Transcript of Food & Restaurant Podcast – What is ‘Better For You?’ with Leah McGrath of Ingles Markets

Transcript of Food & Restaurant Podcast – What is ‘Better For You?’ with Leah McGrath of Ingles Markets. Listen to the episode here.

[00:00:11] Adam Pierno: All right, welcome back to another episode of Food and Restaurant Marketing, the podcast. We are really excited. This will be our conclusion to season 2 and it’s been a very fun season so far but I have a feeling we may have saved the best for last. We have a fantastic guest who is a little different than the other folks that you’ve heard from. Today we have, joining us from Ingles Markets is Leah McGrath who is a registered dietitian. Knows a lot about nutrition, knows a lot about food, ingredients and some of the science behind what we eat and what we add to our meals, and what we’re consuming and also what we’re selling. So, welcome Leah.

[00:00:55] Leah McGrath: Thank you, Adam. Nice to be here.

[00:01:00] Adam: I’m really glad that we did this. We’ve been trying to set this one up for a while and I appreciate you hanging in there while we scheduled and re-scheduled that a few times.

[00:01:07] Leah: Yes, you know I wasn’t trying to play hard to get Adam, I promise. [laughs] I think we were both trying to play hard to get, with busy schedules and timings and everything, but it’s great to be here and be able to talk to you and your guests.

[00:01:24] Adam: Yes I know. Thank you, I’m really glad. Do you want to give the people a little bit of a background on where you’ve been and what you’ve been doing?

[00:01:31] Leah: Sure. I have been a registered dietitian for over 20 years. I’ve been a retail or supermarket dietitian for the majority of that for 17 years, but my background as a registered dietitian has also included work in public health, and I was a dietitian in the army believe it or not. I was an officer and dietitian in the army. That has been the past 20 some years but my life before that, I was involved in marketing as a head hunter and even before that, I worked in the restaurant space, Adam. I was a general manager, banquet manager, catering manager, so I really credit the restaurant world for first sparking my love for finding out more about food and learning more about food and even nutrition.

[00:02:32] Adam: Wow, that’s a really interesting background. So, you’ve seen it all. You’ve seen food from all sides and you’ve done the regiment, the discipline of the army and the craziness of the marketing side as well.

[00:02:43] Leah: Exactly, and being a dietitian is– a lot of people don’t know what the difference is between a registered dietitian and a nutritionist. Registered dietitians have to complete at least a four-year college education. We have to go through about 1200 hours of an internship. We have to pass a nationally administered board exam and we have to keep up continuing education credit every year. It is a pretty rigorous type of study. It’s very competitive to get into an internship and there’s a lot of science and chemistry behind becoming a registered dietitian.

[00:03:23] Adam: Yes. Well, that’s very interesting. Tell me a little bit before we get into our conversation today. As a dietitian working with a brand, what does that entail on a day to day basis?

[00:03:36] Leah: Well, my days are pretty atypical. Today, for example, I was down recording a TV segment and talking about ways that you can use all of the watermelon. My days vary between doing presentations, doing TV, hosting a radio program for our retailer, doing supermarket tours. I do a lot of writing for regional publications, but probably the biggest chunk of my day right now which has also been the case for about the past five to six years, is running social media for the retailer and for my own pages as well. Social media takes up a big chunk of my time right now.

[00:04:22] Adam: Right, I think it takes up a lot of everybody’s time but I do appreciate you being here and let’s get into the conversation today. We’ll be talking today about what does the phrase “Better for you” really mean? What is better for you? We hear it as a claim from CPG manufacturers, restaurants and people thinking about it as they shop, but I thought who better to help me answer that question than a registered dietitian that’s been doing this for a long time. Give me your overview on “better for you” as a claim and what it’s intended to mean.

[00:05:01] Leah: Well, I’m glad you said claim versus what it’s intended to mean. I think that it gets a little murky sometimes because what better for you might be for you, might be very different for somebody who might have diabetes or who might have celiac disease. It’s sort of a very general term. I think there are probably things that most health professionals and dietitians could agree upon that could fall under that “Better for you” might be more fruits and vegetables, or a product having more servings of fruits and vegetables. Less sodium.
Perhaps low in saturated fat, lower sugar amounts, minimally processed or could be higher in fiber. I think that there might be a few ideas that most people would agree on as being better for you, but then we start to get into the gray areas that might depend on a person’s dietary needs, their lifestyle, their food allergies, their food preferences so it gets a little complicated, it gets a little sticky.

[00:06:29] Adam: It happens very quickly, I think. When we start to think about– you mentioned celiacs or food allergies, so I know that if I want to have some good clean protein I can use peanuts or nuts, but if I have a nut allergy that’s obviously not better for me. That’s going to cause all kinds of problems. That’s where the gray area comes in. Even beyond the improved nutrition, I like the idea that people are trying to create products that offer improved nutrition and I think they have the right ideas at heart. But, when they say, “Better for you” is it always better for you? Or is it better than the competitor on the shelf that has 11 grams of sugar and they’re only adding 10 grams?

[00:07:21] Leah: Right, I think we start to get into the whole labeling conundrum and also sort of following a fad. You mentioned lean protein, so right now protein is exceptionally hot thanks to things like the Paleo diet and CrossFit. I see that becoming the “Better for you” perception, is all around protein right now. That’s one of the biggest areas where I think, they think brands are trying to shine the spotlight on products that have higher amounts of protein as being better for you and may not always be the case. But, I think right now protein is very hot.
I think even more so. I mean, we’ve seen other trends through the years. We’ve seen things like fiber, we’ve seen things like anti-oxidants but I think right now, higher protein amounts and lower sugar amounts; those are the two things that brands are trying to seek that competitive edge over their next door neighbor on the shelf and say, “Hey, we look better because we have more protein” or “We look better. We’re better for you because we have less sugar.”

