American palates growing more adventurous

Nine in 10 restaurant operators say their guests are more knowledgeable about food than they used to be and pay more attention to food quality than just two years ago, according to the National Restaurant Association's (NRA) 2015 Restaurant Industry Forecast.

"As dining out has grown into an everyday activity over the last few decades, we essentially have become a generation of 'foodies' with a much wider base of experience and trial of new cuisines and flavors than previous generations," said Annika Stensson, director of research communications for the NRA. "Growth of international travel and increased diversity of cuisines offered here at home have driven today's diners to be more adventurous and generally more willing to try new things when dining out."

NRA research shows that 64 percent of consumers consider themselves more adventurous in their food choices when dining out now than just two years ago. This sentiment is even stronger among millennials, where 77 percent consider themselves more food adventurous. 

Seventy-two percent of consumers also say that restaurant food provides tastes and flavors they can't duplicate at home, which especially true for global cuisines. Roughly seven out of 10 consumers say they are more likely to try ethnic cuisines in a restaurant than they are trying to cook such dishes at home.

The rise of ethnic cuisines has been evolving for decades, resulting in ethnic cuisines and flavors increasingly making their way onto mainstream menus. Currently, more than a third of restaurant operators say they offer ethnic cuisine items outside of their main menu theme, with the highest number reported among fine-dining restaurants (51 percent) and casual-dining restaurants (48 percent). In addition, a majority of operators believe this will become even more common in the future. 

Older workers on tap as teen labor dips

The restaurant industry is the country’s largest employer of teenagers, but that labor pool is shrinking so operators are looking at alternative age groups to fill the gap, National Restaurant Association (NRA) research has found.

According to the 2015 Restaurant Industry Forecast, restaurants currently provide jobs for 1.5 million people between the ages of 16 and 19. That means one-third of working teenagers in America today work at restaurants. Still, the number of teens in the overall workforce plunged from 41.3 percent in 2007 to 34.5 percent in 2013, a decline of 1.2 million individuals.

“The U.S. workforce continues to change, and the pool of restaurant job candidates with it,” said Hudson Riehle, the NRA’s senior vice president of research. “While the industry will remain an important training ground for young people getting their first job experience, it also provides opportunity for more seasoned workers looking for rewarding employment with flexible schedules.

In the wake of the decline in teen labor, more restaurant jobs have gone to older employees. In fact, the number of adults 55 or older working in the restaurant industry rose 32 percent during the same period, an increase of 180,000 individuals.

“Youth workforce participation has been declining for years, and teenagers have traditionally been a significant part of the industry’s workforce, often filling part-time and seasonal positions,” Riehle said. “However, aging baby boomers are staying in the workforce longer and filling some of those positions. And though older adults are a relatively small proportion of the industry’s workforce now, that number will only expand in future.”

6 factors consumers consider when choosing a restaurant

For consumers, choosing where to eat is a complex decision. Today’s diners are concerned about the quality of the food they're eating, but they're also looking at factors beyond food, like technology and a restaurant’s environmental impact. 

Here are six things consumers take into account when choosing a restaurant, according to the National Restaurant Association’s 2015 Restaurant Industry Forecast:

Healthier options: More diners are looking for healthful options when they dine out, and restaurants are responding to that demand. More than eight in 10 restaurants say their guests are paying more attention to the nutrition content of their food today than they were two years ago. Diners are also seeing more options from restaurants, and 81 percent of adults say restaurants offer more healthful options than they did two years ago.

Eco-friendly dining:  When they choose a restaurant, many consumers are thinking about the earth as much as their palates. Nearly two-thirds of consumers say they’re likely to consider a restaurant’s eco-friendly practices when they decide where to eat.

Technology: The number of consumers who say technology options like smartphone apps or self-service kiosks are an important factor in choosing restaurants is on the rise, up to about 25 percent from roughly 20 percent a year ago. The increase spans generations, with older and younger customers alike expanding their use.

Quality, innovative food: Nine out of 10 consumers say food quality is an important factor in choosing a restaurant, and six in 10 claim to be more adventurous diners than they were two years ago. More than half are looking for innovative meals that they can’t make at home.

Local foods: Locally sourced meats and seafood and produce were near the top of the list of the NRA’s Top 25 lists of 2015 tableservice and limited-service menu trends. Find out what else is on the list, including trends in breakfast, appetizers, desserts and classic favorites.

Ethnic cuisine: When diners crave ethnic foods, odds are they’re heading for a restaurant. More than two-thirds of consumers say they’re more likely to order ethnic foods at a restaurant rather than trying to cook it at home.

What’s ahead for restaurants in 2015? Get your copy of the NRA’s 2015 Restaurant Industry Forecast.

Technology, lifestyle food choices evolving trends in 2015

Technology is a rapidly evolving trend for 2015. According to the National Restaurant Association’s 2015 Restaurant Industry Forecast, roughly one-quarter of consumers say technology options are important features that factor into their decision to choose a restaurant.

