Article
QSRs find value in snacks
Smaller portions please budget-, portion-conscious consumers.
December 15, 2008
Initially positioned as an opportunity to fill afternoon dayparts between lunch and dinner, snack menu items also are satisfying consumer need for lower priced menu offerings, especially in light of the economic recession.
Unlike value menus, which are squeezing margins as ingredient costs rise, snack offerings are more profitable and tend to have higher price points, said Sara Monnette, senior manager, consumer and market research, for foodservice consultants Technomic Information Services.
"The tough economy has forced consumers to cut back on restaurant spending, so either they are going less or looking to spend less if they do visit," Monnette said. "Snack options and snack-appropriate value menu items allow consumers to still visit restaurants, something that has become very routine and habitual, but helps them to obtain a smaller check average."
Snack items have appeared on QSR menus with increasing frequency over the last few years. Mintel Menu Insights' 2008 "Snack Attack!" report found the following:
- Snack items on restaurant menus have grown 300 percent from the beginning of 2005 to the end of 2007
- Most of that growth — 196 percent — was seen last year
- QSRs have the highest percentage of snack offerings at 64 percent
The average price of QSR snack items is $1.98, according to the report.
In the third quarter of 2008, at least three brands launched snack items, including Popeyes Louisiana Kitchen with chicken nuggets and tenders, Jack in the Box with snack-sized pita wraps and Taco John's with mini burritos.
Dave Schuh, executive vice president and chief operations officer for Taco John's, said the regional Mexican chain introduced four snack menu items last quarter primarily to fill a void in its offerings, especially value items. The snack items, priced 99 cents to $1.99, hit those value price points and followed the trend for smaller portion sizes.
In addition to its snack-size burritos, known as Snackaritos, Taco John's also created a new queso dip to pair with its freshly made chips and Cini-Sopapilla Bites, mini-versions of traditional sopapillas dusted with cinnamon and sugar.
The most popular snack item is the mini-dessert Cini-Sopapilla Bites.
"They were a homerun right up front," Schuh said. "The reaction that the guest has said is 'Wow.'
The company is studying when consumers are buying the snack items, including whether they are purchased as afternoon snacks or as add-ons alongside other menu items.
Early results seem to indicate customers are not choosing the lower priced snacks over the brand's traditional menu items. For example, sales of Taco John's Churros dessert have not been affected by the Cini-Sopapilla's popularity, he said.
"We have not seen ticket averages decline, so we're encouraged that many of these are being added on to existing transactions," Schuh said. "But we're hoping to see transactional growth during non-peak periods."
Snack fills the gap
Monette said that Technomic has found that snack menu items are attracting customers in non-peak dayparts.
"Consumers don't necessarily eat just breakfast, lunch and dinner anymore," she said. "Part of the reason is due to time constraints on their part, but also operators are making it easier on the consumer to get smaller meals throughout the day."
Teka O'Rourke, director of menu marketing and promotions for Jack in the Box, said the chain's new snack menu items were positioned to follow the trend toward "mini" offerings as well as fit into consumers' snacking patterns.
Quick take-aways for snacks |
—Mintel, Snack Attack! report |
"We launched the Pita Snacks to meet consumer demand for a less filling meal that's easy to grab on the go," O'Rourke said. "Many people are grazing throughout the day rather than sitting down for three meals. The Pita Snack is the perfect portion for them."
The Pita Snacks feature a choice of grilled or crispy chicken strips, strips of marinated sirloin steak or a fish fillet plus shredded cheddar cheese, shredded lettuce and smoky chipotle sauce wrapped in a whole-grain pita.
O'Rourke said Jack in the Box's Mini-Churros fills the category of smaller portioned indulgent desserts in response to the mini-dessert trend, and they have become popular throughout the day.
"They're an excellent add-on when guests want just a little something sweet," she said. "We also see a lot of guests eating them at breakfast."
Schuh said that adding the snack items has opened up more menu development opportunities for Taco John's. For example, the company is already looking into adding other flavors to the Cini-Sopopillas. And a taco meat version of the Snackaritos is ready to rollout in early 2009.
Not everyone is sold
While more brands have introduced mini-versions of their premium offering, some are staying away from snack menu items.
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Hardee's, for example, recently introduced Little Thickburgers, a one-quarter-pound version of its one-third- and two-thirds-pound premium Thickburgers. Brad Haley, executive vice president of marketing for Hardee's and Carl's Jr., said the company developed the smaller burger four years ago in response to the trend for smaller menu items but chose to introduce it this summer as the economy soured.
Haley said the company is resisting adding snack menu items, however.
"At this point we haven't found one that we're comfortable enough with to rollout," he said, noting the company's positioning in the premium burger market. "Those sandwiches or snack type or wrap items are really just a value play in our minds, and if we can't make something that still delivers great taste and great quality, that's not something we're going to do."
