#RealWorldIntelligence | blis © Blis 2019 | 1Real-world intelligence: how the world eatsSeptember 2019#RealWorldIntelligence#RealWorldIntelligence | blis © Blis 2019 | 2ContentsIntroductionExecutive summaryExclusivity varies by region and population density plays a partWho is eating your dinner?Looking forward: disruption presents challenges but physical stores still top the menuWhats for dessert?34571012#RealWorldIntelligence | blis © Blis 2019 | 3IntroductionKey takeawaysWere living in an era of curation, in which consumers carefully tailor themselves on social media and public forums and what they say and show online is not always representative of what they actually feel and do. Instead, consumers are more likely than ever to share what they want others to see, which can pose a challenge for marketers trying to ascertain a real portrait of their customers.The goal of this report is to provide brands with the insights they need to understand consumer audiences in the current climate. These findings, based on real-world intelligence, can help marketers more effectively localize their messaging and strategy while equipping other stakeholders with the insights needed to successfully expand the global footprints of their brands.Each of the five global QSRs included in the report saw high rates of crossover outside of their direct segment competitors, with KFC demonstrating, on average, nearly 40% crossover globally between burger outlets.Markets with the highest population density (Singapore and UK) witnessed significantly lower loyalty levels on average. Disruption within the fast-food industry is bringing more food options to the table and new ways to order. In such a crowded market, having a larger footprint enables more effective competitor targeting. Customer crossover cuts across QSR segments.Expect population density to impact your loyalty.Consumers are seeking more variety and more convenience.1 2 3#RealWorldIntelligence | blis © Blis 2019 | 4With this study, were launching a quarterly series of global reports examining the truth about what people actually do, beginning with how the world eats focusing on quick-serve restaurants (QSRs) in the US, UK, Australia and Singapore. Why focus on food first? Its at the heart of our daily activities. Breakfast, lunch and dinner create the framework for our days and the centerpieces for family gatherings and social outings. According to a Nielsen report, nearly half the world dines out at least once a week1. And as we get busier and lead increasingly mobile lives, QSRs are outpacing casual dining establishments in their growth2.Against this backdrop, our internal research team used Blis proprietary technology to observe visitors in 81 branded QSRs globally during the month of July 2019, focusing on five international brands: McDonalds, Burger King, Subway, KFC and Dominos. The study encompassed:Beyond the ways in which consumers engage with a brand directly, this real world intelligence helps marketers understand competitive threat levels, audience loyalty and key visit patterns which in turn help identify opportunities and understand the state of play in the wider industry.Read on to learn more. We hope it makes you hungry for more Blis insights.Greg Isbister, CEO, Blis133,000 locations 2.5 million consumers 4 million device signalsExecutive summary1nielsen/ma/en/insights/article/2016/dining-without-doing-dishes-almost-half-globally-eat-away-from-home/2latimes/business/la-fi-agenda-casual-dining-20170918-story.html#RealWorldIntelligence | blis © Blis 2019 | 5Exclusivity varies by region and population density plays a partConsumer perceptions of the biggest global brands in each sector differ across markets and impact how they interact with these brands. Branding, menu extensions, innovation, pricing and physical footprint of the competition all play a role. Among the brands included in this report, markets with the highest population density witnessed significantly lower levels of exclusivity loyalty to a single QSR on average, Singapore with 26% and the UK with 33% loyalty to an individual chain. Higher rates of exclusivity were demonstrated in Australia (50%) and the US (57%). This might be surprising given the wealth of options available in the United States, but it may also be indicative of stronger brand traction given the rich history that these retailers have in their home market.Despite strong brand equity and a ubiquitous presence around the world, these colossal brands face the familiar challenge of nurturing customers to return to their stores and