ON a recent Friday night, my wife and I visited a local brewpub. The 200-seat casual-dining restaurant was filled with a variety of different parties. Next to us was a couple with young kids; a birthday celebration for a teen was off in the corner; couples were connecting in the prime seats near the fireplace; and the bar was populated with fans grabbing a quick meal while cheering their team on the big screen. This was all in the same restaurant, at the same time — each for their own individual reasons.
This is the concept of consumer segmentation. By understanding the reasons consumers make a restaurant visit or purchase decision, we as marketers can better target our products and services to meet their individual demands. This look at segmentation is based on The NPD Group’s CREST Dining Demands Segmentation for the year ending February 2022.
Fuel: This consumer segment focuses on quick, convenient meals consumed alone. Whether at home, at work, or on the go, Fuel occasions approach 30 per cent share of total visits. Concentrated in QSR, the largest daypart is now lunch instead of morning meal, reflecting the ongoing work-from-home lifestyle and declines in morning commuter traffic. It’s notable that FSR has grown by more than one-third since 2019, highlighting opportunities for these restaurants to reach people at home. Key visit drivers for this occasion include indulgence and treating.
Feed: Representing just over one-quarter of all visits, Feed focuses on the demands to feed a hungry family at home or on the go. It’s been the fastest growing of the five segments since the beginning of the pandemic. Restaurants that have catered to families spending more time at home have found success thanks to larger party sizes, below-average dealing rates and a high concentration of supper occasions. Expect these visits to trade off with Socialize visits as the recovery progresses. Key visit drivers include kids’ appeal, treats and special occasions.
Routine: This segment is mostly about morning and lunch rituals and accounts for one-in five restaurant occasions. The Routine occasion is concentrated in QSR, though FSR has experienced a decline in Routine visits with the demise of sit-down breakfast occasions. Males comprise more than 60 per cent of these visits, and the segment skews younger than average. Dealing is an important component of Routine visits. Operators catering to this space will need to find a new target segment or figure out how to reach people in their homes while the pandemic lifestyle persists. Key visit drivers include good price and loyalty.
Connect: This segment is all about spending time together as a couple. Representing almost 15 per cent of all visits, about one-third of these occur at dinner and the rest are spread across the day. On-premise Connect occasions dominated in the past, but off-premise occasions have picked up much of the slack during the pandemic. Clearly, Canadians have adapted to connecting at home over a restaurant meal with their loved ones. These occasions can be very lucrative — they generate the highest average eater cheques, being concentrated among older cohorts with higher disposable income. Unfortunately, this is the cohort with the slowest return to in-person dining, and thus will require a continuing off-premise focus. Visit drivers include food quality and variety, and special occasions.
Socialize: It should come as no surprise that this segment, characterized by gatherings with family, friends and work colleagues, has experienced the greatest decline over the past two years, compared to the other segments. Down by more than half, socializing represented just 10 per cent of all restaurant visits in the past 12 months. FSRs, which hold a 50 per cent share of this segment, are counting on the pent-up demand for on-premises visits since they bring with them high eater checks and large parties. Key visit drivers include
special occasions and menu variety.
The particular brewpub I visited did a good job catering to many different consumer segments simultaneously. For example, we were allowed to linger for several hours without feeling pressured. Not every operator is able to accommodate so many different customer segments all at once. Instead, a winning strategy should include a concentrated focus on specific target segments and delivering the specific dining experience these unique customers demand.
By Vince Sgabellone – Vince Sgabellone is a foodservice industry analyst with The NPD Group. He can be reached at firstname.lastname@example.org