This is up from the nearly one-fifth the prior year that said the same, underscoring that technology quickly is becoming an expectation rather than a novelty when dining out. 

“Consumers – especially younger generations – have come to expect certain connectivity attached to their dining experiences, be it the ability to order restaurant delivery with a smartphone app, access wi-fi in their favorite coffee shop, or review menus and make reservations online,” said Hudson Riehle, the NRA’s senior vice president of research.

“While restaurateurs understand their guests’ desire for technology options and more are adopting various forms thereof, the cost and integration into existing store systems can still pose challenges,” Riehle said.

A gap remains between what consumers want and what restaurants currently offer. That gap is narrowing, though, and it will close further over the next several years as restaurant technology evolves and more options enter the marketplace.

Despite increased consumer use of tech, machines may be an inadequate substitute for the personal service that many consider to be the hallmark of dining out. NRA research clearly shows that consumers still want humans as part of their restaurant experience, yet look to technology to increase service speed and convenience.

Lifestyle choices

Another developing trend for 2015 is related to how today’s consumers tend to make lifestyle choices in a “big picture” kind of way and apply those preferences to a wide range of situations – including dining out. As Americans lead ever-busier lives with little leisure time, they want and expect menu options that allow them to adhere to their chosen life philosophies.

“As restaurants have become part of our daily lives, consumers want to stay consistent in their purchases across broad spending categories,” said Annika Stensson, the NRA’s senior manager of research communications. “Food choices very much fit into that pattern.”

“People who buy electric cars and eco-friendly household cleaners also look for environmental sustainability when picking a restaurant. And consumers who adhere to healthy lifestyles want to find nutritious options no matter where they choose to go without sacrificing convenience,” Stensson said.

NRA research shows that nine in 10 consumers say food quality is an important factor for choosing a restaurant, and six in 10 consider themselves more food adventurous now than two years ago.

Sixty percent of consumers say they are more likely to pick a restaurant that offers menu items that were grown or raised in an organic or environmentally friendly way, up from 55 percent the previous year.

In addition, consumers are showing increasing interest in local sourcing, and more restaurateurs are taking notice. More than eight in 10 tableservice operators say their guests are more interested in locally sourced items this year, compared with seven in 10 who said the same a year earlier. And, 69 percent of consumers say they are more likely to visit a restaurant that offers locally produced food items. That’s up 5 percentage points from what consumers said a year earlier.

Meanwhile, eight in 10 of consumers say restaurants offer a wider variety of healthy menu options now compared to two years ago, and three-quarters say they are more likely to visit a restaurant that offers healthy options; seven in 10 say they also order more healthful options in restaurants than they did two years ago.

For additional information and to buy the 2015 Restaurant Industry Forecast, visit Restaurant.org/Forecast. 

Where is the sales picture rosiest?

The improving economy and consumers’ desire to dine out more often should generate increased restaurant sales in every state this year, with the strongest gains expected in Arizona, Florida, North Dakota, Texas and Colorado. According to the National Restaurant Association’s 2015 Restaurant Industry Forecast, Arizona and Florida are projected to post 4.9 percent sales increases. North Dakota and Texas follow at 4.8 percent, Colorado at 4.3 percent, and California and Utah at 3.9 percent.

In Florida, where restaurant sales volume is expected to top $36.4 billion this year, Carol Dover, president and CEO of the Florida Restaurant and Lodging Association, attributes the industry’s positive performance to several factors. They include reduced unemployment, good weather and business-friendly legislation introduced by state lawmakers and endorsed by Gov. Rick Scott (R).

“We are fortunate here in Florida,” Dover says. “Since our governor took office in 2011, unemployment has dropped to 5.6 percent, down from 11.1 percent. Nearly 730,000 new jobs have been created, with the bulk of them coming from tourism. We’re in a really good business mode, and our senate, house and governor are enacting business-friendly legislation, including [several] tax cuts.”

John Horne, owner of Anna Maria Oyster Bar restaurants in Bradenton, Fla., says the mood among business owners and customers is more upbeat than it has been.

“We were one of the states hit hardest during the recession, and we’re also one of the ones recovering quickest. Things seem to be turning around and people are feeling good again. Customers are ordering more and eating better. They’re ordering dessert and having a beverage or two. The mood in the business community is great.”

According to Horne, sales at all three of his locations in 2014 were up 8.6 percent over 2013, and covers increased nearly 2.5 percent. He says this year should be even better.

“The economy is picking up, the weather is in our favor and the [Florida] government is pro-business. These days, it’s all about ROI and getting people to work in Florida.”

In Arizona, restaurant sales volume is expected to hit $11.5 billion in 2015. Restaurateurs cite factors such as hosting the Super Bowl and several pro-golf tournaments, along with increased tourism, as reasons for the uptick in sales.

