Catering to food-allergic diners adds profits
January 4, 2011
by Bryan Salvage
BOSTON – AllergyEats founder Paul Antico has encouraged restaurants to better accommodate food allergic and intolerant diners for the past year. Now, the financial expert said catering to the food-allergy community can significantly increase restaurants’ profits.
A former stock fund manager with 17 years at Fidelity Investments, Antico leveraged his financial analysis background to determine how much economic power the food-allergy and Celiac disease community can influence.
“Millions of Americans – or roughly 5% of the general population – have known food allergies or gluten intolerance, and restaurateurs should recognize the tremendous spending power of this community,” Antico said.
Assuming that 20% of the food allergic population will never feel comfortable dining out, while another 20% will try to eat anywhere, that still leaves 9 million food allergic diners that can be won over by allergy-friendly restaurants. However, this number dramatically underestimates the true economic value of serving the food-allergic population, given that most diners eat out with other people.
“If one person in a party has food allergies, the entire group will likely go to a restaurant that can accommodate that one individual,” Antico warned. “The food allergic diner will ‘veto’ restaurants that won’t cater to his or her specific needs.”
Antico made a conservative assumption that the average party dining out includes only three people, two of whom do not have food allergies. This estimate is especially conservative given the greater prevalence of food allergies in children, who often eat out with a party of four or more. “Therefore, the ‘winnable’ food allergic diner community – 3% of the total US population – actually translates into a 9% or greater potential increase in business for an allergy-friendly restaurant,” Antico continued.
For example, casual dining chain Chili’s averages roughly $3 million in sales per restaurant annually. On each sales dollar, Chili’s earns about 15c in profit. Since restaurants have considerable fixed overhead (rent, staff salaries, etc.), it’s reasonable to assume that every additional sales dollar generates 25c or more in profit.
Therefore, a 9% increase in sales at a typical Chili’s would equate to approximately $270,000 per year. That translates into an additional $50,000 or more in annual profits for an “allergy-friendly” Chili’s versus a similar but “allergy-unfriendly” restaurant.
Even if a restaurant is already at or near capacity during weekend prime times, by becoming more allergy-friendly, they can still increase their profits by tens of thousands of dollars annually.
Many restaurant owners are already taking extra precautions to accommodate food allergic and intolerant guests, having their employees trained in allergy safety, creating gluten-free menu options, providing ingredient lists and seeking industry certifications.
AllergyEats is a free Web site that provides peer-based feedback about how well (or poorly) restaurants accommodate food-allergic customers. It lists more than 600,000 restaurants nationwide, which food allergic diners can rate. The site also offers information on restaurants’ menus (including gluten-free menus), allergen lists, nutrition information, certifications, web links, directions and more.
For more information, visit www.AllergyEats.com