Why the Growth Chains Keep Growing

Each year when Technomic compiles the rankings of the leading restaurant companies, we look for surprises and anomalies. The truth is, after watching the industry all year, we find very few. The reasons why a concept succeeds or doesn’t are always the same. All that changes is the environment in which it operates.

The basic elements I use to evaluate a concept’s viability or strength are:

• Menu—range of items, ability to customize, dayparts served, limited-time offers customization, broad menu range, day parts served, table top promotion
• Price—value for the money, bundling/combo meals, portion size
• Service format—counter ordering, table service, drive-thru, staff interaction
• Atmosphere—décor, ambiance, family friendly, contemporary feel
• Unique elements—use of technology, entertainment, self-service elements

Combining these basic elements of a concept with its relative position within its segment, we get a pretty good sense of whether it will succeed. As I mentioned above, there are consistent methods that drive growth that are less dependent on operating environment. We can narrow down the effective means to success with an acronym: IDEA. Innovation, Differentiation, Evolution, Adaption.

Innovation depends on improving existing menu offerings and the quality of service. For example, menu developers that offer compelling limited-time offerings give customers a new reason to visit the restaurant.

Differentiation, distinguishing a brand’s core offerings from the competition, is key to any business but certainly within the competitive restaurant industry. It creates clarity with customers and defines for them when and how to use your product.

Evolution is about enhancing the experience, understanding the core customers and improving the offering to suit them.

Adaptation is simply meeting today’s changing consumer demands. For example, consumers are less likely to eat according to a three-square-meals schedule. They nosh, skip meals, eat breakfast for dinner and vice versa. This has driven many quick-service chains to keep drive-thrus open all night. The same consumer trend is the reason that chains offer small plates and shareable dishes.

Technomic has found that, regardless of economic environment, operating segment or style, concepts that innovate, differentiate, evolve and adapt are those that are most likely to see ongoing success.

Darren Tristano

Darren Tristano is Executive Vice President of Technomic Inc. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations.

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