Two new marketing campaigns that draw on the timeless appeal of the American diner manifest the restaurant industry’s current malaise and perhaps provide its remedy as well.
McDonald’s American Vintage campaign in Japan celebrates the iconic diner.
The latest NPD Group/CREST data shows that the restaurant business—here and in several other countries—has hit the doldrums. In short, customer traffic isn’t increasing. “We’re seeing flat or declining Informal Eating Out markets and heightened competitive activity across all the geographies,” McDonald’s Corp. CEO Don Thompson told analysts last October. Just last week, Ruby Tuesday CEO James J. Buettgen summed up its current strategy this way: “Our management team, our team at the restaurant support center and our teams in the field are all aligned with one goal: improving traffic at Ruby Tuesday.”
Putting butts in seats is the inelegant but concise goal of every restaurant. And it isn’t easy because consumers aren’t just more careful with their spending; they’re also more careful with their affections. It takes a lot to bring them in the door and even more to win their hearts. New menu items aren’t doing it. Robotic, dispassionate social-media marketing (“Hi. What is your favorite item on our menu?”) doesn’t do it.
Time to evoke—if not emulate—the diner.
Denny’s new campaign positions it as “America’s diner.” A company release explains that it is “celebrating the 60-year-old brand’s authentic diner heritage and ‘come as you are’ atmosphere.” Says Francis Allen, Denny’s Chief Brand Officer, “Everything we are rolling out with this campaign aims to capture and replicate the warm, unique environment that can only be found at your local Denny’s diner, where the sounds from the kitchen and conversations between customers and friendly, spirited servers create that welcoming, familiar feeling that has our guests falling in love with Denny’s all over again.”
There are no fancy new menu items with the campaign. One commercial promotes $4 breakfast sandwiches with hash browns. Another touts burgers, pancakes and the joy of eating breakfast for dinner.
What define this vision of the diner are its casualness and its humanness. The diner is a democratic place where you needn’t dress up and where servers chat with customers and everyone is happy. It’s utopian and Rockwellian and might well be delusional, but it points to something that may be missing from restaurants. Honest human engagement.
We’ve all seen lousy food and service at a diner. Jack Nicholson had trouble getting what he wanted at a diner in 1970’s “Five Easy Pieces.” But that memorable exchange was at least between a customer and server, not between a diner and an iPad, order kiosk or tweet. The diner’s humanity is five pieces of its charm.
The American diner is so iconic that evoking it works around the world. McDonald’s “American Vintage” advertising campaign in Japan right now evidences that. The inauthenticity of the cooked-egg-topped Diner Double Beef burger being sold hardly matters because the pitch here is to Japanese consumers’ vision of the American diner. TV spots show kids dancing to “Johnny B. Goode” on a jukebox. These could be scenes from Barry Levinson’s 1982 film “Diner” or “Happy Days.”
There’s really nothing special in the build of the 1955 Burger that McDonald’s has marketed all over Europe. It’s a burger with grilled onion and steak sauce. But the name allows McDonald’s to market the burger with TV spots evoking the 1950s diner. Watch this TV commercial—with Phil Phillips’ 1959 hit “Sea of Love” as the background—that accompanied the 1955 Burger’s return to the UK last fall. McDonald’s is selling the diner not the burger, which is OK because that diner atmosphere is what consumers want from restaurants all levels, from quick-service up.
Listen to Buettgen explain to analysts the kind of place he wants Ruby Tuesday to become: “Our brand transformation strategy today is focused on reclaiming Ruby Tuesday’s heritage as a casual, affordable, energetic and approachable brand, on delivering what guests want and expect from Ruby Tuesday. The development and implementation of our strategy is based on market opportunity and consumer research and informed by management experience and insights. We believe this positioning will make the brand more broadly appealing and appropriate for a wider variety of dining occasions.”
Buettgen used the term “energetic” repeatedly in his presentation to analysts and I wasn’t sure what he meant. But now I think he sees the need to infuse human energy through honest human engagement into each of his restaurant. He wants the casual, affordable, approachable buzz that exists in the best diners. I think that’s what a lot of restaurants are lacking and seeking.
DDB Chicago has scored a coup in its quiet rivalry with fellow McDonald’s ad agency Leo Burnett by hiring Tony Malcolm as executive creative director on its McDonald’s business in the U.S.
Malcolm has worked on the McDonald’s account during his eight years at Leo Burnett UK in London. There he wrote the “Just Passing By” series of warm, gently rhymed TV commercials for McDonald’s (at left) that frequently have been lauded here. The campaign received the first-ever Cannes Gold Lion for Creative Effectiveness.