[00:08:41] Adam: Right. Yes, it’s interesting. Last month we went to The Fancy Food Show in New York and in the past, I think it was driven new innovation in that space and the CPG space was driven a lot by flavor in the past. But now it seems nutrition and quality of nutrients is really forward in all the innovation. Everybody has, besides popcorn, everybody has something that’s really adding protein or a new way to sweeten without sugar and that seems to be really driving innovation.

[00:09:17] Leah: Yes. I think I’ve seen the same at Expo East, Expo West. I’m seeing reports on those and I would say you’re right on target with that.

[00:09:30] Adam: Earlier this season we interviewed Lucas Clark from MAD Greens, which if you’re not familiar with MAD Greens, it’s a chain of salad restaurants and they have these crazy customizable salads and I happen to be a super fan of the brand. He posited that all trends right now are driven by nutrition and trying to find this edge of “Better for you” so when he was saying they look for ingredients, that’s what they’re trying to do. It’s not just flavor, but it has to obviously taste good. He said they were looking in their culinary team for ways to get more protein in or get more fiber and really amp up the quality of the nutrition.

[00:10:14] Leah: Yes, I think that’s really exciting. As a dietitian, any time you can promote eating vegetables in a salad, I mean, we’re all for that. The top of our list is trying to get people to eat more vegetables and fruits and make those a bigger part of your plate or your bowl. That’s definitely a big selling point for me, but yes. It’s interesting Adam, you haven’t said the word superfood. Honestly, I’m glad you haven’t because I think that, it seemed like for a while every year we would have one superfood that everybody catered to. Whether it was pomegranate or kale, or something like that, but now I think you’re right, I think-

[00:11:08] Adam: Acai.

[00:11:09] Leah: Acai, right. Chia seeds. Now I think we’re seeing maybe a broader look, a broader scope at just making offerings in general. Better for you with more fruits, more vegetables, more protein, less sugar. Maybe not focusing so much on just one food.

[00:11:34] Adam: Leah, you triggered a great question. Do you believe that that is because we’re getting smarter about nutrition as a culture and we understand there’s no magic bullet or do you think the marketing has just worn off of the term superfood, and people are starting to spam it in their email?

[00:11:51] Leah: Yes. I don’t know. I hope the latter, that people are getting tired of that term. Are we getting smarter? I think we certainly have access to a lot more information. I don’t know if that always correlates with getting smarter or just getting bombarded with more information. I think the trends and the fads are flipping much more quickly now than they used to. It feels like when the Atkins diet was the big fad, that stuck around for quite some time, but I feel like now the food fads and food trends just change up. Their cycle is much shorter.

[00:12:38] Adam: That’s really interesting too. I’m glad you brought that up. In the restaurant space we see menus can shift quickly with LTOs and probably not as quickly as internal brand people would like them to, but pretty quickly they can add some things. If chia seeds become a trend, they can add a chia seed salad or an additive to a milkshake or something. But in the CPG world, when you’re talking about shelf space and grocery distribution, how fast do you see that shifting when an ingredient or an additive becomes popular? How long does it take to get to the market and how long does it stay on the shelf before it starts to disappear?

[00:13:20] Leah: Yes. I think going to events like the Fancy Food Show, Expo East, Expo West will give you an inkling of the coming fads and trends in food. Usually what we start seeing presented to buyers might be a little ahead of those shows. It’s kind of like a little trickle, right? At first it’s a little trickle and then the shows come and you see, for example, popcorn, you mentioned popcorn earlier. I remember one year it was like, all of a sudden we’re getting more people trying to introduce popcorn to us and there were like all different flavors and things like that. Then when you go to Expo East or Expo West, there are tons of popcorns there. Then you’re starting-

[00:14:11] Adam: Yes, it’s amazing.

[00:14:12] Leah: Yes. Then you’re just getting this flood of presentations for people to try and sell you popcorn. I don’t know in terms of time what the cycle is, but it’s still probably a lot faster. Then I think in the US, anyway, we’re such spoiled consumers. Our boredom threshold is so low that we get really bored so quickly and we want to move on to the next food, the next taste, sensation. Now we’re tired of sea salt caramel, we want sriracha. You have to be pretty nimble.

[00:14:56] Adam: Oh, that’s funny. Yes. You’re hitting on all the trends. Sriracha was in everything for a year. It’s still very popular. I just read that Auntie Anne’s has a sriracha pretzel [inaudible 00:15:06]

[00:15:06] Leah: Oh, that sounds good.

[00:15:09] Adam: I’ll be heading over to the mall for that for sure. Not better for you, but tasty as well.

[00:15:14] Leah: Yes. Exactly.

[00:15:15]Adam: I’ll do it. What do you think about Panera last year kind of went all in on the idea of the clean menu and I have my own take on that from a marketing standpoint, the use of the word clean. I would love to hear the perspective of a registered dietitian on the clean menu and what does that mean for “Better for you” claims and what does that mean for consumers?

[00:15:44] Leah: Yes. You’ve touched on one of my least favorite terms. One of my friends works for another retailer in the mid west and we had this discussion about that whole term, clean is like, what’s the opposite of clean? Is it something unclean or dirty?

[00:16:06] Adam: Totally, totally agree.

[00:16:07] Leah: Yes. She was saying, and I agree with this is that, “Why can’t we focus on clear?” Why can’t we focus on– if the brand’s idea is to simplify labeling or make things more understandable, or clearer to the consumer, or clear to the guest at the restaurant? I mean, I think everybody could get behind that, but when you start focusing on clean, I think it sets up this sort of caste system of food that implies that you’re better if you eat these foods because they’re clean.
If you’re eating at a competitor or buying these other options, which are unclean or dirty, you, therefore, are unclean or dirty in some way. Let’s not forget Chipotle because I think that when I see Panera making these sort of clean claims, I think, “Wow, this sort of reminds me of Chipotle in the pre-food safety nightmare days”. A lot of people frankly said on Twitter, “Hey, you got what was coming to you. Karma bit you in the butt on that one.”

