Large Meal Off-Premise Consumer Behaviors

COVID-19 has been a huge driver in the popularity of family meals, as restaurants in every segment have put together well-priced packages for consumers that have been asked by their states to stay at home. In tandem, quick service restaurants [QSRs], especially those with drive up service, have increased their menu offerings of value meals and deals. It is clear that economy minded to-go meals are a lure for consumers, because of the economic crisis that is resulting from the pandemic.

Data Points: Consumer Carry Out Information

• According to a new Oracle Food and Beverage study, 39% of American consumers surveyed revealed they are ordering more often from their local restaurant than before the pandemic started. Before stay-at-home orders were issued, 95% of Americans admitted they often ordered take-out, but that number slipped to 88% in the midst of the stay-at-home orders. As restrictions ease, the volume of take-out orders is expected to remain below pre-stay-at-home benchmarks with 79% of US respondents planning to order take-out at least once a month. The strongest return to weekly takeout rituals in the US will be Generation X with 44% planning to order weekly once restaurants reopen. Generation X encompasses those born between the years 1965 and 1980, which makes them between the ages of 40-55 in 2020.

• When comparing the month of May to August 2020, while pretty much all forms of dining enjoyed double-digit growth in traffic, the clear winner was carryout meals. Based on this fact, 50% of fast casual chains and 20% of family dining and casual dining restaurants have rightfully concentrated on improving their customer’s drive-thru and delivery experiences, and enhancing their takeout programs.
• COVID-19 has driven many restaurants to concentrate on solutions and opportunities, and they have introduced a number of new mealtime solutions, which encompass family-sized offerings as well as pre-prepared meals. These are things that may even last well beyond the end of the pandemic. A rapidly rising cohort of restaurant users over the past two years have been Millennials with kids. Given the fact that 41% of food consumer product growth is coming from households with children during the pandemic, it should come as no surprise that family meal bundles and promotions have been heartily welcomed by this group.
• According to a Datassential webinar, and referenced in this Institute of Food Technologists [IFC] source, 40% of American consumers have already purchased a take away family meal bundle from a restaurant, and just over a quarter (26%) of Americans have expressed a desire to buy one. When directly looking at the group that have already bought them, 80% revealed they would do so again. While comfort/classic dishes are the most popular, which is not unexpected given the nature of the pandemic, the fastest growing segment of these meals are classified as healthy and diet oriented. Just over one-third of consumers have a desire to be able to “purchase more globally inspired and chef-inspired family meal options.”
•  Three areas where most restaurant operators would like help from manufacturers and distributors are; “product innovation with an increased focus on prepared foods and flexible ingredients, creating versatile products that will allow them to scale back the items in their pantry and realign their menu, and purchasing discounts or rebates.” Full service restaurant operators, who traditionally focus more on creating an experience, have hustled during the COVID-19 crisis to bring experiences into consumers’ homes with kits for every need—cocktails, sundaes, pizza. Even Michelin star restaurants are delivering family meals and meals that people can cook at home. It is of note that 41% of restaurant operators have switched to new to-go packaging due to COVID-19, which helps with this pivot. 
• New COVID-19 offerings have staying power. For many of these new offerings, more than 50% of restaurant operators who added them will continue to offer them after restrictions lift. Family meals and meal kits especially have the potential to become standard offerings.

• Despite their ubiquity, tacos have grown +40% on menus over the past decade, with varieties like breakfast tacos and street tacos showing the fastest growth. Tacos also have proliferated across menu types, becoming staples at American casual-dining operators, and more recently appearing in taco kits to-go.

• For those American consumers that fall into the Millennial age cohort, and those that reside in an upper-income household, about two-thirds would like to be able to purchase family meal bundles for meals other than just dinner. Two quick statistics surrounding meal kits [which includes “heat-and-eat and take-and-bake“] are: “41% of diners say they’ve tried these types of restaurant meals and 36% have tried a fresh meal kit from a restaurant.” Although a majority of consumers report that they will order them again, 50% of them feel they’re too much work or often are overpriced. When looking specifically at those consumers that are enamored with hands-on items, “six in 10 would like build-your-own pizza, tacos, or burrito kits, pre-prepped barbecue kits, ready-to-grill restaurant steaks, take-and-bake desserts, and signature seasonings/sauces. About half are interested in decorate-your-own dessert or cocktail kits.”

