As post-pandemic changes in the way Americans interface with foodservice settle in to long-term dining habits, Applebee's on date night increasingly ain’t nothin’ but a Walker Hayes tune – or as Mick Jagger put it, goodbye, Ruby Tuesday.
Moderately priced fast-casual fare at a sit-down name-brand chain like Ruby Tuesday, Chili’s, Applebee’s or the dozens of others that grace shopping mall out lots and Business Loop strip malls across the US is being reimagined as many national chains are prioritizing carryout and drive-through business over in-restaurant dining.
Even the drive-through is proving to be a rougher road, as fast-food giants weigh offering deeper promotional discounts to attract inflation-wary consumers who are increasingly opting to eat at home. Weak sales from operators including burger giant McDonald's (which saw global sales growth slow for the fourth straight quarter) underscore US consumers’ declining disposable income, particularly in the lower-income demographic. Menu prices have risen across the industry over the past year as companies adjust to higher commodity prices and supply chain costs.
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Foodservice trends from Technomic
Joe Pawlak, managing principal at foodservice market research firm Technomic, explains how operators featuring more economical cuts, smaller portions, and optimizing entrees for takeout and delivery are among the trends shaping innovation for foodservice.
Driven by rising prices and an upswing in openings, the top 500 chain restaurant sales grew by 7.8% in 2023, according to foodservice market research firm Technomic, with cumulative top 500 chain restaurant sales projected to climb to $453 billion dollars in 2024 (an increase of nearly 7% from 2023).
“Sustained chain store development and the lingering effects of high restaurant inflation are expected to be the primary sources of nominal 2024 top 500 sales growth,” said Kevin Schimpf, director of industry research at Technomic.
Technomic research suggests limited-service restaurant sales grew 8.5% in 2023, with full-service operators clocking a more modest increase of 5% growth.
Chicken chains have outpaced top 500 chains’ average sales growth, with 2023 marking the category’s fifth year of double-digit growth (up more than 12%).
With pickup and delivery the new normal, restaurants are increasingly tailoring the menus to optimize their offerings for on the go.
“Restaurants must focus on products that ‘travel well,’ and fried items just don’t keep their crisp unless the packaging is right,” said Nancy Jo Seaton, president of Seaton Food Consultants LLC. “The focus for many operators is on getting packaging that will enhance their finished product once it gets to their diner — sometimes 30 minutes after it leaves their kitchen. There is a new world of recyclable paper-based packaging that will allow crispy food and hot sauced items to keep their texture and heat.”
Delivering value
Spurred by these ongoing trends fueled by restaurants and their patrons, meat and poultry processors are adapting their approach – and their products – to meet this shifting demand.
“We work with customers across many different markets and see potential in all of them,” said Keith Blanks, chief commercial officer for Standard Meat Co. “Some might be growing at a faster pace than others, but we work to understand all their challenges and how to help them.”
Blanks said Standard Meat is always looking for ways to help its customers deliver the best possible guest experience.
“That's our mission, our opportunity, and what powers our growth,” he said. “Some of the challenges we've risen to lately include developing new flavors, using our expertise and knowledge to help clients navigate complex markets, and helping them meet a challenging environment by reducing labor in the back of the house.”
Blanks said that effort has included expanding Standard Meat’s product mix over the past five years to include solutions for cooked proteins, which has opened up new markets for the Fort Worth, Texas-based company.
“With ready-to-eat options like cast iron searing coupled with our sous vide platform, we can meet the needs of foodservice, retail, direct-to-consumer, and industrial customers,” he said. “With the anticipated opening of our new facility in Fort Worth, we'll be able to continue to expand those capabilities, while staying agile and ready to meet any future customer needs.”
Blanks said Standard Meat is exploring different proteins, looking for more economical cuts, and embracing solutions that reduce labor.
“We couple our operations knowledge with our ability to provide marketing and trend insights to help customers make educated decisions,” he said.
Meat or poultry products properly prepared and packaged for the commercial kitchen can help restaurant operators navigate their staffing challenges.
“What restaurants really need is staff that they can train and retain, who are aware of food safety challenges and have skills to manage and maintain ingredients in a way that will ensure they last through shelf life and that ensure the finished product is of the utmost quality,” Seaton said. “Suppliers are looking at internal packaging that will allow smaller amounts of product to be thawed or prepared while leaving the rest of the case intact in its original transport state, whether that is frozen or packaged without oxygen. This adds more cost for packaging, but does allow the operator to get the most out of a full case of product.”
Trending tastes
Blanks said consumers are interested in exploring specific regional flavors, including flavors inspired by unique regions within the US.
“With the growing focus on health and wellness, there's also interest in flavors that offer functional benefits beyond taste,” he said. “This really is a remarkable era for exploring new flavors and ingredients. We have a very talented team of chefs in research and development that explore techniques and cuisines from all over the world. This includes experimenting with spices, sauces, and cooking techniques. We're seeing a lot of appreciation for bold, assertive flavors and spices like harissa, gochujang, and sumac that add depth and complexity to dishes.”
Seaton noted the saucy trend as well, adding that operators are seeing a broader range of pre-sauced and “heat and serve” items.
.“Sauces make everything more interesting,” she said. “Chicken is chicken until it’s Buffalo, jerk, barbecue, hot honey, and the list goes on. Operators can make the most of reasonably priced protein by getting creative with preparation and sauces. Look at what all of the leading chains are doing now, focusing on their sauces: Popeye’s, Buffalo Wild Wings, etc.”
Competing consumer values
While restaurants chains labor to cater to value-seeking diners, the non-commercial foodservice sector including school feeding efforts and college and university dining programs is seeing greater demand for foods that are organic, local, sustainably raised, or grass-fed.
There’s also the tried-and-true approach of appealing to diners’ sense of novelty. Sometimes FOMO is the restaurateur’s friend, and playing up a limited-time signature protein item on a menu presents restaurant operators unique promotional opportunities.
“The real trick is to have something that ‘expires’ so that if a diner doesn’t try it quickly, it is gone,” Seaton said. “Often operators worry about running out of a promotional item, but that’s really the idea. It’s OK if you can't serve the very last person who wants to try the special. Put it back on the menu next week, and they will likely be first to try it then. Bringing back popular items and letting consumers know it is for a limited time is a fantastic way to drive traffic, regardless of whether you’re in a commercial or non-commercial setting.”
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