "Feeding the Global Consumer," from AlixPartners, the global business-advisory firm.

The report includes a survey of 4,600 diners from nine industrialized countries -- Brazil, China, France, Germany, Italy, Japan, South Korea, the United Kingdom and the United States (where 515 diners were surveyed). In addition, AlixPartners canvassed more than 60 C-level executives from more than 40 different restaurant concepts based in the US with combined 2015 revenues in excess of $90 billion to get their thoughts about international restaurant development as well as global consumer issues.

Dining-out Frequency
The report finds that consumer intentions to dine-out in the next 12 months appear to be relatively high across all countries surveyed. For instance, 47% of diners in China and 40% of those in Brazil said they plan to dine out more often than in the previous 12 months. By comparison, only 15% of American surveyed said that, the lowest percentage of the nine countries. The survey also found that the restaurant segments internationally most likely to gain traffic in the next 12 months are fast casual (with 2.4 expected visits per month per diner in the next 12 months, vs. 2.3 in the prior 12), casual dining (2.3, vs. 2.2) and fine dining (1.3, vs. 1.1), as diners around the world appear to want to "trade up" from fast-food restaurants and meals from convenience stores and grocery stores.

Meanwhile, the survey results for just the U.S. show Americans estimate that visits to fast-food establishments for any type of meal will fall 13% in the next 12 months. Fueling that decline may be a reduction in breakfast occasions, as only 28% of US consumers said they favor fast food for breakfast, a traditional stronghold for that sector, while the remaining 72% said they prefer breakfast from full-service restaurants, fast-casual restaurants, grocery stores or convenience stores.

Per-meal Spending
Like the outlook for dining frequency, the outlook for per-meal spending in the survey is a mixed bag. Of note, the survey reveals what appears to be a barbell-like effect taking hold in dining today across the world. When asked to estimate their average spending per meal per person in in the next 12 months vs. the prior 12, the only increases were at the low end and the higher end of the spending spectrum -- $5-and-under meals and $30.01-$50 meals.

One big exception in terms of spending in the year ahead could be China. According to the survey, 56% of diners there expect to spend more per meal in the year ahead than in the preceding 12 months. That compares with 20% of Americans who said they plan to spend more -- and 24% who said they plan to spend less.

Sustainability / Health & Wellness
Sustainability was a popular topic around the world in the survey. For instance, 53% of diners in China said their choice of restaurants was influenced by sustainable and humane food ingredients and the same percentage said that about sustainable supply practices. In Brazil, the comparable numbers were an also-high 49% and 43%, respectively, while in South Korea, they were 43% and 39%. Interestingly, despite a strong sustainability and health-and-wellness movement in America, the numbers in the U.S. were among the lowest of the nine countries: 34% and 33%, respectively. This could be, says the study, a peek into some of the perhaps-unexpected challenges that await those with international expansion on their minds or it could be a harbinger of even greater sustainability challenges yet to come in the US -- or both.

Regarding health and wellness -- and of challenges, unexpected or otherwise -- the consumer survey found that attitudes toward salubrious menu options differ widely by country. For instance, 33% of Americans surveyed said "healthy" menu options are either "extremely" or "very" important when choosing where to dine out. By comparison, though, 48% and Chinese and 51% of Italians said that. At the other extreme, just 26% of Britons and 17% of Japanese said such options were that important.

"On-the-go" Dining / Delivery / Technology
Another trend shining through in the survey is consumers' growing interest, around the world, in dining while "on the go." On average, 23% of those surveyed said they plan to increase their frequency of carryout meals over the coming 12 months, with 52% of the Chinese saying that, 39% of the Brazilians and 26% of the Germans. The US, possibly the most saturated place in the world for drive-throughs and in-car multitasking, came in at 15%. Perhaps even more telling was that respondents internationally said that on average they expect that basically one of every four meals (23%) of any kind they eat in the coming 12 months to be either carryout from a restaurant or some other form of a "mobile meal," such as food from convenience stores or grocery stores.

Hand in hand with diners' growing interest in moveable feasting is their growing interest in technology, including what appears to be a strong focus on the ability to control both the ordering and payment processes. When asked to identify the top-three most-important technologies a restaurant today can have, 53% of respondents globally chose online ordering, the No. 1 vote-getter of the options offered. Digital menus (49%) were second and digital loyalty programs (48%) third, with mobile payments (44%) and mobile meal-ordering (42%) rounding out the top five. Among US respondents, the leader was digital loyalty programs, at 56%, followed by online ordering (53%) and digital menus (52%).

In addition to seeking value through loyalty programs, diners in the survey also showed that they're technologically savvy when it comes to seeking out pure deals on their meals. When asked how effective online discount services are at influencing their dining-out decisions, 20% said such services are "extremely" influential and 49% said "somewhat" influential. In addition, an average of 52% said they plan to look for more discounts in the year ahead; and notably, those in the two largest economies in the survey, the US and China, came in at well above that average, at 62% and 71%, respectively.

