Restaurant trends of menu segmentation for ‘affluent’ level of target market
New US research has revealed that foodservice locations need to cater to their target market’s household income, household size and cost of living when creating menu options and pricing. The Influence of Income Consumer Trend Report recently released by Technomic reveals that ‘affluence level’ rather than income is determining menu item success.
Although it was reported that twice as many affluent than working class people consume food-service weekly, they only make up a small amount of the market share in the US food scene.
The report broke 2,000 consumers into four levels – affluent, upper-middle, lower-middle and working. The groups were segmented not only on household yearly income, but included demographic information such as the area they lived in and the age and amount of people in the household. The segmentation showed that ‘affluence level’ catered more to the overall needs of consumers when dining out.
Eating-out trends in the working class
The working class group included low-income earners or those that earn an average wage but have large families and little expendable income. Technomic’s report showed that:
– They like discount programs and nights that offer value-for-money
– They eat more take-out food than dining in at restaurants, arguably due to price factors
– They are less likely to try innovative ingredient combinations, and prefer common menu options
– Only 31 per cent consume food-service on a weekly basis, however they hold a significant amount of the market share
Eating-out trends in lower and upper-middle class
The middle classes included lower income earners that have a single or small household, as well as higher income earners that had larger families and lived in more expensive areas, and therefore had less expendable income. Report statistics showed:
– The middle classes are most concerned with calorie and fat content in foods, and are more inclined towards healthy eating
– They are price-conscious and appreciate value-for-money, but also appreciate quality
– They account for the majority of the market share
Eating-out trends in the affluent class
The affluent class includes those that earn a household income of US $125,000 or more, although those with large families in this income bracket were considered upper-middle class. Those that earn slightly under US $125,000 but lived alone were also considered affluent. The report revealed:
– Over half (58 per cent) of affluent consumers prefer dining out as opposed to take away
– They are most inclined to try innovative ingredient combinations
– They still look for value despite having a larger disposable income, as 41 per cent said that they looked for discount and loyalty programs
– They are strongly concerned with ‘seasonal,’ ‘local’ and ‘premium’ products, inferring an association to ‘high-quality’
– They account for only a small portion of the market share
Technomic Executive Vice President, Darren Tristano, said that in order to appeal to economically diverse foodservice consumers, restaurant groups might consider choice for varied menus.
“On one side of the menu there are products that appeal to price-sensitive customers e.g., dollar menus. Lower-priced items can retain customer patronage and possibly lead to trading up at future visits. In contrast, you’ve got items that appeal to customers who see price as a secondary factor. They may be trading down from an expensive restaurant but still want some higher-end menu options,” Mr Tristano said.