By Rita Kousseau
Remember when everybody was worried about millennials transforming America?
Born in the 1980s and ’90s, leading-edge millennials have grown up. They’re moving along in their work lives, getting married, having kids—settling down. But younger millennials in their 20s exist in a different world. They’re digital natives whose lives are mediated by smartphones and social media. They take the gig economy for granted and expect their lives to be unsettled. Highly collegial, they value time spent with their friends.
Now pushing their way into college and adulthood are today’s teens—Generation Z. They’re diverse in every way (only about half are non-Hispanic whites in the United States. They’re addicted to their smartphones and live online. Individualistic and experimental, they think of their lives as a brand to be curated for the world. Teens and twentysomethings use foodservice in different ways than older generations, with profound implications for restaurant menus, operations, and kitchen design and equipment.
A Closer Look
“Younger consumers value experiences over things,” says Christine Gurtler, FCSI, design director at Jacobs Doland Beer. “They’re well-traveled, they eat out often. They’re spending more on experiences, so while they might have less income than older generations, a higher portion of their budget goes to food.”
The latest generational consumer trend report from foodservice research firm Technomic confirms that younger millennials and Generation Z rely on restaurants. “They source more of their breakfasts, lunches, dinners, and snacks from foodservice than Gen X and Boomers do,” says Bret Yonke, manager of consumer insights. “For example, 43 percent of lunches that Gen Z eats are sourced from foodservice, compared to 34 percent for Gen X and 27 percent for Baby Boomers.” Other Technomic data show that 64 percent of 18- to 34-year-olds order delivery at least monthly.
But while these younger consumers are more likely than others to choose takeout or third-party delivery, they still like to sit down and enjoy a nice meal. “Millennials far outpace all other generations in terms of how frequently they visit high-end sit-down restaurants,” Yonke says. Apart from fast food (patronized by everyone), younger consumers are far more likely than their elders to be frequent visitors in all industry segments.
How Younger Diners Dine
Brad Rukstales, president and CEO of Cogensia, a marketing strategies consulting firm, says young consumers value the dine-in experience but want something interesting and special to bring them to their favorite restaurants. “They want value and are responsive to offers that engage them,” he continues. “Brands that can appeal to things like farm-to-table, supporting a cause, or having a unique environment are doing well.”
Recently, Rukstales and Cogensia did a market segmentation project for Houlihan’s, finding that 20-somethings have several characteristic dining patterns. “The bar is much more dominant than the dining room; they will have small plates and drinks but are much less likely to order entrees; they’re responsive to messaging about appetizer, bar, and drink specials,” Rukstales explains.
Eric Schmitt, vice president of Marion, Iowa-based, Rapids Foodservice Contract and Design, agrees that young diners still want to sit around and socialize in a restaurant setting. Once, the need to gather and gab was met mostly by bars but now, high-end coffee cafes play a role, Schmitt says. Casual-dining ethnic restaurants can fulfill some of the same social needs, he adds, but they must create an experience. “It’s no longer enough to be a sushi restaurant; to make it a compelling place to go, the interior design has to tell a story,” Schmitt cautions.
Millennials are looking for experiences—and they’re bringing their friends along. Kurt Maschari of Best Restaurant Equipment & Design in Columbus, Ohio, says younger customers tend to have large dining parties. “They’re still running in packs, and they’re having issues getting tables for eight to 10 when they want to socialize,” he notes. That means they will sometimes forgo the dine-in experience and order food to eat elsewhere. To keep them in-house, he suggests redesigning eateries with large group tables, soft seating, a more comfortable environment that encourages lingering, and things to do at the restaurant other than just eat—like games. On top of all that, young patrons “still like open kitchens where they can see food being prepared,” he adds.
In New York City, twentysomethings are spending a lot of their disposable income on food, says Morgan Tucker, director of business development at the M. Tucker division of Singer Equipment Company. “But they want to be comfortable, have safe spaces that they can return to,” she continues. “The idea of a relaxed lounge is very popular—as is communal seating on a first-come-first-served basis, or sitting at the bar and interacting with the server.”
In addition to food that has been thoughtfully prepared and thoughtfully sourced, ambiance has a lot to do with creating such fast-fine restaurants, Tucker explains. “The chairs, the couches, the plates conjure familiarity with the past,” she says. “Spaces are warm and comforting, with natural elements.” Colorful food, attractive plates and beautiful dining rooms also make great fodder for Instagram photos, which to some younger customers are just as important as the dining experience itself.
The App-Based Delivery Revolution
To better cater to new customers, QSRs and fast-casual restaurants are moving to mobile app-based pre-ordering and in-unit kiosk ordering. “Younger consumers are much more comfortable with technology like kiosk ordering and self-checkout; they like that technology can reduce wait times and simplify ordering and checkout,” says Gurtler. “In the front of house, visual merchandizing of food has become more important. Younger generations also want to see the chefs working, so more of the kitchen has come to the front of house, and equipment needs to be more visually appealing.”
