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Mar 6, 2020

What’s in a (Brand) name

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There is no shortage of iconic brands in the foodservice industry. Colonel Sanders, Ronald McDonald, and Canada’s own Tim Horton. Each of these names elicits a response from consumers; feelings of trust, respect, quality and many other emotions and behaviours based on years of nurturing and promotion.

Within this crowded restaurant universe, packaged goods brands struggle to make their name heard. Restaurants, particularly those with well-established brand identities, don’t necessarily need or want the support of outside brands to help them tell their food stories and attract customers. But according to the latest Omnibus Study from The NPD Group, this isn’t necessarily the case. Canadian consumers are interested in accessing their favourite retail food brand while dining out at their favourite foodservice establishments.

Almost one quarter of all restaurant visitors are influenced to purchase items that are branded and are offered as new, or limited time offers. The most common reasons for purchasing these branded items are a perceived higher quality and good value. This is not at all surprising since two of the fastest growing influencers for choosing a restaurant are food quality and good price. Per capita restaurant visits are flat this year, which means that Canadians are not going out any more frequently than in prior years. Consumers are eager to maximize their value for money on every restaurant visit and purchase, and ordering branded items off a menu helps provide a degree of reassurance. Or as one quarter of respondents tell us, branded items can be trusted. Men in particular are even more likely to be influenced by branded menu items.

Branded items of course are not new to the restaurant landscape. Beverage brands in particular, like soft drinks and alcohol have always been displayed proudly by their host restaurants. And so it is no surprise that respondents feel that branded cold beverages are a suitable option when they dine out. Coffee is the only menu category that respondents tell us is even more suitable for a branding opportunity.  Hot tea, condiments and salad dressings, and cheese are the other menu categories where consumers can be expected to respond well to branded items.

As mentioned above, product branding can help to build trust in an item in the eyes of the consumer. This can especially be true when a restaurant is selling an item that is not necessarily associated with their core offerings. A prime example of this is evident in the proliferation of branded plant-based protein items that have hit Canadian menus over the past 18-24 months. And yet, survey respondents tell us that they do not expect to see branded plant-based items on menus. This could be a factor of the unfamiliarity with the brands that are appearing in this space, or maybe it is that these items continue to appeal to a niche audience. Clearly, the plant-based brands still have a lot of work to do to build their brand awareness and achieve widespread acceptance. It also means that restaurants introducing these items may be just as successful in promoting their own brands rather than these unfamiliar entities.

Most restaurant segments would be a suitable venue in which to serve branded items. From quick serve coffee shops all the way up to casual dining restaurants, as much as half of all respondents say they feel branded menu items would be appropriate. The only restaurants where branded items might be less expected are high end restaurants. This last point is not surprising, since consumers will have a greater expectation that their food items are prepared fresh in the kitchen when they visit an expensive restaurant. And yet, it is higher income Canadians who show a greater likelihood towards ordering branded items when dining out, just not in high priced restaurants. While the study did not dig into pricing options for branded items, this does suggest that branding will bring the possibility of premium pricing along with the perceptions of quality, trust and value.

Not to be outdone, restaurants have been expanding their brands into the retail space by developing consumer packaged goods that carry their brand names. But that’s a topic for another day.

So What’s in a (Brand) Name? Opportunity. The opportunity to offer something unique and create trial where a simple menu description alone just won’t do the trick. Maybe there is room for a few more brand names in the restaurant landscape after all.

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