[00:17:19] Adam: I totally agree. In fact, if you go back, I believe it might have been the first episode we posted of this podcast. We did a story on Chipotle going all in on food safety. It was in the aftermath of the first outbreak. Our position at that time was, “Hey, that’s the wrong move” because now you’re saying, “We promise this won’t happen again” and when you break that promise we’re seeing what’s happening, right?

[00:17:44] Leah: You’re right. I think it’s a dangerous space to try and put up your marketing flag. I think it’s kind of risky.

[00:17:56] Adam: I agree. It’s like service. I never can promise flawless service because it’s a promise that is guaranteed to be not kept. Clean food, it just takes one social media image of some somebody who finds a toothpick in their food or something that all of a sudden it turns into a snarky meme.

[00:18:16] Leah: Yes. What reminds me, if you’ve ever been traveling across the United States and you see a big sign on a roadside that says, “Clean restrooms here” it’s like, well, that’s what we expect. Right? We expect-

[00:18:33] Adam: I sure hope they’re not filthy, yes.

[00:18:34] Leah: [laughs] We expect our food to be clean. We expect a certain level of food safety and safe food handling. We don’t want you to have to brag about that because that’s an understanding that we have that it’s supposed to be clean anyway.

[00:18:51] Adam: I feel the same way about restaurants. I just read an article about Papa John’s and they have a new CMO, and that’s a brand I like. They want to talk more about food quality. To me, I say, “Food quality?” I take that as table stakes. I assume that the food is quality or you wouldn’t be in business. Reminding me of that, I’m not sure that I’m motivated, but with clean food to me, maybe I’m just hypercritical and hyper-skeptical. It raises more questions for me as a consumer than it answers or makes me want to go there.

[00:19:26] Leah: Yes. I don’t know if I mind quality as much because maybe that implies more of people taking care of where the food’s coming from and where they’re sourcing it from, and how they’re storing it. I don’t know if I mind quality quite as much, but I see where you’re going with that.

[00:19:48] Adam: But you do not care for clean?
[00:19:59] Leah: I don’t care for clean, no.

[00:19:54] Adam: Let’s talk a little bit about your neck of the woods in the grocery isle. I know that there’s a lot of new stuff happening on shelf and we’ve already touched on fancy food and the health innovation. Any other trends that you’re seeing in the grocery that are more “Better for you” claims, but that also as a dietitian that you can get behind and think they’re really making advances?

[00:20:17] Leah: Well, I think there are so many different things happening. Sometimes I just like to go to the store without any shopping list or agenda just to try and pay attention to what I see there. I feel very excited that I’m seeing a lot more innovative packaging when it comes to vegetables and fruits to make them more accessible, grab and go prepped so that people don’t have to spend a lot of time cutting. That’s one really cool trend that I’m really happy to see. The other thing, of course, I see that I’m not as crazy about is non-GMO project labeling on products that have no genetic material whether it’s-

[00:20:59] Adam: Wait, can you repeat that? Your voice just cut out there.

[00:21:01] Leah: Yes, sorry. I’m not as happy about seeing non-GMO project labels on products that don’t have genetic material. When you see a non-GMO project label on a bottle of water, or sea salt, or cat litter. I recognize why companies are putting that pay-for-play label on products but I think it’s going to confuse consumers and then they’re going to just start ignoring it because they know that it has little or no value.

[00:21:42] Adam: Right, I couldn’t agree more. I think that’s when we think about green washing and trying to disguise everything as better for you then the tide is going down and everybody starts ignoring those labels. As a consumer, I think I’m never really sure what’s good for me and when I see GMO, non-GMO I honestly have no idea. Is that bad? Is that good? I don’t know.

[00:22:09] Leah: Yes, Adam. I finally decided I think it’s because of the G that I’ve had people who actually confuse non-GMO with gluten free. Because they don’t know-

[00:22:24] Adam: That’s interesting it’s more just from saturation of media coverage that they just kind of confuse those two ideas.

[00:22:31] Leah: Yes, a lot of people, whether we’re talking about non-GMO project or gluten free, or even organic that they don’t know. They think that those labels automatically also imply health or nutrition when they don’t.

[00:22:51] Adam: That’s dead on. We did some research here for a CPG brand of snack that has the “Better for you” shine on it and we found out that consumers liked that it was organic. They attributed it to some health benefit, but they actually had no idea how to draw a line between the word organic and a health benefit. I don’t think there actually is one. It’s just a cleaner way to grow the food.

[00:23:17] Leah: Right, organic was designed as a way to provide agricultural certification for products. Certain standards when it comes to how crops are grown and with what input. What pesticides, because organic does use pesticides but many people don’t understand that. Then it also has to do with how what animals are fed and access to outdoors. It’s just specific standards. Nowhere, if you read the organic standards does it have anything to do with nutrition or even food safety because, of course, we have recalls of organic products several times a year so it obviously is not a guarantee of food safety either.

[00:24:10] Adam: No, I totally hear you. Then, when we think about the trends- you mentioned super food then we talked a little bit about clean, gluten free, non-GMO, organic, all these trends. It’s interesting to see how the trends make it to market and then how they get diluted. You see popcorn came back and then now there’s 60 brands and each one of them has 10 skews with different flavors. It’s so saturated that it almost doesn’t mean anything anymore. Not that that is a nutrition play but I see that also with flavor. At Fancy Food again I saw a lot of seaweed products and I wonder how far will that go before that’s just a totally watered down trend where it just becomes a flavor that’s added to other things.

[00:24:59] Leah: Right. The tide comes in and then it starts to go out again as people just sort of go, “You know, I’m tired of that flavor,” like the example I gave earlier the sea salt caramel or the sriracha and they’re ready for something new. They’re ready for the dill pickle popcorn, or some other kind of flavor that will intrigue their taste buds.

