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Four ways the game has changed for restaurant brands

Nimbleness, dynamic customer relationships, customization and millennial insights are all key to brand success, says FOCUS Brands CEO Steve DeSutter.

November 7, 2014

"I know of no way to know the future but of the past."

Quoting founding father Patrick Henry, Steve DeSutter offered his perspective on the future of foodservice during his keynote address at this week's International Foodservice Manufacturer's Association President's Conference in Phoenix.

DeSutter, CEO of FOCUS Brands, parent company of Cinnabon, Carvel, Auntie Annes, Schlotzsky's, Moe's and McAlister's, drew on his decades as a leader in the foodservice industry to identify four trends for foodservice brands:

The advantage goes to the nimble

Using the playground game tetherball as an analogy, DeSutter said the advantage used to go to the brands that were the "tallest, bravest and strongest."

Brands were powerful based on being well established, and they were not easily disrupted.

"Large players dominated the market. They were advantaged by time, scale, money and resources," said DeSutter. The size of a brand's ad budget equaled the amount of mind share it could command, and marketing channels were consolidated.

But the rules of the game have changed, and now the advantage goes to brands that innovate and disrupt. And the pace of innovation matters, said DeSutter. Change is happening and an increasingly rapid pace.

"Today, to innovate might mean to protect my share, not even to grow my share," said DeSutter. "It's going to take a different kind of nimbleness and a different kind of agility to win."

Dynamic relationships with consumers

"Speed of innovation requires a response," said DeSutter.

Brands must cultivate dynamic relationships with customers. Social media has given consumers a voice, and they are not afraid to use it. Smartphones have shifted power into the hands of the customer, and they are quick to report dissatisfaction with a brand on their social media channels. Brands have fewer chances to be right or to be wrong, said DeSutter.

"Can you imagine how long a snake oil salesman would have lasted if he'd had to put up with online reviews?" he asked. 

Because of this, word of mouth advertising is stronger than ever, in the form of tweets or other social media posts. Citing the book Contagious: Why Things Catch On by Jonah Berger, DeSutter noted that as much as 20 to 50 percent of consumer purchasing decisions are made based on word of mouth recommendations.

Co-innovating with the customer

Brands are winning customers over by collaborating with them for extreme, real time customization.

"Coca-Cola figured out with its Freestyle that if we give consumers choice, they'll come back to the fountain machine," DeSutter said.

Coca-Cola also scored a huge win with its "Share a Coke" campaign, with names printed on the sides of Coke bottles and cans. Customers sought out cans featuring their names or the names of family and friends. Now that brands like Coke have disrupted with their innovative campaigns, consumers expect the same kind of customization and collaboration from other brands, too.

That consumer demand for customization may mean delivering the brand experience through different channels, such as consumer products, food licensing, novelty products and ecommerce.

Brands must understand how they exist in their purest form, and then innovate from there, DeSutter said. 

"Brands must understand what the consumer wants in each of these channels, and then deliver an experience that meets that expectation," he said. 

Millennials set the trends

Millennials may not be the largest consumer group, but they are the influential consumer group, said DeSutter. They influence other, older generations and, as disrupters, they have a lot of voice.

"Which of us didn't want to be younger?" said DeSutter.

Millennials want relevance, trust, transparency and permission – all things that are hard to put on a menu board.

Millennials' influence shows up in the better burger trend. Customers that were turned off by burgers offered by QSRs have become big fans of burgers offered by better burger joints. Why? Those brands are structured around values important to millennials; they are perceived as more local, more natural, more authentic and more expensive.

Moving into the future

How can brands move into the future? DeSutter offered the following tips:

• Get comfortable with being multi-cultural, multi-channel and multi-venue.
• Recruit millennials for key roles. DeSutter pointed to Starbucks' founder Howard Schultz's decision to put millennials on the board, and other brands assigning millennials to mentor senior leadership in a reverse coaching role.
• Evaluate your strategy, and plan to revisit it frequently to keep up with the accelerating pace of change.
• Form alliances and strategic partnerships. "We just can't have all the good ideas," said DeSutter.
• Drive business with consumer insights. DeSutter said, "I think about consumer insights as the GPS of our business." 

Image courtesy of Pixaby.