Why Restaurants are Venturing into the Metaverse
Restaurant
chains are entering the great unknown, taking bold leaps into the "metaverse."
It's the latest endeavor by fast-food brands to reach potential customers where
they're at.
The Food Institute investigated how the strategy works and why brands
are entering this digital space.
What is the Metaverse?
The
metaverse is a term used to describe a virtual environment in which people can
use digital avatars to work, play, or shop, according to a report from The Wall Street Journal (April 5).
Wendy's recently revealed it was teaming up with Horizon Worlds, a virtual reality game
from Meta, to open the Wendyverse.
Visitors can't buy food there, but they can play a basketball-themed game
located near the digital restaurant.
Chipotle has launched a somewhat similar initiative.
"We
see our investment in the metaverse as an opportunity to create immersive
experiences with our community," Tressie Lieberman, VP, digital and off-premise
at Chipotle, told The Food Institute.
Chains' Main Motivation
"The
full vision of the metaverse may be years away, but brands should start
experimenting on what their metaverse presence will be now," said Vishal Shah,
Meta's vice president of metaverse, in a press release.
Chipotle
plans to introduce a game and new virtual restaurant in Roblox, an online game platform
and storefront, which emulates the company's original location in Denver. The
first 100,000 Roblox players to successfully roll a burrito in the game will
earn Burrito Bucks which can be exchanged for an entrée code that can be used
at a real-life Chipotle location.
"We've
tapped into play-to-earn, an emerging engagement model in the metaverse, to
launch our newest experience on Roblox," said Chief Marketing Officer Chris
Brandt, in a statement.
Chipotle
loyalty program members can also trade in reward points for Roblox gift cards.
The company will also make a burrito available for ordering in its app that includes
ingredients voted on by Roblox users and others in a Twitter poll.
What're the Biggest Benefits?
There
are several reasons food brands are entering the digital world.
"Now
that we've established our presence on Roblox, we're excited to continue
activating on the platform and providing real value for Roblox users,"
Chipotle's Lieberman said. "Our presence on Roblox allows us to engage with our
Gen Z fans who are spending a lot of time on the platform."
Prior
to the launch of the Chipotle Boorito Maze last October, the chain noticed many
users on the application were already creating Chipotle-themed experiences in
virtual restaurants, making it a natural fit.
For
Wendy's, entering the metaverse is another way of digitally connecting with
consumers. The fast-food brand is already known for its social media presence,
particularly on Twitter.
"For
years we've been meeting our fans in unexpected ways and places with our unique
approach to social media, gaming and engagement," said Wendy's Chief Marketing
Officer Carl Loredo, in a press release.
Wendy's
will track engagement metrics, such as how many people visit the virtual
restaurant or post about it on social media, to gauge success, Loredo told The
Wall Street Journal. Food Institute Focus
As Masks Come Off, Restaurant Industry Outlook Tempered by Labor
Shortage
With
masks coming off, restaurants are bracing for a surge in business, evidenced by
increased job postings for servers, bartenders and a host of other rolls,
reports PeopleReady, an on-demand labor
company. Unfortunately, many of the workers who filled these jobs before the
pandemic have moved on to other careers, seeking more stability, higher pay and
regular shifts.
"With
the rise of food delivery services and remote jobs, I think that all the people
that were in the restaurant business just for the money, once presented the
opportunity to change, decided to grab it immediately," Michael Cook, a former
chef who has moved on to blogging at MyConsciousEating.com, told The Food
Institute. "Working in the food industry is very stressful, time consuming,
and the pay, as I have seen personally, is not really that high, even in the
best restaurants."
PeopleReady
said some restaurant job postings have seen the highest increases ever since
mid-February:
- Servers
up 31%
- Bartenders
up 28%
- Hosts
and hostesses up 23%
- Cooks
up 29%
- Fast-food
workers up 17%
- Food-preparation
workers up 15%
"As
industries like the restaurant industry continue their recovery, the demand for
workers to help will only increase," said Taryn Owen, president and chief
operating officer of PeopleReady and PeopleScout. "Rebounding amid the current staffing shortage
is a significant barrier for many businesses, and staffing firms are proving a
vital partner through this challenging time."
