FOOD AND BEVERAGE FRANCHISES: TRENDS TO WATCH OUT FOR
The American owner of a Mexican restaurant on Auckland’s city fringe asked me to help him franchise his business. This was nearly 20 years ago. But the business didn’t last. It turned out that Kiwis just weren’t ready for Mexican food.
Then everything changed. The American was ahead of his time because about ten years ago, a plethora of Mexican franchises started popping up all over the country. All over the world, in fact.
Food fads come and go
The latest in both New Zealand and Australia are foods that were once considered exotic to most of us. Empanadas from South America. Churros from Spain. Korean BBQ from, well, Korea. Even mainstream franchises like McDonald’s and Subway, keen not to lose market share to these trendier upstarts, are jumping on the bandwagon. The Golden Arches have even collaborated with K-Pop icons BTS on a menu which reflects the flavours of their home country.
The major F&B franchise players are smart. They understand that, yes, you need to be flexible and adapt part of your menu to local tastes and new trends. But at the end of the day, their core menu – McDonald’s with the Big Mac and Subway with their Classic Chicken Sub – is still their best seller. Change them at your peril.
You can’t please all of the people all of the time
Getting back to the McDonald’s/BTS collaboration, the BTS Meal created much social media excitement when it was launched in 50 countries – including Australia but not New Zealand – this May. Kiwi ‘BTS Army’ members were naturally devastated by the news. But in the world of social media, influencers aren’t just limited to celebrities with 3 million followers plus. Your ordinary everyday social media user can have a powerful influence on their 247 friends.
“It is a travesty that an Oreo McFlurry was not included in this meal, given Kim Taehyung's penchant for them,” complained one Australian BTS fan. Guess who’ll be advising their friends to boycott this ‘travesty’.
The use of influencers and social media may be a ‘must have’ in your F&B franchise marketing, but never forget that online buzz can quickly turn to buzzkill if it’s not carefully managed.
The road to Hell is paved with good intentions
Hell is an upstart franchise that upset the status quo by daring to compete against Pizza Hut and Domino’s – and became New Zealand’s third-largest pizza chain. Part of its success has come from its quirky branding and marketing – it once stuck 550 skins on a billboard to promote its new rabbit meat pizza. But this strategy backfired in 2020 when it launched its Burger Pizza – without telling customers that the topping was completely plant-based. Once news got out, there were claims of misrepresentation and concerns that some unknowing customers could have had allergic reactions to the undisclosed ingredients.
Hell management shrugged off the warning it was slapped with by the Commerce Commission. “We care about the planet and want to start a conversation and raise awareness about sustainable food choices,” they said, pointing out that they had already sold more than 35,000 vegan pizzas in the previous six months.
Where’s the beef?
You know that plant-based eating is moving from the fringe to the mainstream when the big franchises start introducing vegetarian and vegan alternatives to their menus. In Australia, all of the top 10 most visited fast food restaurants except KFC and Red Rooster offer plant-based menu items, and Grill’d even took meat products off its menu for a day to draw attention to its meat-free offerings. Although a little late to the party, McDonald’s came on strong with its McPlant range.
Some franchises have gone the whole hog – probably not the best choice of words – and gone all-plant-based. Soul Burger claims it has “a passion for creating change and social impact through unleashing plant-based brilliance upon Australia”. And Lord of the Fries, which is expanding across both Australia and New Zealand, wants to “help the world eat better and to introduce friends, local and abroad, to more sustainable food options”.
It is estimated that there are 2.5 million vegetarians and half a million vegans in Australia but by far the biggest market for plant-based cuisine are the flexitarians – people who frequently choose to leave meat and dairy off their plates.
Eat in or eat out in style?
The Covid pandemic has brought about two post-lockdown trends that at first glance appear to contradict each other. The first is that the gamechanger that was the emergence of food delivery apps such as Uber Eats is still very much with us, with people choosing to eat in rather than eat out. The second is the return of the ‘see and be seen’ movement where dining out is a special occasion, an opportunity to enjoy an intimate dinner for two – shared of course with everybody on Instagram – or party in style with a group of friends.
The delivery apps were hailed as the saviour of the food service industry during the lockdowns but what many of we stay-at-homes failed to realise is that because the likes of Uber Eats don’t allow restaurants to increase their prices to cover the delivery cost, they are effectively taking a 30% bite out of restaurants’ profits.
The special occasion trend puts more pressure on restauranteurs to perform in terms of ambience, presentation and service – and this should be to the advantage of franchises. But all this depends on how good your staff are, making employee recruitment, training and support more important than ever.
Think global, act local
Just because we’re choosing to eat our way around the world without leaving town now doesn’t mean we don’t expect these global flavours not to be natural and fresh – and that means locally-sourced.
Local sourcing has gained momentum during Covid because of food supply chain security and safety fears, but franchising has gained a somewhat undeserved reputation for standardising and centralising their supply chain management to achieve economies of scale. While this may have to be the case where produce and ingredients simply aren’t available locally in sufficient quantity or quality, many franchises are now taking pains to source locally.
It’s a little-known fact that McDonald’s has always involved its franchisees in its supply chain management. In New Zealand, Maccas has just launched their ‘Ordered from Here’ advertising campaign in which four Kiwis ordering from a McDonald’s drive-thru innocently ask what’s in the product, only to find themselves and their car whisked away on a tour of the fresh source of the beef patties and apple pies.
Looking to buy a food service franchise?
It’s certainly an exciting time to get involved in the food and beverage industry. But there are challenges as well as opportunities. The good news is that by joining a franchise rather than going it alone, you gain the benefits not only of a proven business model, but an organisation that is constantly monitoring changing trends and adapting to take advantage of those trends.