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LSR: Ethnic Concepts - US - February 2015

“Consumers have favorable opinions about ethnic food and flavors, as well as the LSR brands that offer them. For operators who want to remain in a good light, they need to be up-to-speed with restaurant mobile technology, use high-quality ingredients, and offer both new ethnic fare and ‘tried-and-true’ items to be top of mind with potential customers.”
– Katrina Fajardo, Foodservice Analyst

This report discusses the following key topics:

  • Is definition of authenticity changing for good (or not-so-good) for operators?
  • Panelists are excited about new flavors, but still hold on to “tried-and-true” menu items
  • Technology use at LSR Ethnic concepts is growing

The limited service restaurant ethnic market has benefitted from consumers’ interests in more ethnic flavors and desires for a different dining experience on a budget. However, operators are still faced with a changing definition of authentic restaurant brands, as well as the growing emphasis from consumers for restaurants to use high-quality, fresh ingredients. The report focuses on the opportunities for restaurant brands to resonate as an authentic brand with potential customers, important attributes consumers look for within limited-service restaurants, as well as the changes in visitation, behavior, and deal usage since 2014.

There are plenty of opportunities for LSR Ethnic concepts in today’s foodservice market. With a growing Hispanic and Asian population in the US, coupled with increased consumer confidence and the willingness to spend more and visit more often in this category, there are ways operators can increase the traffic through their doors. Brands should keep in mind consumers’ willingness to try new ethnic flavors and foods, increased use of technology at LSR Ethnic concepts, as well as their changing definition of authentic ethnic fare.

 

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Mintel Menu Insights
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                      • The market
                        • Figure 1: Total US sales and fan chart forecast of limited-service restaurants at current prices, 2009-19
                      • Market drivers
                        • The consumer
                          • The definition of authentic cuisine, according to consumers, is changing
                            • Figure 2: Opinions of authenticity among LSR ethnic concepts, October 2014
                          • Visits to Latin, Asian, and Mediterranean LSR concepts have increased
                            • Figure 3: LSR ethnic concept usage, October 2014
                          • Intent to use more technology at LSR restaurants posted largest growth
                            • Figure 4: LSR ethnic concept changes in behavior, more, October 2014
                          • Consumers look forward to trying ethnic foods and flavors
                            • Figure 5: Attitudes regarding LSR ethnic concepts, October 2014
                          • What we think
                          • Issues and Insights

                              • Is definition of authenticity changing for good (or not-so-good) for operators?
                                • The issues
                                  • The implications
                                    • Panelists are excited about new flavors, but still hold on to “tried-and-true” menu items
                                      • The issues
                                        • The implications
                                          • Technology use at LSR Ethnic concepts is growing
                                            • The issues
                                              • The implications
                                              • Trend Application

                                                  • Trend: Experience is All
                                                    • Trend: Objectify
                                                      • Trend: Locavore
                                                      • Market Size and Forecast

                                                        • Key points
                                                          • Sales and forecast of market
                                                            • Figure 6: Total US sales and forecast of limited-service eating places, at current prices, 2009-19
                                                            • Figure 7: Total US sales and forecast of limited-service eating places, at inflation-adjusted prices, 2009-19
                                                          • Fan chart forecast
                                                            • Figure 8: Total US sales and fan chart forecast of limited-service restaurants at current prices, 2009-19
                                                        • Market Drivers

                                                          • Key points
                                                            • Americans are spending more on food and still dining out
                                                              • Figure 9: Food-at-home and away-from-home expenditures in the US, 1960-2013
                                                            • Unemployment rates are falling but underemployment is still an issue
                                                              • Figure 10: Unemployment rate and underemployment, January 2007–October 2014
                                                            • Consumer confidence and disposable personal income is on the rise
                                                              • Figure 11: Consumer confidence index, January 2007-Dec 2014
                                                              • Figure 12: Real disposable personal income, in billions, January 2007-November 2014
                                                            • Both Baby Boomers and Millennials are crucial generations for foodservice
                                                              • Figure 13: US population, by generation share, 2014
                                                            • America’s diversity is growing , and so will ethnic flavor desires
                                                              • Figure 14: Population by race, 2013-18
                                                              • Figure 15: Population by Hispanic origin, 2013-18
                                                            • Obesity and healthful eating is a top concern with Americans
                                                              • Figure 16: American adults, by weight category, as determined by Body Mass Index (BMI), 2008-14
                                                          • Competitive Context

                                                            • Key points
                                                              • Non-LSR Ethnic concepts are trying their hand at ethnic offerings
                                                                • FSR and fine dining locations are expanding the ethnic food scene
                                                                  • Retail expands ethnic food varieties in stores
                                                                  • Marketing Strategies