Eric Dzwonczyk, managing director at AlixPartners and co-head of the firm's restaurant and foodservice practice, said, "It's clear that technology is changing the way consumers interact with restaurants. Increasingly, it's critical for restaurant companies to provide online ordering, digital menus and the ability to control how and when the check gets paid. Digital loyalty programs can be tricky to manage profitably, but customers continue to look for deals. The prudent allocation of capital and resources to technology-based business initiatives will have a major impact on who wins and loses with consumers in both the US and globally."

Chains vs. Independents
Diners' attitudes toward restaurant chains in the survey differed markedly by region. Globally, only 19% of respondents said they prefer dining-out at chains vs. independent establishments; and only 14% of Americans and 9-11% of Europeans surveyed said they preferred chains. However, 41% of the South Koreans, 39% of the Chinese and 23% of the Japanese said they preferred chains over independents. Meanwhile, among American respondents, 53% said chains are "much" or "somewhat" better than independents at the use of technology, and 43% saying that about chains prices.

Kurt Schnaubelt, managing director at AlixPartners and co-head of the firm's restaurant and foodservice practice, said, "Value is never out of vogue and customers are more demanding than ever. They require excellent food quality, friendly and fast service, and reasonable prices -- preferably with a discount or deal. In addition, consumers in many regions of the world prefer independents over chains, further ramping up the competitive pressures. Only with the right mix of attention to pricing, cost control and service will chains be able to maintain profit margins."

C-suite Interviews
As part of the study, AlixPartners also canvassed more than 60 C-suite industry executives to gauge their thoughts on international restaurant development and consumer trends worldwide. In line with the potential opportunities globally uncovered in AlixPartners' consumer survey, 79% of the executives indicated that international growth is currently among their top-three priorities, with 50% of that number saying they're currently exploring three or more international markets. When asked how they plan to enter these new markets, 52% said via franchise, 26% said via joint-venture partners, 13% said through company-owned sites and 9% said a combination of those. However, many of the executives pointed to a dearth of qualified partners, especially in terms of in-country and real-estate expertise, in many markets.

AlixPartners' Global Growth Outlook
Taking all these factors into account, the study includes a proprietary analysis by AlixPartners that looks at potential growth markets around the world. According to the analysis, while the US is a highly lucrative, $782 billion market, countries like China (still a $480 billion market, though China's growth has slowed a bit of late) may be the growth engines of tomorrow. It also points out that other countries in Asia and ones in the Middle East could be very attractive for international development too, including for US brands looking to expand internationally.

Adam Werner, managing director at AlixPartners and co-head of the firm's restaurant and foodservice practice, said, "From the continuing high-low bifurcation of consumer spending to the growing demand for on-the-go meals to the mounting demands for sustainability in all its forms to the pressing need to find growth wherever possible including internationally, perhaps the No. 1 common denominator in all is having a robust, efficient supply chain. In the past, having great visibility into your supply chain was important. In today's complex and fast-changing world, it's mandatory."

About the Study
The AlixPartners report includes a consumer survey conducted in July 2016 comprising 4,600 adults across nine countries (Brazil, China, France, Germany, Italy, Japan, South Korea, the United Kingdom and the United States), ages 18 or over. Survey topics focused on consumers' current and planned frequency of dining occasions across the restaurant, convenience-store and ready-to-eat categories; expected spending on meals outside the home; preferred types of restaurants; and key criteria for restaurant selection. It also asked participants for their opinions on selective topics including health and wellness, marketing/loyalty tactics, technology and pricing. In addition, more than 60 C-suite executives from more than 40 different concepts in the US with 2015 revenues in excess of $90 billion were interviewed to gauge their thoughts on international restaurant development and consumer trends worldwide.

About AlixPartners
In today's fast paced global market timing is everything. You want to protect, grow or transform your business. To meet these challenges we offer clients small teams of highly qualified experts with profound sector and operational insight. Our clients include corporate boards and management, law firms, investment banks, investors and others who appreciate the candor, dedication, and transformative expertise of our teams. We will ensure insight drives action at that exact moment that is critical for success. When it really matters. alixpartners.com

Media Contact:
Tim Yost
+1.248.204.8689
tyost@alixpartners.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
In the first article of this three-part series on hybrid cloud security, we discussed the Shared Responsibility Model and examined how the most common attack strategies persist, are amplified, or are mitigated as assets move from data centers to the cloud. Today, we’ll look at some of the unique security challenges that are introduced by public cloud environments. While cloud computing delivers many operational, cost-saving and security benefits, it takes place in a public, shared and on-demand ...
In his session at @ThingsExpo, Sudarshan Krishnamurthi, a Senior Manager, Business Strategy, at Cisco Systems, will discuss how IT and operational technology (OT) work together, as opposed to being in separate siloes as once was traditional. Attendees will learn how to fully leverage the power of IoT in their organization by bringing the two sides together and bridging the communication gap. He will also look at what good leadership must entail in order to accomplish this, and how IT managers ca...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, will discuss how to use Kubernetes to setup a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace....
The financial services market is one of the most data-driven industries in the world, yet it’s bogged down by legacy CPU technologies that simply can’t keep up with the task of querying and visualizing billions of records. In his session at 20th Cloud Expo, Jared Parker, Director of Financial Services at Kinetica, will discuss how the advent of advanced in-database analytics on the GPU makes it possible to run sophisticated data science workloads on the same database that is housing the rich inf...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...