QUICK SERVICE VS. FAST CASUAL...CHAPTER 1: QSR VS. FAST CASUAL: A SNAPSHOT NESTLEPROFESSIONAL.COM • 1-800-288-8682 • 5 DEFINING “FRESH” QSR FAST CASUAL Consumers expect (and

QUICK SERVICE VS. FAST CASUALWhat consumers want and how your restaurant can deliver it to them.

What’s next in QSR & Fast Casual dining?In a country that put fast food on the map over 75 years ago, there’s a thirst among consumers and the industry to uncover “what’s next.”

And there’s good news for everyone: while fast still rules the day in both Quick Service Restaurants (QSRs) and Fast Casual establishments, menu options are getting fresher every day. Old favorites are finding newer, healthier friends. (Would you like an apple instead of fries in your Happy Meal?) Ethnic-themed QSRs are joining the ranks of burger joints. (Choolah Indian BBQ, anyone?) And customizable Fast Casual options are becoming the new “family” meal. Consumers are happy with the results and showing it with increased traffic and dining dollars.

While QSRs and Fast Casual restaurants will never compete with fine dining in terms of experience, these establishments still hold high appeal and play an important and growing role in consumers’ lives. There’s also a big difference in consumer expectations between QSRs and Fast Casual restaurants. QSRs must now compete with the fresher and perceived healthier options of their Fast Casual counterparts while Fast Casual chains try to match the convenience and speed of QSRs.

Convenience, menu consistency, quality, and healthier food: consumers are demanding it all. The good news for the industry? When consumers get the better choices they’re after, these food decisions are quick to turn into lifestyle choices.

Read on to learn more about consumers’ motivations, how they define “value,” what they want out of Fast Casual restaurants and QSRs, and the top trends in limited-service dining.

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QSRs must now compete with the fresher and perceived healthier options of their Fast Casual counterparts while Fast Casual chains try to match the convenience and speed of QSRs.

CHAPTER 1: QSR VS. FAST CASUAL: A SNAPSHOT

Why Consumers Choose You – And Why They Don’tWhile QSRs and Fast Casual establishments often draw in the same consumer in terms of demographics, both establishments have their niche in a consumer’s life.

What a person chooses depends mostly on how much time they have, who they’re with, and what they want in terms of an experience. QSRs are ideal when people are under a time crunch and dining solo; Fast Casual establishments are preferred for a shared sit-down meal in a nice environment. It’s also perceived to offer a healthier meal at a better price than a Full Service Restaurant (FSR), where they have to take tip into consideration.

Although the individual reasons for choosing a QSR or Fast Casual restaurant vary, the reasons a consumer chooses away from home (AFH) options are the same for both QSRs and Fast Casual establishments1.


REASONS FOR AVOIDING2

REASONS FOR CHOOSING


QSR FAST CASUAL

30%PROCESSED FOOD

30%LACK OF HEALTHY OPTIONS

29%LOW QUALITY

26%HAVE NO TIME TO COOK

14%WENT OUT TO CELEBRATE

24%FEEL AFH IS EASIER THAN

COOKING AT HOME

10%THINK AFH FOOD TASTES BETTER

43%NOT AFFORDABLE

30%LACK OF DEALS

20%SERVICE NOT GREAT

WHICH FACTORS DO CONSUMERS SAY ARE BARRIERS TO DINING OUT?

MORE LIKELY TO VISIT IF:

• Offer healthier value menu options and combo meals

• Give discounts for frequent visits

• Offer value menu options

For the same reasons consumers choose a Fast Casual restaurant or QSR, they often choose not to go to one or the other. Sometimes, the Fast Casual diner wants to have someone bring them their food, refill their drink, and just take care of them; they don’t want to “self serve” and they’ll choose an FSR, even if it’s more expensive.

Consumers avoid QSRs because they believe the food isn’t as healthy – and they have a heightened awareness of their overall wellness. They know that QSRs are now offering healthier options, but they also see that these choices are priced higher and are not of better quality.

1 Datassentials, CPP 2015 Segment Drive2 Datassenials, CPP 2013-2014 Segment Overview



DEFINING “FRESH”

QSR FAST CASUAL

Consumers expect (and demand) a lot of choices, but want those choices to be served hot or cold, and taste

“just made.”

Consumers believe that a smaller menu means the ingredients are more seasonal

and fresh.

