Who is Driving Your R&D Bus?

By: Ron Marks

I have read numerous studies over the last twenty years debating what drives repeat business and customer loyalty in our industry. Although there has never been (and never will be) absolute consensus as to the single most important driver, the top two factors are consistently food and service. It still constantly amazes me how many people in this business focus time and resources on other areas while they treat food and service as a step child and wonder why their comp sales and profits are down. Many people consider success in the restaurant business as a complex issue, it's not. Give your guests a product selection that they find appealing, deliver it well and consistently, with a good price value, and keep it fresh over time as a compelling reason to come back. There is not a more critical vehicle in your entire operation than your menu, which speaks directly to your guests in regard to food and service.

Your menu is the life blood of your restaurant. It is a statement of product, segment positioning and social and cultural values to your customers. It is the blueprint of your operations and P&L statement. It's obvious how your menu is perceived and defined by your customers as the definition of your food offerings, but it may not be as obvious as to how it is critical to their service satisfaction. There are many definitions of service (actually 42 definitions in the current online Merriam Webster); however the one that is most appropriate to the foodservice industry would be; to provide a delivery and style of product either tangible or intangible which is pleasing and of value to the user. The actual menu item selection which fulfills the wants, needs and lifestyle choices of your guests is in fact a crucial service which your guests will seek out from you (or your competitor) if your menu does not meet their service needs.

Whether it is food or service which is the most important issue to your clientele, there is no doubt that menu and menu item selection is the core driver of both of these areas. An extremely relevant question at this point is, what are the processes and support systems that your organization has in place to maximize your current menu's potential, and effectively and strategically serve your (and your guests') menu needs into the future? There is not a "one size fits all" approach which will best meet your menu R&D needs. Obvious considerations for developing "The Right" system for your group will depend on a variety of factors; system size, geographic regions, budget, internal competencies and company culture all need to be taken into consideration.

I am constantly amazed that within restaurant chains of all sizes, that what needs to be a well defined, quantifiable, disciplined and objective process, is often times a hip shooting, reactive and crisis driven process. There are a variety of structures which all can work very well in serving your menu development and R&D needs. A formal R&D department within a corporate structure is typical and prevalent among mid to large size organizations. Other structures which can (and do work well for a variety of restaurant chains) as drivers of R&D are; a talented leader within a group (oftentimes the chief executive or founder), a senior management member who leverages external resources such as vendors and trade organizations (this is typically done within the purchasing function), or the retaining of external R&D resources on a project or retainer basis. All of these approaches can work anywhere from extremely effective to poorly based upon competency, systems, discipline and execution.

While there are no "One size fits all" systems to R&D, there are a number of key characteristics and philosophies of any well functioning successful menu development process.

1. The R&D process is integrated internally within a cross-functional team. This may happen formally or informally, but it needs to happen. Operations, purchasing, marketing, training, and finance need to be involved, have buy in and have their needs met as an ingrained designed part of the process. Vendors and suppliers are also a critical external member of this team.
2. The R&D process is planned, disciplined, objective and quantifiable. How often has it happened that an item makes it to the menu because it's a personal favorite of the president or an ego driven project for the Corporate Chef? How often does it happen that adequate field testing or staff training never occurs because it was not planned for or you ran out of time against a rollout date? A well functioning system is a slave to timelines and pre-defined performance expectations. It allows for time and events and contingencies to occur in an organized, pre-planned and accountable fashion.
3. The R&D process is ultimately Consumer Driven! There can be a variety of functions which may lead or drive your R&D process internally (whether it is R&D, operations, marketing or Sr. Mgmt.). But there is ultimately only one external key driver at the beginning and end of the day which will make or break your menu and new product initiatives: and that is the consumer. That is to say, "If your customer aint buyin' it, you shouldn't be tryin' to sell it". An effective and well designed product development system will not only produce compelling new products that your guests want to order and will come back to re-order, but they will identify the "Dogs" early on in the process.

As restaurant operators, we are all competitors in a marketplace. An essential premise to being successful today is that our products (menu) are current, competitive and meet the needs of the consumer. An essential premise to being successful tomorrow, is to somehow be proactive in anticipating and supplying the future needs of the consumer. It is incumbent upon us as savvy professional operators to somehow have a system to clearly hear the voice of our customers regarding their opinion of our current menu and our future menus. Hearing the voice of our current customer about our current menu is not necessarily a complex or expensive process. Gathering feedback from your dining room (through servers, managers and comment cards) is a valuable source of information. Regular and ongoing product mix evaluations will also give you a strong indication of how well your menu is meeting your guests' food and service needs.

Staying on trend with your menu and anticipating future menu needs is a more challenging opportunity. Consumers' willingness and desire to try new and different types of foods has moved more in the last three years than it has in the previous 20. "Healthy Food" a generation ago meant cottage cheese and a canned peach, 5 years ago it was perceived to be a grilled chicken Caesar salad, in 2003 it almost defies definition with the explosion of low carb, low fat, trans-fat and the ongoing media barrage regarding obesity and lifestyle issues. Asian food used to mean Cantonese province Chinese food. It now encompasses an amazing variety of both national and regional cuisines which the marketplace is becoming increasingly familiar, accepting and demanding of. The point is that restaurant operators across all segments will need to be increasingly proactive in researching, developing and supplying new menu items if they expect to keep or grow marketshare.

This issue is not only relevant for new menu item development but also for keeping existing menu items strong sellers into the future. A system for ongoing evaluation of current menu items is a critical and effective part of smooth and efficient menu evolution. Big and bold or hot and spicy flavor profiles of 1995 and 2000 will be significantly different in 2006. The aging of baby boomers and significant changes in our ethnic population mixes will shift the "Tongue of America" dramatically over the next 5 years. Ongoing evaluation and proactive retooling of your current menu items today will pay significant dividends into the future.

Tuning into what the consumer wants tomorrow has a variety of approaches. Once again system size and resources available should be key considerations. Smaller operators will need to rely more on direct feedback from the dining room via LTO or daily specials combined with internal creativity and intuition. Larger systems should absolutely incorporate formal consumer research (in a variety of forms) in combination with other previously mentioned internal resources. Appropriate field testing is a critical step for all operators regardless of system size. The foodservice industry ranks at or near the top of all industry segments worldwide. We also rank notoriously low in regard to how much of our G&A budgets are spent on R&D. Although adequate testing and research is not easy or low cost, it is a necessary and very cost effective investment when you consider the cost of a failed system wide rollout with media expenses or continually eroding marketshare.

The bottom line is this; The demand for new and on trend current menu items is increasing and will continue to increase at an accelerating rate. If the consumer (your current and future customer) is not at the wheel as a key driver of your R&D process, then you are somewhere between lost without a map to driving off the edge of a cliff.

Ron Marks is a 30 year veteran of the foodservice and product development industry. He is the principal partner of Focus On Food, " Culinary Innovation Center" an Atlanta based product development and consumer research firm devoted to serving the foodservice and food manufacturing industries.