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Murillo Meireles explores the impact of the pandemic on the QSR industries and considers the new opportunities.
The restaurant industry has been one of the most affected by the pandemic. With much of the world’s population told to stay at home to comply with social-distancing rules, once-bustling restaurants, and cafés have had to sit empty for the best part of the past 18 months.
However, a few QSR chains experienced heightened demand and hired thousands of workers – largely to them doing a good job at leveraging technology to tap into the delivery and takeaway channels more efficiently. In 2020, quick-service restaurants lost 24% of consumer spending, significantly less than the rest of the restaurant market at 38%.
On top of that, the QSR sector is recovering considerably faster too. The home delivery segment of the market is expected to continue its growth trajectory because some changes in consumer behaviour brought about by the pandemic are here to stay. As normality edges closer, physical stores have a lot to look forward to.
In the UK, German Doner Kebab announced plans to open 49 outlets in 2021, doubling its presence in the country. The initial plan was to open 25 new sites but Imran Sayeed, CEO, said a pandemic-driven demand triggered a wider expansion.
The list of QSRs announcing expansions also includes pizza chain Fireaway, aviation-themed fried chicken chain Wingstop and Wendy’s, which returns to the UK after having exited 20 years ago.
Across Europe demand is being driven primarily by Gen Zers and younger Millennials looking for alternative types of fast food.
The opportunities these insights create will be the ingredients for success as QSR brands continue their recovery; from new product development to communications, from customer experience to the channels that are leveraged for engagement.
Insight: Foodie Adventures
Young consumers with an appetite for foodie adventures are driving the growth of the QSR sector. According to Mintel, 62% of Gen Z adults (aged 18-22) say they like to experiment with international cuisines they discover on social media platforms.
Gen Z is our most diverse generation yet. They have been exposed to international cuisines from a very young age and are keen to explore new cultures through flavours.
After a year of sameness, they now crave the excitement of the new. They are looking for adventure, and foodie experiences to feed their desire for discovery and experimentation.
As a result, QSR chains offering more than the usual burger and fried chicken have thrived amidst the chaos of the pandemic.
Opportunity: Use Products As Magnets
Lure customers with opportunities to get out of the ordinary. Encourage them to explore unexpected flavours and combinations to feed their desire for escapism and adventure. Give them something that they will want to share with their friends after.
Insight: From Zero To New Normal
Some types of QSRs, in particular coffee bars and bakeries, have always been over-reliant on people coming in and out of stores on their commute to work. These places were some of the hardest hit by lockdowns. In fact, coffee bars and bakeries reported losses nearly 2x as big as the wider QSR industry.
Although community mobility is recovering, it may never go back to what it once was. So, as we go from zero mobility to the new normal, restaurants are re-thinking their communications to become the destination, instead of the stopover.
Opportunity: Comms That Create Curiosity
Be bold and tap into new occasions or flip the context of your communications to create positive disruption that will drive footfall to your restaurants.
Insight: In Store, At Home And Everywhere In-Between
Lockdown forced people to rediscover the outdoors — backyards, parks and other public spaces — and it’s becoming clear now that this newly found love is not going away.
As a result, restaurants are having to offer a more flexible experience, and account for
the fact that the moment of consumption increasingly takes place outside of their premises.
Opportunity: Flexperiences-To-Go
Understand what customers buy from you and adapt your offer to provide a flexible experience that consumers can enjoy wherever and whenever they want.
Insight: New Habits, New Needs
Beyond the fall in consumer mobility, early signs from the economic recovery indicate that at least part of the shift in spending from restaurants to grocery stores is likely to persist in our post-pandemic world.
To supplement those losses, some QSRs have started to search for other revenue streams, and the growing off-trade channel is proving as a great place to begin.
This started before the pandemic, but the events of the past 18 months have accelerated this trend. Now, many QSR brands are launching grocery-channel focused product lines to tap into consumers’ appetites for premium, restaurant-quality products to enjoy from the comfort of their home.
Opportunity: New Channels, New Opportunities
Fish where the fish are. Engage consumers in new channels and formats. Understand their changing needs and package your product experience to fit an evolving moment of consumption.
Joining Missouri five years ago, Murillo heads up the agency’s strategy department. Murillo is the mastermind behind building and developing client strategies, working closely with both the account and creative teams. His experience spans over multiple sectors, from F&B to education to sport. Murillo is also heavily involved in writing insights and trends reports, and is the primary copy writer for the agencies bi-annual publication, Show Me.
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