[00:25:34] Adam: Yes, they’re looking for the next one. I do like the dill pickle actually, that’s a good flavor. I know we talked super food, we talked clean, what about the phrase “Free from”? I’ve been seeing it almost as a substitute for “Better for you” and it’s used a lot as “Free from lifestyle” kind of like you referenced CrossFit at the top of this talk. “Free from” has become a banner people can get on.

[00:25:59] Leah: Yes, my goodness I have a whole slide and a presentation I’m working on now about “Free from” claims because, remember fat-free, Adam? Fat-free has gone by the way side but with sugar-free, or no sugar added. We’ve got GMO-free, we’ve got non-GMO, or antibiotic-free, hormone-free, free range, cage-free. I think that whole “Free from” has taken on a big personality. There is just so much in that space and I think again, we have a situation where consumers are confused about what the alternative is. Cage-free eggs for example. I will admit I only learned this more recently, cage-free eggs being a really big thing or the word cage-free. I did not realize that our broiler chickens, the ones we eat, are never raised in cages anyway. Did you know that they’re-

[00:27:25] Adam: No, and I have also seen hormone-free chicken or anti-steroid chicken and then foster farms have said legally, you’re not allowed to have that anyway so I don’t know what produce was talking about. It’s interesting how they try to make those claims.

[00:27:39] Leah: Yes, they do it and they will admit that they do it for marketing reasons to have a competitive advantage. It’s kind of like watching a domino when one brand label does that, that everybody has to get in line to do the same thing because nobody wants to be the odd man out. If the chicken brand puts on their label, “Antibiotic-free,” then that’s not technically correct. They can say, “No antibiotics administered” then every other brand’s going to go, “Well, we’re gonna do it too now because everybody’s going to be thinking that we’re the ones who have antibiotics even if we don’t.”

[00:28:20] Adam: Yes, they’re all updating their packaging the next day as soon as they hear that claim from their competitor, that’s for sure. It’s a crazy world but I think it’s making it hard for consumers to keep pace because I look at “Free from” and to me it seems like it will stay fringe. It hasn’t really caught on mainstream yet. I haven’t seen it as something that restaurant brands definitely not, but I haven’t seen it in grocery either really take hold as there’s no “Free from” section or there’s no “Free from” promotion but the food brands that like it or that use it are really, really into it.

[00:29:01] Leah: I think the only place that we’ve really seen sections in the store and labeling has really been gluten free universally. That really kind of got adopted and then it has FDA backing now so that serve a separate category though.

[00:29:21] Adam: Yes and there’s actually traceable reasons why it’s important. I have noticed though in the groceries we’re in Scottsdale, Arizona, and I’ve noticed that our stores out here have added a snack area to the produce section. In the produce section there will be one or two isles set up that have the “Better for you” snacks and some of the products I would consider “Free from” or cleaner. Are you guys also doing that?

[00:29:52] Leah: We have a lot of our newer stores have a bulk food section so that’s real popular. In the produce section, we’ve always had things like apple chips and different kinds of nut and fruit bars. Those have always been very popular in that area. But as to a separate section within produce, no, I don’t think we have anything that I would describe that way.

[00:30:24] Adam: Those things have always been part of the produce like apple chips and fruit leather. Some of those products that are just little bit better for you. Okay, well I think we have run the gamut here of topics. I really appreciate you making time to chat with us today.

[00:30:42] Leah: It’s been a pleasure, Adam. Thank you.

[00:30:47] Adam: Leah, is there anything that you have going on that you want to talk about?

[00:30:50] Leah: Well, if people want to find me, they can find me on Twitter. I’m @InglesDietitian on Twitter and I am on Facebook as Leah McGrath Dietitian, on Facebook as well. I am happy to interact with people on social media. I think one of the things that I’m probably most proud of right now that we’re doing is we work a lot with local farmers and vendors and we have monthly events in our stores to highlight locally grown and produced products. That is probably my most fun right now.

[00:31:31] Adam: I love that. Actually, Twitter is how you and I met, so I can vouch for the fact that if you reach out to Leah she will respond pretty quickly. Also, don’t forget Leah also has a radio show that she’s been doing for over 10 years. 12 years is it?

[00:31:48] Leah: About that, I think, yes.

[00:31:50] Adam: You can download that. I’ll include a link to the podcast. Every episode is released as a podcast just like this one. It’s called the Ingles Information Aisle. I will add a link to the show notes here so that people who enjoyed this talk can hear some more.

[00:32:06] Leah: Great.

[00:32:09] Adam: Alright. Well, thank you very much, Leah. I really appreciate your time and as always to our listeners, we appreciate all the feedback that we get. You can email us Adam@foodandrestaurantmarketing or on Twitter FandRM. We love to hear feedback especially when it’s positive. You can keep the negative stuff.

[00:32:26] Leah: [laughs]
[00:32:28] Adam: I’m just kidding, I’ll take that too. [laughs]
[00:32:29] Leah: Thanks, Adam.
[00:32:30] Adam: Alright, well, thanks again, Leah. I appreciate it.

Listen to the episode here.

Transcript of Food & Restaurant Marketing Podcast – Episode: Amazing Culture with Kaffee Hopkins of Sterling Hospitality

Brand recognition vs. Exclusivity

All of these are brands that have an Oreos product on their menu: Baskin Robbins, Burger King, Dairy Queen, Dunkin’ Donuts, Jack In The Box, McDonalds, etc. Drawing in a large audience means finding items with mass recognition and appeal. Oreos has done a great job over the past decade of growing recognition and revising their brand appeal through quirky messages and tone largely on social media platforms.

Media fragmentation has made it hard for impatient brands to build products as quickly as they want. Stunts like the Unicorn Frappuccino or mass media vehicles like Shark Tank are some of the ways brands try to break through.

Oreos’ high awareness makes them an idea partner for product or LTOs. People’s recognition of the name sets expectations for the flavor and experience of the product. This make the product appealing for consumers and for brands in need of hits.