The two agencies have sparred over pieces of the McDonald’s global ad business since 1981, when McDonald’s marketing czar Paul Schrage stunned the ad world by moving what was then the chain’s $75 million national account to Leo Burnett in Chicago from Needham, Harper & Steers (now DDB Chicago). DDB regained some of the business in 1990 and the two have competed for favored-agency status with McDonald’s here and around the world ever since. DDB Chicago is part of Omnicom Group; Leo Burnett is part of the Publicis network.
McDonald’s ad spending has grown considerably since 1981: the chain spent $957 million on measured-media advertising in 2012, according to Advertising Age.
“I have been an admirer of Tony’s work for a long time and I am thrilled he is joining DDB Chicago and focusing his talents on our McDonald’s business. A superior creative product is what DDB is expected to deliver to our clients, and Tony brings superior creative skills and experience to the Agency,” DDB Chicago CEO Paul Gunning said in a release.
McDonald’s Corp. has announced its commitment to begin purchasing “verified sustainable beef” during 2016 following a two-year ramp up during which it will “listen, learn, and collaborate with stakeholders from farm to the front counter to develop sustainable beef solutions.”
The change can’t happen faster because McDonald’s sells about 1 billion pounds of beef annually in the U.S. Fiddling with its beef supply is a rather large undertaking. There’s also the matter of semantics “because there hasn’t been a universal definition of sustainable beef,” McDonald’s explains on a new page on its corporate website, initially reported by GreenBiz.com. Further, the beef supply chain is fragmented with ranchers, suppliers, slaughter houses and patty producers working independently but who need to work together to improve their product.
McDonald’s says it has worked with World Wildlife Fund, beef suppliers Cargill and JBS and others since 2011 to create a Global Roundtable for Sustainable Beef. That consortium now has “has drafted guiding principles and best practices for sustainable beef – a breakthrough for the beef industry, and for McDonald’s,” according to the company.
McDonald’s says its timetable is to support development of global principles and criteria in 2014; develop targets for purchasing verified sustainable beef; and finally to begin purchasing sustainable beef in 2016.
Why do it? Because “burgers remain some of our most iconic menu items,” McDonald’s says on its site. Additionally, “we want to do our part to improve environmental practices in the way beef is produced, support positive workplaces in the beef industry, and drive continuous improvement in animal health and welfare. Plus, we envision doing all of this while providing affordability and quality, along with economic viability for those who raise cattle and produce beef.”
Supporting sustainable farming is not only the right thing to do, it makes marketing sense as well, of course, McDonald’s faces increasing competition from chains such as Elevation Burger, B. Good, BurgerFi, The Counter, Farmer Boys, South St. Burger Co. and others that sell natural beef as well as a host of independent burger bars built around offering fresh, naturally raised beef.
According to researcher Technomic’s 2011 Center of the Plate Beef & Pork Consumer Trend Report, 23% of adults said they are willing to pay “slightly more” for beef (not just burgers) that is steroid-free. Another 11% would pay “significantly more” for the absence of steroids. Additionally, 21% say they’d pay slightly more for hormone-free, antibiotic-free and “natural” beef. That’s enough of an endorsement to draw McDonald’s attention.
What little growth the foodservice industry is seeing is largely attributable to lunch sales, according to the latest CREST data from The NPD Group. Mid-day is the driving daypart, up slightly not just in the U.S. but in seven of the 10 countries the researcher tracks.
Source: The NPD Group/CREST; in U.S. dollars (converted 2/16/13).
“The weak performance of the full-service restaurant segment in the U.S. is evident in the lunch daypart visit declines there,” NPD reports. Recent moves such as Olive Garden’s addition of its Italiano Burger at lunch and Bob Evans Restaurants’ creation of a budget tier on its menu and revival of its Knife & Fork Sandwiches are responses to the lunch-traffic decline NPD finds.
Canada is the outlier in this, however. Full-service restaurants were the only segment to post growth in Q3.
Despite all the would-be fixes to menus and marketing applied by U.S. restaurants in all categories, customer traffic remained flat in Q3 for the second consecutive quarter. Average check rose 2% to $6.47 in the U.S. That continues to be lower than the check average in nearly all other markets tracked (see the chart). One exception is China, where the average restaurant check remained lowest at $3.22 despite a 4.8% increase in Q3.
Britain showed surprising strength in Q3 with customer traffic up 2% compared with a year ago. “Looking back at the past 12 months, visits to pubs in the UK have increased but there is no one trend driving the UK foodservice market at the moment,” according to Cyril Lavenant, NPD director of foodservice for Great Britain. “Instead it is a complex picture by daypart, consumer segment and category. Foodservice operators really do need to understand how consumers are behaving across the sector and how that is changing quarter by quarter if they are to tap into the growth areas, and address those that are static or in decline.”
There are some indications that Q4 numbers for U.S. restaurants will show improvement: the National Restaurant Association’s Restaurant Performance Index hit a five-month high in November. Its Current Situation Index—which measures trends in same-store sales, traffic, labor and capital expenditures—hit its highest level in six months.
