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NRA2016: What you need to know about emerging global markets (Part 2)

In part two of this series on global markets for restaurateurs, Euromonitor International shares discussed what global restaurateurs must keep in mind when designing their outlets overseas.

May 25, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

In the first part of this series, Euromonitor International's Michael Schaefer predicted that the Top 5 global markets for chain restaurants in the next five years would be China, Southeast Asia, Thailand, Vietnam and Turkey. Just as important as where the emerging markets are, however,  is what the customers in those countries want from a restaurant. 

During a jam-packed session at the National Restaurant Association meeting in Chicago over the weekend, Schaefer put special emphasis on the fact that these markets were quite different from those elsewhere in the world. Granted, the populations in the areas he tagged for highest growth were still very much about the fast-food scene, but it's not the same kind of fast food restaurant that people living in the West are familiar with, according to Schaefer. 

The markets for restaurateurs in Southeast Asia, the Middle East and Eastern Europe are highly fragmented, he said. And while, chains may dominate the American landscape, in these less developed areas, the vast majority of food service businesses are one-off, mom-and-pop ultra-casual venues that are often more similar to street vendors and food trucks, than actual eat-in restaurants. 

"These are … street stalls, kiosks ... humble, immediate, local food service," said Schaeffer.  

Outside of that key factor, though, Schaefer pointed out that although these markets are the major growth areas, the higher-income markets, like those in the U.S. and Western Europe will still dictate restaurant trends for menu items. As such, here are some of the key anticipated trends for the next five years in the restaurant sector: 

• The need for speed:  "Everything is getting faster,"said Schaefer. He explained that although the QSR model doesn’t appear to be going anywhere, it's changing and adding a little polish to the apple. Likewise, he pointed out that just about everywhere the whole coffee shop idea is huge and only getting bigger. "Coffee," he said, "is the new fragrance."
• Luxury:Schaeffer talked a lot about something he called "luxury QSR,"which he said is an emerging trend in the restaurant industry where purveyors work hard to offer customers high-caliber food very quickly at affordable price points. Fast food chains that manage to incorporate menu ideas that tout a little dollop of luxury (think high-end coffees, artisanal breads, herb-filled sauces and the like) stand to win big on the global market.
• Is it good for me and the planet?Another huge trend in all markets, according to Schaeffer, is that people not only want to eat healthfully, but they also want to feel good about what they’re eating. The more you can tell customers about where the food you serve came from and whether it was grown and processed responsibly, the better. For example, if you know the carbon footprint of the food you serve, consider promoting that fact in some way. Or if you have information about the "safety" of your ingredients from farm to table, find a way to get that information on the menu or in your promotions.
• Be crystal clear: The more transparent you can be about the food you serve today, the more customers here and across the world are likely to both patronize your business and feel good about doing so. This trend is not only the result of everyone's increasing interest in the environment but also fall-out from the many recalls and scares from various types of highly publicized food poisoning at restaurants around the world in recent years. 
• Connect through technology:The increasing importance and pervasiveness of technology in all of our lives will play just as important of a role in the restaurant industry. Schaefer said the companies that figure out how to use mobile to interact and build relationships with customers will ultimately reign over this sector. As an example, he pointed to the Pizza Mogul franchise in Australia. Cleverly, this chain figured out a way to use social media and its website to prompt customers to actually design their own pizzas. But then the chain went a step further to prompt these would-be pizza planners to post their creations online for critique, as well as ordering by the general public. Schaefer said Pizza Mogul then shared a cut of the profits off the sales of each designer's pizza with the person who designed it. It's the kind of campaign top marketers aim for because it gave customers a sense of ownership in the brand, along with a little cash, which never hurts.

So, those are the primary recommendations for restaurateurs who want to go global over the next five years or so. The solidity of those recommendations is based on the fact that Schaefer's firm does a ton of research into these markets all over the globe. 

Perhaps then, you will also take heed of one of the Schaefer's final recommendations to those who want to go global. In essence, he echoed the words of the immortal Bette Davis, "Hold on to your hats. It's going to be a bumpy ride."

Schaefer explained that emerging markets are new for Westerners and the areas are usually cursed with dilapidated infrastructures and chaotic business and government organizations. Schaeffer said companies that choose to enter these markets should be prepared to fly a little by the seat of their pants to negotiate the twists and bumps in the road.

Although opportunities come and go quickly, Schaefer advised exercising caution about entering a market globally, as well as the selection of your location and service model. He made it clear, however, that there were tremendous opportunities for restaurateurs with steady hands and calm stomachs.

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.