- WHITE PAPERS
We’ve all heard the theory that a Hostess Twinkie can endure a nuclear attack. Now it seems that desserts in general have extraordinary survival characteristics.
For the past three years, consumers have reined in their spending for needs and wants, but desserts have remained consistent.
Technomic released a study in October that found these after-dinner treats to be surprisingly recession proof. Only 1 percent of survey respondents did not eat dessert within that time frame, and 70 percent said they ordered dessert at least once a week.
"Dessert is unique because it not only involves sensory appeal, but also sparks strong emotional drivers," said Darren Tristano, Technomic executive vice president. “It can provide comfort when people are depressed and it can be used to celebrate and feel good about something. Playing into all emotions is a big reason the category has stayed relatively strong.”
Small but mighty
While desserts remain a small portion of restaurant menus – about 2 to 3 percent – they present a strong growth opportunity for operators looking to increase sales. Additionally, many operators are getting creative with this part of the meal.
Technomic’s 2010 Dessert Consumer Trend Report concluded that a variety of beverages can also satisfy consumer dessert cravings. In addition to shakes, coffee and specialty-coffee options can serve as an after-dinner indulgence for consumers.
“Smoothies and coffee drinks are a dessert for people,” Tristano said. “This is another reason desserts are a very important part of the menu – they add to the margin for the operator.”
Many chains have taken note. McDonald’s has been wildly successful with its McCafe line, which includes coffee drinks flavored with mocha and caramel, as well as its Smoothie line.
Other chains have stuck with traditional desserts, such as Wendy’s with its iconic Frosty.
Some QSRs switch up their dessert line-ups with sales-friendly, limited-time offers. For example, Sonic is gearing up to launch its Red Velvet Cheesecake Blast shake, which combines red velvet cake batter, ice cream, cheesecake pieces and whipped topping. Burger King is rolling out Funnel Cake Sticks, covered with powdered sugar and served with a cup of icing dipping sauce.
Arby’s limited-time only chocolate turnover was originally scheduled to be on the menu through the end of December but will now stay through the end of February.
“We had such passionate fans of the product that we have a movement going on our Facebook page where if we get 5,000 likes, we’ll extend the chocolate turnover,” said Kathy Siefert, director of public relations for Arby’s Restaurant Group. “We’re not surprised. We’ve always had such a positive response to our LTO desserts.”
El Pollo Loco – where desserts constitute about 2.5 percent of sales – has realized the opportunity to do better in the sweet-tooth category and is in the process of concept testing. It is in the middle of a “Cakes and Plates” promotion, offering three cake choices, including bundt, chocolate fudge bundt and Dulce de Leche, alongside three new entrée dishes.
Jon Rogan, executive chef at El Pollo Loco, said the promotion has gone very well, and the chain’s flan and churro desserts have also always been popular.
“We’re trying to recognize desserts as an important part of our menu," Rogan said. I’m seeing trends toward healthy dishes, but with desserts, you can address that with smaller portions or fruit-driven items. People will always want their indulgences, even if they’re small. It’s necessary to have them on the menu because they provide an incremental sale and build a check, and because they offer an opportunity for greater guest satisfaction.”
Rogan added that desserts not only provide menu optimization, they’re also an ideal canvas for product innovation, which makes it easier for chains to rotate them on a limited-time only basis and gauge whether they’re worth the resources.
Another sign we’re fulfilling our cravings: Doughnuts, cookies and ice cream have always been big players in the quick-service dessert market and, for the most part, seem to be doing extremely well in the recuperating economy.
“From our ice cream chains’ perspective and our Great American Cookie business, we have seen resurgence. People are always going to crave sweets, no matter what position they’re in,” said Jenn Johnston, chief marketing and operations officer for Global Franchise Group, owner of the Great American Cookie, MaggieMoo’s and Marble Slab Creamery.
Ice cream has heated up across the board. According to Mintel Global Market Navigator, the combined value of ice cream retailers in the Top 5 European markets - France, Gerany, Italy, Spain and the United Kingdom - is up to $4.6 billion from $4.1 billion in 2008.
Stateside, sales for Dairy Queen’s signature Blizzard have increased by 15 percent over 2009.
Doughnuts have also been impressively buoyant. In the fall, Time Magazine reported that the doughnut industry, driven by the big three – Dunkin’ Donuts, Krispy Kreme and Tim Hortons – now includes more than 10,000 U.S. locations, which is a 2.2 percent increase from last year.
Foodservice research company NPD Group found that the number of doughnuts consumed in the U.S. jumped 6 percent in 2010 over 2009. Helping the cause, Dunkin’ Donuts and Tim Hortons are both working toward their expansion goals, and Krispy Kreme has completed a 180-degree turnaround from the grips of failure less than two years ago.
Other, less familiar dessert-centered concepts have begun to take off, as well. Burger King launched two of its Dessert Bar concepts in Europe this year, one in London and one in Benidorm, Spain.
The Dessert Bar features a menu filled with indulgences, including BK Fusions ice cream, mini pancakes, brownies, cakes, cookies and muffins.
Also, Nestle Toll House Café by Chip, a bakery and dessert bar that first opened in 2000, now has more than 100 cafes in the U.S., Puerto Rico, Canada and the Middle East, and continues to grow.
The Nestle concept features the brand’s flagship cookies, cookie cakes, brownies, ice cream sandwiches, dessert coffees and smoothies.
“For us, dessert created with a passion for life and endless imagination is more than a sweet temptation. It’s a state of mind, an intriguing place, an experience that can take you on a journey,” said Valerie Shropshire, director of marketing for Crest Foods Inc., franchisor of Nestle Toll House Café by Chip.
Whether you need imagination to indulge seems to be a footnote to the bigger story – we continued to spend on something we didn’t need when we weren't spending much; and we continue to order indulgences even as the demand for healthier food skyrockets. Meanwhile, restaurants that continued to offer desserts benefitted from a surprising up sell.
“Desserts are a win-win. The demand is always going to be there and they’re always going to be a very important part of check averages,” Tristano said. “More people will order water to save money on their bill than compromise their dessert. These small indulgences give our day a lift. And because they are affordable and crave-able, we know they’re going to be strong no matter what.”