IN A clear reflection of the growth being seen in the boutique burger restaurant segment, recent consumer research suggests younger generations are increasingly seeking-out less mainstream fast-food options.
As Australia’s ‘foodie’ culture grows—evidenced by the popularity of MasterChef and other TV cooking shows – the fast food industry is inevitably by affected by consumers’ changing food preferences.
Recent findings from Roy Morgan Research indicate that Australian consumers in generations Y and Z* are still more likely than older generations to visit big-name quick-service restaurants, but in most cases, their visitation rate is declining.
Hipsters, it seems, are opting for a more ‘bespoke’ casual dining experience, as evidenced by the table below.
Between 2012 and 2016, the proportion of Australians visiting McDonald’s burger restaurants at least once in an average four-week period has declined from 31.2pc to 29.4pc, Roy Morgan found. While this is due partly to the shrinking proportions of Generation Y* (from 39.4pc to 35.3pc) and Generation Z* (from 40.3pc to 36.1pc) eating at or taking away from the hamburger giant, Generation X* and Baby Boomers* also appear to be losing interest.
McDonalds’ biggest rival, Hungry Jacks was less affected, with the total proportion of Aussies visiting it shifting only marginally over the four years measured, from 13.1pc to 12.7pc. While visitation by Gen X and Baby Boomers slipped incrementally, Gen Y showed a more pronounced decline (from 19.2pc to 16.5pc). The youngest Gen Z customers, on the other hand, picked up a little (from 15.7pc to 16.8pc).
% of each generation who visit burger chains in an average four weeks: 2012 vs 2016
So if younger generations are seeking out less mainstream fast-food options, does this mean the more niche and gourmet-oriented burger chain, Grill’d, is attracting those young customers who have abandoned the long-established offers? Grill’d has seen a slight year-on-year increase among Generation X visitors, but a noticeable drop among Gen Y (from 8pc to 5.4pc), and little change among Gen Z (8.3pc to 8.1pc).
Tellingly, the proportion of Generation Y who pay at least one visit to ‘other’ hamburger outlets in an average four weeks has grown from 4.7pc to 6.4pc, suggesting they could be frequenting smaller, ‘hipsterised’ burger chains. Alternatively, they could be going to no-frills ‘ma-and-pa’-style outlets.
Similar trends away from the dominant global/national players are being seen in other fast food segments, including chicken and pizza.
Roy Morgan Research industry communications director, Norman Morris, says like any industry, quick service burger restaurants have changed over the years, adapting to evolving consumer preferences and needs.
“This is not an industry that is resistant to change or new ideas. But as Australia’s ‘foodie’ culture grows—evidenced in our changing cuisine preferences – the fast food industry is obviously going to be affected,” he said.
“The much-reported trend among ‘Millennials’ for hipster culinary experiences cannot be ignored”
“And the much-reported trend among ‘Millennials’ (a group which spans about the first half of Generation Z and the second half of Gen Y) for hipster culinary experiences cannot be ignored. In fact, McDonald’s is actively addressing this, even opening an almost unbranded café (called The Corner) in Sydney to try out potential hipster-friendly menu items before rolling them out in their stores.”
While Roy Morgan data showed that the proportion of Australians of all generations who visit hamburger, pizza and hot chicken quick service restaurants is mainly declining, there are exceptions to the rule, such a Domino’s Pizza, which appears to be bucking this trend. Domino’s clever use of technology at all stages of the ordering, delivery, pick-up and purchasing process has won it many new fans in recent years.
Also worth noting was a growing penchant among Generations Y and Z for Mexican fast food, Mr Morris said, with new arrivals like Guzman y Gomez and Mad Mex.
“Fast food brands wishing to gain an advantage over their rivals in this competitive and ever-changing market need to ensure they have an in-depth understanding of their customers (as well as those of their rivals) and how their culinary tastes are evolving,” he said.
* Generation definitions: Pre-Boomers – born pre-1946; Baby Boomers – born 1946-1960; Generation X -born 1961-1975; Generation Y – born 1976-1990; Generation Z – born 1991-2005.
Source: Roy Morgan Research