The Oreos logo or the distinctive cookie on the menu board or in a TV tag is certainly a positive. The question is how many different menu boards can have that logo before consumers feel the product is no longer different. Differences, even subtle ones, are what drive favorability and preference for consumers. Jack in the Box new use of flavored ‘butters’ is a good example.

As you can see, the Oreo trend is probably going to be successful for each of these brands. It will ultimately be more successful for Mondelez as they grow awareness and preference for Oreos.

Top QSR menus have plenty of similarities, they are nearly standardized. Hamburgers, french fries, chicken sandwiches, salads and shakes. Burger King has made strides in growth by finding novel takes on these standards going all the way back to onion rings, but including Chicken Fries and the addition of hot dogs. Jack in the Box has focused on the ‘munchie’ set with their tacos and late night special combo offers.

For either brand an LTO is the way to create difference and (hopefully) traffic. Oreo has proven to be a brand that generates interest from consumers; whether to retailers with unique flavor varieties or product partnerships like these QSR LTOs. It is strategically sound to add such a differentiator to the menu as an LTO. Look at the success Sriracha has had in its own partnership and licensing deals.

Oreos, LTO, QSR
Oreos, Oreos everywhere!

But it is less clear whether there is any advantage to having a ‘me too’ product. Once Burger King launches an Oreo product, Jack in the Box should be pursuing other ingredient partners or LTOs altogether. The attention Oreo provides will be there in a diminished capacity.

McDonald’s has its successful McCafe line and its powerful $1 beverage offer that drives value. The Oreo offer for them probably works best to fend off the challengers by eliminating differences in the dessert or beverage category.
The biggest and most visited restaurant chain has made the Oreo shake a standard.

Going back to Sriracha, their rise to near omnipresence on menu boards (and as a flavor additive in CPG products) was inarguably better for their brand than for any of their partners. Having a Sriracha flavored item on the menu became an expectation, not a surprise and delight it was originally, for consumers.

As you can see, the Oreo trend is probably going to be successful for each of these brands. It will ultimately be more successful for Mondelez as they grow awareness and preference for Oreos. The impressions the brand receives through LTO promotion by QSRs is a huge value, though certainly factored into the licensing negotiations.

If there is one way both brands could expand the benefit of partnership or continue to create differentiation it would be to add alternate Oreos flavors to LTOs in lieu of the original flavor. At least one brand has a Golden Oreo variety in some markets. If exclusive, this is a way to get the benefit of Oreos’ awareness and the exclusivity needed to break through parity.

Transcript of Food & Restaurant Marketing Podcast – Episode: Is Discounting Getting People to Like Your Brand?

Transcript of Food & Restaurant Marketing Podcast – Episode: Is Discounting Getting People to Like Your Brand?