                                                                    • Overview
                                                                      • LSR Ethnic brands are expanding to create unique dining experiences for customers
                                                                        • Panda Express experiments with new food and drink items in their new “Innovation Kitchen”
                                                                          • The Halal Guys slated to open brick-and-mortar locations across the US
                                                                            • New menu items help expand flavor profiles
                                                                              • Fazoli’s adds new Signature Cheddar Alfredo Bakes
                                                                                • Fresca Bowls at Del Taco helps compete against fast casual and other Mexican-inspired chains
                                                                                  • Qdoba’s new burritos use sauce to bring more flavor
                                                                                    • Promotions and giveaways help LSR Ethnic brands gain exposure in the market
                                                                                      • Noodles and Company celebrates National Noodle Day with giveaways
                                                                                        • California Tortilla utilizes Instagram for their hot sauce campaign
                                                                                          • LSR Ethnic restaurants go healthier and more ethical
                                                                                            • Salata brings back its “Eat Light at Night” promotion
                                                                                              • Tropical Lite is the new healthful menu section at Pollo Tropical
                                                                                                • Taziki’s Mediterranean Café earns REAL certification
                                                                                                  • Chipotle stops serving pork due to suppliers violating standards
                                                                                                    • Taco Bell tests protein, Greek yogurt at breakfast
                                                                                                    • Menu Analysis

                                                                                                        • Figure 17: Menu item cuisine type at QSR and fast casual, by incidence, Q4 2011-Q3 2014
                                                                                                      • Salads debut to showcase healthy ethnic flavors
                                                                                                        • Authentic items and ingredients are emerging on LSR ethnic menus
                                                                                                          • Spicy makes its way onto LSR Ethnic menus
                                                                                                          • LSR: Ethnic Food Concepts – Social Media

                                                                                                              • Key findings
                                                                                                                • Market overview
                                                                                                                  • Key social media metrics
                                                                                                                    • Figure 18: Key social media metrics, Jan. 2015
                                                                                                                  • Brand usage and awareness
                                                                                                                    • Figure 19: Brand usage and awareness for select ethnic food concept restaurants. Oct. 2014
                                                                                                                  • Interactions with ethnic concept restaurants
                                                                                                                    • Figure 20: Interactions with select ethnic food concept restaurants, Oct. 2014
                                                                                                                  • Leading online campaigns
                                                                                                                    • Mobile apps
                                                                                                                      • User-generated content
                                                                                                                        • Games
                                                                                                                          • What we think
                                                                                                                            • Online conversations
                                                                                                                              • Figure 21: Online conversations for select ethnic food concept restaurants, by week, Jan. 19, 2014-Jan. 18, 2015
                                                                                                                            • Where are people talking about restaurants?
                                                                                                                              • Figure 22: Online conversations for select ethnic food concept restaurants, by page type, Jan. 19, 2014-Jan. 18, 2015
                                                                                                                            • What are people talking about?
                                                                                                                              • Figure 23: Topics of conversation for select ethnic food concept restaurants, Jan. 19, 2014-Jan. 18, 2015
                                                                                                                          • Opinions About Authenticity Among Restaurant Brands

                                                                                                                              • Figure 24: Opinions of authenticity among LSR ethnic concepts, October 2014
                                                                                                                            • Ubiquity in the market can lead to authentic opinions
                                                                                                                              • Authenticity is connected to fresh and local
                                                                                                                                • Marketing can be key in operators offering authentic foods
                                                                                                                                  • Fast-casual ethnic concepts are considered authentic to Older Millennials
                                                                                                                                    • Figure 25: Opinions of authenticity among LSR ethnic concepts, by age, October 2014
                                                                                                                                  • Hispanics think highly of these brands’ authenticity
                                                                                                                                    • Figure 26: Opinions of authenticity among LSR ethnic concepts, by race/Hispanic origin, October 2014
                                                                                                                                • Correspondence Analysis

                                                                                                                                  • Methodology
                                                                                                                                    • Question used:
                                                                                                                                      • Men are a coveted demographic for LSR Ethnic concepts; how can operators keep them coming through their doors?
                                                                                                                                        • Figure 27: LSR ethnic concept daypart usage, February 2015
                                                                                                                                      • The data
                                                                                                                                        • The issues
                                                                                                                                          • Figure 28: Correspondence analysis, February 2015
                                                                                                                                        • The implications
                                                                                                                                        • Consumer Data – Overview

