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Our Tastes Are Growing Up And Away From Fast Food

Editor’s Letter

Our Tastes Are Growing Up

And Away From Fast Food

According to a recent survey, Americans are eating out less often compared to a year ago. That's hardly front page news, but the Harris Interactive survey suggests that the public's eating habits are changing. Though the recession is a major reason why folks aren't eating out as much at upscale restaurants, it's another story at fast-food restaurants, which are taking the biggest hit. Of those surveyed by Harris, 34% said they are visiting quick -serve operations less frequently than they did last year. A big reason: Concern about fat in food.

Harris surmises that while younger diners are more vulnerable to economic downturns, they are—for the first time in their lives—making money and "developing their personal adult tastes for (better) food in (more upscale) restaurants." In other words, younger consumers are getting tired of fast food and they’re finally thinking about their health.

I know what you're thinking. Consumers have always told surveyors that they are eating more healthfully, but when you've got 'em in your restaurant, they eat what they've always eaten. Talk thin, eat fat. That's a hard argument to refute. But customers at a full-service restaurant have a choice, while the options at a QSR restaurant are considerably more limited when it comes to healthful eating.

"There seems to be a growing dissatisfaction with the quality aspect of the McDonald's and Burger Kings of the world," restaurant analyst Fitzhugh Taylor told Reuters during a recent interview. "People are more focused on quality."

It's not just young adults who are turning away from fast food. Baby boomers are also looking for "better" alternatives, says Scott Van Winkle, a restaurant analyst for Adams, Harkness & Hill. "Fast food is not appealing to the baby boomer who is fighting age like the plague," he says.

Certainly the fast food feeders, themselves, have seen a need for change, and their reaction has been to upgrade some of their offerings and to venture into the fast-casual arena. McDonald's purchase of Chipotle has been one such example.

Market share for the fast-casual segment is expected to double within four or five years, says Mitchell Speiser, an analyst at Lehman Brothers. He estimates that the fast-casual sector is growing in the range of 15% to 20% per year, while growth in the quick service sector is only about 2% a year.

"People are willing to pay a couple dollars more for a better dining experience, yet don't want to sacrifice the convenience of quick service," Speiser claims. "Fast-casual combines all the elements for what the on-the-go consumer—which seems to be almost everyone these days—is looking for."

The good news is that you don’t operate fast food restaurants. And the good news is that the fast-casual segment is ripe with opportunity. But if that’s not your game, full service, whether it be casual or upscale, is still essential. Watch your prices, because consumers are price-conscious in this economy. And if you don’t have some good healthful menu offerings, get some for those who talk and eat thin.

Michael Sanson

Editor-in-Chief [email protected]

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