Steele
Smiley, founder of Crisp & Green, said calling the situation a "staffing
shortage" is misleading.
"It's
a fictitious storyline for the McDonald's of the world, for these tired, legacy brands
that are trying to keep people working there when those brands, for decades,
have failed to advance the working conditions to live up to today's employees'
expectations," Smiley said.
Surveys
have indicated people are turning away from the restaurant business, not only
because of low pay and unstable schedules, but due to an increase in the rudeness
of customers. Nearly a quarter of people who left their jobs last year worked
in the hotel and restaurant industries.
Carla
Diaz, co-founder of Broadband Search, said in an email that people like the freedom
they've gained from the gig worker economy.
"What
the restaurant industry needs to do is to rework their policies so that they become
more attractive to new workers or those returning," Diaz said.
"Business
owners must find a way to make their business less stressful for their workers
while balancing a customer centric approach as well. While customers are
important to any operation, if you have no workers to help you run it, you have
no business either way."
Another
piece of the puzzle, said Sean Behr, CEO of the technology company Fountain, which provides
fast-hire solutions, said the hiring process itself may be to blame.
"You
need to reduce your time-to-hire from weeks to days — even to hours," Behr
said. "If you take too long, there's a good chance your job candidate will go
elsewhere." Food Institute Focus
Why Food Brands Should be Targeting Gamers
Gamers
are proving to be an influential demographic in the food industry.
In
fact, research from Wunderman Thompson Commerce's Future Shopper Report 2021
shows that globally, 84% of online shoppers are gamers.
With
this in mind, The Food Institute explored what makes gamers such an
influential purchase group and how brands should be targeting them:
Why are Gamers So Influential?
"What
makes gamers so interesting is that there are so many of them," Naji El-Arifi, head
of innovation at Wunderman Thompson Commerce, told The Food Institute.
Wunderman
Thompson studied gamers in its Gaming Commerce report and found that 55%
of those surveyed said that gaming was an integral part of their lives, with
51% having spent money on in-game items.
Other
key stats included:
- 56%
of gamers are more likely to buy from a brand that features in their favorite
game
- 33%
of gamers have bought something that their favorite streamer has recommended or
used
- 33%
of gamers have discovered new brands while gaming
El-Arifi
noted that gaming has always had a close relationship with food and drink, with
massive sponsorships of events and streamers "happening all the time."
What Strategies Should Brands Use?
The
report also found that 49% of gamers wish their favorite brands were in their
games so they could purchase them for their avatar, a personalized character that
represents the user in games.
"This
data clearly shows us that, if this is how people feel now, before the eventual
arrival of the metaverse, we can only expect these numbers to keep rising,"
said El-Arifi. "Which means brands need to start treating gaming as another
channel that they can use to create experiences for their customer."
He
added that brands should be experimenting with technology and talking to gaming
companies to put plans in place for the future.
"For
example, brands need to get better at creating 3D models of their products that
can be used across augmented reality, virtual reality, and gaming," added
El-Airfi. "It only stands to reason, that in time, we will be able to order our
meals directly from inside a game and have it delivered to us."
Brands Ahead of the Game
Some
big players in the food industry have already begun implementing marketing
strategies around gamers:
Kellogg Company: Kellogg's Pringles brand brought a video game zombie to life in a Twitch livestream in Europe. The
livestream featured "Frank the Gaming Zombie," a game character in the West
of Dead video game.
"We
are laser focused on understanding [gamer] behaviors and the role that culture
can play in attracting and engaging them with our brands," Charisse Hughes, chief
brand & advanced analytics officer, at the Kellogg Company, told The
Food Institute. "Our data indicated that we could use gaming to engage the
Gen Z audience, who over-index on snacking and also spend ample time on social
media."
To
interact with gamers, Frank took over the Twitter accounts of Pringles in the
U.K. The campaign was one of the most talked about with 640K impressions and
drove a 25% increase in Pringles sales.
