How can QSR brands cater to the demand for affordable and healthy food options?

Healthy food options are often twice as expensive as regular offerings.

Quick service restaurant (QSR) brands are at a crossroads as emerging consumers are divided: some prioritise low prices, whilst others seek healthier, albeit more expensive, food options. This requires brands to transform their offerings to find a balance between providing an affordable menu and healthier choices.

A Euromonitor International survey found that 51% of Southeast Asian consumers are looking for health and nutritional benefits when buying food and beverage products, whilst 43% prefer items that have lower prices.

“There needs to be an affordable range but many of them also want to give more value to differentiate from the competitor. So they have another range of products. For instance, some chains have a signature menu or a more premium one,” Emil Fazira, Food Insight Manager in Asia at Euromonitor International, said.

A report by GlobalData also showed that 62% of Asia Pacific consumers’ purchase decisions are often or always influenced by the impact of a product or service on their health and well-being.

“Despite the waning of COVID-19 concerns, APAC consumers are gravitating towards natural, organic, and functional food products that are perceived to help in alleviating health concerns,” said Priyanka Jain, Consumer Analyst at GlobalData. 

This rising demand for functional food products will transform the food service sector as consumers become more conscious of lifestyle-related diseases and preventive healthcare.

The trend also explains how brands like llaollao, a Spanish yoghurt brand, have achieved a following in Asia and why fast food giants like KFC in Singapore and Shake Shack in Hong Kong are going the extra mile to emphasise freshness in their ingredients.

Value hackers
However, reconciling the demand for healthier offerings with affordable pricing can be challenging, as healthy food is usually twice as expensive as less healthy food on a per-calorie basis, according to a report by The Food Foundation's Broken Plate, released in June 2023.

In the US, meal deals are rampant as fast food brands entice consumers to visit their restaurants. A similar trend is happening in Asia with the emergence of a consumer segment called “value hackers,” who look to outsmart the system to get the best deals and discounts.

“They are not about short-term savings but getting the most out of it for the long term, which suits their financial habits—a mix of trying to reward themselves and having money-saving habits,” Fazira said.

In China, a Circana report showed that 41.5% of consumers said in February that prices had increased. The report added that the majority of consumers understood the need for price increases but insisted that food quality and richness must be improved.

As a result, 30.2% of consumers said they plan to dine out less in March, up from 24% in October 2023, as they want to spend less on dining out.

Questions to consider:

  1. How can QSR brands effectively balance offering value deals with maintaining profitability in the face of rising food and operational costs?
  2. What role can technology play in helping QSR brands provide healthier and more affordable menu options?

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EXPERT OPINION

Creative Director & Founder, The Creative Method

At our agency, we believe the question isn't merely about balancing affordability with healthy options—it's about understanding and amplifying what truly makes your brand resonate with your customers. In the Euromonitor stats, 51% of Southeast Asian consumers seek health and nutritional benefits, but a significant 49% don't prioritise these factors. Similarly, while 43% prefer lower prices, the remaining 57% may be willing to pay more if they perceive added value.

The key lies in understanding what your customers genuinely value about your brand. If they come to you for indulgent, delicious food, attempting to pivot towards healthier options might dilute your brand's authenticity. Instead, embrace what you excel at and find innovative ways to enhance that experience.

Consider this: value isn't strictly about the price tag—it's about perception. As Rory Sutherland, a renowned behavioural scientist, aptly puts it, "The problem with logic is it kills off magic." The real magic of your brand lies in creating unique, memorable experiences that your customers can't find elsewhere.

Here’s how you can redefine value and stay true to your brand:

Amplify Indulgence: If your brand is synonymous with indulgent food, lean into it. Explore economical ways to make your offerings even more decadent. Imagine dipping your whole burger in sauce or adding an unexpected twist like covering it in chocolate. Creativity in format and presentation can turn a regular meal into an experience worth paying for.

Enhance the Experience: Make your restaurant environment more vibrant and aligned with your core customers. Play music that resonates with them, create a lively atmosphere, and consider unique, interactive promotions. For instance, offering value deals once a week with a twist—like requiring customers to come in fancy dress—adds an element of fun and community, enhancing the overall experience.

Cultural Zeitgeist: Tap into the cultural trends and interests of your target audience. Whether it's through themed events, limited-time menu items inspired by popular culture, or collaborations with local influencers, aligning your brand with what your customers love can create a deeper connection.

Perceived Value: Emphasise the unique aspects of your brand that justify your price point. This could be your commitment to quality ingredients, exceptional service, one-of-a-kind products, or an unmatched experience. When customers feel they’re getting something special, they’re more likely to see the value beyond just the price tag.

Ultimately, it's about being authentic to your brand and delivering what your customers truly crave. By focusing on what sets you apart and enhancing those aspects, you can create a compelling value proposition that resonates with your audience.

So, instead of trying to be everything to everyone, be the best at what you already are. Embrace your brand's identity, innovate within your niche, and your customers will keep coming back—not because you're the cheapest or the healthiest, but because you're authentically you.

4 days ago
General Manager Asia Pacific, Deliverect

Advanced data analytics can help brands understand consumer preferences and optimize menu offerings. By analyzing sales data, customer feedback, and market trends, QSRs can identify popular items and adjust their menus accordingly to minimize waste and reduce costs. 

This data combined with smart menu engineering will play vital role in maintaining profitability when offering value deals, by offering products with higher margins in deals with items that are in high demand. 

Additionally, digital ordering platforms like QR code ordering or kiosk can streamline operations and improve efficiency. These platforms can suggest healthier choices like grilled chicken instead of fried, encouraging healthier eating habits.

11 days ago
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