Waking up to late night

By Cari Price, Corporate Development Chef, Food IQ

If the early bird gets the worm, he's going to have to stay up a lot later. As we all know, today's fast-paced world consists of consumers who want what they want when they want it. And when they want it after typical closing times, both quick-service and casual-dine restaurants are dedicated to answering the call. But is the consumer really getting what they want?

In 2006, Taco Bell coined the term "fourthmeal" when the chain launched its late-night daypart. Consumers initially mocked the campaign as gluttonous, indicating that the suggestion of an additional meal beyond the traditional three seemed excessive. But the term "fourthmeal" was quickly accepted to signify any food eaten between dinner and breakfast. The acceptance of Taco Bell's campaign might have been helped with amusing "fourthmealer" character ads where super heroes dramatically save people from their late-night hunger pangs. Perhaps it was the use of descriptive food terms like crunchy, spicy, melty and grilled. Or maybe it was just the beginning of a shift in American behavior that demanded the satisfaction of late-night cravings or a meal following a nontraditional work schedule.

In recent years, the glow of restaurant signs on main suburban thoroughfares have grown a bit brighter after the midnight hour. Many of the big players in the QSR category, including Burger King, Jack in the Box and others, have already extended their hours beyond the longstanding standard of the 10 p.m. close. Dunkin' Donuts has about 2,300 24/7 locations. Approximately 40 percent of U.S. McDonald's stores are currently open around the clock, and the number is growing. In fact, as a result of more and more locations adopting the around-the-clock model, the chain has taken steps to federally trademark its 24-hour operation logo. This new day/night logo has already made its way into TV advertising, floating above the Golden Arches at the close of some new spots.

In QSR, the newest late-night experiment seems to be the offer of breakfast. "The moon is full, you should be too." That's the line from the latest McDonald's ads touting its new "Breakfast After Midnight" menu, currently in testing. Available in 24-hour locations across Ohio, Denver and Boston, limited offerings from the existing breakfast menu are available beginning at midnight. Taco Bell is also in the process of testing its breakfast menu, calling it "firstmeal."

The 24/7 model is a natural opportunity most QSR drive-thru restaurants are taking advantage of. But what about other segments? Denny's, Waffle House and Steak n' Shake are full-service formats that remain open 24 hours a day. These have long been destinations for those seeking sustenance after a long night out. Applebee's however is taking a different approach. Instead of being a destination after the club, they're offering club amenities. For the past couple of years, the chain has been trying to broaden its appeal by experimenting with "Club Applebee's." A handful of locations have extended hours to 2 a.m., offering half-price appetizers and drinks with other club-like elements including strobe lights, karaoke and a DJ. Applebee's is now taking the model national, calling it "bee's Late Night," while competitors such as Chili's and Ruby Tuesday's are still closing at 10 p.m.

Extended late-night hours have proven to be successful among a variety commercial restaurant formats. The Wall Street Journal reported earlier this year that the midnight-to-5-a.m. time period is McDonald's fastest-growing daypart. Former McDonald's CEO Jim Skinner credited the chain's strong sales gains in part to its strategy of "broadening accessibility through extended hours."

But what about the fast casual segment? Why has it not leveraged the late-night sales strategy when so many chains are experiencing such success?

Are fast casual restaurants holding back because they feel that their price point might be a little high? Or that their food and atmosphere might not fit the bill for the after-bars crowd? While these are legitimate concerns, perhaps the real question is if the consumer is feeling the void of customizable menu offerings in the space of late night.

There's something about being awake during the wee hours of the night that draws out the individuality of the consumer. If they're hungry at this time, they're likely thinking, "It's been a long day, and I want what I want." This type of late-night consumer mindset is ready for the high flavor, fresh-made just-the-way-I-like-it food a fast casual chain can offer. The menu offerings don't need adjustment, and it's believed that the consumers are willing to pay a slightly higher price point due to limited choice in the market place. In this case, menu development efforts may prove to be minimal

The segment is full of high-quality, customizable offerings that late-night consumers are craving. Right now their doors are closed and their parking lots are dark, but in the near future, I see a more satisfied late-night customer.

FoodIQ is a firm that focuses on delivering business-building ideas and culinary insights.

Photo provided by chefranden via flickr.

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