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NPD: Baby boomers represent potential boon to industry traffic

NPD: Baby boomers represent potential boon to industry traffic

Children may be the future of the world, but according to new data from market research firm The NPD Group, baby boomers are the future of the restaurant industry.

While nearly all other age groups have decreased their per-capita visits to restaurants in the last five years, boomers—roughly defined as adults born between 1946 and 1964—have significantly increased their visits, according to Port Washington, N.Y.-based NPD. With the Bureau of Labor Statistics forecasting that the size of this group will grow at three times the rate of the rest of the population over the next decade, NPD officials say that boomers will continue to be a dining-out force that operators cannot afford to ignore.

“I don’t think people are aware that this group is supporting the industry’s traffic,” said NPD analyst Bonnie Riggs. “They’re going to be around for a while, so we need to pay attention to them.”

In the 12 months ended in October, the number of per-capita visits by adults aged 50 to 64 was 208, up from 204 a year earlier and 201 in 2003. Meanwhile, nearly all other age groups made fewer visits to restaurants in the 12 months ended in October, versus a year earlier. Meanwhile, visits from the industry’s core users, adults aged 18 to 24, have declined steadily in the past five years, dropping to 233 from 254 in 2003. The only other group to increase per-capita visits over the past five years was adults aged 65 and older. This group increased per-capita visits to 159, up from 151 a year earlier and 148 in 2003.

When baby boomers dine out they visit a variety of restaurant categories, NPD found. While they patronize many of the same categories as the general population, boomers have an above-average usage of midscale places with varied menus, food and drug stores, and midscale family-style restaurants, according to the data.

When it comes to choosing a restaurant, older adults are more influenced by price than their younger counterparts. In the 12 months ended in October, 24 percent of restaurant visits made by adults 65 and older and 21 percent made by adults aged 50 to 64 were price-driven, compared to just 20 percent of visits made by those younger than 50.

While price is a concern, particularly during a recession, baby boomers don’t visit a restaurant just because it’s cheap.

In the 12 months ended in October, just 21 percent of baby boomers’ restaurant visits were because of deals. By comparison, 22 percent of visits made by those younger than 50 were influenced by deals, and 26 percent made by those 65 and older were deal-driven.

Because boomers are physically more active and living longer than previous generations, they tend to look for more healthful food options when they visit restaurants, the data found. In the 12 months ended in October, 10 percent of visits made by those 50 to 64 were for a so-called healthy or light meal, compared to just 8 percent of visits made by those younger than 50. In addition, NPD found that as adults age their desire for more healthful fare increases. During the same 12-month period, 12 percent of visits made by those 65 and older were for a healthy or light meal.

While burgers, French fries, Mexican and breakfast sandwiches top the list of foods most frequently ordered by boomers, they tend to order them less frequently than the general population. For example, in the year ended in October, burgers made up 14 percent of items ordered by boomers, while burgers made up 14.5 percent of items ordered by the general population. More important to boomers than to their younger counterparts are foods such as nonfried vegetables, main dish salads, side dish salads and shellfish.

When quenching their thirst, boomers are much more inclined than the general population to drink coffee, diet carbonated soft drinks, iced tea and alcoholic beverages, NPD found.

“Clearly, foods and beverages with relatively high dependence on those over 55 years of age will be those enjoying strong growth going forward,” Riggs said.

Though these foods and beverages are important to this group now, continuing physical changes will influence the demand for various products and services in the future, Riggs noted. As they age, boomers will seek out more low-fat, low-sodium, low-sugar and higher-fiber foods and beverages. However, Riggs said, that does not mean they will be willing to sacrifice the taste and flavor of food.

Other reasons baby boomers visited particular restaurants included “restaurant exploration” and “food variety and quality,” NPD found. In addition, as diners age factors such as “personal loyalty,” “treating myself” and “need it now” become far less important than they are to younger patrons.

Restaurant marketers have historically targeted younger consumers, who have tended to be the most frequent restaurant visitors. But as the economy has increased competition for any type of consumer and the heads of those dining in restaurants become grayer each day, many marketers have started to turn their attention to baby boomers.

Boomers are a prime target for Calabasas Hills, Calif.-based The Cheesecake Factory. To bring them in more frequently, the more than 145-unit chain has been rolling out value-added programs and new products. For example, in December, the chain offered customers a free $25 gift card with the purchase of a $25 holiday bear and introduced a new cheesecake flavor.

“[Baby boomers] are a very important and lucrative target for The Cheesecake Factory,” said senior vice president and chief marketing officer Mark Mears. “[We’re] finding it’s a nice draw to get people to come back for incremental visits.”

To continue to attract this crowd, Mears said, The Cheesecake Factory “has a lot of things in the works,” including a new special menu featuring eight items priced between $11 and $14.

In August, Los Angeles-based Kabuki Japanese Restaurants, a casual-dining chain that operates 13 locations in Southern California, Arizona and Nevada, rolled out its Red Mask Club, a new frequent-diner program. Although designed to reward all of the chain’s regular customers by letting them earn points for each visit and then redeem them for cash-value gift certificates, baby boomers are certainly a target market.

“A high number of our guests are in the baby boomer category,” said marketing director Young Kim, noting that while all of the chain’s restaurants have experienced negative sales versus a year ago, those locations that have the heaviest boomer traffic had less negative—only single-digit—declines. “Now we are giving them an incentive to come back.”

After just two months, nearly 15,000 customers were enrolled in the Red Mask Club, and many of those members were baby boomers, Kim said.

“I don’t mind giving away $25 or a birthday meal,” Kim said of one of the loyalty program’s perks. “We are getting really good returns. … It makes sense for them and for us.”

While fresh deals and new loyalty programs are working for some, to keep baby boomers coming back to Good News Cafe in Woodbury, Conn., owner Carole Peck is doing what she’s done for the past 15 years: offering a lot of healthful vegetarian choices at a good value and remaining heavily involved in the local community.

“I’ve always had a lot of vegetarian choices…and a lot of baby boomers want to eat healthy,” Peck said.

Although most customers come to Good News Cafe for its menu of “modern farm cuisine,” which changes seasonally and typically features about 45 items, Peck said working with local farmers and being involved in various charity events also drives business.

“A lot of people recognize that and come in and support us for that reason,” she said.

No matter what the approach, Riggs said operators who focus on older adults are bound to benefit.

“As weak as the industry is today, it would be even weaker if not for the support obtained from baby boomers and senior citizens,” Riggs said. “It pays for operators to pay attention to this group, not only currently but in the future.”

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