At the NRA show, Nancy Kruse said consumer attitudes are affecting innovation on menus.

CHICAGO — An “unprecedented shift” in consumer attitudes and expectations toward menus, ingredients and transparency is affecting innovation across all segments of food service, said Nancy Kruse, president of The Kruse Co., Atlanta, during a presentation at the National Restaurant Association Restaurant, Hotel-Motel Show, held May 21-24 in Chicago.

“We really are operating in extraordinary times,” Kruse said. “The old rules are being replaced by new realities, and all food sectors are being disrupted. It is not simply endemic to the restaurant or food service trade channel, but supermarket grocery as well. What’s driving it, of course, is the consumer.”

She described a “powerful combination” of persistent economic challenges, political uncertainty and a major generational change that has sparked a profound transformation of consumer behaviors and aspirations.

“If consumer attitudes are changing, their appetites are changing, then your approach to menu R.&D. is changing as well,” Kruse said.

During her presentation, Kruse identified five areas of menu innovation.

Spotlight on simple

Consumer demand for simple ingredients has moved into the mainstream “with extraordinary velocity,” Kruse said.

“(Consumers are) demanding foods that are clean and free-from artificial sweeteners, antibiotics, GMOs,” she said. “I think the primary driver is … the impact of the fast-casual segment because key players like Panera and Chipotle showed it was possible to deliver on a clean food promise in a mass-market context. Major chains are all over this bandwagon. It would be easier for me to tell you who is not engaged somehow in cleaning up the menu.”

Papa John’s, for example, has announced a major initiative to reformulate its menu, which will cost the company $100 million a year, Kruse said.

“Why are they doing it?” she said. “Because they want to appeal to millennial families.”

The trend extends into grocery retail, underpinned by a significant number of retailers and packaged food companies announcing a clean label commitment in the past year.

“One of the interesting facets to this whole phenomenon is that it’s one of the very rare food trends that began on the supermarket side and then migrated to food service,” Kruse said. “About 95 percent of food trends in this country start in food service and work their way gradually into the retail grocery channel. This has been just the opposite.”

Recent innovation centers on “simple,” a descriptor that, while undefined, may resonate more with mainstream consumers than words like “organic” and “non-GMO.”

“If you’re the average consumer, you may not understand the concept of organic, and if you don’t know what organic means, you sure don’t know what GMOs are,” Kruse said. “Simple is all-encompassing. We are just now beginning to see this consumer friendly approach to simplicity making its way into restaurants.”

In March, McDonald’s Corp. registered the phrase “The simpler, the better” for potential use in marketing, and the chain is testing in Southern California a menu dubbed Simple Delights, Kruse said.

On the packaged food side, such brands as Heinz ketchup, Lay’s potato chips and Keebler cookies have launched products positioned as simple.

“I really like this simplicity thing; I think it could have legs,” Kruse told participants attending the presentation. “So, if there’s a way to make it work for you on your menus, by all means do it, and then promote the living daylights out of it.”

Down with dieting

 Houlihan's Zoodles
The restaurant chain Houlihan’s recently introduced menu items featuring "spiralized" noodles made from ingredients such as zucchini, sweet potatoes and butternut squash.

Seventy-seven per cent of consumers are trying to eat more healthfully, but only 19 percent say they are on a diet, according to a Fortune magazine poll.

“This is not a good time to be in the diet food or beverage business or the weight loss center business because consumers are staying away from those programmed regimens in droves,” Kruse said. “What they’re really doing is taking a more holistic approach and asserting their control over their lives.”

The breakout star of the healthful eating movement is the vegetable, she said.

“It’s all about plants and plant-centric dining,” she said.

Not only are plants replacing meat on menus to align with an emerging flexitarian lifestyle, they also may stand in for grains. Houlihan’s recently introduced dishes featuring noodles made from zucchini, she noted.

“Where are we going to go next when it comes to better-for-you foods?” Ms. Kruse said. “It’s going to be all about better sugar. We know the bad sugar is the refined stuff. The better sugar is the sugar that comes in with some sort of credentials.”

As an example, PepsiCo, Inc. recently launched a line of soft drinks made with certified fair trade sugar.

“Watch the consumer acceptance of cane sugar, pure cane sugar and organic sugar,” Kruse said. “Indra Nooyi, who is the CEO of PepsiCo, says their research shows when consumers see an identifier like certified fair trade sugar … consumers perceive it as a healthful food.”

