Can a Business Be Built on a Single Craving?

The shine is coming off the star that is Fast Casual. With several exceptions, the category has had a rough year plus. This past quarter continued declining category sales overall. After several years of craving creating brands, headlines and growth the narrative has been changing.

Analysts are now looking back to QSR as the best bet for growth. Experts are calling for brands like Jack in the Box to spin off their Fast Casual sub-brands (in this case, Qdoba) because they are creating drag for the higher growth QSR.

Fast Casual brands have been praised for a simplified, focused menu. Under-complicated. Built around a single craving. Think Habit Burger (one of the Fast Casual brands bucking the growth trend). That is a fantastic attribute until it isn’t. One clear difference between FC and QSR brands is veto power. FC brands have menus based on one craving. A great burger. Custom pizza.

Across QSR, brands have built our a strong menu that attracts a core while adding a moat. That moat is the extra items that match the brand expectations but meet a different craving. This stops the veto, which is difficult for a brand like Qdoba with a very simple menu to do. Want a burrito, or something like it? Great, Qdoba works. But if not, the search for the next option begins. The single craving is a double edged sword.

Every new FC brand had a simple description: Chipotle for “insert cuisine here.” There was a novelty for most cuisines, as people flocked to see how pho or Uraguayan food could be presented to guests in an assembly line. But time passed and the unknown became the known. There was nothing new to try and back to Jack in the Box we go. Burgers, chicken, tacos, breakfast. Plenty of options for all.

People are not getting richer so price will matter going into the next 18 months.

Doing the mental math here? The next move for Fast Casuals would naturally be to combat the QSR menu moat by adding items. Not so simple. The expanded menu is just one moat. The second was built-in by Fast Casuals but has been enhanced. Pricing.

Fast Casuals took price as part of a premium positioning to differentiate against the perceived quality gap of QSR from the outset. In many cases, the claim that a tighter focus on a single craving made the price make sense. As in: we use the best ingredients to make the best burritos, sorry it costs a bit more. Now it’s a little hard to go head to head with QSRs and expand the menu to match. Sure, they may offer a more premium product but going head to head gives people a chance to compare price.

People are not getting richer so price will matter going into the next 18 months. Fast Casuals like Blaze can’t expand their menu. They’ll be unable to compete on price against QSRs and against Casual Dining if they try to add premium entrees. The question becomes what can they do to make people crave their food more? If they really wish to expand that craving, they’ll need to bring in new, unique flavors and innovation into their core. Fast Casuals have to go all in on ingredients in both variety and quality. Enhance that single craving and make people see the difference between their offering and QSRs.

Force of Habits

Heading into a new year, we tend to think a lot about our habits. Some are good, some less so. Some can be changed. Some we wish could be. Of course all restaurant brands would love to believe that visiting their locations a habit. It likely isn’t. Instead, think of habits as a behavior carried out repeatedly by individuals or groups of guest.

Customer acquisition is a huge investment of time and of money. Winning new customers is so hard, brands have to find ways to create reasons for repeat visits. We know that a small percentage of loyal customers can create the majority of revenue by having a higher lifetime value (LTV). But light and super light users make up 47% of customers on average according to NPD.

Some brands strive to create these repeat generating habits. But regular customers may already have habits that are closely integrated into their visits. These habits can become powerful reinforcement for positive experiences and almost a draw unto themselves. Watching consumers repeat these behaviors can unlock insights into what they like about the brand. Sharing these habits with light users can actually drive occasions.

Gathered together, individual quirks become trends.

A very common habit that has rituals attached to it is coffee. People have a thousand different types of orders and millions of ways to mix their coffee. Splenda, skim, Sweet N Low, cream, whole sugar, half and half, vanilla, stir. That preparation for coffee drinkers is a ritual behavior that is as much a part of the beverage as the actual consumption. Or more. Watch a person making coffee in a new environment or without their favorite additions try to reconcile the challenge.

At the QSR level, frequent visitors have a habit around their tray. Watch patrons closely and observe how each person organizes the items on the tray. Where they place the food, how they move the containers and wrappers, where they put their sauce. These habits are very telling. Tray set up shows how people prioritize and align the food.

For all restaurants an easy way to detect habits are by looking at custom orders. Are customers regularly removing an ingredient to an item or dish? This might be an opportunity to strike it permanently, or replace it with something they’ll like better.

Is there an odd component consistently being added to item? Coleslaw is now a common sandwich topping, but that came out from a small number of people who started the practice and shared it. Finding an item like that could unlock a new menu item, entree or hidden menu.

This behavior is particularly true with beverages. The Coca-Cola Freestyle machine has created a cult that allows people to truly customize their drink to the meal they’re having. Sonic has done a similar thing with their secret drink menu consisting of unique combos that keep people coming back and more importantly, talking.

A look at the purchase data can tell us which items lead to the purchase of other items. Identify uncombined products that groups of people order together. These are habitual meals that customers already enjoy. These can be offered together as a custom LTO through a loyalty program, or an item may be offered individually to drive purchase of it accompaniments.

We tend to think about habits as individual quirks. Gathered together, individual quirks become trends. We can learn a lot about our customer base as a whole by investigating the trends of our top customers.