                                                                                                                                            • Visitation to LSR Ethnic concepts increased, with fast food Latin and fast casual Asian leading the way
                                                                                                                                              • Figure 29: LSR ethnic concept usage, October 2014
                                                                                                                                            • Consumers are using technology more often at LSR Ethnic
                                                                                                                                                • Figure 30: LSR ethnic concept changes in behavior, more, October 2014
                                                                                                                                              • Dealing is moving from traditional discounts to website coupons and loyalty programs
                                                                                                                                                • Figure 31: LSR ethnic concept deals, October 2014
                                                                                                                                              • Panelists expect higher-quality, fresh, customizable foods when visiting LSR Ethnic concepts
                                                                                                                                                • Figure 32: Important attributes at LSR ethnic concepts, October 2014
                                                                                                                                              • Respondents are “ethnic foodie fans” but still enjoy common ethnic foods
                                                                                                                                                  • Figure 33: Attitudes regarding LSR ethnic concepts, October 2014
                                                                                                                                              • Consumer Data – By Restaurant Type

                                                                                                                                                • Key points
                                                                                                                                                  • Mediterranean and Indian LSR concepts are attracting diet-focused consumers
                                                                                                                                                      • Figure 34: LSR ethnic concept changes in behavior – More, by restaurant types, October 2014
                                                                                                                                                      • Figure 35: Important attributes at LSR ethnic concepts, by restaurant types, October 2014
                                                                                                                                                    • Latin, Italian, and Asian visitors are more apt to use BOGO deals; mobile app discounts for Mediterranean, Indian
                                                                                                                                                      • Figure 36: LSR ethnic concept deals, by restaurant types, October 2014
                                                                                                                                                  • Consumer Data – By Daypart

                                                                                                                                                    • Key points
                                                                                                                                                      • Affordability is key for evening snack; customization and portion sizes are areas of opportunity
                                                                                                                                                          • Figure 37: LSR ethnic concept deals, by dayparts, October 2014
                                                                                                                                                          • Figure 38: Important attributes at LSR ethnic concepts, by dayparts, October 2014
                                                                                                                                                      • Consumer Data – By Gender

                                                                                                                                                        • Key points
                                                                                                                                                          • Women look for affordability and health
                                                                                                                                                              • Figure 39: LSR ethnic concept changes in behavior – More, by gender, October 2014
                                                                                                                                                              • Figure 40: Important attributes at LSR ethnic concepts, by gender, October 2014
                                                                                                                                                              • Figure 41: Attitudes regarding LSR ethnic concepts, by gender, October 2014
                                                                                                                                                          • Consumer Data – By Age

                                                                                                                                                            • Key points
                                                                                                                                                              • Lunch and dinner are areas of opportunity among Millennial-aged consumers
                                                                                                                                                                  • Figure 42: LSR ethnic concept usage, by age, October 2014
                                                                                                                                                                  • Figure 43: LSR ethnic concept daypart usage – Lunch, by age, October 2014
                                                                                                                                                                  • Figure 44: LSR ethnic concept daypart usage – Dinner, by age, October 2014
                                                                                                                                                                • 55-64 year-olds are slowly, but surely, using technology at restaurants
                                                                                                                                                                    • Figure 45: LSR ethnic concept changes in behavior – More, by age, October 2014
                                                                                                                                                                    • Figure 46: LSR ethnic concept deals, by age, October 2014
                                                                                                                                                                  • 25-34 year-olds can be daring with new ethnic foods, as well as hesitant
                                                                                                                                                                    • Figure 47: Attitudes regarding LSR ethnic concepts, by age, October 2014
                                                                                                                                                                • Consumer Data – By Hispanic/Non-Hispanic

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Hispanics are core users of LSR Ethnic; willing to spend more, visit more
                                                                                                                                                                        • Figure 48: LSR ethnic concept usage, by race/Hispanic origin, October 2014
                                                                                                                                                                        • Figure 49: LSR ethnic concept changes in behavior – More, by race/Hispanic origin, October 2014
                                                                                                                                                                      • Hispanics are more sceptical about ethnic foods
                                                                                                                                                                        • Figure 50: Attitudes regarding LSR ethnic concepts, by race/Hispanic origin, October 2014
                                                                                                                                                                    • Consumer Data – By Income

                                                                                                                                                                      • Key points
                                                                                                                                                                        • Affordability is the biggest concern for consumers less than $50K income
                                                                                                                                                                          • Healthy, upscale items are important to consumers more than $100K income
                                                                                                                                                                              • Figure 51: LSR ethnic concept changes in behavior – More, by household income, October 2014
                                                                                                                                                                              • Figure 52: LSR ethnic concept deals, by household income, October 2014
                                                                                                                                                                              • Figure 53: Important attributes at LSR ethnic concepts, by household income, October 2014
                                                                                                                                                                              • Figure 54: Attitudes regarding LSR ethnic concepts, by household income, October 2014
                                                                                                                                                                          • Appendix – Other Useful Tables