“Our local economy is excellent, and tourism is stronger than ever,” says Bobby Fitzgerald, owner of White Chocolate Grill, which operates in Scottsdale, Phoenix, Schaumburg, Ill., and Colorado. “Arizona is building a real culinary atmosphere with high-quality operators who are offering cutting-edge food.“

Fitzgerald, chairman of the Arizona Restaurant Association, says 2015 so far has produced positive sales that should continue to grow. “In the beginning weeks of the year, first with the Fiesta Bowl, then the Pro Bowl and now the Super Bowl, sales have been quite good.”

Louis Basile, president and CEO of the Phoenix-based Wildflower Bread Co. fast-casual chain, says the pro-sports events plus the drop in gas prices are the big drivers for sales.

“We started to see a real consumer shift last December, and the first five weeks of this year have been pretty dynamic,” he says. “Beyond that, Arizona has such a driving population, so when gas prices are down to where they are now, the dollars saved go directly to food and entertainment. For someone who spent $60 at the gas pump, but now spends $30, that’s license to spend another $30 on dinner or a movie or both. Consumers seem to be feeling better about the economy and the relief they’re getting from the lower gas prices. I’d say I’m more optimistic we’re going to have a much better year than last year.”

Purchase the 2015 Restaurant Industry Forecast here.

Riehle: Food costs will remain a top challenge in 2015

The restaurant industry is set to post record sales and employ 10 percent of the total U.S. workforce in 1 million locations this year, according to the just-released 2015 Restaurant Industry Forecast. Food costs will remain a top challenge for restaurant operators this year, says Hudson Riehle, the National Restaurant Association's senior vice president of research. Watch him summarize additional key points from the report. 

Positive outlook for 2015 for U.S., Louisiana restaurant industry

The restaurant industry will reach some landmark numbers in 2015 – more than $709 billion in sales, one million locations and 14 million employees - according to the National Restaurant Association's (NRA) 2015 Restaurant Industry Forecast released today.

The good news: sales growth is expected to accelerate and represent the sixth consecutive year of real (inflation-adjusted) sales growth for the industry.

The bad news: growth rates are still modest in historical terms, as the economy continues its struggle to reach normalcy after the Great Recession, begging the question “Is this the new normal?”

It might just be. America’s restaurants are expected to post record sales and continue to be a leading job creator in 2015, but the operating environment will remain challenging due to the slower-than-normal economic recovery after a recession, as well as rising costs.

“Population growth and Americans’ continued desire for convenience and dining out continues to fuel industry growth,” said Hudson Riehle, senior vice president of research for the NRA. “Certain components of the business climate remain a challenge, however, as regional variability in employment levels and disposable income gains still put a damper on the overall environment.”

“Total restaurant industry sales are expected to advance at a 3.8 percent rate this year. That’s lower than the compound, pre-recession annual sales growth rate the industry experienced, but still a positive sign that the industry is in a better place now than six years ago,” Riehle said.

Sales in the tableservice segment are expected to reach $220 billion in 2015, a 2.9 percent gain over 2014 sales, while sales in the quickservice/fast casual segment are projected to grow by 4.3 percent and reach $201 billion.

Looking at the state level, the top five states for restaurant sales growth in 2015 are Arizona, Florida, North Dakota, Texas, and Colorado. Louisiana's projected sales revenue for 2015 is up to $7.3 billion, 3.6 percent over 2014 with $7 billion. 

Job gains expected in 2015 and over next decade
As sales growth improves in 2015, restaurant industry employment will perform even better. In fact, this will be the 16th straight year in which restaurant industry employment growth will outpace overall employment growth.

Restaurants will employ 14 million individuals this year as the nation’s second-largest private sector employer, representing one in 10 working Americans. In Louisiana this year, total restaurant industry employment is projected to exceed 203,000 and reach nearly 220,000 by 2025, an additional 16,600 new positions. 

Eating and drinking places – the largest subcategory of the foodservice industry – are projected to add jobs at a 3.2 percent rate in 2015, a full percentage point above the projected 2.2 percent gain in total U.S. employment.

In addition, the NRA projects that restaurant industry employment will reach 15.7 million by 2025, an increase of 1.7 million positions during the 10-year period. Over that decade, the top five states for restaurant employment growth are Arizona, Florida, Texas, Georgia, and Utah. 

Challenges include food costs, increased labor competition
While the restaurant industry is expected to grow this year, operators will continue to face a range of challenges, according to the NRA’s forecast. The top challenges cited by restaurateurs include food costs, building and maintaining sales volume, the economy, and recruiting and retaining employees.

Food costs continue to put pressure on many restaurateurs’ bottom lines.  Average wholesale food prices jumped more than 5 percent in 2014, which represented the fifth consecutive annual increase. During the last five years, average wholesale food prices rose roughly 25 percent.  Operators can expect to get pricing relief on several of the major commodities in 2015, including dairy and pork.

Restaurants are expected to spend $253.6 billion on food-and-drink purchases this year.