They like to win: Millennials driving restaurant spending
Millennials are hungry and they’re eating out more than they’re eating in.
In March, the Census Bureau reported that for the first time since such records were tabulated in 1992, Americans are spending more money in restaurants and bars than they are in grocery stores. Americans in March spent USD 52.3 billion (EUR 46.6 billion) at restaurants and bars and USD 49.7 billion (EUR 44.3 billion) in grocery stores, according to the U.S. Department of Commerce.
The trend is being driven by millennials, the generation born from the early 1980s to the early 2000s, and the reason, according to the National Restaurant Association, is that this generation views dining out as a social event. The NRA reports that millennials prefer fast food, deli food and pizza restaurants, they support reward and loyalty programs and their allegiances can be flexible. So how do seafood restaurateurs attract these young consumers to their tables?
First you have to understand what millennials are looking for and the psychology behind their food choices, said Menu Engineer Gregg Rapp, based in Palm Springs, Calif. One feature favored by millennial diners is the ability to customize their meals, he said. This part has to be carefully executed to avoid the potential commodification of the meal, he warned. Over the past 33 years Rapp has specialized in helping restaurants understand the power of their menu and the profitability and popularity of each individual item. His clients include almost every national restaurant chain in the United States as well as independent operators.
“I caution my clients against providing a list of products because when you do that you lose the chef portion of the restaurant, i.e. the chef’s professional touch and reason for being,” said Rapp. “Instead, give as much information as possible about the items on your menu, and make recommendations on what’s best together. But be careful about offering too many choices.”
Too many choices is anything more than seven items in any category, be it seafood, poultry or meat. This applies not just to millennials but to all diners.
“If you offer more than seven on the decision tree, a person will shut down and pick what they had last time, or what they know is easier,” Rapp said.
What distinguishes millennials from other generations is their ardent desire to know about what they’re eating and where it comes from, said Rapp. “They want the story behind the story. Is the seafood sustainable? Where is it from? How did it get here and who are the people behind the food? The better the story the more it will attract the millennial, and the more you can dial down into the farm or the 40 acres an item came from, the better.”
Rapp recently worked on a menu in a Maine restaurant, adding lobster floats in specific patterns on the menu. “Each pattern reflected the individual lobsterman that owned the particular floats, and you could look out into the bay from the restaurant and see those floats,” he said. “Doing this made this restaurant’s lobsters better than those in the restaurant next door.”
Sherry Frey, VP for Nielsen’s Perishables Group, said the dining out trend driven by millennials bodes well for seafood at foodservice. “When it comes to grocery store sales we find millennials are less adventurous with their seafood purchases, indexing higher on fin fish like tilapia. The restaurant channel provides an opportunity to entice millennials into seafood purchases with globally inspired cuisines and a variety of seafood options.”
Millennials like to know that they’re making the world a better place by ordering the right items, Rapp added. “If, for example, you’re ordering a seafood item that’s on the red list of Monterey Bay Aquarium’s Seafood Watch, it can position you as someone who’s not a good person,” he said.
Recycling is another way millennials feel they can make a difference in the world, and it’s often the first thing they look for in a restaurant. “If you’re serving glass bottled drinks and you don’t have a recycling bin a millennial won’t come back to your restaurant,” said Rapp. “So it makes sense to recycle at your restaurant and to let people know you’re doing it, because it scores you points.”
Rapp said Duke’s Chowder House, a restaurant group with six locations in Washington state, is doing a great job of putting stories about their seafood on their website. There are YouTube videos of owner Duke Moscrip in Alaska, where he sources seafood, and blog posts wherein Moscrip describes fishing with his fishermen in the Copper River and meeting with the scallop boat captains and treating them to lunch at one of his restaurants. Duke’s communicates its food-sourcing standards on its menus, and its signage indicates that most of its seafood comes from Alaska.
“We have what we’ve termed the ‘Duke Worthy Standards’ for processing our fish and for our food sourcing,” said Bettina Carey, marketing director. “It’s a little stamp we’ve created, that appears in our menus and is defined in the menus too. We also have a loyalty program, Duke’s VIP club, through which we communicate our message.”
Duke’s offers discounts and promotions to its club members once every four to six weeks, and while membership is not tracked by demographics, rewards like this are a good hook for millennials, Carey said.
“Millennials like to win, so to speak, and they prefer to get a break here and there.” Sales growth at Duke’s has been tremendous,” she adds. “We’re experiencing 14 percent increases in sales a year, and every year it keeps getting better.”