Jake Melnick’s Patty Melt
The best way to start a new year is with fresh burger ideas, and there are a slew of them here. Several of our old favorites appear to have slept late and not announced their specials yet but that just means we can spotlight some first-time contributors that we hope will become regulars.
One is Jake Melnick’s Corner Tap in Chicago. One of Levy Restaurants’ portfolio of great restaurants, Jake Melnick’s starts the year with a Patty Melt (a 9-oz. hand-packed Angus patty draped with Swiss and American cheese, grilled onion, mushrooms and bacon, and served with Russian dressing). Bucket List Burgers in Riverside, Calif., is new for 2014, too. Its January special is the appropriately named New Year’s Resolution Burger. That’s a hand-pattied turkey with citrus-corn salsa on top of iceberg lettuce and tomato with light sun-dried-tomato-and-spinach aïoli.
Burger Shack’s The Hut
Burger Shack in Whitehall, Pa., makes a memorably debut on the BOTM list with The Hut for January. That’s ground beef “stuffed” with mozzarella cheese and roasted peppers, topped with more mozzarella cheese and roasted peppers and a balsamic vinegar glaze. I’d be foolish if I didn’t offer shout outs to two regulars for their particularly creative January specials. Lakewood, Ohio’s Buckeye Beer Engine starts 2014 with two inventive burgers (the Yaxi’s Relleno de Papa and Croque My Burger). And Slater’s 50/50 in California doesn’t let us down: Its Excesstasy Burger may prove to be the year’s most over-the-top burger creation. And it’s only Jan. 3. Do check out both of them below. 5 Napkin Burger, East Coast locations Cheddar Chili Burger An 8-oz freshly ground beef patty topped with beef chili, red onions, cilantro, pickled jalapeňos, crema and Cheddar cheese with tortilla strips and barbecue fries 5 Star Burgers, multiple locations, Southwest Nacho Mamma ($10) Our Harris Ranch beef burger topped with red chile sauce. Pepper-Jack and provolone cheeses, jalapeňos and tortilla chips
5 Napkin Burger’s Cheddar Chili Burger
8 Oz. Burger Bar, Seattle Ham Burger House blend patty, bourbon-poached apples, shaved ham, Brie cheese, sweet potato chips and sage mustard The Avenue, St. Petersburg, Fla. I’m Ribbin’ It ($12) Kansas City coffee BBQ boneless ribs topped with spicy collard greens and Cheddar with Southern slaw B Spot Burger, Cleveland Breakfast Burger Sausage gravy, Cheddar, green onion and fried egg, served open face on sourdough
Blue Moon Frito Pie Burger
Blue Moon Burgers, Seattle Frito Pie Burger We pile up a toasted brioche bun with sour cream chive mayo, a third-pound premium beef patty, melty Cheddar, smother it in our house-made chili and top it with Frito chips BGR: The Burger Joint, multiple locations The Tracy Our Legendary Burger with the works, spice it up, bacon, french fries and BBQ sauce! Bobby’s Burger Palace, multiple locations Koreatown Burger Soy-glazed beef patty with Korean “ketchup,” kimchee and a fried egg Buckeye Beer Engine, Lakewood, Ohio ‘Yaxi’s Relleno de Papa’ ($10.50) Combines our half-pound burger with a Puerto Rican classic…the Relleno De Papa, a deep-fried mashed potato dumpling filled with a beef, pepper and adobo mixture. All of this is topped with pepper-Jack cheese, sour cream, pico de gallo, chile threads, and fresh jalapeno slices. Served with house-made chips and a fried pickle. ‘Croque My Burger’ ($13) Our half-pound burger topped with sliced ham, Gruyère cheese, green onion and a sunny-side-up egg, all atop two pieces of egg-battered Texas Toast. Served with a side of sage-Dijon mayo, house-made chips and fried pickle.
Buckeye Beer Engine’s Yaxi’s Relleno de Papa (l.) and Croque My Burger
Burger 55, Penicton, British Columbia Homer’s Delight ($9.75) Our beef patty, topped with lettuce, tomato, onion, mayo, mustard, relish, Buddha sauce and a Kraft single jammed between halves of a glazed doughnut! Only $9.75 Burger Boss, Elmwood Park, Ill. Banh Mi Burger The classic Angus beef patty fits in-house pickled carrots and radishes, fresh cucumber slices, jalapeño peppers, cilantro and Sriracha-hoisin mayo all between two perfectly toasted brioche buns Burger Revolution, Belleville, Ont. The Pollo Zapata! Grilled chicken breast, avocado slices, pico de gallo, roasted-poblano mayo, red onion, lettuce and a feta fritter DMK Burger Bar, Chicago The Monte Cristo Sausage patty, ham steak, Gruyère cheese and fruit jam between French toast slices.
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