                                                                                                                                                                              • Figure 55: LSR ethnic concept usage, October 2014
                                                                                                                                                                              • Figure 56: Opinions of authenticity among LSR ethnic concepts, by age, October 2014
                                                                                                                                                                              • Figure 57: Opinions of authenticity among LSR ethnic concepts, by race/Hispanic origin, October 2014
                                                                                                                                                                          • Appendix – Consumer Data – By Restaurant Type

                                                                                                                                                                              • Figure 58: LSR ethnic concept changes in behavior – More, by restaurant types, October 2014
                                                                                                                                                                              • Figure 59: LSR ethnic concept deals, by restaurant types, October 2014
                                                                                                                                                                              • Figure 60: Important attributes at LSR ethnic concepts, by restaurant types, October 2014
                                                                                                                                                                          • Appendix – Consumer Data – By Daypart

                                                                                                                                                                              • Figure 61: LSR ethnic concept usage, by dayparts, October 2014
                                                                                                                                                                              • Figure 62: LSR ethnic concept deals, by dayparts, October 2014
                                                                                                                                                                              • Figure 63: Important attributes at LSR ethnic concepts, by dayparts, October 2014
                                                                                                                                                                          • Appendix – Consumer Data – By Gender

                                                                                                                                                                              • Figure 64: LSR ethnic concept usage, by gender, October 2014
                                                                                                                                                                              • Figure 65: LSR ethnic concept deals, by gender, October 2014
                                                                                                                                                                              • Figure 66: Important attributes at LSR ethnic concepts, by gender, October 2014
                                                                                                                                                                          • Appendix – Consumer Data – By Age

                                                                                                                                                                              • Figure 67: LSR ethnic concept daypart usage – Lunch, by age, October 2014
                                                                                                                                                                              • Figure 68: LSR ethnic concept daypart usage – Dinner, by age, October 2014
                                                                                                                                                                              • Figure 69: LSR ethnic concept changes in behavior – More, by age, October 2014
                                                                                                                                                                              • Figure 70: Important attributes at LSR ethnic concepts, by age, October 2014
                                                                                                                                                                          • Appendix – Consumer Data – By Hispanic/Non-Hispanic

                                                                                                                                                                              • Figure 71: LSR ethnic concept changes in behavior – More, by race/Hispanic origin, October 2014
                                                                                                                                                                              • Figure 72: LSR ethnic concept deals, by race/Hispanic origin, October 2014
                                                                                                                                                                              • Figure 73: Important attributes at LSR ethnic concepts, by race/Hispanic origin, October 2014
                                                                                                                                                                              • Figure 74: Attitudes regarding LSR ethnic concepts, by race/Hispanic origin, October 2014
                                                                                                                                                                          • Appendix – Consumer Data – By Income

                                                                                                                                                                              • Figure 75: LSR ethnic concept usage, by household income, October 2014
                                                                                                                                                                              • Figure 76: LSR ethnic concept changes in behavior – More, by household income, October 2014
                                                                                                                                                                              • Figure 77: LSR ethnic concept deals, by household income, October 2014
                                                                                                                                                                              • Figure 78: Attitudes regarding LSR ethnic concepts, by household income, October 2014
                                                                                                                                                                          • Appendix – Consumer Data – By Race

                                                                                                                                                                              • Figure 79: LSR ethnic concept usage, by race/Hispanic origin, October 2014
                                                                                                                                                                              • Figure 80: Important attributes at LSR ethnic concepts, by race/Hispanic origin, October 2014
                                                                                                                                                                              • Figure 81: Attitudes regarding LSR ethnic concepts, by race/Hispanic origin, October 2014
                                                                                                                                                                          • Appendix – US Census Regions

                                                                                                                                                                              • Figure 82: LSR ethnic concept usage, by region, October 2014
                                                                                                                                                                              • Figure 83: LSR ethnic concept changes in behavior – More, by region, October 2014
                                                                                                                                                                              • Figure 84: Important attributes at LSR ethnic concepts, by region, October 2014
                                                                                                                                                                              • Figure 85: Attitudes regarding LSR ethnic concepts, by region, October 2014
                                                                                                                                                                          • Appendix – LSR Ethnic Food Concepts – Social Media