Comfort food comeback

 Burger King's Extra-Long Buttery Cheeseburger
Butter is making a comeback in many menu items as consumer attitudes about fats have changed.

Menus are in the midst of a big “fat” revolution, Kruse said, and millennials are leading the charge, having concluded animal fats have been unfairly demonized. These consumers are more likely than older generations to use lard, beef tallow and duck fat, she said.

“In the last 50 years, animal fats have been public dietary enemy No. 1,” Kruse said. “What I think is most interesting here is that the highest increases in consumption are in households with kids. Why? Because there’s the image of minimal processing.”

Butter consumption has increased 25% over the past decade, giving way to such
fast-food burger innovation as the Extra Long Buttery Cheeseburger from Burger King and the Buttery Jack burger from Jack in the Box, which became the chain’s most popular limited-time offer in 20 years, Kruse said.

And speaking of fat, fried foods remain a comfort food favorite.

“We continue to have a love affair with fried foods,” she added. “First, because they taste so darn satisfying. Secondly, because from your perspective as operators, this is an area where consumers really don’t feel comfortable at home. We’re not adept at making great fried chicken.”

Nashville hot fried chicken, in particular, is having a moment on menus, appealing to consumer interest in regional cuisine.

Other comfort foods making a comeback are bologna, featured in gourmet sandwiches in a handful of independent restaurants, and porridge. And then there’s congee, a familiar comfort food for Asian diners, Kruse said.

“It seems to me that one of the things I find as connective tissue through all of the items we have looked at is that they really deliver across generations,” Kruse said. “In other words, it’s frequently the case that a millennial diner will find something interesting and fun but it’s new, whereas the baby boomer may get a sense of nostalgia and recognition. These are foods that speak to us.”

Breakfast around the clock

 McDonald's Simple Delights
In Southern California, McDonald's has introduced its Simple Delights menu, which features an egg white and turkey sausage bowl, and a scrambled egg and chorizo bowl.

More than half of consumers enjoy breakfast at nontraditional times, representing a major opportunity for menu innovation, Kruse said.

“Breakfast foods are absolutely another take on comfort,” Kruse said. “The appeals are convenience, indulgence, health, value, fun. And, importantly, you don’t need to offer the breakfast day part to have fun with breakfast foods.”

A pizza restaurant may offer familiar breakfast ingredients as toppings, she said.

McDonald’s national launch of all-day breakfast earlier this year has “gone gangbusters,” she said, prompting other restaurant chains to add creative breakfast items to the menu. Carl’s Jr. and Hardee’s, for example, recently introduced a breakfast sandwich on an Auntie Anne’s pretzel bun, and White Castle debuted a waffle breakfast slider.

Mid-scale restaurant chains also are dishing up enticing twists on the morning meal. Shari’s, a regional family dining chain, offers breakfast poutine, featuring fries topped with cheese, bacon and an egg.

“IHOP, Denny’s, Cracker Barrel and Shari’s are absolutely doing wonderful work, and they’ve got the sales numbers to prove it,” Kruse said. “Now, they’re not benefiting from the convenience breakfast trend, but the notion of creative, satisfying breakfasts around the clock 24/7 is right in their wheelhouse.”

Not only does breakfast have strong demographic appeal, it has nice margin potential, she added.

What’s next? Kruse predicts a rise in ready-to-eat cereal making some unexpected appearances on restaurant menus.

“In retail grocery, the ready-to-eat cereal market has been in steep decline, yet on the food service side, chefs are giving it a second lease on life,” she said, citing such examples as a dessert featuring Cap’n Crunch and a slider dog topped with Froot Loops.

Ethnic experimentation

More than 60 percent of consumers surveyed by Technomic order ethnic foods to “look for something different” or discover new flavors. And, lately, restaurant operators are exploring new areas of the world, Kruse said.

Chefs are combining global flavors with familiar formats. Falafel, a fixture of Middle Eastern cuisine, is popping up in burgers and on pizzas. And gochujang, a fermented condiment with a touch of sweet heat, is being marketed on menus as “Korean barbecue sauce.”

“You know what happens to an American when you say ‘barbecue,’ right?” Kruse said. “So, I think that opens the door for crossover.”

The next big ethnic cuisine, she predicted, will be Cuban food.

“There is a direct line as far back as we can go between what’s happening in the world and what’s happening in your pantries,” Kruse said. “It’s not just by coincidence that Middle Eastern cuisine is trending, and it’s not just by coincidence that I expect we will see more Cuban food appearing on menus around the country.”