Predicted Post Pandemic Fast Food Trends

1. Off-Premises as a Priority

• Moving forward past the pandemic, research shows that “off-premise dining” will continue to be the preferred option for most customers. According to SMG, while going out for a nice dinner was the top priority for most consumers once restrictions were eased, only 42% reported that they would be ready to do that within the first month. “That leaves more than 50% of consumers still preferring to opt for drive-thru, pick-up, or delivery to get food from restaurants”, even when told they could dine-in.

• According to a June 2020 McKinsey Pulse Survey which surveyed ~1,000 American adults “who had visited QSRs or casual-dining restaurants within the past year”, nervous and anxious seem to be the prevailing emotions that most consumers are associating with sit-down dine-in restaurants. Eighty percent of those asked reported that they had “medium to high anxiety levels about the idea of returning to dine-in restaurants”, with more than 50% revealing that they would be “highly anxious.” Juxtapose this with “consumer sentiment regarding drive-through dining, about which only 16% of respondents reported high anxiety.”

• The takeaway here is that restaurants should not count on indoor dining to return to pre-COVID-19 sales levels anytime soon, and should focus on take-out for the foreseeable future by optimizing carryout, curbside, and drive-through operations.
• According to David Portalatin, the food industry adviser for the NPD Group, “…many QSRs when given the opportunity to reopen dining rooms are choosing not to because they have already made the pivot to optimize that off-premise experience.”

2. Meal Kits

• According to Kerry Insights, in order to create a revenue stream, and to meet consumer demand during the pandemic, some foodservice chains and restaurants are now offering meal kits to take home and have people assemble themselves. “Although such innovations were pioneered in part as a way for struggling restaurants to stay viable, giving customers the opportunity to purchase multiple meals at once while reducing back-of-kitchen work, foodservice and restaurant meal kits may be here to stay.”

• For limited-service restaurants, meal kits have become a way to provide something fun for their customers. Not only does a meal kit provide that familiar taste from a person’s favorite restaurant, they provide consumers something to do with their family at a time when staying at home has become very stressful for many. Learning to cook is one of the top trends that has come out of the lockdowns due to the pandemic.
•  Kerry Insights asserts that “[t]his trend will likely continue to evolve. Some restaurants have shut down their storefronts and are instead relying on brand recognition to sell ready meals at local grocery stores, something that could eventually branch out to include branded meal kits.”
•  ResQ reports that delivery and to-go meal kits are here to stay. They believe that “[a]s uncertainty continues to plague the restaurant industry, meal kits will become an increasingly popular option for restaurants in the months and years to come.”
• According to Amanda Topper, the associate director of food research at Mintel, “62% of customers want restaurants to continue selling meal kits after the pandemic is over. Keeping those kinds of packaged goods on the menu is not only a way to offer convenience to guests, but also a way to compete with retail brands like grocery stores.”

3. Restaurants Offering Meal Kits/Bundles for Takeout

•  Garbanzo Mediterranean Fresh started selling family meals in early April, which was almost at the very beginning of the pandemic. This move turned out well for them. According to Devin Handler, VP of marketing at Garbanzo, “[we] looked over [our] catering offerings and developed a menu where guests could mix and match sauces, meats, veggies and salads with six-packs of pita and falafel. [We] didn’t use any new SKUs or packaging and [were] able to launch a new product by simply reconfiguring existing menu items. What also helped was [that we] already batch cook various ingredients and when [we] know [we have] a large bulk to-go order out that day, [we] will just cook more batches to accommodate those orders.” Handler reports that even just a “few weeks into offering family meals, [our] sales [were] increasing. He also predicted “that the family style will be used for small office catering in the future.” Devin Handler went on to reveal that “[s]o bottom line it’s a creative merchandising play with existing packaging and SKUs that we think was done in such a way that won’t only sort of satiate the moment but will live beyond and be a valuable offering for our guests.”

•  El Pollo Loco, compared to other QSRs, was well positioned for the meal bundle trend as it has been promoting more family meals through its delivery channels since 2019. According to the CEO of the company, Bernard Acoca, “[w]henever [we] run family meal promotions, [we] see a 3% to 5% incremental same-store sales lift during those marketing days.” He also reported that “half of what is being sold through [the company’s] e-commerce channel is family chicken meals and half of what is being delivered are these meals.” In a Q1 2020 earnings call Acoca revealed that “[o]verall, these family meal offerings have resonated very well with our customers resulting in record high family chicken sales mix during the last several weeks.”

