How family-oriented restaurants should approach menu labeling

July 15, 2010
How family-oriented restaurants should approach menu labeling

In this, our inaugural "Ask the president" blog series with Stevi B's president Matthew V. Loney, we ask the executive how restaurants like his family dining pizza buffet concept might cope and respond to menu labeling laws that could potentially turn parents off to high-calorie menu items.

Q:   How might menu labeling laws affect family-oriented restaurant genres, like the pizza buffet?

A.    Similar to other major changes in the restaurant industry that have occurred in the past, it is best to accept the fact that menu labeling laws are here to stay and to embrace the change rather than wait until the last possible moment to react.  That being said, the overall effect of such laws will vary greatly depending upon the establishment and their current customer perceptions.  For example, if a concept is generally perceived to offer a "healthy" product selection (i.e. salads), despite the fact that the offerings may contain as many or more calories than other types of menu options, the release of such nutritional information will break these common misconceptions regarding what is truly healthy, and customers are likely to respond.

Therefore, in anticipation of the new menu labeling laws, I would recommend that restaurant owners/operators take the following steps to better position themselves for success:

  1. Understand your customers’ perception of your brand and the factors driving their decision to frequent your establishment.  Although this sounds elementary, I am often amazed at the number of owners who have not spent the time to determine some of the most basic information regarding their consumer base, such as: (1) what is the demographic of the average customer, (2) who is the decision maker to frequent your restaurant (i.e. mom, dad, kids, etc.), and (3) why do your customers choose your restaurant over your competitors (i.e. cost, taste profile, etc.).  Basic information regarding your consumer will assist in your analysis of what effect, if any, the new menu labeling laws will have on your business.  A recent study in the journal Pediatrics reported that although parents often make decisions for their children based on calorie information, they are far less likely to modify their own eating habits based on such information.  Therefore, if your average consumers are adults (as opposed to kids or families with children) such study would suggest that the new menu labeling laws will have a far less effect on your business.  On the other hand, if you are a restaurant that caters to families and children, the importance of offering healthier options will become necessary.
  2. Understand how your products compare nutritionally against your most direct competitors.  Often owners of “less-healthy” restaurants believe that menu labeling will affect business; however it is very likely that your customer is already aware of the fact that there are more healthy options available and nevertheless chooses to eat at your restaurant.  In such instances it is important to determine where your restaurant compares to competitors whether in the same industry or in close proximity to your restaurant.  If, for example, the fried chicken restaurant in your area has twice as many calories as your pizza, you can encourage customers that your pizza is the better option when dining out. 
  3. Identify the nutritional strengths and weaknesses of your restaurant and product mix and refocus advertising and point-of-purchase materials accordingly. Customers looking to reduce their calories are likely to purchase and eat less food instead of choosing lower-calorie items, which can potentially affect your sales (i.e. choosing the salad bar option only instead of the full pizza buffet).  Offset this problem by highlighting menu items combinations that are better nutritionally such as a veggie topped pizza slice with a side salad, sans dressing.
  4. Be flexible.  If after going through the analysis above, it appears that the new menu labeling laws may have a dramatic effect on your business, be willing to take a hard look at your menu and make changes as necessary. Pizza buffet restaurants offer a wide variety of pizza selections, but it is important to remember those customers looking for a lower calorie pizza option. If one is not available, create one.

While new menu labeling laws will no doubt affect the family-oriented restaurant segment, those restaurants that are willing and able to adapt will garner long term success.

As president of Stevi B's Pizza, Matthew V. Loney is taking a small pizza buffet concept from a promising regional brand to a leading national franchised system.  During his tenure at Stevi B’s Pizza, Loney has achieved a complete rebranding of the company, including a redesign of the restaurant's prototype plans, a significant cut in franchisee upstart expenses, and a system purchasing association that has reduced food and paper costs by a half million dollars. 

Topics: Business Strategy and Profitability, Commentary, Food & Beverage, Health & Nutrition, Marketing / Branding / Promotion, Operations Management

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