[00:00:05] Adam Pierno: Welcome back to another episode of Food and Restaurant Marketing. I am Adam Pierno. With me today again is Dan Santy.
[00:00:14] Dan Santy: Hello everybody.
[00:00:15] Adam: Welcome back. Are you excited?
[00:00:18] Dan: Always.
[00:00:19] Adam: Are you ready?
[00:00:20] Dan: I’m always.
[00:00:21] Adam: This is something we people get very fired up about. This topic I may end up with a black eye or a busted lip, I’m prepared.
[00:00:29] Dan: Why are they giving it away Adam?
[00:00:32] Adam: Why are they giving it away? Would you like to talk about the topic today?
[00:00:36] Dan: Offers and discounting, stop yourselves. Stop yourselves.
[00:00:40] Adam: [laughs] Well, there’s probably a time and a place, I would imagine.
[00:00:47] Dan: There is. I’m always the contrarian on discounting, I always will be. I don’t think it’ll ever go away. I marvel at the flyer in my mailbox almost every day. Clearly, it’s working on some level and achieving some level of results for many, many customers — many, many, many restaurant brands. But I just think it’s so antiquated. When I look at — every so often I look through that flyer and I’ll just see what are they doing and it’s the same thing over and over and I marvel at it. Here we are 2017, essentially right? We’ve had 20-plus years of the internet, digital marketing is just exploding, it’s about ready to blow past television and spending et cetera, et cetera. But yet, every week we get and wake up, sometimes a couple of times a week, I get this free standing insert (FSI) in my mailbox with literally dozens upon dozens of companies giving stuff away.
[00:01:56] Adam: It’s amazing.
[00:01:57] Dan: Yes.
[00:01:58] Adam. It’s amazing and I think it just takes discipline for companies to do it right, like anything.
[00:02:03] Dan: Always.
[00:02:04] Adam: Like anything we talk about. Let’s talk about what the challenges. Really, we want to split up two things; Discounting which Dan hates versus Offers and knowing when to use each and they’re different levers you can pull, there are different amounts you can discount. There’re different ways to break up things and making offers or feel like offers or look like offers that maybe aren’t really offers or they aren’t really discounted.
[00:02:29] Dan: My favorite.
[00:02:32] Adam: One thing we’ve seen this with some brands that we consult with, where they get into a discounting cycle and essentially the customers are trained to wait for that discount. They do not come in until they get the coupon from the FSIs or from the internet or whatever it is they are trained to wait for that coupon.
[00:02:52] Dan: Unequivocally, that’s the thing that drives me absolutely [unintelligible]. How many brands have we consulted with Adam where they show up and we start working with them and we see that they’re using the discount drugs, it’s like heroin right? and I always get the same story. Yes, but we’ve got to comp over last year and we did a coupon –
[00:03:17] Adam: Yes, and we do sympathize with that.
[00:03:18] Dan: – and I get that again, but that’s false. I said this before in our loyalty discussion about we’ve got people to answer to. Might all our clients have people to answer to whether it’s straight to the C-suite, PE, for whatever the case may be. We get it. We’re not ignorant to that fact. But we also know that we have successfully helped brands wean themselves off –
[00:03:44] Adam: Short-term pain for a long-term gain.
[00:03:46] Dan: Exactly, and listen, forgive me but I use this drug analogy but that’s what it’s like. You’ve got to wean yourself off. You can’t just turn it off one day. I mean, technically you could, but we don’t necessarily recommend that. What we try to get our clients to do is wean themselves off of that and demonstrate tested optimized. Demonstrate how we can help them lower their reliance on discounting.
[00:04:15] Adam: Yes, if you just turn it off. Traffic will drop off the face of the earth when the discounts are due. That’s not a correlation, that is just a hard connected fact.
[00:04:27] Dan: Exactly.
[00:04:28] Adam: If you’ve been doing hardcore discounting, you no doubt have built up an audience of people that are coupon clippers and when you stop that, the flow of coupons, the lines of people will stop pulling into your parking lot –
[00:04:41] Dan: Correct.
[00:04:42] Adam: – It’s a given.
[00:04:43] Dan: Yes, and agreed.
[00:04:44] Adam: Let’s talk about what customers see in the marketplace than when they are seeing your offer or your discount and how you can vary those things. We break them up into three different things; Discounts which we’ve already talked about. That’s your standard coupon where it’s a BOGO or I’m giving something away and I’m actually cutting my margin by doing that–
[00:05:07] Dan: Cents off.
[00:05:07] Adam: Cents off, yes, or more, sometimes. Offers. On offers, an interesting thing, we subscribe to the notion that an offer is really just a way if you could re-package the same thing that you already sell and just remind them that it’s there and by putting a price point, even if you have an entree that you sell for $16.95 on any given night and you put it with the same price point $16.95, it will appear like an offer. It will appear as a discount to the consumer.
[00:05:40] Dan: Especially if the imagery, the messaging creates crave-ability. It really can become a branding opportunity too. Here’s this beautiful 6-ounce New York or fillet, I’m just picking on that for maybe a casual dining restaurant that serves steak and you have that $16.95 price. It’s like, “Man, that looks good” and it doesn’t sound terrible.
[00:06:13] Adam: Now, let’s talk about price. It’s not here in our notes but we’re really strong believers in there’re some price point barriers that if you can get something under $10, that if you can hit $9.95, you’re going to sell more. You’re going to see more traffic, we know this. This is not anecdotal, this is not a guess. We know it. We just watched it happen and so many times we see, when we were working with brands and consulting we say, “Just give us three menu items that can get to that price point and let’s work with option, let’s work with food and let’s get to work with culinary and get the portion size right. They go, “Well, we really can’t do that or our bestseller is this version and it’s only $12.95.” Look, $12.95 is good but $9.95 is better. It’s the magic number.
[00:07:03] Dan: Yes. That’s like a $5 price point now or I think it’s even come down to four bucks maybe? But I think it’s $5 now that all the QSRs have out there. I see Wendy’s doing it and Taco Bell
[00:07:14] Adam: Yes, the $5 number is back.
[00:07:16] Dan: Yes and that’s for the QSR and then casual-dining. Adam’s right. That $9.99- $9.95 is magical. Again, this is a hard business man, we get it. We understand your business so well. We know how hard it is slogging it out every day and you’ve got — Adam brings up a great point, is you’ve got to work with the integrated team of Finance ops and culinary, whoever that is in your organization, to create the best program that will actually attract guests and make them feel, like if it’s an offer, that they really are getting a good deal.
[00:07:57] Adam: Right and you’ve got to reset those expectations. The next kind we talk about discounts and now we just covered offers. The last kind is your LTO, so those are your Standard Limited-Time offer. Now again, this is all a matter of perspective, so a lot of times when we talk and we say, “Well okay, we think news is good.” If we can do something with your menu to create some news. Let’s talk about an LTO the pushback that will get again, is it from culinary or from OPS and they say, “Well, training the staff on this or that is really hard.” It doesn’t have to be creating an entire new subcategory of your menu. Sometimes it can just be combining things in a different way or changing out cheese or something very simple that all of a sudden takes it from the regular burger to the power burger. The spicy hot version of the same burger because you put pepper jack cheese on it which right now would be a great deal.
