Menu innovation in an off-premise world: How to bring your next craveable product to market (Part 1)

Menu innovation in an off-premise world: How to bring your next craveable product to market (Part 1)

Finding new ways to tantalize customer taste buds is a hallmark of quick service restaurants (QSRs), and the battle for traffic and market share never ceases. While prosperous times might encourage radical product builds, depressed economic environments instill focus on top-performing SKUs. Rapid changes in consumer behavior, such as delivery models eating away at the dine-in footprint, drives another wave of scrutiny on product performance.

Whether you’re considering significant or conservative menu changes, innovation is a key component of getting people talking and traffic coming through the physical and digital doors. We’ve compiled our recommendations for bringing a new product to market based on years of field experience in local and national QSR markets.

Audit your current menu

Start your menu analysis with point-of-sale (POS) data, preferably a cloud-based system that integrates with restaurant inventory management software.

With readily available information, you can discern what items and ingredients have been most profitable over the last several quarters and years. This is key since it’s more cost-effective to stretch your core ingredients than risk wastage on rarely used equipment or items. Your best-selling core items also make great fodder for new ideas when you’re in the early stages of product development.

While you’ll want to focus on your star items, go ahead and assess the profitability of each offer. Now that you’ve evaluated your menu mix, you might decide to replace a low-performing item with your new offer.

As menu engineers know, not every product can bring the highest check and sometimes the less lucrative offers are a means to diversify patronage (a case in point being the barbell strategy that uses both aggressively low price points and premium offers to balance value-driven traffic with average check growth).

It’s also critical to account for recipe complexity and employee skill level. If this product is considerably more difficult and time-consuming to create than other successful ones, then you need to be cautious about how this dish would impact your ordering cycle.

Here are other key factors to consider before deciding on your next innovation:

  • Average ticket sales
  • Sales forecasts
  • Sales velocity (how quickly you deplete items and ingredients)
  • Loyalty program data
  • Seasonal variances (a key point for aligning products with promotional periods)
  • Store performance for each daypart
  • Ingredient lead time
  • Storage capacity
  • Ingredient shelf life
  • Deliverability (Since QSRs have had to pivot away from a primarily on-premise dining model, this factor can’t be overstated)
  • Delivery item popularity
  • Mobile transaction data
  • Competitor trends and launches
  • Market price for similar items

Find your target audience

There are several tools for capturing your target audience’s pulse. Data resources such as Scarborough and Nielsen, which are available for every market in the country, are go-to resources for demographic and psychographic (e.g. interests, attitudes, behaviors, etc.) information.

Syndicated research (i.e. studies conducted by a market research firm that aren’t client-specific) can also provide key insights about consumer preferences, such as portion size or packaging (tamper-proof seals are especially important for a restaurant model reliant on delivery). You can also get a holistic view of consumer triggers, as a QSR customer will have different purchasing influences, such as cost, than a casual dining customer.

Social media and online listings are also an indispensable tool for audience insights. Here are some key areas to analyze:

  • Native analytics from social platforms (e.g. Facebook Insights, Twitter Analytics, etc.)  regarding top performing posts and events
  • Customer reviews on Google My Business, relevant directories (such as Foursquare and Yelp), and flagship social media accounts
  • Brand mentions on social platforms and forums
  • Align test products with brand goals

Your products are married to your brand strategy. Menu expansion, or even changing the ingredients of core products, can moderately impact your customer mix, the variety of patrons you draw in.

That means you have to be cautious about how off-brand products (i.e. items customers normally wouldn’t associate with your restaurant) will strengthen or dilute your brand equity.

While internal surveys and syndicated research are invaluable, we recommend pairing this data with more granular research to personalize your product development path. We have helped clients commission custom research for brand perception and menu development purposes, since the two areas are dependent upon one another.

With custom research, you truly get at the vitals of your brand. You discover the kind of flavors and messaging that resonate most with your consumers. From there, you can get a detailed understanding of how customers describe your brand attributes, such as taste or perceived value for cost.

While every brand generally attracts a few consumer types, ideally you want a product that entices your core audiences (or heavy users) but also has potential for less frequent and potential users, rather than trying to net a poor fit.

Taking feedback from focus groups into account, you can then determine if and how your planned products align with your competitive differentiation (i.e. what qualities make a consumer choose your brand over another). If your new product line isn’t furthering your brand goals, then take it back to the testing lab.

Develop and test product internally

The research and development (R & D) process is contingent upon business size and organizational structure. Enterprise chains have teams of culinary chefs in their headquarters ideating, concepting, and iterating upon several versions of a product. From there, taste testers and stakeholders hold the keys to approval.

But if you don’t have a systemized fleet at the drop of a spoon, then you can contract the testing process on a smaller scale to ensure product quality and consistency. Product development ranges from weeks to even a few years depending on marketing goals and resources.

Per board regulations, sometimes franchisees are only permitted to test products within a certain window of time, or with ingredients from pre-approved food distributors (a key reason behind this being to ensure food safety and nutritional standards). So you can take comfort in that there’s not a one-size-fits-all approach.

An additional consideration prior to testing an LTO (or a soft launch if you’re introducing broader changes to your menu) is giving front-of-house (FOH) and back-of-house (BOH) employees enough lead time to make the trial run successful. One example would be ensuring that BOH employees have worked out operational kinks like ingredient portion and preparation time while FOH employees have learned how to upsell the product.