•  Bartaco, much like El Pollo Loco, already had the “infrastructure to create meal bundles in place with its party packs, and decided to roll out family packs beginning mid-March.” According to Scott Lawton, bartaco co-founder, “[the company] chose to offer a roasted chicken pack and a taco pack offering. The taco pack provides two taco fillings from its standard taco menu, which offers fillings such as chicken, cauliflower, baja fish, carnitas, mushroom, pork belly, duck and oyster. The taco pack also carries well and can be reheated if it is not eaten right away,” Lawton reflected on the learning curve during the pandemic and noted that “[w]e are learning a lot in these crazy times — our team is really creative and as we respond to the needs of our guests, I am taking careful notes. This is a great opportunity to really focus on takeout and delivery and get it right for our guests. So far, guests and loyal diners have provided positive feedback over [our] family packs. People have been posting themselves on social media bartaco’ing at home and it’s been really amazing to see.”

•  Torchy’s Tacos introduced its family packs when a majority of states were under stay-at-home orders. They did this “to appeal to consumers looking for customizable meal options for their families”, according to Scott Hudler, Torchy’s Tacos CMO. Hudler reported that “Torchy’s Tacos is offering family packs that serve four to five people and provides a choice of meat, tortillas and toppings, rice, beans and chips for about $25. [We are] also offering to-go selections from [our] bar in states where it is allowed. These selections include an At-Home Margarita Kit, which provides a bottle of tequila, housemade sweet and sour, salt and lime.” Hudler went on to discuss consumer sentiment surrounding their offerings and revealed that “[d]emand for these take-home offerings has been particularly positive. To meet demand, [we] added [our] top-selling Trailer Park Taco to [our] family pack menu. [We]also added a new single-serve Bootleg Margarita Kit, Mimosa and Bloody Mary Kits and Titos + Mixers [as offerings to our] guests in Texas.” Scott Hudler reflected on the future and revealed that “[…] like everyone else in the restaurant industry, [we] are considering what our menu and restaurants will look like once we are able to reopen our doors to guests. We expect delivery and takeout will continue to be a bigger emphasis for us, and given guest feedback, [we] are certainly considering making some of our newer rollouts, such as family packs, a more permanent part of our menu offerings.”

• Back in 2018, Chick-fil-A, tested a Chicken Parmesan Meal Kit in its Atlanta restaurants, which received a positive response from consumers. Fast forward to 2020 and Chick-fil-A, driven by the coronavirus, the QSR chain brought back the concept with a nationwide rollout that began May 4. “Designed to feed two adults, the kit includes two fully cooked, breaded chicken filets; marinara sauce; Italian cheeses; and creamy garlic-and-lemon pasta. The Chicken Parmesan Meal Kit joins a line of mix-and-match Family Meals that Chick-fil-A introduced in early April. The bundles include a choice of Chick-fil-A Nuggets or sandwiches; sweet or savory sides, such as fries, macaroni and cheese, or chocolate chunk cookies; and iced tea.” According to Senior Culinary Lead Stuart Tracy, “[b]oth options are positioned as a dinner alternative, [as the restaurant] historically generates much of its business during the lunch daypart. We hope that providing a dinner option for guests who are ordering lunch with us will help make mealtime decisions easier. The goal is to deliver the joy of cooking without added stress, and the recipe is simple enough that even the kids can help.” To assist consumers with cooking at home, and to reach out and engage with their customer base, the extremely popular QSR is smartly offering “Nightly Nuggets” video tutorials. “Episodes demonstrate easy-to-make recipes, such as this Chick-fil-A Cordon Bleu, that use Chick-fil-A breaded filets and other simple ingredients.” It is of note here that QSR Magazine declared that “Chick-fil-A leapt into action with all kinds of innovations. It introduced Family Meal Bundles early on, with collections of entrées, sides, and beverages starting at $13.25. Chick-fil-A also scored well in a key measurement: sales per franchise. It far outperformed its top-five rivals, with an estimated $4.5 million in sales during 2019, QSR calculates. For comparison, McDonald’s came in at $2.9 million per franchise”, the magazine estimates.