Overall, diners at both types of restaurants want their food and beverages to be fresh. What this means at each restaurant, however, is a little different:

CHAPTER 2: MOTIVATIONS

Diving Deeper Into Personal Motivators: Getting Traffic In The DoorWhen you see a group of coworkers enjoying coffee at your restaurant in the a.m., you assume that the clean environment, fresh brew, and overall experience brought them in your door. But there’s often more going on behind the scenes in the consumers’ lives. As trends come and go, these personal motivators often stay the same and tend to drive consumers to dine at both Fast Casual restaurants and QSRs.

TOP 5 MOTIVATORS FOR EATING OUT:1. No time to cook2. Enjoy the experience3. Already out4. It’s easier5. Craving something particular

Restaurant owners and operators can only influence 2 of the 5 top motivators: consumers’ experiences and their cravings. Focusing on customer service, consistency of product, and key menu offerings gives you a competitive edge.

You’re out anyway...why not grab a bite? Often, life’s unplanned circumstances draw consumers to Fast Casual or QSR dining.

CHAPTER 2: MOTIVATIONS

REASONS FOR VISITING


QSR FAST CASUAL

64%AGREE

86%AGREE

14%AGREE

68%AGREE

78%AGREE

22%AGREE

“I GO BECAUSE I’M CRAVING SOMETHING SPECIFIC.”

“I LIKE/APPRECIATE/DESIRE THE CONSISTENCY.”

“I LIKE/WANT INNOVATIVE FOODS.”

APPLICATION

SATISFY THEIR CRAVINGS: WHERE TO FOCUS YOUR TIME AND MONEY.While you can’t control how often consumers will be out and about, you can control what drives them into your establishment. Cravings are largely based on menu options, consistency, and quality. Experience involves a variety of factors including food/beverage, customer service, and environment/atmosphere.

• Offer consistency. Make a few select items on your menu more consistent with semi-scratch or premade options. For example, use premade barbecue sauce on a grilled chicken sandwich or serve protein-enhanced breakfast drinks.

• Make impulse buying easier. Offer real rewards programs that pay off like a free meal or $5 off for every $50 you spend. Make the deal attainable and worth pursuing.

• Be the “go-to” solution: Make useful suggestions/options that accommodate why consumers visit a QSR or Fast Casual restaurant. For instance, create family meals to-go that working parents can pre-order and pick up on the way home.

When consumers want to try something new, they generally scale up to fine dining or check out a trendy option at the local food truck.

1 Datassentials, CPP 2015

CHAPTER 3: VALUE

Creating Maximum Consumer Value: The Overall EquationDo you think value equals price? Cost is often just one factor in a consumer’s perception of value.

There are many variables that come into play – from the way food looks to the smile that accompanies its delivery to the feeling the consumer has in your restaurant. When creating a sense of value for the consumer, it’s often just as important to deliver a good experience as it is to avoid a bad one.

GIVE ME WHAT I WANTThe value equation includes several tangible

items that can set your restaurant apart:

LEAVE CONSUMERS PLEASANTLY SURPRISED...When looking at how to elevate the value of your establishment, consider a few “hidden motivators” that often leave consumers happier. These drive your value higher and can motivate people to revisit your establishment over the competition:

• Choices for the entire group• Offers top brands• Good ambience• Ability to customize

AVOID WHAT I DON’T LIKEConsumers will often consider a restaurant

a poor value if they encounter any of these turn-offs:

47% GREAT SERVICE

57% NOT CLEAN

40% INCONSISTENT QUALITY

41% GREAT FOOD & BEVERAGE CHOICES

52% UNFRIENDLY SERVICE

20% UNHEALTHY FOOD

35% HIGH QUALITY INGREDIENTS

42% SERVICE IS TOO SLOW

17% NOT ENOUGH VARIETY/

BORING MENU

CHAPTER 3: VALUE

TOP EXPECTATIONS BY RESTAURANT TYPE

VALUE DRIVERS


QSR FAST CASUAL

45%FOOD DELIVERED FAST

37%HIGH QUALITY INGREDIENTS

14%HEALTHY OPTIONS

44%HIGH QUALITY FOOD

& BEVERAGE

42%GOOD SERVICE

22%VARIETY

WHILE CONSUMERS IDENTIFY DIFFERENT EXPECTATIONS OF A QSR OVER A FAST CASUAL RESTAURANT,

CUSTOMER SERVICE REMAINS KEY.