Chipotle: Chipotle launched its gamer strategy in 2019 to connect with
Gen Z consumers, CSP Daily News noted. The brand has taken part in
in-person gaming events and has partnered with well-known gamers, in addition
to establishing itself on platforms like Fortnite and Twitch.
Hellmann's: In December 2020, Hellmann's launched its own interactive
island within Nintendo's Animal Crossing: New Horizons, reported The Grocer.
Wingstop: Wingstop released a commercial promoting its boneless wings
that used the "boneless dance" popularized by Fortnite, an online battle royale
game. Food Institute Focus
Store
News:
- Tim
Hortons has secured
a deal to add 300 locations in India over the next decade, reported Yahoo.com
(March 15). Full Story
- McDonald's
is bringing back
Szechuan Sauce nationwide, exclusively on the McDonald's app. Full Story
- Meanwhile,
McDonald's McPlant burger test appears to be off to a tepid start, with poor
reception by many consumers, reported Seeking Alpha (March 23). Full Story
- Additionally,
McDonald's shareholders will vote this spring on whether or not the company
should conduct a civil-rights audit. The restaurant chain had previously asked
the SEC to let it omit the proposal from its annual proxy, saying it
would interfere with lawsuits brought by Black franchisees and employees,
reported Bloomberg (April 6). Full Story
- Lancaster
Colony Corp. said it
reached an agreement with Arby's Restaurant Group Inc. to be the sole
supplier of its sauce and sauce products to U.S. and Canadian retailers,
reported MarketWatch (Mach 21). Full Story
- Restaurant
Brands International has
pledged to phase out its use of PFAS (perfluoroalkyl and polyfluoroalkyl)
chemicals in food packaging, reported The Washington Post (March 23). Full Story
- Dairy
Queen is expanding
its burger offerings with five burger flavors for U.S. customers, reported CNBC
(March 29). Full Story
- Chipotle
Mexican Grill is
relaunching Guac Mode, an exclusive benefit for Chipotle Rewards members. Full Story
- Krystal plans to open its first franchise in
Puerto Rico. Full Story
- WaBa
Grill continues its
California expansion with 13-store development deal. Full Story
- Taco Bell and Sweetgreen are among the
latest chains to introduce or test subscription programs, betting that
consumers will be interested in the chance to pay upfront for a taco a day or a
discounted salad, reported The Wall Street Journal (March 30). Full Story
- Papa John's entered a major refranchising
agreement with Sun Holdings, in which Sun Holdings has assumed control
of 90 Papa John's restaurants in Texas, reported Meat + Poultry. Full Story
- Pizza
Guys is further expanding its California
presence by opening its newest location in San Carlos. Full Story
- Rush
Bowls is looking to continue its rapid national
expansion and have 50 locations open by the end of 2022. Full Story
- The latest push by Donatos to expand in Florida
includes a 3-store deal in Fort Myers with Herwig Enterprises, with the first
location slated to open later in 2022. Full Story
- Cracker
Barrel virtual brand
Chicken n' Biscuits will now offer a new, exclusive Homestyle Chicken
Sandwich at 400 locations nationwide via DoorDash, Uber Eats and Grubhub.
Full Story
- Panera
Bread is piloting Miso
Robotics' new automated coffee brewing system as it doubles down on its
drink subscription program. It's part of a broader shift across the restaurant
industry toward automation as many eateries struggle to find workers and labor
costs rise, reported CNBC. Full Story
Executives
on the Move:
- Southern Classic
Chicken promoted Tom
Gerdes to vice president of operations. Full Story
- Walk-On's
announced the hiring
of Sam Patterson as chief financial officer. Full Story
- Red
Lobster CEO Kelli
Valade is leaving the seafood chain after less than a year and gave no reason
for her departure, reported Restaurant Business (April 4). Full Story
- Denny's CEO
John Miller is
retiring from the family-dining chain after more than a decade in charge,
reported Restaurant Business (April 8). Full Story
