DC Strategy press | Food for Thought

Healthy food franchises have carved a niche within a society that is increasingly concerned with obesity levels and bulging waist lines. But, as Domini Stuart finds out, success in this industry is not as easy as separating the carbs from the joules.

When Janine Allis opened her first Boost Juice outlet in 2000, the sector was dominated by burgers, fries and pizzas. By contrast, her juices and smoothies were created with the help of a naturopath and nutritionist and free from preservatives and artificial colourings — and they led the way in making ‘health’ part of the take-away franchise equation. With more than 170 stores throughout Australia, plus three in Chile, two in Indonesia and one in both Kuwait and Singapore, Boost Juice is an oft-quoted story of entrepreneurial success. Now, it is also one of a growing range of franchises offering fast toed which is also nutritionally sound. “Attitudes and awareness change,” Allis said. “Look at smoking — when I was growing up cigarettes were all about a man on a horse riding up a mountain. Today, the packets are covered with shocking images showing the damage smoking can do. Now a similar thing is happening with food. We have more cancer than ever, more diabetes, more heart disease and people are becoming more educated about the role food has to play in wellness. They want to eat more real food, and food producers have to follow.” For some time, the media and reality TV have been driving home the message about rising levels of obesity and its consequences. The baby boomers who grew up on fast food are hitting middle age, and increasing numbers are paying close heed to the effect that diet has on their health. At the same time, parents are being urged to provide their children with nutritious food. But time is short. We’re working longer and harder. It is little wonder we’re seeing more ready-made salads, soups, sandwiches and other healthy meals and snacks that allow consumers to choose the easy option — and feel good about it.

· The proportion of men aged 25-64 years classified as obese doubled from 9 per cent to 17 per cent between 1980 and 1999-2000.

· In the same period, the obesity rate among women of that age range more than doubled, from 8 per cent to 20 per cent.

Don’t decide to sell salad just because you like salad. Compare brands, and look at the level of support you’ll be getting, and do market research to find out about people’s eating habits and preferences

“Think about trends in the community — it’s all about convenience for people who are time poor,” Richard Evans, CEO of the Franchise council of Australia, said. “People used to take a packed lunch to work; now they’re looking for other options. Every home used to have a dining room but you hardly find them any more — the space is more likely to be used for an entertainment centre. The kitchen is no longer the heart of every home. People don’t have time to cook, but they don’t want to eat the same thing every day. The evolution of variety is being driven by the market.”

Perhaps the most startling example of a food producer bowing to the pressure of changing taste is McDonalds. Just two years after the movie ‘Super Size Me’ tested the veracity of the saying that any publicity is good publicity’, McDonald’s has been so successful in modifying recipes and creating new meal combinations and procedures that the company has earned the

right to display the Heart Foundation Tick on nine of its meals. “The nine Tick-approved meals stack up as nutritionally balanced main meals,” Dr Lyn Roberts, CEO of the National, Heart Foundation, said. “They have less than two per cent saturated fat, virtually no trans fat, at least one serve of vegetables and provide less than a third of your daily energy needs.” Does this mean the days of the ‘junk’ food franchise are over? Adrian McFedries, Managing Director of DC Strategy, doesn’t think so. “Yes, there is a growing number of healthy food franchises, but then the number of franchises is growing overall,” he said. “The health and wellness angle has certainly been more in the sunlight over the last two to three years as the media is driving more exposure, but growth isn’t restricted to this sector. The largest take-away food groups haven’t changed — sandwiches, fish and chips, burgers and French fries are still the biggest sellers. And Domino’s Pizza has experienced phenomenal growth even though pizza isn’t strictly perceived as healthy”. In America, there’s even something close to a backlash.

It seems that, while people are saying they want to eat more healthily, not all of them are putting their money where their mouth is. Jeffrey Summers of the Texas-based Restaurant coaching Solutions said that customers of the Hardee’s burger and chicken franchise told researchers they wanted salads. But, when salads were added to the menu, they were practically trampled into the ground as customers scrambled for the new Monster Thickburger. This consists of two huge slices of beef, eight bacon strips and three cheese slices in a buttered bun — and it supplies the average male with around 70 per cent of his average daily energy needs in one hit. In a similar instance, when Wendy’s introduced fruit bowls the initiative failed dismally despite the support of a multi-million dollar advertising campaign. “We listened to consumers who said they wanted to eat fresh fruit but, apparently, they lied,” a disillusioned spokesperson told the New York Times. Hardee’s is not the only big us franchise pushing so-called ‘indulgent offerings’. Burger King’s new BK Stacker includes as many as four slabs of beef; four slices of cheese and four strips of bacon. Denny’s Extreme Grand Slam Breakfast consists of three strips of bacon, three sausages, two eggs, hash browns and three pancakes — all for only us$5.99.

Attitudes and awareness change. We have more cancer than ever, more diabetes, more heart disease and people are becoming more educated about the role food has to play in wellness. They want to eat more real food, and food producers have to follow

One Denny’s commercial also taps into the continuing importance of cost by having a man state ‘I’m going to eat too much, but I’m never going to pay too much’. While most healthy food franchisers report that customers are willing to pay more for a premium product, some can’t afford to do so, or at least not every day. “The typical person going to a fast-food restaurant isn’t driving in there with a BMW and an expense account,” said food psychologist Brian Wansink in his book Mindless Eating. “They’ve got a couple of bucks in their pocket, and their big objective is to get full.”

Australia doesn’t inevitably follow America, but overseas trends do support the observation that all aspects of the fast food segment have room to grow. While there are certainly more people searching out healthier alternatives there will always be those who would rather starve than order a salad and, in between are the ‘floating voters’ - consumers who are conscious of the need for a more balanced diet, but who also want convenience and variety, including the occasional indulgence.

For the would-be franchise owner, fast food offers what can seem like a bewildering range of alternatives — but the type ~of franchise you choose could actually be the least of your worries.

“Whichever sector you’re considering, you need to bear in mind that the food business is hard work,” Evans said. “You can expect to work long hours, especially when you’re starting out, and there’s a heavy burden of compliance associated with issues of health and safety. If you’re sure you can handle it, you should set about choosing your franchise on the basis of good business, not personal taste. Don’t decide to sell salad just because you like salad. Compare brands, and look at the level of support you’ll be getting, and do market research to find out about people’s eating habits and preferences.” Whether you decide to ride the health wave could also be influenced by your attitude to risk. “Healthy food franchises are still at a relatively early stage,” Evans said. “That means they can come with an opportunity for greater returns, but also more risk. If you’re risk averse, you might want to stick to an established brand, but with the understanding that there are no guarantees anywhere. You can go broke owning a McDonalds — there are always ways to spend more than you earn.”