                                                                                                                                                                            • Key social media metrics
                                                                                                                                                                              • Figure 86: Key social media metrics for select ethnic concept restaurants, Jan. 2015
                                                                                                                                                                            • Online conversations
                                                                                                                                                                              • Figure 87: Online conversations for select restaurants, by week, Jan. 19, 2014-Jan. 18, 2015
                                                                                                                                                                            • Brand usage or awareness
                                                                                                                                                                              • Figure 88: Brand usage or awareness, October 2014
                                                                                                                                                                              • Figure 89: Noodles & Company usage or awareness, by demographics, October 2014
                                                                                                                                                                              • Figure 90: Pei Wei usage or awareness, by demographics, October 2014
                                                                                                                                                                              • Figure 91: Daphne’s California Greek usage or awareness, by demographics, October 2014
                                                                                                                                                                              • Figure 92: Panda Express usage or awareness, by demographics, October 2014
                                                                                                                                                                              • Figure 93: Kogi BBQ usage or awareness, by demographics, October 2014
                                                                                                                                                                              • Figure 94: Moe’s Southwest Grill usage or awareness, by demographics, October 2014
                                                                                                                                                                            • Activities done
                                                                                                                                                                              • Figure 95: Activities done, October 2014
                                                                                                                                                                              • Figure 96: Noodles & Company – Activities done – I have looked up/talked about this brand online on social media, by demographics, October 2014
                                                                                                                                                                              • Figure 97: Noodles & Company – Activities done – I have contacted/interacted with the brand online on social media to, by demographics, October 2014
                                                                                                                                                                              • Figure 98: Noodles & Company – Activities done – I follow/like the brand on social media because, by demographics, October 2014
                                                                                                                                                                              • Figure 99: Noodles & Company – Activities done – I have researched the brand on social media to, by demographics, October 2014
                                                                                                                                                                              • Figure 100: Pei Wei – Activities done – I have looked up/talked about this brand online on social media, by demographics, October 2014
                                                                                                                                                                              • Figure 101: Pei Wei – Activities done – I have contacted/interacted with the brand online on social media to, by demographics, October 2014
                                                                                                                                                                              • Figure 102: Pei Wei – Activities done – I follow/like the brand on social media because, by demographics, October 2014
                                                                                                                                                                              • Figure 103: Pei Wei – Activities done – I have researched the brand on social media to, by demographics, October 2014
                                                                                                                                                                              • Figure 104: Panda Express – Activities done – I have looked up/talked about this brand online on social media, by demographics, October 2014
                                                                                                                                                                              • Figure 105: Panda Express – Activities done – I have contacted/interacted with the brand online on social media to, by demographics, October 2014
                                                                                                                                                                              • Figure 106: Panda Express – Activities done – I follow/like the brand on social media because, by demographics, October 2014
                                                                                                                                                                              • Figure 107: Panda Express – Activities done – I have researched the brand on social media to, by demographics, October 2014
                                                                                                                                                                              • Figure 108: Moe’s Southwest Grill – Activities done – I have looked up/talked about this brand online on social media, by demographics, October 2014
                                                                                                                                                                              • Figure 109: Moe’s Southwest Grill – Activities done – I have contacted/interacted with the brand online on social media to, by demographics, October 2014
                                                                                                                                                                              • Figure 110: Moe’s Southwest Grill – Activities done – I follow/like the brand on social media because, by demographics, October 2014
                                                                                                                                                                          • Appendix – Trade Associations

                                                                                                                                                                              • Council for Responsible Nutrition
                                                                                                                                                                                • Food Marketing Institute (FMI)
                                                                                                                                                                                  • International Food Information Council (IFIC)
                                                                                                                                                                                    • International Food Service Executives Association (IFSEA)
                                                                                                                                                                                      • International Foodservice Distributors Association (IFDA)
                                                                                                                                                                                        • International Foodservice Manufacturers Association (IFMA)
                                                                                                                                                                                          • International Franchise Association (IFA)
                                                                                                                                                                                            • National Council of Chain Restaurants (NCCR)
                                                                                                                                                                                              • National Nutritional Foods Association (NNFA)
                                                                                                                                                                                                • National Restaurant Association (NRA)

                                                                                                                                                                                                Companies Covered

                                                                                                                                                                                                • Chipotle Mexican Grill Inc.
                                                                                                                                                                                                • Del Taco, Inc.
                                                                                                                                                                                                • Fazoli's Restaurants, Inc.
                                                                                                                                                                                                • Noodles & Company
                                                                                                                                                                                                • Qdoba Restaurant Corporation
                                                                                                                                                                                                • Taco Bell Corp.
                                                                                                                                                                                                • Walmart Stores (USA)
                                                                                                                                                                                                • Yelp Inc.

                                                                                                                                                                                                LSR: Ethnic Concepts - US - February 2015

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