By: Robert Carter
[dropcap size=big]T[/dropcap]he September instalment of this column provided a window into what the quick-service restaurant (QSR) landscape is expected to look like in 2020, according to key findings from NPD’s report “Vision 2020: The Future of QSR in Canada.” Last month’s column examined the report’s findings that increased competition and ethnic influences will shape the landscape in 2020. This month it’s time to examine convenience and snacking trends.
Convenience Will Be King
The 2020 restaurant market will be driven by convenience. Today, 58 per cent of restaurant meals occur off-premise via drive-thru, delivery or take-out. The growth of off-premise restaurant meals has increased five per cent annually during the past five years, with no indication consumers will temper their desire for quick, convenient restaurant meal solutions. And, as the economy strengthens, and the unemployment rate drops, daily pressures will continue to support the need for convenient meals. As a result, off-premise customer traffic at QSR is forecast to grow by 10 per cent up to the year 2020. Unfortunately not all QSR segments will be part of the off-premise growth. Ironically, quick-service pizza units — the segment that relies the most on off-premise traffic — appears to be falling out of favour with consumers due to innovative retail frozen pizza and the lack of menu innovation from quick-service pizza operators. The net effect will be a decline in customer traffic of three per cent running up to 2020.
Snacking is on the Rise
The snacking dayparts, defined as the meal occasions after breakfast and before lunch (a.m. snack) as well as after lunch and before dinner (p.m. snack), are poised for strong growth during the next five years. The a.m. snacking daypart is forecast to experience increased customer traffic by 13 per cent up to 2020. The growth drivers of a.m. snacking are primarily a result of the generation following millennials. Post-millennials (aged zero to 19), who have grown up integrating restaurant meals into their daily routine, will gravitate to quick-service coffee houses, upscale burger restaurants and the fast-casual segment for decadent caffeinated beverages, indulgent baked goods and innovative snack items. The afternoon snacking daypart is also expected to become popular at QSR. This time will be popular among boomers seeking a daily social, treat-based occasion. As a result, customer traffic at the p.m. snacking daypart is forecast to grow seven per cent leading up to 2020.
The Response
Easy-to-prepare, portable menu items — such as sandwiches, specialty beverages as well as in-home meal solutions from an outside source — will be popular in the next five years, driven by the growth of off-premise restaurant occasions. Similarly, baked goods and innovative snacks are expected to grow in popularity, too. QSR operators should consider both trends when determining menu strategies in what’s predicted to be an otherwise flat market in the years leading to 2020.
