New Directions: Off-Premises Innovation Steers Foodservice Sales During COVID-19 (Part 1)

Posted in Family Restaurant on May 26, 2020

blog 262_daniel-salgado-55oEHjHnH_k-unsplashAs restaurant operations pivot to takeout and delivery to boost sales during the pandemic, menus are being revamped to reflect the new norm.

According to survey results from the market research firm Technomic, comfort and convenience are coming center-of-plate as sales drivers. “Instead of single innovative, buzzworthy menu items, operators are turning to family and boxed meals as a new type of LTO,” Technomic reported.

Comfort foods (45%) top the list of menu items operators are promoting, followed by family-style meals (40%) and ready-to-eat meals (33%).1 Value-driven options tailored to the shifts in the disrupted market are helping to feed the bottom line, especially for quick service restaurants eager to appeal to cost-conscious consumers sheltering at home, where they often juggle family and professional responsibilities.

Uno’s $5 make-your-own pizza kit for kids is a case in point. Once available only for dine-in customers, the kits are now available for takeout and delivery and come with instructions, crust, cheese, sauce, pepperoni, and a pizza coloring sheet.

In addition to a pizza bagel kit, Einstein Bros. Bagels offers a kit for making bagel sandwiches. “As more consumers continue to work from home and schools remain temporarily closed, we know that families are spending a lot of time together, and we want to make sure they make the most of it,” explained Chad Thompson, the chain’s vice president of culinary innovation.

Given the economic impact of the crisis, budget-friendly promotions are a big deal. Forty-seven percent of consumers surveyed say that coupons and promotions influence their choice of restaurants to order from.1 Waiving delivery fees also appeals to consumers’ hunger for savings. Forty-four percent are more likely to order from a third-party delivery service that doesn’t charge a fee, and 37% say having to pay delivery fees in addition to the food itself is unfair.1

Moving Forward: Takeout and Delivery Poised for Post-Pandemic Profits

While half of consumers surveyed rank eating out as the activity they look forward to most post-quarantine, research shows that off-premises is poised for continued growth.2 Digital channels were already transforming foodservice at a rapid pace prior to the pandemic; COVID-19 has only accelerated the adoption of delivery throughout the industry.

Survey results from the customer feedback firm Service Management Group determined that 80% of consumers were aware of third-party delivery services prior to the pandemic. Forty-three percent had used a third-party delivery service in the three months prior to being surveyed, and a quarter said they were using one of several more frequently.

Now that COVID-19 has compelled consumers to take advantage of the ease and convenience of digital platforms for restaurant transactions, usage of these services is becoming ingrained. As margins tighten and tensions rise between restaurant operations and third-party delivery players, both large chains and independents may move toward in-house delivery to continue to grow off-premises business and maximize profits post-pandemic.

At Mondelēz International, we have the culinary expertise and trusted brands to help your operation thrive on premises and off. Reach out below to learn how we can provide custom solutions to overcome challenges and optimize opportunities in an ever-changing landscape.

In Part 2, we'll delve deeper into off-premises innovation as foodservice operations continue to navigate the COVID-19 outbreak and prepare for the post-pandemic market.

1 Technomic, [Updated], Technomic’s Take: COVID-19, The Foodservice View, April 4, 2020
2 Technomic, Quarterly LTO Review, Q1 2020, p. 9

 

 

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