App-based third-party ordering subtly shifts brand loyalty, says Barry Friends, a partner in foodservice research and consulting firm Pentallect. “Consumers connect to delivery brands at the expense of the operators they represent,” he says. “Some customers are becoming Uber Eats customers versus being loyal patrons of Applebee’s, etc.” Patrons who don’t do dine-in won’t give a restaurant points for its ambiance or adult beverage menu. And the vast array of food options offered via delivery services puts pressure on restaurants to compete by broadening their menus.
The delivery revolution has changed space allotment and equipment decisions in restaurants, notes Friends. Restaurants have reconfigured floor plans to accommodate third-party delivery personnel. Multi-temperature holding stations are being installed, allowing for extra minutes of optimum food quality. Equipment that can automate or accelerate food packaging is also being explored.
Customers who are still willing to come to the restaurant for pickup also have new demands that operators must account for. “Young consumers want to design their burrito or sub sandwich in the parking lot or lobby only to have it appear, Starbucks-style, with their name on it, ready to grab—prepaid, of course,” Friends says. “Concepts will need the software and holding equipment to pull it off.”
Manufacturers have made advances in heated holding, holding with humidity control for fried foods, cold holding, passive holding, even induction equipment running off plugs in delivery cars. Makers of disposables have new ways to hold fried foods, venting them to maintain crispness. New transport bags have compartments for different foods to hold proper temperature, crispness, and humidity level for each.
Delivery-order delay and shelf clutter are real problems, says design consultant Foster Frable, FCSI, president of Clevenger Frable LaVallee. “Orders are sitting in bags or boxes waiting for pickup on open shelves, often poorly marked,” he says. “Customers can pick up the wrong order or just steal a bag.” Operators may need to think about a management system like the one from order solutions provider Apex, in which pickup orders are stored in lockers with individual codes that can be scanned by the customer or delivery driver.
The Incredible Shrinking Restaurant
Even as restaurants are challenged to update systems and expand menus, their footprints are shrinking. “The smaller the footprint, the better,” says Friends. “Rent, utilities, taxes and maintenance are driven by square footage.” As a bonus, a pared-down dining room will still look full even if a greater proportion of orders come from takeout or delivery.
Operators are reconfiguring both menus and kitchens to accommodate the smaller cooking area. “It’s about keeping a tight space and not preparing elaborate entrees,” Schmitt explains. Salads, sandwiches, and wraps are the go-to items for pickup and delivery.
Restaurants are also rethinking work flow and customer pickup flow, according to Maschari of Best Restaurant Equipment. “New restaurants are adding drive-thru windows and separate counters, and orders are funneled toward the pickup counter for pre-ordered food or to the drive-thru, with different work flow lines to support them,” he says.
For basic prep, restaurants are turning to commissaries, Sarah Bulmer of M. Tucker explains. “Fine-casual concepts make many of their products offsite and then bring that fresh, daily production onsite to warm, sear and serve,” she says. “It saves operators money in terms of equipment and also allows them to experiment using new techniques.”
Utilizing offsite commissaries to produce sauces, sauté ground meat, do batch cooking and portion food means restaurants can ditch equipment. “You don’t need a tilt skillet at every location,” Schmitt points out. “If you’re mostly holding and retherming at the store, you may just need a combi, a convection oven, hot holding, or cook-and-hold cabinets, a steam table, and a couple of other flexible pieces.” There also may be front-of-house prep. Ventless plug-and-play equipment allows restaurants to do light-duty cooking at sites without installed hoods. Extra utility connections mean equipment can be switched out as menus change to meet fast-changing millennial and Gen Z demands.
Serving Younger Diners: The Dealer’s Role
Meeting the new foodservice needs of younger millennials and Generation Z offers complex challenges for restaurant operators, chefs, consultants—and equipment dealers.
“We listen to operators to understand what their pain points are, what they’re trying to accomplish, what market segment they want to branch into,” says Maschari. “If the restaurant wants to accomplish more carryout and grab-and-go, we may redesign the queueing lines so customers don’t feel like cattle going to slaughter; add kiosks and mobile ordering capacities; revamp the cook line; shrink the front-of-house and make the back of house as small as possible.”
Those changes ultimately come down to finding better ways to serve customers, says Schmitt. “Understanding the target demographic and the area where the restaurant is operating are really important,” he says. “We talk about income in the area, anticipated foot traffic. Then, we create the tools in the space to produce food as close to on-demand as possible, build the basic work environment—and keep things simple.”