The Special Relationship may not be as strong as it was in the Blair-Bush era, but in food service the USA still leads the way. Ben Walker looks at how our American cousins have influenced contract catering and restaurant chains, while Darren Tristano describes the next big trends to cross the pond
McDonald's, Pizza Hut, KFC and Starbucks are now such familiar sights in UK town centres that we hardly consider them to be American any more; they are as much a part of our landscape as quintessentially British brands such as Marks & Spencer and WHSmith.
In addition to familiarity, a further reason these names hardly seem American is that, although they originated in the USA, they have been modified to cater for British sensibilities. A visit to a McDonald's in Boston, Lincolnshire, will not be the same as a visit in Boston, Massachusetts.
"Increasingly, Europe has learnt what it wants from the USA and implemented it in a European way," says Peter Backman, managing director of food service analyst Horizons. "Years ago the Americans revolutionised the way restaurants were done and they taught us how to develop restaurant chains. Today it is more like we are running in parallel with them and now we have less need to learn."
Though the influence of American restaurant chains on a UK public familiar with quick-service restaurant concepts has plateaued, food service across the Atlantic still leads the way in terms of innovation and evolution.
In terms of food trends, there is now growing interest in Mexican food in the UK, following its popularity in the USA. London has witnessed the start-up of home-grown Mexican restaurants Wahaca and Chilanga as well as the debut of US chain Chipotle, while a Taco Bell opened in Lakeside Shopping Centre, Thurrock, in June 2010 with more locations planned.
It is the second time Taco Bell has entered the UK. It first opened in the 1980s and grew to four restaurants, which then closed in the mid 1990s. Taco Bell's owner, Yum!, clearly believes that the more cosmopolitan nature of British society today, and the new interest in Mexican cuisine, make it worth taking another crack at the UK market.
The trend for Mexican-style street food has not gone unnoticed by the major food service companies. Compass Group UK & Ireland has introduced a range of Mexican meals called "Zona Mexicana" which are available in its Business and Industry client sites as well as in other business sectors, and Sodexo notes the popularity of healthy hand-held snacks and Mexican street food.
There is a current focus on the provenance of ingredients in the USA, which is already well on the way to being embedded into the UK high street, according to Sodexo's marketing director, Claire Morris.
When it comes to healthy eating, food service concepts that have been successful in America are often then adapted for the UK market. Delaware North's Culinary Wellbeing range of reduced fat, salt, sugar and higher fibre menu options are being launched in the coming months at the company's airside restaurants at Gatwick, Heathrow and Edinburgh airports and at its stadium venues. Similarly Compass introduced a range of healthy dishes to its B&I client sites called "Balanced Choices", which were first developed in the USA.
In terms of marketing, communication with the consumer through multi-media channels is going to increase both in the USA and the UK, says Morris, be it through Twitter, Facebook or other routes. The use of digital signage is seen not only as a technological advancement but also as an opportunity to reduce the use and cost of paper.
Unsurprisingly, the recession has led to an emphasis on value and price on both sides of the pond. University and health care contracts in the USA have not been affected as much as restaurants but operators have still had to cut overheads and reduce prices.
Some individual companies in the USA have done comparatively well. McDonald's has had a good recession because the improvement plans the company embarked on about three years ago came to fruition at just the right time and it has upheld its prices. But it is the exception rather than the rule. Hundreds of other US restaurant chains have engaged in massive and widespread discounting. One example is Taco Bell's $2 (£1.40) Meal Deal which includes a choice of entrée, a medium soft drink and a bag of Doritos.
Backman recognises that lower prices have helped to sustain sales but warns that massive discounting is exacerbating a long-term structural difficulty in the US food service sector - lack of differentiation.
FLIGHT TO SAFETY
"Although there is a wide choice of quick service restaurants, indeed all types of restaurant, the choice of cuisines on offer is not that wide - burgers, chicken, pizza, seafood, Tex-Mex - and then what? There has been a long-term flight to safety on food service strategic thinking in the USA. This is expressed in many operations offering the same food, ambience and prices," he says.
While times boomed this wasn't a problem, but as soon as heavy and widespread discounting set in, the consumer was attracted by one thing and one thing only - price.
"Eating out is becoming - some would say has already become - a commodity. And loyalty has been destroyed," Backman observes. The climb back to more sustainable levels of profitability is a very real challenge for the USA.
Europe also faces the same challenges posed by discounting, but Backman's verdict on the market here is more positive.