APPLICATION

ADD MORE VALUE TO EVERYTHING YOU OFFER:• Consider customizable beverages. Provide snappy service

without limiting yourself to a soda dispenser. Beverage equipment for flavored iced tea, infused waters, and specialty coffee offers a variety of customizable options without compromising speed and service.

• Include your team. Ask your team to work with you to develop service standards. Having input on process and protocol helps employees feel a sense of ownership, which motivates and can positively impact results.

• Feature healthier options prominently on your menu. Even if repeat visitors are driven by cravings for traditional menu items, they will be happy to know they have choices, especially when they want to experiment with something new. For a quick way to spice up your sandwiches or side dishes, use Nestlé® Tribe Hummus, which comes in a variety of flavors and is free of cholesterol, hydrogenated oils, and high fructose corn syrup.


CHAPTER 4: MENU

Driving Check Size: When & Why Consumers Will Pay MoreWhile consumers appreciate the convenience of dining out, they still have to consider their overall budgets. There are several areas where consumers state that paying a little more is worth it:

FRESHER, NAME-BRAND BEVERAGESWhen it comes to food, consumers are more likely to pay a premium for fresh, all-natural ingredients at a Fast Casual resaurant than at a QSR. However, the rules are a bit different when it comes to beverages – and that’s good news for both. Consumers state that, no matter what type of establishment they’re at, they’re willing to pay more for drinks when they have any of the following attributes:

INTERNATIONAL FLAVORInternational cuisine is growing in popularity among both QSR and Fast Casual diners. In fact, Fast Casual customers state that they’re more likely to experiment now and then – ordering a curry dish with a Lassi instead of a burger and a soda (even if they come in craving the latter). QSR consumers, however, are fairly limited in the types of international dishes they’ll experiment with; if it’s Italian, Mexican, or Chinese food, they’ll likely give it a try.

28% FRESH-SQUEEZED JUICE

24% HAND-PREPARED BEVERAGES

23% ALL NATURAL

21% POPULAR BEVERAGE BRANDS

CHAPTER 4: MENU

TOP ETHNIC FOODS BY RESTAURANT TYPE:


QSR FAST CASUAL

APPLICATION

ENHANCE YOUR MENU: GET THE MOST OUT OF EVERY CONSUMER TRANSACTION.• Pair food with all-natural beverages and feature these combos on

your menu. • Design snack packs that offer healthy calories and a flavor punch

between meals. Think small salad + fruit smoothie or half a turkey wrap + fresh-squeezed juice.

• Pair drinks with the appropriate menu items – whether it’s an ethnic eat or signature dish. For example: iced tea with a deli item, juice with a breakfast sandwich, or San Pellegrino with a Caesar salad.

1. Italian 2. Mexican 3. Chinese

1. Italian 2. Mexican 3. Chinese 4. Greek 5. Japanese 6. Thai 7. Indian


What’s Next?The more dining trends change, the more they stay the same.

Across most dining out options, consumers are looking for “good food fast,” specifically:

• High-quality options• Premium ingredients• Great taste• Ingredients that come from a good place • Attractive presentation

These factors not only create a great experience for consumers, they also provide the largest opportunity for restaurants to grow their business.

MORE HEALTH & WELLNESS OPTIONSToday’s consumers care about their health and want to feel that their preferred consumer brands do too. 40% of consumers say they carefully watch what they eat and only 11% feel food that they eat away from home is healthier than the food they eat at home. Good food is often healthy, fresh food.

Today, fast dining options fall behind in this category, with only 15% of consumers believing that QSRs care about their health and wellbeing and 30% believing Fast Casual restaurants do. With farm-to-table restaurants and local chefs parking fresh food trucks in front of office buildings over lunch hour, QSRs and Fast Casual establishments need to increase their healthier options.

CHAPTER 5: TOP TRENDS AND INFLUENCES


THERE’S AN OPPORTUNITY TO CHANGE CONSUMER PERCEPTIONS:

QSR FAST CASUAL

15%AGREE

84%AGREE

94%AGREE

30%AGREE

70%AGREE

85%AGREE

THEY CARE ABOUT MY HEALTH AND WELLBEING.”

“EATING AT HOME IS BETTER.”

“EATING AT HOME IS HEALTHIER.”

81% of Americans say that “eating well is important” and 70% state that “it’s worth paying more for healthy” products.


