By Tad Wilkes

“Operators today are just managing chaos,” says Scott Hoffmire, president of Food Insights Inc. in Memphis, Tenn., which provides research and marketing services for beverage and food operators, including the Chili's and Cozymel's chains.

“There are many reasons for the chaos,” he says. “The markets are changing rapidly. What was a good concept five years ago is a dead concept today.”

Hoffmire has watched high-profile fast casual concepts get lost in the middle of the pack as newer concepts cash in on evolving consumer needs and wants. “You've got Bonefish Grill and Firebird's and Baja Fresh and all these other ones that are just out front. They've addressed needs for fast casual, while others are still trying to maintain an old platform.”

Those trying to manage the chaos meet the obstacle of trying to keep up with their ever-changing markets. This challenge becomes more difficult when other factors, such as day-to-day management headaches, keep operators too busy to move past concept stasis.

“Your labor force is the biggest struggle everyone's having,” Hoffmire says. “You're chasing bodies around, and it's become a strain on management, because of high turnover, etc. There's not longevity in that industry much anymore. Where it used to be a career for people, now it's just a whistle stop as they shift between jobs.”

Help from Suppliers

The time-consuming distraction of nuts-and-bolts daily management takes focus from improving upon an operation's concept. But help and solutions are available.

“The one element that really overarches all this is that the operators, because of this chaos, are learning to reach to their partners — the distillers and food manufacturers or distributors — for support and services,” Hoffmire says. “They need everything from inventory control systems to bar menus and bar promotions. (They need to know) ‘How do I price this?' They need training.

“In the past, you could generate these areas of support yourself. That was part of the whole world; you were a good businessperson if you knew how to direct and generate business. But now you're having to look for support because these other elements are commanding all your time. In that respect, there is a huge dependency now on these institutions such as distillers and food distributors. (Operators are saying) ‘Help me. My customers want low fat. They're looking for sizzle. They're looking for this. They're looking for that. I don't have the time to be creative anymore. I'm hurting.'

“What used to be fairly easy has now become very difficult. No one I've talked to in the last five years has said it's any easier. It's getting harder.”

Reading Their Minds

Piggy-backing on the expensive, focused research suppliers have done is just one way operators can mold their operations to meet current consumer needs. Additionally, specialized market research commissioned by operators themselves is useful. For example, such research has helped some established, ultra-successful chains such as Chili's remain viable.

“They have not lost steam,” Hoffmire says. “They are still maintaining high popularity and check averages. (Research firms' role) is making sure these concepts are aligned with the changing market needs.”

Firms like Food Insights offer qualitative and quantitative programs, online surveys, focus groups and purchasing and consulting services. While operators are in the trenches, taking care of operational issues, these firms can take time to do things such as menu-testing and other initiatives to help bars and restaurants understand market needs and popularity of new items. This feedback from the marketplace allows on-premise venues to adjust their products and services.

Depending on what a specific operator wants to accomplish, there is a method of research to fit it. For instance, custom research helps with new product development. Hoffmire describes custom research as “a creative process, beginning with an idea, extended through a series of qualitative and quantitative tests.” Syndicated research and secondary sources also help flesh out the market to enable operators to map out their next steps.

Operators who are not looking to revamp an existing concept but instead are launching a totally new concept would need a blend of research types, Hoffmire says.

“If the operator is developing something that is somewhat unique, you would want to get some feedback on the acceptability or any barriers to entry. You need to understand how big the market is and (your) competitive set in the market.”

Existing successful concepts don't need as much shaping. Hoffmire draws an extreme analogy in the off-premise world.

“Gas stations today look at zip code research,” Hoffmire says. “They don't even look at ethnic makeup, etc. They just go by census and zip code and find a spot on the map and drop a gas station on it.

“So if there was a bar or restaurant that was highly developed concept that's just being cookie-cuttered, maybe you don't need a lot. There are some factors that go into site selection, but it's not as difficult as a very unique and emerging concept.”

And the Brand Played On

When Hoffmire started his company in 1990, menu branding and nutrition were on the cusp of becoming two of the biggest menu trends in the industry. “Also,” Hoffmire says, “the away-from-home market was now bigger than the retail market.”

Since then, menu branding has continued to be a strong marketing tool, to the point that off- and on-premise branding has, to some extent, blurred together.

“For years, the grocery and retailers had dominated the world with advertising, research and marketing expenditures,” Hoffmire says. “All of a sudden, around 1991, everything changed. Now we're seeing that the retail brand manufacturers have moved all over to the foodservice and bar world. They're now building a presence in away-from-home settings. Eventually, it will all be the same. It will all merge. A good example is Starbucks. You can buy it in a grocery store or at a restaurant or in their own shop. It will evolve to where there's no real differentiation.”