select from their menus time and time again. Understanding where audiences are currently eating can inform brand and marketing strategies, with tempting products and tantalizing offers that resonate with the people that matter most to them.Exclusivity of global QSRs by countryMcDonalds Burger King Subway KFC DominosUK US Australia Singapore20%62%51%33%31%53%66%61%43%17%46%20%24%53%36%26%49%55%50%36%sustralia20%62%51%33%31%53%66%61%43%17%46%20%24%53%36%26%49%55%50%36%#RealWorldIntelligence | blis © Blis 2019 | 6American consumers are the most loyalOverall, Australians and Americans tend to be more loyal to their QSRs than consumers in other regions. Based on our data, Americans are actually 70% more likely than Brits to stick with a favourite QSR. On the other side of the globe, Australians are twice as likely to be loyal as Singaporeans, who, in turn, are 38% more likely to visit multiple fast food chains than Americans, Brits or Australians. That said, Australians represent an almost perfect midpoint between the hyper-promiscuity of Singaporean and British diners and the proclivity of Americans to steadfastly stick to favoured brands. With an average exclusivity of 50% across McDonalds, Subway, KFC, Hungry Jacks and Dominos, loyalty to any particular QSR is literally split down the middle. Brits and Singaporeans have similar habits, but whats on their menu differsBrits and Singaporeans share some similarities in their eating habits: both groups seek variety in their diets, but differ in their food preferences. Brits are fans of the sandwiches from convenient options like Pret a Manger and Eat. Singaporeans tend to frequent hawker-style franchises that serve up modern takes on traditional local staples. Ultimately, its all about the consumer. Global brands need to understand regional engagement with their brands to know how much to tailor, or localize, their communications accordingly. In markets where consumers show higher exclusivity i.e. the US and Australia it can be inferred that the QSR doesnt need to adapt far beyond “original” branding. Conversely, the knowledge that Singaporeans, for example, frequent hawker-style franchises serving regional fare more often than global QSRs could spur brands to localize their communications to better appeal to consumers seeking a wider variety.Highest store visits by countryUSburgers39%Singapore34%other QSRUK40%sandwichesAustraliaburgers28%#RealWorldIntelligence | blis © Blis 2019 | 7Who is eating your dinner?Whilst the major QSRs employ a one brand strategy globally, local interpretation and market dynamics shape audience perception in different ways and influence how consumers engage with each of these fast food chains. This is clear in an examination of the five major global QSRs and the food segments (burgers, chicken, pizza, sandwiches and other) with which they see the greatest competition. For brands, this poses the question: “Who are the real competitors?”. If a QSR in the burger segment, for example, is focusing its energy and budget on targeting the “traditional” burger audience, are they losing out on potential customers? Whats interesting to note is that whilst there is fierce competition within the individual food segments, three out of the five global QSRs observed that, when choosing other options, their consumers were more likely to opt for a different genre of food. Subway consumers were more than twice as likely to select any other segment (+105%), with Dominos and KFC nearly twice as likely (+99% and +87% respectively). This indicates that in their categories these retailers are the undisputed winners of their patronage. This also suggests that for these retailers in particular, a communication strategy that speaks to diners of other genres could be more effective than targeting direct competitors in their own segments.The burger behemoths saw the greatest competition with their own segment, Burger King (34%) and McDonalds (28%), which underlines the fever pitch at which the burger wars are fought. In addition to local champions such as Wendys in the U.S. and Byron in the UK, these two pillars of the QSR industry have been under assault over the last few years with the emergence of global competition, including Five Guys and Shake Shack which are providing more choice and increasing the challenge for customer loyalty.Global brand crossover with QSR segments (Average)Subway consumers were more than twice as likely to select any other segmentExcluding own segment In own segmentBurger King Dominos McDonalds Subway KFC23%34%23%12%24%28%26%13%29%16%Excluding