Ignore Millennials at Your Peril

31 January 2017

The food service and restaurant sector is increasingly dancing to the beat of the Millennials – a very different demographic to their predecessors with contemporary demands and new ways of consuming and sharing information. What is clear is that operators who are slow to respond could be missing out on enormous profit opportunities. But if you tailor your offering accordingly, you gain their trust making them lucrative and loyal ambassadors. The following article by the DSL NorthWest team is designed to help you understand this group and tailor your menu and operation accordingly.

What are the REAL Differences?

We have been working with the food service sector and operators for many decades, and there are significant differences between the millennials and preceding generations that are seeing new trends and new ways of operating being adopted by the industry. The most significant include:

Transparency – transparency such as open kitchen areas are very important to Millennials. They want to see food being prepared, how the ingredients are handled and how the kitchen teams work together to assemble dishes and respond to orders.

Made on Demand – Millennials want to control their own food and quickly to combine ingredients and flavors that they want. They reject being dictated to by inflexible menus and set dishes. This is evident in a new generation of operators such as frozen yogurt stores, or customized pizza restaurants such as the highly successful MOD Pizza.

Questioning – there is now much more emphasis placed on the origin of foods and ingredients. This doesn’t necessarily mean healthier ingredients, but more of a focus on better quality, superior ingredients that are better for you. This is echoed in the ‘locavore’ movement where Millennials eat only locally-grown foods from within a 300 mile radius and will pay a premium for this.

Everyone’s a Critic – the rise of social media and online review sites are a norm for the millennial generation, from Facebook, Twitter, Instagram, TripAdvisor, Yelp… the list goes on. With location services now prompting people to submit a review as they leave the restaurant, the challenge is on to ensure every customer’s expectations are exceeded. In addition, ordering before they arrive at the restaurant is becoming the norm; an online menu and ordering system is no longer an optional add-on.

Socially Responsible – engaging with the local community in an appropriate and authentic manner is important to millennials. They care about hiring and they care about giving back. It is no longer an option to bolt on an activity to a marketing or CSR program; they need to be baked into the heart of the restaurants’ values and behaviours.

How Is the Sector Responding?

Trailblazers – there are some notable trailblazers that have been at the forefront of responding to millennials; and who are also preparing for Generation X and Generation Y because of their forward thinking practices including:

College/University Campus Operators – for any organizations that want to witness best-practice in responding effectively to millennials, we advise a visit to a local college or university campus food service operator. They realized that they needed to respond very quickly due to declining numbers. A new generation of consumers were demanding everything from organic and locally sourced ingredients to composting and recycling. The campus operators not only rationalized their menus in a fast and efficient manner, but they also adopted sustainable business operations that reflected the values of their millennial consumer base.

New Concepts – we have seen a plethora of restaurants, cafes and stores that have broken the traditional model and have successfully caught the crest of the wave of new consumer demand. These include concept operators such as frozen yogurt stores where customization is king, upscale sandwich shops, a new wave of salad bars and now new Asian food models. The common thread that unites them all is giving the control to the consumer to create their own food to their own specification.

Behind the Curve – there are other sectors that haven’t considered this generation at all, or who are only now playing catch-up. For example, we are currently working with operators in the bakery sector who have understood that cleaning up ingredients decks is no longer an option as they make the move to higher quality and ‘better-for-you’ options.

Technology is revolutionizing experiences and ordering is becoming a dominant factor for many new innovations such as apps that allow consumers to pre-order. The Starbucks chatbox app is a good example of this. There is no excuse for operators to be left behind as organizations such as UberEATS, the on-demand meal delivery service, become not only common-place but expected.

Communication on their terms – We have talked about social media and there is still a lot of reticence and push-back from the sector. But it is a necessary evil – without it your brand is lost in the wilderness. For example, a client of ours in Arizona recently launched a new product. They used Facebook and Twitter to launch the product locally promising a free sample of lemonade for anyone that visited the store. Within two hours they had had over 100 visits at just one store demonstrating the power of social media to crowd-source action.

Ingredient rationalization – there is a careful balancing act to be achieved for many food operators, and we are working with clients to streamline and optimize their ingredient lists while ensuring that taste and quality is not comprised. For example, we have recently developed a cold-brew coffee base product that is all-natural and still allows the client to position the product as locally roasted. Or a ready—made smoothie product where we have adapted the ingredients to now feature only higher quality, more natural ingredients that still allows consumers to modify the flavours based on their taste profile.

The “Five C’s” For Targeting Millennials

Based on our experience at DSL Northwest, we have created the following five points to consider that will help you to win over the millennial generation:
1. Consistency – be consistent, efficient and fast; or you could read about it on Yelp.

2. Clean Up – rationalize your ingredient decks and incorporate locally sourced and better-for-you options.

3. Consumer Loyalty – create a loyalty program largely driven through social media; utilize the platforms they use.

4. Customization – reduce menu items and build in flexibility to allow for consumer customization.

5. Community – be specific about your community positioning and connections back into the community from a hiring perspective to
business operations that incorporate sustainability practices, recycling and waste management.

To understand how you can apply The Five C’s to your own business in order to optimize your own menu, call us at DSL Northwest at 877-665-1125 for a free consultation.