New Gluten-Free Standards set to Change Restaurant Offerings

It is estimated that roughly 18 million Americans have a non-celiac, gluten sensitivity while another 2 million have a diagnosis of celiac disease. Add on the growing number of people who are avoiding gluten for various other health-related reasons and it’s no wonder that so many restaurants are making the move to offering gluten-free items on the menu.

‘Gluten-Free’ has Varied Widely from Restaurant to Restaurant

That said, what the term ‘gluten-free’ actually reflects can vary greatly from one restaurant to another, with as much as 90% of restaurant items currently labeled as gluten-free actually containing quite a bit of gluten. Part of the problem is inadvertent cross-contamination. The other part of the problem is that gluten is found in a number of items a person wouldn’t necessarily suspect. As a result, those whose health can be seriously affected by gluten currently can’t trust gluten-free labels or menus.

This safety risk has led the FDA to put out a new rule which requires items voluntarily labeled as gluten-free (or with similar terms such as “no gluten,” “free of gluten,” or “without gluten”) to contain fewer than 20 parts per million of gluten.

The rule was added to the Federal Register on August 5^th, and gives packaged food companies one year to comply with the new standard. Once in effect, restaurateurs will be able to purchase anything with a gluten-free label without having to examine the ingredient list for hidden sources of gluten.

Next Step: Preventing Cross Contamination

Cross contaminating an otherwise gluten-free food in the restaurant is very easy to do and is another area of real concern for those with health issues related to gluten. For example, a gluten-free food cannot be fried in the same oil as foods with gluten; nor can knives, cutting boards, or other food preparation tools be shared. Airborne flour can even be a gluten culprit, meaning that gluten-free foods must be prepped in a sealed area.

Many restaurants are developing company-wide training programs to teach staffers proper food handling and preparation for their gluten-free customers. Some restaurants have even gone so far as to develop a “GF” prefix code for their point-of-sale systems so that employees can follow specific plating instructions and recipes when a gluten-free item rings up.

Education and Alternatives for Restaurants to Meet the Gluten-Free Demand

In some cases, it is simply not feasible for a restaurant to be able to prepare gluten-free foods in the establishment itself. For example, many restaurants don’t have a dedicated fryer for gluten-free items nor the capability to prep gluten-free foods in an area sealed from airborne flour. Some restaurants are working around such problems by simply not offering any gluten-free items that are fried or by purchasing pre-made pizzas, for example, which have been packaged and sealed in a certified gluten-free facility, cooked in the bag, and are opened only by the gluten-free customer.

A number of restaurants have been utilizing the training provided by nutrition consulting groups and advocacy organizations such as the National Foundation for Celiac Awareness to train staff, implement procedures, and find new methods of meeting the gluten-free demand in their establishments. The prevalence of gluten sensitivity is a real issue that has a significant impact on consumer choices. New labeling standards, staff education, and the willingness of restaurateurs to be a part of the solution are making all the difference in the world to the 20 million Americans who need gluten-free options.

Adjusting Your Menu Prices to Reflect Rising Costs: Is There a “Sweet Spot”?

According to the National Restaurant Association, menu prices are projected to inflate this year by 2.7% across the industry due to the increasing costs of wholesale foods. Since price is by far the most important factor determining a restaurant’s traffic, this creates a challenge for restaurateurs. They have to increase their prices to cover their costs, but to do so across the board would be suicide.

Instead, restaurant owners need to be selective about their price increases and take steps to identify where the ‘sweet spot’ lies in terms of a customer’s sense of value about buying a meal at their establishments.

 So What’s the Menu Price ‘Sweet Spot’?

In an effort to determine what price points would bring consumers back to restaurants, the NPD Group recently conducted a study examining the relationship between a customer’s level of satisfaction and the amount of money they spent on their check. The measures of satisfaction were affordability, good value for the money, and intent to return to the establishment again. The results of the study were revealing, showing that there are, in fact, some ‘sweet spots’ in the price points where customers feel the most satisfied.

For the fast casual dining sector, this sweet spot sits at about $9-11 for a dinner time meal. Surprisingly, the results for regular casual dining establishments were more mixed. The study showed that while over 35% of consumers were paying more than $17 per dinner, their results showed that they would be more ‘satisfied’ with the value of the meal if it were between $10-13.

This difference between where a customer would feel satisfied with the value of their meal versus what they are actually paying may be one of the factors contributing to the struggle for some restaurants in the casual dining sector to stay afloat.

Rising Costs and a Recession have Created a Different Type of Consumer

During the course of 2011, the national inflation rate was 3.2%, bringing costs up for everyone. Consumers were hit even harder by inflation of the cost of groceries which rose by 4.8% during that same period.  Ironically, the gap between the amount of inflation in menu prices versus that of groceries actually works somewhat in the favor of the restaurant industry.  After seeing the price of things in the grocery stores, customers aren’t quite as surprised or turned off by seeing an increase in menu prices.

What’s more, people remain willing to pay for the increased value of the restaurant experience over that of a grocery store; they’re just far more sensitive to the perceived value of the service they’re getting.

One-Size-Fits All Pricing Is No Longer Viable

The take-home point here is the importance of understanding where your consumers’ mindsets lie in regards to price vs. value and to provide opportunities for your customers to hit their pricing sweet spots.  Customers are still willing to pay more for a restaurant experience, but it is now more critical than ever that they feel that they have gotten a good value for their money.

The challenge is understanding which price points resonate with your consumer base and then featuring promotions and options within that range. Work over your menu list, discount items whose price may not have increased much, and provide options such as portion sizes to help your customers manage their checks.

Focusing on finding your customer’s ‘sweet spots’ makes them feel like they are receiving a valuable service for their money and goes a long way toward ensuring their loyalty toward your establishment.