SOURCING INGREDIENTSWhile consumer expectations for local, organic ingredients are pretty low in the fast dining categories, consumers are still spending more dollars on dishes that can prove their lineage: organic meats, sustainably grown veggies, and low-hormone dairy. “Natural” tops the charts in terms of popularity with consumers – 88% of those polled claimed they’re more likely to buy those products. Americans also have concern over unhealthy farm practices, making “organic” and “pesticide-free” big purchase drivers.

CHAPTER 5: TOP TRENDS AND INFLUENCES


THERE’S AN OPPORTUNITY TO CHANGE CONSUMER PERCEPTIONS

“I’M WILLING TO PAY MORE FOR...”

QSR

QSR

FAST CASUAL

FAST CASUAL

14%AGREE

22%AGREE

74%AGREE

21%AGREE

21%AGREE

19%AGREE

33%AGREE

81%AGREE

31%AGREE

27%AGREE

“THEY SHOW A COMMITMENT TO SUSTAINABILITY PRACTICES.”

FRESH INGREDIENTS

“I WOULD FEEL BETTER KNOWING WHERE THEY SOURCE THEIR INGREDIENTS.”

ALL-NATURAL INGREDIENTS

NO ARTIFICIAL FLAVORS

APPLICATION

SEIZE THE OPPORTUNITY: GIVE CONSUMERS MORE HEALTHY OPTIONS.• Tout healthy ingredients on your menu or create a segment of the

menu dedicated to healthier options (that are well-defined, like organic ingredients, low-calorie, natural, wholesome, etc).

• Accommodate popular diet restrictions and choices to demonstrate a commitment to consumer interests in wellbeing: mark items that are gluten free, dairy free, vegan, and vegetarian.

• Run seasonal campaigns that speak to your establishment’s practices and philosophy around sourcing good ingredients.

“Natural” tops the charts in terms of popularity with consumers


TOP HEALTH-CONSCIOUS NESTLÉ PROFESSIONAL BEVERAGES PRODUCTS

LATEST “INGREDIENT FORWARD” BEVERAGES FROM NESTLÉ PROFESSIONAL BEVERAGES

NEW INNOVATIONS THAT ALLOW FOR BEVERAGE PROGRAMS TO BEST FIT THE QSR/FAST CASUAL OPERATIONAL MODEL

NEW PRODUCTS THAT ALLOW FOR FOOD PROGRAMS TO BEST FIT THE QSR/FAST CASUAL OPERATIONAL MODEL

LATEST “INGREDIENT FORWARD” FOODS FROM NESTLÉ PROFESSIONAL

NESTLÉ® VITALITY® FLAVOR INFUSED

WATERS

NESTLÉ® VITALITY® FLAVOR INFUSED WATERS LIKE PINEAPPLE GINGER, STRAWBERRY BASIL

AND CUCUMBER MINT.*

NESTLÉ® COOLPRO™ COLD BEVERAGE

SOLUTION

NESTLÉ® HYDROPONIC BASIL

PESTO

NESTLÉ® ROASTED CHICKEN BROTH CONCENTRATE

NESTLÉ®

HARISSA SAUCENESTLÉ® GOCHUJANG

FLAVOR CONCENTRATE

NESTEA® ICE TEAS

NESCAFÉ® MILANO SPECIALTY COFFEE

MACHINE

SUNKIST JUICES

Consumer demand is high for what Fast Casual restaurants and QSRs offer: convenience and familiarity. Yet, consumers are asking for more: better service, fresh choices, and quality ingredients.

With consumer taste cravings driving traffic, consistency will keep people coming in the door and new flavors and dishes will drive growth, especially menu items that can prove their all-natural background or health benefits. It’s more important than ever to find solutions that don’t break the bank while offering variety, quality, consistency, and speed.

Sources: Datassential CPP 2013: Segment Overviews, January 2014Datassential CPP 2013: Upgraded Segments, January 2014Datassenetial CCP 2015 Decision FactorsDatassenetial CCP 2015 Segment ReviewsDatassenetial CCP 2015 Value Beyond PriceNestle Health & Wellness Trend Report, 2016

* Infused waters have NO artificial colors, flavors, sweeteners (stevia), or preservatives.

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QUICK SERVICE VS. FAST CASUAL...CHAPTER 1: QSR VS. FAST CASUAL: A SNAPSHOT NESTLEPROFESSIONAL.COM • 1-800-288-8682 • 5 DEFINING “FRESH” QSR FAST CASUAL Consumers expect (and