Menus are one of the most complex aspects of one of the most complex businesses in the world — yet they’re often relegated to junior teams and mired in committee consensus. Those who’ve made it past a slump have often done so by launching a new menu that revisits their brand’s DNA and purpose, in a way that honors the past, but ensures it continues to be relevant today and in the future. Below, we outline some of the questions that restaurants launching a new menu should, but often don’t, consider.
For restaurants, a menu is more than a list of entrées, appetizers, and desserts — it’s the company’s product list and, as such, should serve as its best-performing salesperson. Every restaurant company – from small shops to well-established and multi-national restaurant chains – have pains with rising costs, consistency, profitability, and the need to differentiate their offerings. In large systems, just a few ounces or minutes of waste in a preparation method can lead to tens of millions of dollars in lost profits when extrapolated across the entire system.
Shoddy and anemic analysis – when it comes to menu design – can shave millions in profits (unnecessarily). In fact, in our past work, we’ve consistently been able to add an extra $12,000 for every $1 million in revenue, without changing menu prices or unit costs — just by applying some basic merchandizing techniques. Further considerations regarding menu design include:
Current (even antiquated) approaches are still employed by many chains, contributing to further suffering in an industry in which once-major players are already ailing. Even in multi-billion-dollar companies there will be a well-meaning junior analyst sitting in a cubicle cluttered with competitor menus, punching away in Excel spreadsheets to determine what everyone else is selling and how much they’re charging for it. Outside the carpeted walls of their cube, however, there are several other areas of a restaurant company (all, in fact) that will be affected by menu changes.
Sending a new menu up the chain to be approved by those in a board room often means only the most bland, consensus-dulled changes will make it through. And the crowded togetherness that often comes in that corporate vacuum can lead to a loss of the company’s magic, with analysts so closely watching the competition (and therefore straying from their own brand) that they do little to stick out from the sea of 2-for-$20 menu items so rampant in the industry.
While the committee consensus approach can seem to shave off the rough edges, in the process, it could actually remove some of the chain’s character. Not every chain is going to have advanced analytics in terms of things like eye-tracking software, of course, but even some of the largest, multi-billion-dollar restaurant companies are lagging behind, and could greatly benefit from the application of the latest technology. The following questions help to ensure a company is thinking long-term, and not simply creating a menu in a vacuum:
Firms that utilize new (more advanced) analytics and a holistic approach can ensure the proper analysis required of a new menu undertaking. An agency that specializes in visual design won’t necessarily understand things like consumer trends, or what makes a drive-thru work (as much more goes into such an important initiative than simply placing items on three menu panels). A thorough menu engineering and merchandizing strategy engagement will require 3-5 people, working on a full-time equivalency basis for a solid six weeks (if your company is applying less resources than this you may be leaving significant value trapped in an under-performing menu). The design is important, but it requires having the proper bones, structure, and strategy in place first. And it’s an investment that pays off.
Tremendous things, from revenue bumps to differentiation, earned media, and improved morale, can all be effectuated through the right menu. The effort that should go into launching a new menu is a balancing act. Are there too many (non-owned) logos on the page? Too many menu items all competing with one another? Without strategy, it can become akin to a room full of screaming kids, all vying for the teacher’s attention. What about photography? In a world full of candid Instagram and Snapchat images, overly-styled images tend to make consumers skeptical. On the one hand, those partner brands can help by conveying a sense of quality and trust. But if overdone, the logo-laden menu can start to look like a NASCAR vehicle. Below are some other, more specialized considerations when undertaking a menu re-design:
If your brand were to speak, how would it walk, talk, act, dress and behave? Is it playful? Is it serious? The menu should convey that positioning, purpose, and promise. Modern restaurant chains face stiff competition, yet many suffer from the same problems — their menus aren’t distinct enough, they don’t mirror the brand’s personality, and they’re too long. We conducted a study of Casual Dining Restaurant menus, and found that many now exceed 4,000 words. With the average person reading about 200 words per minute, it would take them 15+ minutes to read — and that’s if they were solely concentrating on reading the menu. For such reasons, field observations are also important and can enable greater understanding of how a menu is perceived through the lens of the guest and used in the operation. Just as it’s cumbersome to force on the guest too many menu items, its equally cumbersome to be faced with too many syllables (which is often the case when ordering a half-caf, extra-hot, triple-shot White Chocolate Mocha, for instance). Those extra ten syllables to order what is essentially a “number five” could be slowing down the drive-thru and translating to millions of dollars lost. With so many moving parts (particularly for those chains with multiple brands operating in more than one region), having the confidence that a new menu will resonate with the guest, the market, and play off the brand’s promise will ultimately help differentiate a chain and ensure it can remain relevant.
Focusing on just a few key signature items, for instance, can boost revenues for under-performing brands and further propel growth-minded restaurant companies. A lot of discipline is required to get all this right and, to be fair, it’s a significant undertaking. But when done right, it’s more than worth it. Increasingly, this marriage of art and science is what’s required to maintain the level of competitiveness today.
Aaron Allen & Associates is a leading global restaurant industry consultancy specializing in growth strategy, marketing, branding, and commercial due diligence for emerging restaurant chains and prestigious private equity firms. We have helped evaluate and engineer menus for some of the world’s largest restaurant brands, as well as helped restaurant companies around the world drive revenues, increase profits, and enhance the guest experience through improved marketing, messaging, and menu engineering. Collectively, our clients post more than $100 billion, span all 6 inhabited continents and 100+ countries, with locations totaling tens of thousands.