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Demand for Gastronomic Experiences Grows in Australia: Lessons for Chains

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The demand for nonconventional foodservice formats in Australia aptly reflects the country’s increasingly adventurous foodie culture. Chefs are using the Australian market to experiment with new culinary concepts and creative formats, and simultaneously, Australians are trading up to satisfy their demand for greater gastronomic experiences. This greater culinary movement is increasingly gaining traction, much to the detriment of chained foodservice establishments. The total value of chained full-service restaurants in Australia fell 7% in 2015, for example, while the value of independents, by contrast, increased 2%. In order to keep pace and remain relevant to this emerging, largely millennial, consumer base, chains have tested the market with new concepts, albeit with mixed success. Traditional chains will likely always have a place in the market, but will find it difficult to capture the attention of this emerging demographic unless they become more relevant to their uniquely adventurous preferences.

Foodies welcome

Boosted by a generally healthy economy, Australian consumers are turning to nonconventional foodservice formats as an outlet in which to have fun, socialise, and spend their hard earned dollars. The Australian market, therefore, has become a sort of playground for both international and domestic chefs alike to experiment with new foodservice concepts. In the wake of this movement, pop-up restaurants have found success in Australia’s great food cities that cater specifically to this adventurous subset of Australian diners with money to spare. Copenhagen’s world-renowned Noma recently appeared in Sydney for its second pop-up appearance after a highly successful stint in Tokyo. At A$485 (approximately US$339) a seat, reservations are booked solid across the restaurant’s planned ten weeks in operation, with thousands of hopeful diners on the waiting list.

Noma exemplifies the success that traditional pop-ups have had in the Australian market, but other pop-ups have taken an even more alternative approach. Fervor, a unique culinary concept, is a traveling pop-up that wanders along Australia’s coastline, scheduling appearances in one- or two-day events at a time. Fervor sets up shop in natural, remote settings, allowing diners to eat outdoors in a communal picnic setting. Chefs source the day’s ingredients from the wild in order for each dish to remain completely natural and true to local customs and cuisine.

Emerging concepts like Fervor are breaking the boundaries of traditional foodservice formats and represent a trend that is evolving and redefining what it even means to be a restaurant. Australian consumers have clearly become more interested in the gastronomic experience than simply in the food itself. Restaurants have accordingly played around with these boundaries in order to maximise the consumer experience. The Farmhouse in Sydney’s Kings Cross neighbourhood offers communal seating and set menus within a particularly attractive and rustic space, and Sydney’s Lentil as Anything offers a pay-what-you-want service, allowing consumers to decide how much the dining experience was ultimately worth to them.

While these examples reflect the growing demand for greater gastronomic experiences, they remain at the very top tier of full-service dining. A greater demand for unique experiences exists amongst consumers that are increasingly willing to trade up, but perhaps are unable to afford the exorbitant costs of fine dining. This interest is ultimately driven by the exclusivity and unique nature of the experience, regardless of cost. California’s In-N-Out Burger made a pop-up appearance in several Sydney locations recently in which queues began forming at 06.00hrs and led out the door as consumers waited hours, at times, to get their hands on a gourmet, yet affordable, US-style burger. The demand was driven by the restaurant’s hushed appearance. Without much in the way of advertising, Aussies were intrigued by the exclusiveness of being in the know, and by the temporary nature and limited availability of the pop-up.

Fast food responds

This growing movement of nonconventional foodservice formats and unique culinary experiences has shaken the stability of traditional fast food chains that are largely unable to capture the attention of this emerging consumer base, but some chains have responded. McDonald’s introduced the Create Your Taste concept in which consumers could create their own bespoke burgers online or from in-store touch screens which provides the option of adding or replacing McDonald’s traditional ingredients with healthier, or at the very least, more artisanal, alternatives.

This service offered a way for Australians to get the exclusive experience they demand by providing consumers the means to have control over the food they consume. The Create Your Taste concept has had a positive impact on McDonald’s sales in Australia, and sales at Australian outlets have offset general declines in the region, according to company estimates. The concept has since been rolled out to all Australian outlets, as well as an initial set of outlets across the US market to help spurn slumping sales there.

Not all fast food chains have fared as well. KFC, in a similar move, launched a new concept store called KFC Urban in greater Sydney’s bustling Parramatta neighbourhood. KFC Urban was based on Canada’s KFC Fresh which offers beer and cider on tap and a healthier, pared down menu that caters to the specific demographic of the neighbourhood in which it is located. KFC Urban was KFC’s attempt to imitate the success of the fast casual concept; a category in which total foodservice value increased 22% in Australia in 2015. KFC Urban was outfitted with a more modern, wood-themed interior, and integrated healthier ingredients including red quinoa and corn salsa to featured menu items. KFC Urban closed after just six months in operation, however, after failing to obtain a critical liquor license, and because KFC Urban as a concept was not distinct enough from the regular KFCs that dot the city. KFC Urban was too ambitious for the foodie neighbourhood it had entered and ultimately failed to reach consumers there.

Lessons learned

Chains, by definition, provide predictable meals at comparatively affordable prices, but this traditional concept is nearly at complete odds with the unique and adventurous experiences that Australian consumers demand. This is the challenge for chains in Australia, but chains could benefit from experimenting with new concepts as well, in both cost effective and creative ways. Chains should utilise their strengths while capturing the draw of exclusivity. This could be accomplished in say a seasonal pop-up, with limited branding and a targeted audience. KFC might find success in a fried chicken pop-up stand on Bondi Beach in summer, or McCafé might offer wintertime spiced cider kiosks in urban areas with high footfall, to list some possibilities. Furthermore, if these experiments ultimately fail to attract consumers, given the low overhead costs in opening a pop-up, closing one down is likely to have little impact on the chain either way, and the chain will have learned from the experience.

The Australian foodservice market is a haven for culinary creativity and is attracting the attention of global restaurateurs looking to make their mark. As millennials mature into the Australian market, they are increasingly willing to trade up for exclusive gastronomic experiences, and while traditional chains are unlikely to compete directly with the creative pop-ups of internationally renowned chefs, they may be able to recreate the allure of the concept, especially as a service to consumers priced out of the fine dining echelon. Chains ought to utilise this distinctly adventurous market to test new concepts that could then be incorporated in other developed markets in order to revive sales and reach an emerging global consumer base that increasingly expects more.

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