Minority Matters
Survival of the fittest means rising to the opportunities of an evolving foodservice market. R&I’s exclusive research shows the way.
By Allison Perlik, Senior Editor -- Restaurants & Institutions, March 15, 2005
 While standard marketing efforts target all audiences, understanding the unique cultural experiences of Asians, Hispanics and African Americans can broaden a company’s reach. |
Those for whom “know your customer” is a maxim of marketing success should know this: Ignoring the ethnicity of target audiences could mean alienating nearly a third of potential patrons. As growth in multicultural populations—and their buying power—continues to outpace that of the general population, foodservice operators can benefit from evaluating this often-untapped opportunity.
Already, many the industry’s biggest names, including Miami-based Burger King, Dallas-based Chili’s Grill & Bar and Spartanburg, S.C.-based Denny’s Restaurants, dedicate resources to reaching key niche markets including African American, Asian and Hispanic consumers. “We have made a concerted effort to focus on these customers because we realize how important they are to business,” says Sope Aluko, manager of multicultural marketing at Burger King, which for more than 15 years has employed ad agencies specializing in reaching black and Hispanic consumers. “The multicultural market makes up 40% of our business, so in terms of our overall growth it’s an important component.”
R&I’s 2004 Tastes of America Study finds that ethnic groups demand close attention. More than 90% of consumers in all minority groups reported they had dined out in the previous month, including 98% of Hispanics and 91% of both Asian and black consumers. Asians and Hispanics also spend more on dining out compared to the overall average of $44.57, spending $52.59 and $51.34 per week, respectively. The average is $44.14 for white diners, $37.28 for black consumers.
Data from the U.S. Department of Labor’s Bureau of Labor Statistics back up these findings, showing Asians with the highest average annual expenditures on food away from home, followed by Hispanics and then blacks.
Consumers Who Have Dined Out in Past Month Source: R&I 2004 Tastes of America Survey |
Patronage Patterns
“Asians are an ideal market, especially for upscale restaurants,” says Ivan Cevallos, principal at Los Angeles-based multicultural marketing and advertising agency Ethos Group Inc., which helps clients target Hispanic and Asian populations. “Asian consumers in general tend to go out more often because their disposable income is higher.”
While R&I’s survey shows little difference among ethnic groups in patronage of fine-dining or family-dining restaurants, significant variations exist regarding casual-dining and quick-service eateries. When asked what segment the restaurant they patronize most often falls under, Asians are the most likely group to name casual dining, at 47%, followed by 44% of whites, 38% of Hispanics and one-quarter of blacks. Conversely, a majority of black diners—57%—point to QSRs as their most-frequented establishments, compared to 43% of Hispanics, 35% of Asians and 34% of white diners.
Average Weekly Household Expenditures on Food Away From Home Source: R&I 2004 Tastes of America Survey |
Examining each daypart sheds further light on ethnic dining habits. Hispanics and blacks purchase breakfasts away from home more often than do Asians or whites, while Hispanics demonstrate a lower frequency of dining out at lunch compared to other groups. At dinner and snack/other occasions, whites show the lowest incidence of buying food at restaurants or other foodservice establishments.
These findings reveal opportunities for foodservice operators across all segments that may not be attracting their share of ethnic diners.
Appealing to “historically excluded” audiences such as black, Hispanic or even gay consumers means sending specific messages that let them know they are welcome, says Howard Buford, founder and CEO of New York City-based Prime Access Inc., a marketing firm that specializes in communications to such groups. Once restaurateurs get these customers in the door, they must take care to avoid what Buford calls “micro-inequities”: less welcoming or attentive service, seating in the back of a restaurant or away from windows and other not-so-subtle slights.
Ethnic Buying Power ($ billions) Source: Selig Center for Economic Growth, The University of Georgia, May 2004 |
“It’s very important to train waitstaff not to deliver these micro-inequities, because people in service situations bring with them their own perceptions. They may feel an affinity for certain groups that are more like themselves—not just racially but also economic brackets, gender, age—and less for others, and it shows in their service,” he says.
Different, Yet the Same
While understanding what distinguishes target audiences helps operators better address groups’ specific needs, it’s no replacement for knowing what’s important across the board.
Asked to choose among 14 attributes to describe why they patronize their favorite restaurants, all four ethnic groups polled selected the same top three reasons: food quality, convenience and price. Likewise, ethnicity played little role in respondents’ decisions not to return to particular restaurants, with all groups pointing to bad food and bad service as the top two motivations.
“First and foremost, minority customers want the same things as their majority counterparts—a good guest experience, quality service and quality food—and they want to walk out the door thinking that the price-value relationship was in their favor,” says Daniel Halpern, president and CEO of Atlanta-based Jackmont Hospitality Inc., a business-and-industry contractor and operator of a T.G.I. Friday’s franchise in Atlanta’s Hartsfield International Airport.
Part Two: Opportunity Knocks >>
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