July 2010

Kids' Meals Grow Up

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Establishing brand loyalty, increasing sales and driving customer traffic are the top aspirations of restaurant operators. Particularly in the current financial and social environment, growing the number of family dining and kid-focused dining occasions can be key to achieving all of these goals. To do so, however, requires an understanding of dining occasions, restaurant choice drivers and food preferences from the perspectives of both parents and children.

Foodservice occasions that involve children can be quite different from adults-only occasions. Many families use quick-service restaurants as a way to provide a treat to their children. Other families are “dashboard diners,” using restaurants on a regular basis to feed their kids as they busily move from activity to activity. In either case, dining decisions are made by both adults and kids, often approaching the occasion from very different points of view.

July 2010

In a 2009 study done by Technomic*, moms indicated that the key elements in the brand decision across all restaurant segments were consistent food quality, restaurant cleanliness, value and consistently good service. Most moms (89%) said that it was extremely important that a restaurant “has food my family likes” or “has food my kids like.”

Nearly eight out of 10 of the Top 250 chain restaurants have children’s menus, including 88% of full-service restaurants (FSRs) and 71% of limited-service restaurants (LSRs); pasta, sandwiches and chicken are the most popular children’s entrées. About two of five moms (38%) reported that they “always” order for their children off the kids’ menu at FSRs. Moms with kids between the ages of 2 and 9 were more likely than moms with kids 10–12 to report they “always” order off of the kids’ menu; moms of kids 10–12 years of age were more than twice as likely as moms with younger kids to report they “rarely or never” order off of the kids’ menu.

The 16% of moms who reported they “never or rarely” order off of the kids’ menu at FSRs said that it was because their children are “too old” (46%), portions are “too small” (31%) or the “child prefers food available on the adult menu” (29%).

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When the Technomic researchers asked kids to construct their own ideal meal, they found that while younger kids strongly prefer conventional chicken fingers or chicken nuggets as an entrée, older kids (aged 10 to 12) are far more adventurous. Tweeners prefer steak almost as much as chicken, and vote for pizza and shrimp by a good margin as well. Older kids are likely to respond favorably to trends around more “adult” kids’ menus. They want to show a bit of independence as they head into their teens. Some may also be interested in bolder flavors or those with an ethnic or international influence. Children will likely become brand-loyal to operations that provide them with an experience and foods that allow them to grow, learn and experiment within their own comfort level.

While children may influence where a family dines out, it’s a parent’s vote that matters most. Today, adults are seeking out more fresh, local, natural or organic ingredients on the menu. As a result, healthy offerings are growing in children’s menus. There is an uptick in the number of listings of vegetables and fruits, healthy beverages and smoothies, and items described as natural or organic. LSRs and FSRs alike are substituting fruits and vegetables for fries, and grilled or roasted proteins for fried entrées. Salads are now among the leading entrée items on kids’ menus at the Top 250 full-service restaurants, appealing chiefly to kids at the higher end of the kids’ menu age range. Healthful side items are a growing category. Other health-conscious trends: whole-grain breads for sandwiches, more low-fat milk, yogurt as a dipping sauce for fruit, “squeezable” yogurt products that factor in some fun, sugar-free syrups for breakfast and the continuing emphasis on “fresh” offerings, particularly fruit sides and toppings.

Attributes related to natural, organic, local and sustainable foods could present an opportunity in many restaurant industry segments in the coming years. Older kids may also be more appreciative of fresh food that’s customizable and prepared to order in view of the customer.

The Parent Perspective

In the pre-teen years, kids want to establish an individual identity, and may show less interest in falling into the default mode of a designated kids’ menu.

38%49% 46%

29%

46%44% 46%

48%

16% 23%7% 8%

All moms Ages 2-5 Ages 6-9 Ages 10-12

Rarely or never

Yes, always

Yes, occasionally

Source: 1,289 moms who visit FSRs

Moms who Order for their Kids off the Kids' Menu By age of kids

The Kid Perspective

The Move to Healthier Kids' Fare

*Study done with C3, a kid-focused market research firm.

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Some recent health-related trends in kids’ fare:

Breakfast: As the breakfast daypart grows, more restaurants are focusing kids’ menu development there. Wendy’s has been testing breakfast items including kids’ dishes including multi-grain pancakes and fresh fruit smoothies with and without yogurt. Egg Harbor Café, a breakfast- and lunch-focused concept, offers a Little Chicks kids’ menu that features breakfast offerings such as Green Eggs and Ham, French toast sticks and mini-omelet.

Calorie-defined items: Starbucks introduced 270-calorie Snack-Fulls kids’ packs—organic apple slices, a box of raisins, string cheese and Annie’s Bunny Grahams bunny-shaped snacks. Burger King added new kids’ meals that comply with its nutrition criteria including a 560-calorie limit: a two-pack of BK Burger Shots with Apple Fries, caramel dipping sauce and apple juice; a hamburger with Apple Fries, dipping sauce and apple juice; and 4-piece chicken tenders with Apple Fries, dipping sauce and fat-free milk.

Healthy kids’ meals that mimic the restaurant’s “adult” positioning: Even concepts that previously had no separate children’s menus are introducing “mini-me” versions of their adult menus. Chicken Out Rotisserie rolled out a healthy-for-kids selection including a baked chicken tenders platter and a skinless grilled chicken filet. P.F. Chang’s China Bistro launched its first kids’ menu including Kid’s Chicken, served with honey or sweet-and-sour dipping sauce; Kid’s Lo Mein, egg noodles stir-fried with chicken; Kid’s Chicken Fried Rice; and Baby Buddha’s Feast, featuring steamed or stir-fried snap peas, carrots and broccoli.