own segment In own segmentBurger King Dominos McDonalds Subway KFC23%34%23%12%24%28%26%13%29%16%#RealWorldIntelligence | blis © Blis 2019 | 8As weve established, there is not one universal experience of a QSR globally. As such, the competition a brand faces from a given segment varies hugely from region to region, so delving into the detail is recommended to adapt brand positioning locally.80%60%40%20%SandwichesOtherBurgersChickenPizza60%40%20%SandwichesOtherBurgersChickenPizzaMcDonalds crossover For McDonalds the biggest challenger in the UK market is sandwiches, with a whopping 71% crossover. While in Singapore, it is the only international brand that didnt experience its highest crossover with the “other” category.Burger King crossover (Hungry Jacks Australia) Burger Kings biggest battle in Australia (25%) and the US (28%) is to be the unrivalled #1 with their audience, as the competition with other burger chains is more intense than with other QSR segments.UK US Australia Singapore#RealWorldIntelligence | blis © Blis 2019 | 9KFC crossover We found burgers provided most competition for KFC in the US (33%) and Australia (41%). Interestingly, in the UK, the KFC audience was most frequently seen at pizza chains (47%) indicating strong brand compatibility.Subway crossover Subway saw competitive threats from a variety of QSR segments. Sandwiches are big business in the UK, but despite the physical scale of the competition, Subway saw a higher crossover with burgers (35%) than their sandwich peers (21%).60%40%20%SandwichesOtherBurgersChickenPizza60%40%20%SandwichesOtherBurgersChickenPizzaSandwichesOtherBurgersChickenPizza40%30%20%10%Dominos crossover In all four markets, Dominos greatest competition came from outside of the pizza segment. This indicates strong sub-segment preference from their audience #1 for pizza but high competition from other segments. UK US Australia Singapore#RealWorldIntelligence | blis © Blis 2019 | 10Looking forwardDisruption presents challenges but physical stores still top the menuDisruption impacts every industry, and food service is no exception. However, its more than digital innovation thats impacting restaurants, its changes in diet and attitude as well. Environmentally conscious consumers demand reduced and improved packaging, right down to biodegradable straws and recyclable cups, as well as more sustainable menu items3. Health-conscious eaters seek not only healthier options, but plant-based4and even gluten-free choices. (Hence the incredible growth of the plant-based meat market, which jumped 42% between 2016 and 2019, to $888 million USD.)5 The restaurant industry has been quick to accommodate, with more salads, more (and more convincingly meat-like) veggie burgers and in many cases, better packaging for all of it. Of course, digital disruption also impacts fast food restaurants, as consumers increasingly expect the ability to order and pay with their mobile devices. Along with the convenience of app-based ordering, customers also want enhanced personalised experiences and improved loyalty programs.6All of this bumps up against broader changes as QSRs endeavour to modernize their overall appearances, menus and payment systems. Its against this backdrop that QSRs are expected to grow 4.6% globally by 20227. Despite an evolving market, people still need to eat, and they have less and less time to prepare meals for themselves and their families. This not only accounts for the growth of fast-food restaurants but also delivery services like Uber Eats and meal kit delivery providers like Hello Fresh. The meal kit delivery market is expected to double over the next five years, reaching $14.1 billion USD by 20248, while the on-demand delivery service market is also expected to grow from $2.5 billion in 2017 to $8.94 billion by 20259.3ey/en_gl/disruption/why-your-next-big-bet-should-be-in-food-innovation4businessinsider/vegan-items-sweep-fast-food-chick-fil-a-mcdonalds-eye-options-2019-5?r=US&IR=T5macleans.ca/news/canada/what-the-skyrocketing-popularity-of-beyond-meat-means-for-our-planet/6qsrmagazine/content/5-tech-trends-impacting-quick-serves-20197restaurantdive/news/qsrs-to-grow-46-globally-by-2022-bolstered-by-consumer-demand/542996/8marketwatch/press-release/Meal-Kit-Delivery-Services-Market-Size-will-grow-at-7-CAGR-to-exceed-23400-million-USD-by-2024-2019-04-169hexaresearch/research-report/meal-kit-delivery-service-market?utm_source=referral&utm_medium=prnewswire&utm_campaign=prn_13march mealkitdeliveryservice_rd1QSRs are expected to grow 4.6% globally by 2022