The recession is jolting the restaurant industry to concoct who’d-a-thunk-it products that are redefining what even the industry’s biggest brands stand for.
Never mind that KFC’s middle name is “fried,” as in Kentucky Fried Chicken. Its biggest campaign of 2009 is to sell what it calls unfried (i.e. grilled) chicken.
Pizza Hut, whose first name is pizza, is pushing pasta like there’s no tomorrow. Home delivered, no less.
McDonald’s, the world’s biggest fast-food chain, is in the midst of rolling out a line of designer coffees — even as Starbucks is peddling value meals.
It gets crazier. Domino’s is delivering subs and pasta-stuffed bread bowls. Boston Market, the rotisserie chicken king, is pitching crispy chicken. Arby’s, the anti-burger chain, is hyping Roast Burgers. Cheesecake Factory, known for its gigantic servings, is offering “small” meals. Even Morton’s, the pricey prime steakhouse, has $5 burgers at the bar.
“This is a defining moment for the industry,” says Hudson Riehle, research chief at the National Restaurant Association. “The financial crisis has brought with it a redefining of boundaries.”
The fallout looks — or tastes — surreal. Many of the food innovations appear to be the opposite of some chains’ founding principles, and carefully honed brand image. Could sushi at Taco Bell be next?
The driver is how the recession is eating into the heart of the $566 billion restaurant industry, which has seen 10 consecutive months of same-store sales declines and 19 consecutive months of falling store traffic.
“The industry has never faced a period of stress like this,” says Alan Hickok, a veteran restaurant industry consultant. “There’s never been anything this deep.”
As a result, the big chains are spinning out new products about as fast as any time in the industry’s history. “There are innovations, and there are spinovations,” says Russell Weiner, marketing chief at Domino’s. “When you’re trying to grow a category, you need to bring in innovations.”
But the new menu items also are about more than bad times. They are also about changing times. Consumer tastes, particularly for better-for-you foods, have evolved in recent years.
No one’s more aware of that than KFC. So, last month, the fried chicken chain began undoing the image it’s spent years building. It rolled out grilled chicken.
New ads urge consumers to “unthink what you thought about KFC. Taste the unfried side of KFC.”
KFC has held nothing back in convincing consumers that fried is yesterday’s news. “It’s one of the biggest new product rollouts in the history of our company,” President Roger Eaton says.
Other restaurant chains trying to break out of their usual boxes:
• McDonald’s is selling designer coffee. It’s some stretch from cheap burgers. But the fast-food giant is adjusting to evolving consumer tastes with the rollout this month of McCafe specialty coffee bars in many McDonald’s, says Wade Thoma, vice president of U.S. menu management.
• Pizza Hut is selling pasta. One year after adding pasta to its delivery menu, pasta has become a $500 million business at Pizza Hut, says Brian Niccol, marketing chief. It’s on the way to becoming a $1 billion business, he says.
Pasta has been one of Pizza Hut’s most successful new products, right up there with Stuffed Crust pizza, he says. It now accounts for slightly under 20% of it sales. While it has siphoned off some pizza sales, it has added to sales early in the week and on Sunday nights, he says.
Instead of insisting that “we’re only in the pizza business,” Niccol says, Pizza Hut is now asking consumers what they want the chain to sell, and when.
• Domino’s is selling subs. The world’s largest home-delivery pizza chain last summer started rolling out a line of sub sandwiches. Thanks to that new sub line, marketing chief Weiner says, Domino’s posted a slight same-store sales boost in the first quarter.
• Boston Market is selling crispy chicken. The chain once called Boston Chicken is best known for whole chickens roasting on metal spears and used to present itself as the alternative to fried chicken. But in February the chain rolled out so-called Crispy Country Chicken.
The crispy chicken is baked, not fried, but is being directly positioned to compete with fried. “People still crave rotisserie chicken, but they also want different eating experiences,” explains Richard Davis, vice president of culinary innovation at Boston Market.
Davis insists he isn’t concerned about “confusing” consumers about what type of chicken Boston Market actually stands for. “It’s not as if we’re trying to replace what we do. We’re still a 100% rotisserie chicken concept.”
• Morton’s is selling $5 burgers. With same-store sales down 24 percent in the first quarter, the chichi steakhouse chain had to do something.
And guests now can wash down their mini-burgers with $4 beers.