Big-kid menus: For children who have outgrown traditional kids’ menus, “big kid” menus at both FSRs and LSRs offer larger portions of more sophisticated fare. Quaker Steak & Lube launched Tweener Tunes Meals including Chicken & Cheesadilla, Double Stack Burger Midgets, V-6 Wings, Crispy Shrimp, Grilled Boneless Wings, Crispy Chicken Fenders and Double Mac & Cheese Bowl. Sides include baby carrots with ranch, rice, steamed broccoli, applesauce and fries.

No matter how appealing the menu is, families reject a restaurant where they don’t feel comfortable. In the Technomic study, restaurant attributes that moms rated as most important included the following:

Some examples of restaurants that specialize in family-friendly environments:

Munch in North Vancouver, British Columbia, offers sophisticated West Coast-inspired fare in a playful environment. A 1,000-square-foot play area is defined by a short wooden fence and made with wood and recycled rubber flooring to absorb sound; it features a wooden castle playhouse surrounded by toys. Older kids can nestle into a reading nook, complete with bean-bag chairs and a selection of games.

Beach Pit BBQ, which brings a little bit of the South to Orange County, CA. The Costa Mesa unit operates in a converted red-and-white house surrounded by a white picket fence, abundant trees, picnic tables and plastic chairs, and a kids’ playhouse.

Gator’s Croc & Roc, a Dallas-based neighborhood bar and grill specializing in homemade burgers, Tex-Mex and Cajun dishes as well as frozen adult beverages. Its newest Dallas location offers nine HD TVs, pool tables, ping pong, darts, and a kids’ play area.

While it is true that kids’ play areas and seating areas are a big investment and could “turn off” some adult clientele, there are plenty of ways to make a restaurant’s atmosphere kid-friendly.

The Move to Healthier Kids' Fare—continued

The Right Atmosphere Seals the Deal

Clean and functional bathrooms

Not stressful for the family

Comfortable seating for families

Does not have a long wait

Good place for quality time together

Relaxing atmosphere

85%

84%

79%

77%

76%

71%

Base: 1,500 moms

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One is to offer different sizes and configurations of seating, including high chairs. Another is to have available activities for children. California Tortilla, for instance, introduced a kids’ activity book to encourage more family dining, featuring the adventures of the chain’s mascots along with interactive games. Lettuce Entertain You’s Big Bowl concept gained “green” cred with the eco-minded younger set by outfitting its waitstaff in uniforms made of bamboo, using recycled paper products and takeout bags, and offering a kids’ menu that contains activities and tips for kids to live green.

Appealing food in an appealing atmosphere won’t drive families unless the price is right. Families have come to expect discounts and deals and expect restaurants to approach the kids’ menu as a loss leader. Almost nine out of 10 moms (88%) consider “value for the money” when making a restaurant choice, and 84% say they consider the cost of food and drink. But surprisingly, fewer than half (42%) are drawn to restaurants that offer “kids eat free” programs and coupons. Families see a “kids eat free” night as a bonus, one that’s only relevant if the restaurant offers a strong value proposition overall.

Rather than using discounts and kids-eat-free promotions indiscriminately, restaurants are increasingly employing them to boost family business at otherwise slow times—and potentially build more

profitable repeat business. Kids’ meals are free on Mondays at Cheeburger Cheeburger and on Tuesdays at Godfather’s Pizza. At Smokey Bones, kids eat free every Monday from 5–7 p.m.

Cleverly, Beef ‘O’ Brady’s proclaimed the 17th of every month as “St. Practice Day,” featuring 17¢ kids’ meals and other promotions. Massachusetts-based 99 Restaurant offers an annual summertime kids-eat-free

deal on the day after every Red Sox win. Last winter, 99 Restaurant advertised a Snow Day Special that allowed kids to eat free on days whenever local public schools were closed due to snow. Also anticipating family downtime, Qdoba Mexican Grill hosted a kids-eat-free promotion over Easter weekend and Fazoli’s promoted free meals for kids on the Martin Luther King Day holiday in January.

For independent operators, competing in the chain-dominated realm of appealing to kids and families can seem a daunting task. Fortunately, your Sysco Marketing Associate and an enormous backup team of Sysco experts stand ready to help with market insights, ingredient and menu suggestions, pricing tips and marketing assistance.

The big fast-food chains maintain their position as kid magnets with multi-million dollar marketing campaigns that involve toys, movie tie-ins, TV commercials and an overwhelming web presence. But now, smaller chains and independents also have the ability to compete with web-based and social media marketing, thanks in part to Sysco’s iCare partner companies. Sysco iCare provides restaurateurs with connections to business partners that help them compete. Whether you would like to send a targeted direct mail campaign to families with children using Moving Targets, establish your restaurant’s presence on the Web with OrderEze,or increase traffic through email marketing with mUrgent, Sysco iCare can help bring more patrons through your doors. Operational service partners can help you fine-tune everything from the atmosphere your music selection creates with AMTC/Sirius Satellite Radio to the Micros point-of-sale that ensures the customer gets the right order on time.

For more information, contact your Sysco Marketing Associate.

Pricing for Families—continued The Right Atmosphere Seals the Deal—continued

Nearly nine out of ten kids surveyed said that fresh vegetables and fresh whole fruits are healthy.

Pricing for Families

Sysco Can Help