Generational Marketing: How Noncommercial Operators Can Keep Their Captive Audiences Coming Back for More

Americans may spend well over $800 billion annually in restaurants, but these eateries aren’t the only foodservice game in town. The noncommercial segment feeds consumers in the environments they frequent regularly—college and university campuses, workplaces, and healthcare facilities, among them.

how-noncommercial-operators-can-keep-their-captive-audiences-coming-back-for-more

For these operations, profitability is a goal. But retaining the regulars and keeping them interested enough to refrain from dining elsewhere can be especially challenging.

Fortunately, the consumers who dominate each noncommercial segment share a number of demographic and psychographic traits influenced by the generation in which they came of age. Noncommercial operators who study these nuances, evolve their menus to account for those preferences, and then market their offerings accordingly are best positioned to achieve both profitability and high customer satisfaction.

College and University (C&U)

Many students sign up for a meal plan when they enroll and, consequently, are beholden to the cafeteria and other campus offerings. Yet only one-third of them are satisfied with their school’s foodservice facilities, and 69% eat off campus at least once a week, according to Technomic’s 2019 College & University Consumer Trend Report.

People currently between the ages of 12 and 24—collectively known as Generation Z—are digital natives and both socially and environmentally conscious. Research shows that they also have certain “hot buttons” when it comes to dining. C&U foodservice operators must be mindful of these proclivities to keep them satisfied.

Specifically, Gen Z looks for ingredient transparency, environmental responsibility, and social media post-worthy visuals and entertainment. Though they would be the first to notice the irony of a paper straw sticking out of a plastic or Styrofoam cup, Gen Z’ers are the biggest beneficiaries of such packaging, as they are the most apt to be eating foodservice offerings on the go. These consumers are also most likely to order with allergies and food intolerances in mind and to seek gluten-free, dairy-free and other alternatives.

Vanderbilt University is one of many institutions that has modified operations to be more environmentally responsible. The Nashville, Tennessee-based university has already eliminated all single-use plastics, such as plastic bags, lids and straws, says Suzanne Herron, sustainability coordinator for Vanderbilt Campus Dining. And beginning in the fall 2019 semester, the university “will no longer offer bottled water and bottled sodas, eliminating a great deal of plastic from the waste stream, she adds.

Soda is on the chopping block in more ways than one, Herron continues, noting that Vanderbilt has launched a campaign promoting no-sugar, no-calorie flavored water as an alternative to sugary sodas. “We are actively promoting this campaign to [raise] awareness regarding the healthier choice of water,” she says.

Business and Industry (B&I)

Corporate dining isn’t about padding the company bottom line. Instead, it’s an appealing convenience for busy employees—and a powerful recruiting and retention tool for companies that do it well.

Some 57% of corporate dining revenue comes from lunch sales, according to Datassential’s Pulse 2018 study. Breakfast also has become a lucrative daypart, accounting for 25% of B&I sales in 2018. To maximize profitability and satisfaction, B&I foodservice operators would do well to cater to the specific sensibilities of the generations that comprise the bulk of today’s workforce: Millennials and Generation Xers.

Millennials, who are between the ages of 25 and 42, consider themselves to be adventurous eaters—making them candidates to try out bolder and international flavors. If they’re pleased with their meal (and even if they aren’t), they’re likely to take and post photos on social media. Environmental responsibility is also important to Millennials, and they pay attention to packaging—how much there is, what it’s made of and what it says. They’re also more likely to look up menu offerings’ nutritional information before heading to their dining destination.

GenX, now between the ages of 43 and 54, are even more interested in nutrition, with nearly half currently trying to lose weight. It’s therefore not surprising that this demographic seeks multiple vegetable servings when dining out. They also prioritize value, with loyalty programs driving much of their destination decision making.

Contract management company Sodexo serves these interests through its Mindful by Sodexo program, “In corporate services, companies like USAA have subsidized Mindful items for [its roughly 16,000] employees at 50% of the retail price as part of their robust wellness program,” says Dasha Ross Smith, Sodexo’s public relations director for brand and communications.

With nearly a dozen foodservice outlets operating across its sprawling San Antonio, Texas-based campus, USAA uses Sodexo’s Mindful criteria to determine if an item qualifies for the discount, Ross Smith explains. These criteria include such initiatives as providing low-fat options and healthy meal combinations (salad instead of fries, for example), as well as labeling calories per serving and offering a greater variety of whole and sliced fruit.  

Healthcare

Foodservice operations at hospitals, long-term care facilities and senior living communities serve not only the patients or residents but also the workers who care for them. Research shows that the quality (or lack thereof) of these operations influences overall patient and worker satisfaction. In fact, 71% of hospital operators that enjoyed sales increases in the past year attributed the increase to improved menu options, according to Datassential’s Pulse 2018 study.

Consumers of healthcare dining services are predominately GenXers and Baby Boomers. Currently between the ages of 55 and 73, Baby Boomers tend to be less adventurous eaters, favoring the foods they know and the strongly held belief that a meal isn’t a meal without a protein. Given their typically smaller appetites, Boomers find half-portion sizes particularly appealing. Not surprisingly, health issues affect how and what they order.

The healthcare café/retail dining segment is adapting to these preferences by introducing new health-centered meal options—and the equipment to facilitate their preparation. In fact, according to Datassential, 71% of the hospitals planning foodservice capital improvements intend to upgrade their food-prep equipment.

North Oaks Hospital in Hammond, Louisiana, for example, is capitalizing on state-of-the-art equipment to offer nutritious food via a partnership with The Salad Station, a local salad restaurant chain. Scott Henderson, the chain’s president and founder, suggested the arrangement after learning about Sally, a “fresh-food-making robot” invented by Chowbotics. (The Hayward, California-based company specializes in “bringing fresh food to places where it wouldn’t otherwise exist.”)

Henderson saw a need for such innovation at North Oaks, and the rest, as they say, is history.

Located outside the hospital’s cafeteria next to the snack vending machines, the refrigerated, automated machine holds 22 canisters of salad ingredients prepared and filled by The Salad Station. From a built-in touchpad, hospital patrons select from an ingredients list that includes lettuce, toppings, proteins and dressings—and then press a button. The machine makes and dispenses the salad, which they pay for with a credit card. A smart function within the machine alerts the restaurant when it’s time to replace specific ingredients.

Regardless of the noncommercial segment, a one-size-fits-all foodservice approach is rarely effective. Operators who grasp and adhere to the food attitudes and dining behaviors of their target demographics will keep them coming back for more. 


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Topics: Flavor Trends, Farm Promise