[00:08:53] Dan: Exactly and what I love about LTOs is that you are reminding people about why they love your brand and giving them a reason to come in. Discount by itself, sorry, is not necessarily a reason to select you. It can perhaps motivate certain customer basis, that high-discount customer, high volume discount customer. But the LTO has a broader swath of reach when you put that out there. Adam’s absolutely right. Flavor profile enhancement, a unique twist on a product, whatever. The interesting thing to remember is that I believe we saw some research and correct me if I’m wrong, where it’s like people were told, “Hey come in for this exotic hamburger” and they just ended up ordering the cheeseburger anyway.
[00:09:50] Adam: Yes, that’s from the Counter — yes.
[00:09:53] Dan: Yes. It’s interesting, but if that advertisement, that limited time offer was the driver to get me to your parking lot, well then, it’s done all the work it needs to do. I don’t need to order it.
[00:10:08] Adam: That’s right. Then I think that applies to offers as well.
[00:10:11] Dan: Right.
[00:10:12] Adam: What we love about offers is, as Dan said, is credibility. Sometimes you just take your best selling item and you re-package it as an offer. People are waiting for that reminder about your concept, what they like about it and you’ve showed them what they love about it. You’re not bringing in some new crazy menu items that doesn’t make sense. You are saying, “We sell hamburgers. Here is a great hamburger from us.” “Okay, I forgot about that. Now I want one.” Another really powerful thing about LTOs that I think is overlooked if we stay on the idea of a first casual burger, it gives you an opportunity to ride a trend. I mentioned a spicy trend. Both flavors are really popular right now and Sriracha is riding that wave. But vegetables and garden fresh is just heating up and there’s more and more concepts coming out.
We know that Smashburger’s eventually is going to have to make a really strong play there, and LTO is an awesome way not only to get a vegetable based product. I don’t know what that would be. Not something beyond a veggieburger. But to test tender for once over the course of a year and figure out a new mix that they can create a menu that it will appeal and stop that veto for that vegetarian or that non-red meat eater each time. In LTO there’s a great way to get that attention and say, “Okay. I never thought of them like that.” Now they’re on trend for this strength trend that when I think about Zoe’s and think about all these better for your options, all of a sudden you can be aligned with it just through this LTO.
[00:11:47] Dan: Absolutely. Smart. Smart.
[00:11:51] Adam: When we talk about coming up with things that will stop a veto that’s another powerful reason LTO as an offers really work. Think about if you’re crafting those things, we’ve given you some thoughts starters based on some no votes that we get as we’re pitching ideas or as we’re presenting research to brands. Another thing is really understanding the audience that you want and figuring out what is the inertia that keeps them from coming in. If you try and just get a half extra visit a month, if you try win back customers who are lapsed, you know somewhere there is research that will tell you. If you’ve conducted the research or you need to conduct the research to know why they’ve lapsed or why you’re not getting that , where do they go for the next half a visit.
[00:12:38] Dan: Exactly.
[00:12:40] Adam: Craft your LTO to beat that.
[00:12:42] Dan: Exactly. Remember, we’ve got a client that I really respect a great deal because they dig in after an LTO runs. Typically run a 6 week window, Adam is that correct?
[00:12:57] Adam: That’s correct.
[00:12:59] Dan: They look at the penetration of that LTO. They look and see what was the sale through on that particular LTO number one. They look at the average ticket for that LTO and they have that historical data across many years –
[00:13:16] Adam: And by channel.
[00:13:17] Dan: – and by channel, that’s right, and by [unintelligible 00:13:19]. Is that what mean?
[00:13:20] Adam: No. By media vehicle.
[00:13:22] Dan: By media vehicle.
[00:13:23] Adam: They track it all the way down from every vehicle through redemption as much they can.
[00:13:27] Dan: Yes. That tells them so much about what to do going forward. It gives them standards. What are the sale through levels we want to see? When something performs under that they are like, “Okay. That LTO we’re going to put that thing at the back-burner or we’re just going to set it out to pasture.”
[00:13:48] Adam: That won’t be returning.
[00:13:49] Dan: Yes. We won’t bring that back. That’s another thing that we believe is very important if you adopt an LTO strategy. It’s to look at that limited offer and how well it’s doing. Again, the bash on the discounting for you. That kind of information is so valuable in forward thinking analysis. Discounting doesn’t give you that same depth of understanding because all you’ve got is this, okay well, a thousand people redeem the bogo[sp]. What have I learnt other than a thousand people redeem the BOGO.
[00:14:30] Adam: Right. You didn’t do anything interesting enough to have a finding from it or takeaway.
[00:14:34] Dan: Exactly.
[00:14:36] Adam: Another thing that you can be thoughtful about is you’re choosing a guidance for an LTO or just choosing items for an offer more than a discount. A discount is really how much margin can we stand to lose as loss leader to drive traffic. Let’s take that off the table. We know what that is. For an offer, think about the item that you’re offering and what people will order on top of it. We’ve seen a lot of offering really good deals on sides knowing that people are going to come in and order an entree or they’re going to add beverages, they’re going to add drinks, right? You can create the offer that looks like a really good value because you know where the off-sale opportunities are and your staff is ready to pounce on those ready to capitalize and say, “Okay. Now I’ve got your $13. I know I can get you to $18.” Your guests doesn’t feel ripped off from that.
[00:15:26] Dan: No. Especially don’t feel ripped off because they’ve made the decision. That new answer is so critical. When you’ve sold, you don’t have the same experience when you choose. A whole another level of experience is perceived.
[00:15:43] Adam: At that point you feel,” Okay. I’m getting a good deal so I don’t mind spending less. I’m buying something else at regular price and I still feel okay about it.”
[00:15:51] Dan: Exactly.
[00:15:52] Adam: Because the main thing I came in for was on sale or the least I thought it was.
[00:15:55] Dan: One of the point I want to bring up, I know that we talk about [unintelligible 00:16:00] and [unintelligible 00:16:02], I believe that’s the term.
[00:16:04] Adam: [laughs]
[00:16:05] Dan: But when you start talking about discounts with that audience I always think back to the research we did where we discovered that they’re making the decision to dine out within an hour of dining out.
[00:16:18] Adam: Less than that, yes.
[00:16:19] Dan: Yes, or even less than that. How does a discount work in that environment? I have to have had to put that coupon in my pocket or have it somewhere preserved. It has to be — If I’m making that decision from my home or from my office or from my car, or where I’m going to go, I don’t see it as a driver for that audience. I think they love some of the electronics stuff that’s happening in absence of what and what not. But in mobile wallets really it’s really important. If you’re going to go down that discounting route, please, please, please make sure you create the mobile wallet environment because –
[00:16:59] Adam: Make all the tools if you can to get into my phone.
[00:17:02] Dan: Yes. Especially if you think you’re going to make any in-roads with millennials.
