The QSR segment is having an identity crisis. As fast-casual restaurants continue to grab market share, and as value menus become harder to maintain because of increasing food costs and greater demand for high-quality ingredients, quick-service chains face the challenge of developing the right menu to please as many diners as possible.
Amid these challenges, there is one bright spot in the market: Hispanic diners. U.S. Census data shows that Hispanics now account for 17 percent of the country’s population. Several recent demographic studies show this group to be loyal and regular QSR users. In 2014, Hispanics’ per capita visits to QSRs increased by 4 percent, compared to a 1 percent decline in visits by non-Hispanics, according to Chicago-based research firm Technomic.
Additionally, the National Restaurant Association predicts Hispanics will account for 25 percent of projected spending increases on food away from home through 2015—and this group spends 16 percent more on QSR visits each year than non-Hispanic households.
For QSR operators, the opportunity is clear. But how can this segment continue to attract Hispanics? The key is knowing more about their preferences, from social media use to meal preferences to health concerns and more.
According to new research from Univision and Burke, many QSR-usage drivers are similar for Hispanics and non-Hispanics. All consumers seek a place to satisfy hunger, and all find value in a convenient location. But other factors set Hispanics apart.
“Where we see a difference is in the importance of the social factor on the Hispanic side,” says Peter Filiaci, vice president of strategy and insights for Univision. “Being a ‘good place to spend time with family and friends’ is a top driver of usage among Hispanics.”
For example, Hispanics are much more likely to visit QSRs with a significant other, and they’re twice as likely to visit with children, making the average Hispanic party size 2.8 people versus 2.1 for non-Hispanics. Top drivers for usage and trial show that Hispanics have a greater pull toward the traditional family table, so as QSRs remodel and renovate, it will be important to make room for larger tables and child-friendly seating.
Serving the spice of life
Contrary to popular belief, catering to Hispanics doesn’t mean adding American interpretations of Latin food to the menu. “In terms of the menu, most chains seem to discover that they don’t need to make major menu changes,” Filiaci says. “Hispanic consumers are interested in variety and different food experiences as much as all consumers are, especially because they’re looking to please a larger group of diners at once.”
This variety should be a focus during all meal occasions, because Hispanic traffic has significant distribution across all dayparts. Breakfast and snacking have been two areas of growth for all QSR traffic, and Hispanics over-index for these dayparts. Breakfast represents 19 percent of Hispanic QSR visits versus 15 percent for non-Hispanics. Late-afternoon and late-night snacking are significantly higher for Hispanics as well (19 percent versus 6 percent and 8 percent versus 4 percent, respectively).
And although bigger, more complicated menus have posed some problems for many national chains, catering to the Hispanic market could help address this problem. The Univision/Burke study found that Hispanics are highly digitally engaged in ways that could help test or introduce new menu items, such as online incentives, or ease operational challenges associated with larger orders by using digital pre-ordering options.
“Our study found that Hispanics are twice as likely to use a mobile coupon as non-Hispanics,” Filiaci says “This is an area where chains can connect effectively.” Filiaci says that Hispanics show more interest in using mobile apps to locate QSRs and pick up and pay for orders.
The QSR segment can also use social media as another way to target Hispanics. Hispanic consumers are more likely to become a Facebook fan of a restaurant (29 percent vs. 12 percent for non-Hispanics). Savvy operators have added Spanish-language websites and Twitter accounts to their social media strategies, and more chains should take advantage of this relatively inexpensive way to speak directly to different audiences.
Consumer demand for higher-quality food and menu transparency has fueled an industry-wide shift that resonates with Hispanic diners. According to Univision, about two-thirds of Hispanics say they look for healthier food alternatives for their children and family on restaurant menus. Similarly, Hispanics are much more likely (59 percent versus 39 percent for non-Hispanics) to say they avoid foods that are overly processed.
Meeting this Hispanic consumer demand is good for business in many ways, according to Filiaci. “One of the biggest shifts we saw in updating our QSR study was that consumers are dramatically more interested in, and focused on, the quality and freshness of their food,” he says. “It’s one area where Hispanic consumers and non-Hispanics appear to be consistently aligned.”
For more insights and tips for attracting Hispanic consumers, visit Univision Communications, Inc. here. Register for the October 21 Univision/Burke webinar discussing the results of our new study on Hispanic consideration, usage and loyalty drivers tied to QSR now.
This post is sponsored by Univision Communications, Inc.