"The longer-term problem is not as great since there is still substantial differentiation between offers," he says. "Thus the commoditisation and loyalty issue is partially offset by the greater choice of cuisines and styles - and so, in theory, the route back to profitability is not as hard."
US Chef Survey - The Top 20 Trends in 2010
1 Locally grown produce
2 Locally sourced meats and seafood
4 Bite-size/mini desserts
5 Locally-produced wine and beer
6 Nutritionally balanced children's dishes
7 Half-portions/smaller portion for a smaller price
8 Farm/estate-branded ingredients
9 Gluten-free/food allergy conscious
10 Sustainable seafood
11 Superfruits (eg, acai, goji berry, mangosteen, purslane)
12 Organic produce
13 Culinary cocktails (eg, savory, fresh ingredients)
14 Micro-distilled/artisan liquor
16 Simplicity/back to basics
17 Regional ethnic cuisine
18 Non-traditional fish (eg, branzino, Arctic char, barramundi)
19 Newly fabricated cuts of meat (eg, Denver steak, pork flat iron, Petite Tender)
20 Fruit/vegetable children's side items
Source: National Restaurant Association
Product Innovation from the USA
At the NRA Show in Chicago this May, there were two notable new pieces of hardware on display. First, the Freestyle vending system from Coca-Cola, which delivers a choice of more than 100 individual drinks, attracted permanent queues at each machine on display.
Secondly, the TRUfill dispensing system fills glasses from the bottom upwards. When first witnessed it appears to be an unfathomable magic trick.
The liquid travels through a non-return valve in the bottom of the glass and allows rapid fill (four pints of beer in 10 seconds) by a single operator. It is therefore ideal for stadium and other high-volume catering environments. The system is currently being trialled by a number of breweries in Spain, the Czech Republic and the UK and is expected to become commercially available in 2011.
The fact that TRUfill, which won a Kitchen Innovation Award at the Show, was developed by a British company (Manitowoc Beverage Systems) underlines how innovation is increasingly moving in both directions across the Atlantic.
The UK has a headstart in other areas too, according to Sodexo's marketing director, Claire Morris. "We definitely lead on school meals provision. Jamie Oliver is currently looking to replicate what he did in the UK and break into the US school system. Also in terms of sustainability, I believe we are leading on offer in this area, too," she says.
When it comes to trans-Atlantic trends, sometimes the borrowed idea is the best idea, says Darren Tristano
The restaurant industry is evolving and changing at a rapid pace. Operators have less time and resources to test new strategies and, as a result, look peripherally for innovation. Many culinary trends that originate in fine-dining restaurants - or "beyond restaurant" segments - trickle down and develop into successful mainstream trends and strategic shifts.
Although we can look locally for innovation, it's important for operators to keep up with successful trends in the USA that have the potential to migrate overseas. Concept elements to review include menu, pricing, service, space maximisation and marketing strategies that appeal to today's food service consumer.
Eliminating the veto vote
Casual-dining chains in the USA have developed broad menus designed to create mass appeal and eliminate the veto vote by providing something for everyone. As a result, menus have become overwhelming and restaurants have lost the signature dishes that helped build their success.
Chains are now looking at their menus to determine how to optimise their offerings by eliminating slow movers and enhancing more popular signature items with new flavour options. Another essential strategy is to provide a delicate balance between indulgent dishes and healthier offerings. It has become more important for consumers to have portion flexibility than breadth of offering.
Today's consumer is more value conscious than ever before. As a result, many US chains have adopted a "ladder pricing" strategy.
Premium items such as lobster can be offered at a high price point for more affluent consumers or those who are celebrating with a nice meal. Steak and pork entrées generally tend to provide rungs in the middle of the ladder, and chicken, pasta and burger dishes can usually be found at the bottom of the price spectrum.
This pricing formula ensures that all consumers can find something at a level that they can afford and are willing to pay.
With the emergence of many new US "Breastaurant" concepts such as Tilted Kilt, Twin Peaks and Brickhouse Tap, male American consumers are getting a taste of comfort service to go along with their comfort food. Although these chains tend to rely on the attractiveness of their waiting staff, the attentiveness of the staff is the real focus of these concepts.
As chains such as Hooters move across the pond into the UK, so will the introduction of attractive, attentive staff. Likewise, as concepts that rely less on the quality and price of the food expand, expect service to be a primary factor in driving guest traffic.
As many Americans cut back on their spending, purchasing take-away meals at restaurants and supermarkets has become increasingly popular. By avoiding the cost of high-priced beverages and gratuity, eating at home can be a more affordable as well as comfortable and convenient experience.