[00:17:06] Adam: No, you are dead on. I tend to think of offers in LTOs with regard to millennials and now iGen or GenZ. It’s news. I’d like to use them as a level of news. That’s how we consult our clients to use them. Having that announcement about that product gives you permission to say something. Because otherwise it’s very hard to be relevant and it’s hard to have a meaning for me. If I’m in Facebook and I’m just scrolling through, why do I want to hear from this? Why do I want to hear from smash burger? Why do I want to hear and I know everybody is creating consent and trying to get infront of me. I’m just here to talk my air. I don’t know, but all of a sudden you have news, you have something to say. You got a new product or here is a new combination of things or “Hey, this is on sale.” I was like, “All right. I forgot about that.”
[00:17:58] Dan: Exactly.
[00:17:59] Adam: However you can use news and I’m picking on Facebook but whether that’s done on TV or other digital channels that’s fine. But you have to find ways to be relevant and sometimes that’s kind of manufacturing something. Like an offer on LTO.
[00:18:13] Dan: Yes. Kudos to McDonald’s and how they leverage the news of breakfast all day.
[00:18:19] Adam: And now they’re doing it again with the McRib. The McRib is back and they’ve been pretty smart about rolling that out and making it feel exclusive and they’re doing a good job.
[00:18:30] Dan: I think it’s been around for, what? 30 years. I almost remember that when I was in high school or something the McRib. It’s really amazing how they have successfully let that be that LTO. In this case, it’s not even an offer. It’s just a limited time offering.
[00:18:47] Adam: It’s a true LTO. It’s once a year if that. I’m pretty sure it’s every year but the whole thing about that is it’s supply because they can’t get the supply. That’s why they make it once a year. That’s what drove it originally to be an LTO.
[00:19:02] Dan: Interesting.
[00:19:03] Adam: It was a test item and they couldn’t roll it out full time. I think it works better for them as an LTO. I think it actually creates that news, then it goes away and then next year I’m excited about it when it comes back.
[00:19:12] Dan: Talk about a reason for a lapsed visitor to make their way back. I love that McRib and nobody else has it. Every year I do that. It works on a number of different levels.
[00:19:28] Adam: It’s a great example of what we’re talking about, finding a way to make news. You’re right, all day breakfast was another thing that they did where people had been begging for it for three years. It seems like just so stupid. Why can’t I get breakfast at 10:45? When they did it I think they did a good job of doing it right and really sticking it back into Taco Bell’s face. You want to have breakfast fight? Let’s have a breakfast fight.
[00:19:54] Dan: And now they’ve, from my understanding, they’ve actually rolled it’s like almost the full menu.
[00:19:58] Adam:: It’s a lot of the menu, yes.
[00:20:01] Dan: It’s funny to see the followers coming along, so you saw Jack In The Box, saying they’re doing brunch.
[00:20:09] Adam: Brunchfast?
[00:20:09] Dan: Yes, Brunchfast.
[00:20:11] Adam: I’ll take it.
[00:20:12] Dan: They’re trying to compete now, now they’re trying to stay up with the gorilla.
[00:20:18] Adam: Well, now yes. At this point, now everybody has to do it now. It’s become table stake, so McDonald’s set the agenda. Whether they were goaded into it a little bit by a Taco Bell. How often do you think regular presentation of on an LTO or an offer makes sense before an audience gets desensitized. If we’re saying it’s newsworthy, do you have any thoughts on regularity or cadence?
[00:20:41] Dan: I think back to our client that’s been doing it for a while now, meaning a number of years, and doing it successfully. I think that’s that four to eight week window, depending on who you are as a brand, what kind of frequency you currently get from your customer. I think that that window is a good window, and again, it comes back to what you said earlier, that it’s a news bulletin. It is a news bulletin about your brand, and it keeps you in — you get a share of mind, with that new piece of news, which all of a sudden gives you a potential access to share of stomach.
[00:21:27] Adam: You know that what we found is that the cadence of the LTO’s offers, is probably directly related to the frequency of visits. However much you’re trying to amp that up, if you’re a once-a-month-place, then you can probably get away with every other month, in having an offer, and if you are that last over that time, and if you’re at once-a-week place, then you might be able to do it much more frequently, because you’re trying to keep that pace up, or you’re trying to get people excited to have that time on the experience curve, where they get some new wrinkle every time they’d come in, that makes them come back next time. Otherwise forget it, they start getting bored, and they’re done.
[00:22:01] Dan: Yes. It does another thing too, is like if you get bored with a place and I can, I said this earlier, you get bored of a place. “Oh, I keep having the same thing every time I go,” so it becomes a reason not to go back, and it reduces my frequency. But the LTO, it gives me a reason to come in, I may still get what I always get, because that’s just who I am as a human being.
[00:22:29] Adam: If you saw, you would have some new stimulus, and it created a new memory for you, and then you had something new to tell somebody about it –
[00:22:36] Dan: Exactly.
[00:22:36] Adam: – which, amen. All right, last question on this is, how far out are we planning these things, how far out are we leading LTOs and offers, before they actually hit the market? The answer is as much time as you possibly can, and the reality is, just try to do in fewer than two weeks, or longer than two weeks. Frequently it seems like they come up as a rush, we know that planning these things out a year, six or eight months out, and having everything figured out before, is really what we target. Then make sure that the operationally everybody is trained up and ready to go.
[00:23:11] Dan: You can have that discipline, it ensures, I shouldn’t say it almost ensures success, but it elevates the possibility of success the further out you work, because in the creative can be better, the channel selections can be better –
[00:23:30] Adam: The execution that –
[00:23:31] Dan: Everything about it.
[00:23:32] Adam: – and operation level can be better, and we know that so much of it comes down to training. If you have a new, if it’s a true LTO where there’s a new menu item, and that means a staff has to learn how to prep it and how to serve it and how to sell it. Well, you just can’t bang that stuff out, if you want it to be excellent, you have to do it. We had an engagement with a fast-casual Asian brand, and they were rolling out a new menu item, which was a whole new category for them essentially. Watching how that testing went, and going in and seeing it in the field, and then seeing like, ” Rr, this is wrong.” We experience what the test was like, and then we saw it tested in market, and it was way off, and they rushed it, they rushed it just to get it out there. It takes time to do that stuff right and make sure that everything is operating on all cylinders, because if it is the true LTO, and people are trying, new based on it, it has to deliver. It has to deliver on whatever you promise, or you just had to keep those things in mind when you’re crafting what the LTO should be.
[00:24:36] Dan: Couldn’t agree more.
[00:24:38] Adam: All right. Well, I think we’ve beaten this one into the ground, what do you say?
[00:24:42] Dan: I think we have, there’s a few more things I’d like to say about why you shouldn’t discount for. I will restrain myself today.
[00:24:50] Adam: We will, there will be an amendment to this episode, so look for the amendment.

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discounting, coupon, offer, FSI, LTO, daypart