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A new NPD Group report suggests the restaurant industry will experience slow growth in 2012 that is marked by a shift toward healthier choices, particularly for kids. The foodservice forecast also says restaurant offerings will be shaped by a changing U.S. demographic that includes more Hispanics and Millennial-generation consumers. Particular factors that are expected to influence the industry include higher beef and chicken prices, more reliance on social media for advertising and rising competition from retail stores (e.g. convenience stores) offering food. For more on this continue reading the following article from Blue MauMau.

The restaurant industry in 2012 will continue a slow recovery. Foodservice market researcher the NPD Group predicts the industry will see change this year to match demand for more selections of healthy kids meals.

"We're forecasting a continued slow recovery for the restaurant industry in 2012," says Bonnie Riggs, restaurant industry analyst at NPD. "Still, there will be pockets of real growth, behaviors supporting traffic that will outpace overall demand. To tap into that growth, however, operators need to understand what influences will affect consumer behavior and drive traffic in the next 12 months."

Healthy and lighter foods are faring better than many foods and beverages, according to an NPD survey that continually tracks restaurant consumer usage. Consumers seem to be pushing back in controlling their diets.

Kids meals have been the focus of legislative and health advocacy activities over the past few years and that focus is expected to continue throughout 2012. The continuing pressure on restaurant operators to improve the healthfulness of kids meals combined with increasing health consciousness among moms has resulted in children, younger than 13, eating more better-for-you foods like fruit, non-fried chicken, chicken wraps, cereal; and less of the not-so-good-for-you foods, like French fries, dessert items/frozen sweets, regular size burgers, and fried chicken.

Targeting millenial men, Carl's Jr introduces Turkey Burger in 2011.

The Group says that changing demographics of bigger population groups such as Hispanics and Millennials will also impact menu fares in 2012. Other factors that will influence the restaurant industry in 2012 and beyond include:

  • Retail competition will increase. Convenience stores are capturing more dashboard-dining occasions, delivering the benefits of fast, on-the-go, one-stop shopping. Supermarkets, on the other hand, are making inroads with prepared foods being taken home to eat.
  • Work-related visits and lunch will experience a turn toward recovery. Unemployment has hit the work-related lunch occasion most heavily, and recent more positive economic indicators, such as reduced unemployment and increased consumer confidence, are encouraging. Some turn toward recovery of that meal occasion is anticipated in 2012, providing broad benefit to commercial and non-commercial operators.
  • Higher beef and chicken prices in 2012 will affect restaurant offerings and menu prices. There will be a shift away from high-cost beef and chicken items and those items under less price pressure will be promoted, similar to what happened with chicken in 2011 when beef prices rose. Coffee is also anticipated to be under cost pressures in the near term.
  • Social media will continue to stimulate trial, especially at full service restaurants. Social media (Facebook, Yelp, Google, Fourspace, etc.) is still evolving, but it's clear that leveraging it has the potential to benefit restaurants, especially in the full service segment. Expect innovation in harnessing social media to continue. Social media will be important in stimulating consumer trial and restaurants will use discounts, loyalty and other programs to convert these consumers into regular customers.
  • Beverages will continue to be a focus of quick service restaurants. Finding new ways to promote beverages will continue to be a successful strategy for restaurants in 2012. Recent tactics by beverage companies to drive traffic and boost profits have included beverage loyalty programs, promotions to build off-hour demand for specialty drinks, an influx of new and non-carbonated options, and offerings that appeal to the aging population.

In addition to restaurant consumers eating healthier foods, another growing influence in the industry will be the rapid growth in the Hispanic and Asian population in the U.S., which will continue to drive demand for more ethnically diverse foods this year. Tastes will evolve, and consumers will seek spicier and more flavorful foods. The large group that came of adult age at the Millennium and aging Boomers will also influence restaurant foods. Based on NPD survey information, juice drinks are also likely to grow, particularly among younger adults, along with food items popular among Boomers, like coffee, fish/seafood, and breakfast foods.

This article was republished with permission from Blue MauMau.