QSR BRANDS WINNING WITH GAMES

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A handful of quick-service brands released games for mobile platforms in 2013, and the apps proved to be more than just for fun. In fact, some brands are reporting increased sales and customer loyalty by integrating games within their apps. Among those that found success this year with app games were Blimpie and Chipotle.

Chipotle’s “The Scarecrow” app, the brands first mobile game, made a major splash when rolled out in September. Since the launch, more than 530,000 consumers have downloaded the game through iTunes. In addition to boosting the brand’s image as a provider of quality food, Chipotle’s mobile game has driven visits to its stores and garnered more than 22,000 e-mail opt-ins and 4,200 mobile database opt-ins from the game.

Another successful mobile game designed to boost sales and customer loyalty, Blimpie’s Blimpie Run, rolled out in mid-September. After nine weeks, nearly 4,400 people had downloaded the Blimpie Run game, and it had generated an opt-in rate of almost 38% to Blimpie’s e-mail club, dwarfing the average opt-in rate of 2–10% for most of the chain’s e-mail club promotions. Blimpie added the Blimpie Run game as part of its brand overhaul, done in an effort to appeal more to Millennials.

Source: Blank, Christine. “Game Time.” QSR Magazine. December 2013.

SOCIAL NATIVE ADVERTISING MORE THAN A FAD

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While not a new concept, over the past year, the term “native advertising” evolved from a simple industry buzzword into a complex, frequently debated advertising strategy being proclaimed as the future of digital. More recently, however, the buzz has shifted from native advertising in general to native advertising in social media. In the context of social media, native advertising is defined as ads that are seamlessly integrated into a user’s feed and are nearly indistinguishable from organic content. Social native advertising is also not an emerging concept, so why all the hype now?

Social native advertising has become such a huge trend for a reason: It drives results. Twitter started the native-social ad trend with Promoted Tweets in early 2010. The social network is now among the most influential voices in arguing that TV and digital ad spend can work hand-in-hand. On Facebook, native ads in the News Feed generate 49 times higher click-through rates and a 54% lower cost-per-click than traditional placements in the right-rail sidebar.

Native social advertising is here to stay. In fact, it is expected to grow from a $1.6 billion market in 2012 to $4.6 billion by 2017, according to research firm BIA/Kelsey. This would equate to over 40% of social media ad spend being concentrated on native.

Source: The Native Ad Rush Is On. (November 5, 2013). Business Insider.

THE “HOTTEST” FLAVOR TREND OF 2014

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While sour continues as a major flavor trend, driven in part by the embrace of Korean and Scandinavian culinary styles with their fermented and pickled foods, Sriracha is the hottest flavor trend building consumer enthusiasm. The popularity of this hot sauce further attests to how embedded ethnic foods have become in the U.S. food scene – Sriracha first appeared in Thai restaurants, and affirms how the overall flavor profile continues its unstoppable march toward ever-hotter condiments. Where is the Sriracha trend going? Mainstream. Sriracha now flavors a Lay’s potato chip, UV Vodka and recently made its way into candy canes just in time for the holiday season.

For QSRs, the beloved condiment offers a great opportunity to boost restaurant’s flavor profile in 2014. The incorporation of the hot sauce recently helped to shake up Subway’s sandwich lineup as they introduced the new Sriracha Chicken Melt and Sriracha Steak Melt, both topped with a creamy Sriracha sauce. As a practical matter, another reason the QSR industry might want to jump on the Sriracha trend train in 2014 is that unlike other hot sauces, Sriracha never goes bad.

Source: Flavor Trends 2014: Sour, Sriracha and High Concept. (December 13, 2013). CMI Online.

THE POST-RECESSIONARY MINDSET

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No longer in the midst of a free fall like many of the post-recession years, consumers are feeling more in control and have recognized that pre-recession they were living beyond their means. In fact, being forced to live with less during the recession has made consumers rethink their expectations. As consumers begin to see less in a new light, they’re realizing that less is not always about the lower end or the forced choice. Consumers have discovered that in many cases less just fits their lives better.

This shift to a taste for less has led to trends like “disownership,” where consumers now lease or borrow products instead of buying them outright. Combined with the decreased desire of ownership is the long-term trend of people valuing intangible experiences more than material possessions, based upon the notion that experiences lead to greater well-being than material things.

Source: U.S. Monitor State of the Consumer. (September 2013). The Futures Company.

RISING DEMAND FOR FLEXIBILITY

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Snacks were big last year, and that should continue in 2014. But there’s an even a bigger trend now into which snacks fit: flexibility. Customers want breakfast, lunch and dinner at various times in the day and they’re also looking for smaller portions to tide them over until their larger meals.

McDonald’s is experimenting by serving a few menu items from each daypart after midnight. Some restaurants are selling burgers all day. Others are offering items such as yogurt parfaits – originally meant for the morning daypart – any time.
Flexibility gives QSRs an ability to offer items that appeal to a wider range of consumers, such as those seeking gluten-free options. Additionally, flexibility could also assist those QSRs that are seeking to participate in the better-for-you trend.

Source: 8 Fast-Food Trends for ’14. (January 2014). QSR Magazine.

TREND: GUILT-FREE CONSUMPTION (GFC)

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Fueled by a pervasive awareness of the conflicts between their consumerist impulses and their aspirations to be “good,” experienced consumers are increasingly weighed down with guilt. The result? A growing hunger for a new kind of consumption: Guilt-Free Consumption (GFC). GFC is a new kind of consumption, one free from worry, or at least with less worry, about its negative impact, that allows continued indulgence.

