With expectations of fresh and better-for-you ingredients and sophistication, Millennials are shaking up the restaurant industry.
With expectations of fresh and better-for-you ingredients, sophistication, customization and innovation, Millennials are shaking up the restaurant industry. Restaurants like McDonald’s that have depended on twenty- and thirty-somethings are stumbling as young customers switch to fast-casual chains like Chipotle, as The Wall Street Journal reported this week. According to Technomic data compiled for the Journal, the percentage of 19- to 21-year-old Americans visiting McDonald’s monthly has fallen by almost 13 points since 2011; visits by customers ages 22 to 37 have been flat.
Raised in a foodie-focused culture, Millennials care where their food comes from and what it’s made out of. Fast casuals like Chipotle and Panera are investing more in ingredients than in marketing to build credibility, RBC analyst David Palmer told Forbes. A key reason Panera recently decided to cut artificial additives in its offerings was to appeal to this demographic, reports USA Today. The chain is also seeking to cut high-fructose corn syrup from its beverages. Chipotle specifies which ingredients are local and/or organic (and “responsibly raised,” when it comes to meat), and is working to eliminate GMOs and hydrogenated oils.
Chipotle is also a hit with Millennials because it offers many combinations, even with a limited number of ingredients. Rapidly expanding U.S. chain Blaze Fast Fire’d Pizza, which lets diners choose ingredients and watch their pizzas being assembled, is pinning its success to Millennial tastes. Food-obsessed Millennials are also interested in unique flavors and a little gourmet flair. Pizza Hut is evolving its offerings along these lines, as Ad Age reports. Wendy’s is putting some sandwiches on ciabatta bread or pretzel rolls to attract Millennials.
Restaurant chains are also focusing on technology to lure Millennials. Wyman Roberts, CEO of Chili’s parent Brinker International, cited an emphasis on tech to engage Millennials in a recent analyst call, including tabletop tablets for ordering food. Starbucks, Wendy’s and others use mobile payment and loyalty initiatives. Branded apps that enable smartphone ordering and payment have piqued the interest of quick service restaurants trying to build better customer relationships, reports Nation’s Restaurant News.
McDonald’s, meanwhile, is focusing on rebranding and rethinking everything from its menu to its marketing. Watch for other established brands to work much harder to capture the Millennial diner.