Many US chains are investing in dedicated take-away operations that include drive-through service, reserved parking and separate pick-up and payment stations. With traffic at full-service chains still slow, larger restaurant concepts are developing new, lower-rent prototypes with smaller footprints and dedicated space for take-away operations. With between 5% and 15% of full-service sales now generated via take-away sales, full-service chains continue to shift toward providing convenient restaurant meals for home consumption.
Finally, because today's operator must work harder just to show a profit margin, marketing in a down economy has become essential to a restaurant's sales health. Targeting the core consumer while appealing to other demographic groups rather than alienating them is key. Appealing prices and attentive service are becoming less of a standard and more of a differentiator. Adapting your restaurant to meet evolving consumer expectations while adopting strategies that have made other operators successful could be the elements needed to thrive in today's marketplace.
11 trends to look out for in 2011
1 Action in adult beverages We'll be seeing lots of action in "Mad Men"-style retro cocktails, high-cachet gin and bourbon, craft beers and punch (including sangria).
Look for cocktails with herbal and floral ingredients; "skinny" cocktails; even more adult beverages in fast-casual eateries to set them apart from traditional limited-service competitors.
2 Beyond bricks-and-mortar Food trucks, facilitated by social media that notify foodies of their whereabouts, were an LA and Manhattan fad a year ago. "Land-based" restaurants are using food trucks as brand extensions and catering aids. Food-truck districts and "rodeos" are starting to appear; regulatory agencies are scrambling to keep up.
3 Farmers as celebrities Once, it was all about celebrity operators; then star chefs rose to prominence. Now, the back-to-the-source mentality is sending farmers and producers into the spotlight.
Restaurants will feature their celebrity suppliers by offering special menus, inviting them to comment on blogs, even hosting visits.
More attention to the supply chain also means more attention to food safety and product traceability as well as local sourcing.
4 Social media and technology Kiosk ordering, wine lists on iPads, tableside payment systems - which technologies will revolutionise operations? Voucher websites and location-based social media will grow, while the apps fad will continue to evolve.
Front-of-house and back-of-house technology and social media are evolving so fast that rewards and risks are high - but the biggest risk of all is failure to innovate.
5 Korean and beyond The Korean taco, an only-in-America synthesis of Korean-style fillings and a Mexican format signals the rise of Korean barbecue and Korean food in general. Multicultural tacos with world ingredients, sometimes in surprising combinations, and portable street food and small plates from around the planet are likely to gain in popularity.
6 Frugality fatigue Penny-pinching was a novelty when the recession began; now it's old. Anyone who can afford it will dip back into luxury dining in 2011. Look out for some extravagant, indulgent specials even on staid menus.
Meanwhile, the middle class will gravitate to reasonably priced but high-experience-value, thrill-a-minute concepts with memorable menus. Pricey full-service concepts will continue to push bar menus, bringing in new customers at a lower price point, and gastropubs will proliferate.
7 How low can you go? Consumers will continue to demand price deals, everywhere they eat. As food input prices heat up next year, sustaining the bottom line will continue to be a crucial issue for operators. Look for more restructuring of price deals, for example, "everyday low price" positioning favoured by retailers.
8 Carefully calibrated brand action As capital spending picks up, we'll see more fast-casual brand extensions by full-service restaurants and even non-restaurant brands; more ultra-niche eateries with narrowly focused menus and high-concept ambiance; investment in brand refreshes and remodels instead of unit growth. What new units we'll see will be smaller, sustainably built, with efficient layouts, often in non traditional locations.
9 Back to our roots The durable hunger for comfort food has developed an appetite for traditional fare, from grits to seafood; retro Italian, including meatballs; gourmet doughnuts and popsicles for dessert. In the UK think pork pies, Scotch eggs and pilchards on toast.
10 New competition from retail Retailers have been encroaching on restaurant turf for some time, but now the hottest action is among convenience-store operators upgrading their food service, where margins are 40-60% instead of the 5% typical for petrol. Consumers are responding positively to upgraded offerings, variety and ambiance.
11 Healthy v indulgent The little angel says one thing; the little devil another. Look for more items and detailed descriptions on "healthy" menus, including gluten-free fare as well as more "under x calories" items.
Limited-time offers (including seasonal fare) will be popular, not only because they attract attention, but also because they don't require posting nutrition data that consumers would rather not know.
Darren Tristano is executive vice-president at Technomic, a US consulting firm serving the food industry