For now, the most potent GFC innovations will target those areas where there is the greatest tension between consumer values and impulses, and help absolve the most troubling guilt. For QSRs, this means identifying the consumption choices that cause the most guilt, such as sugar, fat, sodium and calories, and taking steps to help absolve that guilt.

September 2013 saw QSR giants McDonald’s and Burger King sparring with GFC initiatives. Burger King launched “Satisfries,” -French fries with 40% less fat and 30% fewer calories than the McDonald’s equivalent. While McDonald’s announced a global partnership with the Alliance for a Healthier Generation to make specific commitments, including always offering a choice of a side-salad, fruit or vegetables as a substitute for fries in a value meal.

Source: Report: Trend Briefing–Guilt-Free Consumption. (November 2013). Trendwatching.

PINTEREST, STARBUCKS AND THE MISSING STORY

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Starbucks boards are full of fantastic images that are almost entirely sourced from third-party sites, which are an important part of creating a successful Pinterest strategy; however, they are missing one key element – a great story.

While Starbucks’ Facebook page has some amazing photos that tell a story or inspire an action, this does not carry through to Pinterest. In fact, there are very few, if any, of the pins across “Starbucks Loves” – their official Pinterest Channel, that focus on storytelling. What’s more is that avid fans are telling great stories on behalf of the brand, and for some reason, the brand is not repining them.

A recent article, “5 Reasons Why Starbucks’ Pinterest Strategy is Not A Big Hit,” provided the photo to the right as example of a “great story” that Starbucks should be pinning. At the time, the photo, described as telling the story of someone that “truly” loves her Starbucks, had been shared more than 4,700 times on Facebook, and received 165,000 likes, Starbucks has since pinned the photo on their “Coffee Moments” board, perhaps indicating that they are taking note of the storytelling opportunity that exists.

Sources: NG, Vincent. 5 Reasons Why Starbucks’ Pinterest Strategy is Not A Big Hit. (September 12, 2013). Business to Community.
Starbucks presses social media onward. (April 27, 2013). Seattle Times.

PRIVATE LABEL INVASION

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Formerly synonymous with generic typeface and questionable quality, today’s private label goods are transforming categories and forever shaking up the consumer marketplace. In fact, 80% of all shoppers now believe that private label brands are equal to or better than national brands in terms of quality and packaging.

Over the last three years, sales of private label/store brands grew 18.2%, accounting for $111 billion in sales, according to Nielsen. That is more than twice the rate of growth for national brands – 7.9% to $529 billion – over the same period.

While not experiencing the same rate of growth, private label is a solid contender within the coffee industry. Given coffee’s fairly volatile and higher price point, private label brands can leverage lower cost, making the option appealing enough to rank among the segment’s leaders. In fact, for ground coffee household penetration, private label is nearly tied with Maxwell House for second place at 15.6% and 16.2%, respectively, led only by Folgers at 21.9%. And while it might be an occasional trade-down for some, 38% of households are brand loyal to private label coffee brands.

In terms of consumer perceptions, 42% perceive private label/store brand coffee as offering a better value than name brand coffee and 16% see no difference in taste.

To protect market share, national coffee brands will need to further leverage their core strengths and differentiate themselves to compete against private labels effectively and keep consumers’ loyalty.

Sources: Groceries Are Cleaning Up in Store-Brand Aisles. (October 1, 2013). The New York Times.
Single-cup coffee picks up steam. (July 12, 2013). Private Label Store Brands.

JURY STILL OUT ON FACEBOOK HASHTAGS

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Ever since Facebook hashtags hit the scene in June, brands have been trying to determine their effectiveness. While some recent studies have reported that the use of Facebook hashtags is not yielding added exposure for brands, the truth is that only time will tell. As brands integrate more Facebook hashtags, and Facebook users become more familiar with discovering content through hashtags, post engagement will be the true indication as to whether including hashtags is an effective brand tactic.

In the meantime, one brand that seems to be getting it right is Starbucks. At Starbucks, the arrival of the Pumpkin Spice Latte is one that many look forward to every year. Many fans take advantage of the #PSL tag on channels like Twitter and Instagram, and Starbucks is now pushing the same enthusiasm on Facebook. Not only is Starbucks joining the vast conversation of PSL fans by including #PSL on relevant posts, it is engaging with fans using the hashtag and created a cover photo comprised of user-generated content from the trend.

FOOD TRENDS: “CULINARY FORWARD”

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Consumers are in search of new flavor sensations, they are looking for bold, varied and diverse flavors, causing a demand for what is being called “culinary forward” food innovation that expands beyond traditional flavors and offerings. This “culinary forward” demand is led by millennials, whose interest in flavor is largely based on their exposure to a variety of foods from an early age, but may also reflect the ethnic diversity of millennials. Diversity is a hallmark of millennials with an estimated 36% being members of a minority group.

Expanded exploration of both global cuisines and U.S. ethnic cooking are also fueling the growth of this trend, though you can see the impact in such mundane categories as the bakery department. Sales of breads with chili peppers soared almost 20% in the last year or so. In produce, sales of specialty fruits, including mangos and papayas are up by double digits. In terms of product developments, Campbell Soup has launched an array of new soup flavors, including Coconut Curry, while the company’s skillet sauce line has flavors like Thai Green Curry with Lemongrass & Basil. Kraft is keeping up with the trend with bold flavors like its Fresh Take’s spicy chipotle cheddar seasoning.

The trend to bold, unique and distinct flavors means that traditional food brands and QSRs alike will have to think about retooling their lines and menus to meet this “culinary forward” demand for new flavors.

Source: Food Trends. (May 2013). CMI Online.

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