A new study finds that demographics and the core values of various age groups are combining to speed consumers' changing tastes in food, as fast-casual eateries increasingly displace fast food joints.
The 3,000-consumer study conducted by Brand Keys examined attitudes and behaviors of 1,000 consumers in each of three generational cohorts -- Baby Boomers, Gen X, and Millennials.
"You only have to look at the same-store sales of brands like McDonald's, Burger King and Taco Bell to see the shift that's taking place," said Robert Passikoff, Brand Keys founder and president. "The declines reported by all three segments prove the loyalty shifts seen in our Brand Keys Customer Loyalty Engagement Index, with fast food brands rapidly losing loyalty and profits."
The survey conducted in the 3rd Quarter of 2014 identified the following trends influencing food choices:
Baby Boomers Want Better Service
Baby Boomers reported an 18% decrease in fast food restaurant visitation.
"Not surprisingly this group placed an extraordinarily high value on health and living well," noted Passikoff. "They can afford, what nearly a third of the sample (32%) called, 'quality food,' something that they attribute more to the fast casual restaurants like Panera and Chipotle than they do to the traditional fast food brands."
"The survey showed that Baby Boomers also expect better service, something traditional fast food chains have fallen down on in recent years. They're not as fast as they used to be."
Gen X Looking for Value For Dollar
Gen Xers reported an 11% decrease in visitation to fast food restaurants, the lowest decline in the three groups examined but with an equal increase reported in visitation to fast-casuals.
"The Gen X group is more pragmatic about their decisions about eating out, so they seem to be more vulnerable to value positioning," said Passikoff. "But they're skeptical about brands too, and are looking not for price-value but value for dollar. They feel the fast-casuals offer that too, equal to and more often better, than the fast food brands."
Nearly 50% of this cohort reported that time was important to them so 'fast" has its advantages.. "But years of experience and process-engineering pretty much guarantee you don't have wait long at a Panera either," noted Passikoff.
Millennials Not Interested In "Dollar Food"
Millennials reported a 20% decrease in visits to fast food chains. Forty-two percent (42%) reported increased visits to fast-casual restaurants in the past year. "Millennials are, perhaps, our most sophisticated segment right now," said Passikoff. "They're the toughest to reach via traditional marketing à la McDonald's et al. And, they are the toughest group with whom to build loyalty."
When asked to characterize traditional fast food brands more than half of this group (53%) called it "dollar food," a reflection of the reliance of traditional fast food brands on the 'Dollar Menu' to boost sales. "You don't build brands or loyalty on the basis of price," said Passikoff. "That only works for commodities."
Virtually all this group (89%) reported looking for fast, casual food that they deemed tastier, healthier, and more customized, than fast food.
"There's an issue with this group regarding how they see value as well. They see fast-casual restaurants as offering better, more customizable options and they're willing to pay more for them. And while it's true that digital and mobile behavior has changed particularly for Millennials more mobile apps and outreach isn't "going to change how they see the brand," noted Passikoff.
"It's true that consumers in all cohorts have definite expectations about eating out, but a new McWrap isn't going to do it," said Passikoff. "The traditional fast food brands have tried to be all things to all customers and failed. Longer menus have just resulted in longer waits, but more significantly, a real dilution of the brand.
"Your brand may be all over, but you can't be all things. You really do have to stand for something in the mind of the consumer. Otherwise, loyalty for fast food brands is only going to move in one direction. Down."