Are healthy menu options important to the American fast-food consumer? A recently released study found one restaurant where consumers couldn't care less about healthy choices. Yet this company is emphasizing nutritious menu items with even more vigor.
Healthy menu choices: Offer the whole enchilada?
A recently released Placed survey, "Dining Out in America, Part 2: The Impact of New Menu Items, Value, and Nutrition," found that consumers who would fork over more money for healthy menu options were 10% more likely to visit Wendy's (NASDAQ:WEN), which ranked at the top of the list among big burger chains. In fact, Wendy's was the only burger joint where consumers stated a willingness to pay more for healthy menu items.
Wendy's is trying to distinguish itself as a premium brand. The company has rolled out more upscale menu items such as its Monterey Ranch Chicken Sandwich, Apple Pecan Chicken Salad, and Asiago Ranch Chicken Club. The company boasts sea salt on its fries and strawberries and almonds on its salads.
Wendy's faces a challenging rebranding battle and stiff competition from fast-casual restaurants, namely Chipotle Mexican Grill (NYSE:CMG), Panera Bread (NASDAQ:PNRA.DL), and Starbucks (NASDAQ:SBUX), which the study found health-conscious consumers most likely to patronize (in that particular order). But Wendy's customers clearly care about and seek out healthy options, and the company is listening.
... or as few as possible?
Yet at the opposite end of the spectrum, Yum! Brands' (NYSE:YUM) Taco Bell loiters near the bottom of the list, with health-conscious consumers 10% less likely to patronize its restaurants. Its taco-loving clientele appears to be not at all focused on calorie counts and fat grams.
But, interestingly enough, Yum! plans to place more emphasis on the health-conscious consumer. For example, Taco Bell's higher-quality Cantina Bell menu, which was released last July, more directly competes with Chipotle's premium offerings.
Taco Bell recently announced its plan to roll out more nutrition-focused menu items, including a "Power Protein" menu. For several years, Taco Bell has had its "fresco" menu, which features offerings with reduced fat and calories, but revenues from these items account for only a sliver of total sales. Yum! expects better results with its "Power Protein" options.
Taco Bell might want to ditch its focus on good-for-you menu items altogether. After all, if consumers are less likely to seek your restaurant out for healthy options, is it wise to put even more of them on your menu? Time for investors to keep a close eye on sales of Taco Bell's healthy menu items. Time for Yum! to go back to the drawing board.