from APT's Restaurant Practice

Making Green Make Green

July 29th, 2010 | Posted by Jonathan Marek in Restaurants

UPDATE: A recent study in the grocery space concluded what many already know: more than one third of consumers polled remain leery of the exact meaning of a product labeled as ‘natural.’ It’s no wonder – as restaurant chains as well as other food retailers have skirted using phrases that imply health claims in favor of buzz words such as “premium” or “wholesome.”

Organic.  Sustainable.  Local.  Fresh.  Healthy.  In the restaurant world, these words mean different things, yet they are still lumped together under a general “green” umbrella.  Many restaurant chains seem to be chasing these ideas wholesale.  For restaurant companies to really differentiate themselves, they need to unpack these “green concepts” and figure out what their customers are truly willing to pay for. The best of intentions can lead to disastrous results, as Frito Lay recently realized. Sales of SunChips plummeted by more than 11% as customers responded negatively to new eco-friendly bags made of a material that was so loud, consumers likened it to a jet engine.

Before discussing further, we should say there are many good reasons restaurant companies may go in this direction:  beliefs, PR, employee morale, etc.  But as we think about measurement and analytics, we are primarily concerned about one dimension:  what’s the impact on consumer sales and loyalty?

From the consumer perspective, programs to date have had varied success.  For some brands, like Chipotle, the whole green package is built into the brand identity.  For others, like In-and-Out Burger, one aspect (“fresh”) shines through.  Others, like McDonald’s, are introducing program after program designed to change their brand in the direction of these concepts.  Even Taco Bell is talking health.

We see three main challenges as restaurant companies:

1)      Green concepts have strong perception but varied reality.  Part of this is definitional – what’s the mileage radius on “local”?  Who determines what is “sustainable”?  Worse than that, for some concepts, especially health claims, the reality might not even be known.  After decades of overly-strong public health claims against fat, for example, many scientists now think tortillas, rice, and beans may well be worse for you than carnitas and carne asada.  No one really knows, which makes consistent communication to the customer that much harder.

2)      Green doesn’t equal better tasting.  Green terms are often (though not always) used to imply the food will taste better.  One interesting example is McDonald’s “local” campaign (currently being tried in Washington state)… if the product tastes the same everywhere, and that’s a critical element of the McDonald’s brand, then does the local angle really matter in the customer’s mind?  Does your consumer want green, or better tasting?

3)      Some green concepts work better than others.  Apart from deeply-linked brands like Chipotle, most restaurant chains don’t need to play across all green concepts.  They need to find out which concepts work for them.  It might be “Made Fresh, Here, Today”, like Krispy Kreme’s donuts (which are fresh but not local, organic, or healthy).  It may be a “fresh, high-quality ingredients” message, as Wendy’s is pitching.  But it’s hard to know without data.

It is difficult to get clarity on these issues using market research. Customers say that they’ll behave in a certain way with the best of intentions, however this isn’t necessarily the way they actually behave.  This is especially true on environmental, health, and dietary issues.  To attack these issues, restaurant companies must assemble a series of facts over time, by testing various green ideas and measuring the actual impact on consumer behavior.

Finally, don’t forget the Double-Down and Footlong Cheeseburgers.  With all of these green concepts, there’s an opportunity to capitalize on a backlash as well.

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