Restaurant Business July 15, 1997 Market Report: Kids Family Matters Can you cater to kids without alienating adults? Maybe – if you pitch to families, rather than children exclusively. By NANCY BRUMBACK CHILDRENS’ OPINIONS are a powerful part of the dining decision, not only for fast-food restaurants, but also for casual-dining chains that appeal particularly to families. The lengths to which restaurant operators go to win the kids’ vote range from a limited children’s menu and a coloring placemat all the way to ShowBiz Pizza Time’s Chuck E. Cheese’s playground-with-restaurant for the preschool set. The decision to appeal to children can be a profitable one, as Arctic Circle Restaurants in Midvale, UT, discovered. The 47- year-old chain with 90 restaurants serves burgers, sandwiches, and salads, plus milkshakes and malts. It claims to be the first chain to offer a kid’s meal package as such, but, notes Gary Roberts, president and CEO, “we did not have heavy usership among families with younger children, instead appealing more to the 32-45 crowd.” After a customer survey with store remodeling in mind, Arctic Circle decided to try a direct appeal to those younger families. About a year ago, the chain added a glass-enclosed playground area running about 750 sq. ft. to two stores it was remodeling. The results have prompted Arctic Circle to plan such playgrounds for all new stores and remodels. “Average sales in those two stores are up 36%-over the first nine months the sales increases ranged from 32-50%,” Roberts says. Attracting the family crowd has also produced sales increases closer to 50% in dinner daypart business and on Sundays. “Sundays were 40% of a normal day for us. In the playground stores, Sunday business is up 70-80% from the normal business,” Roberts says. “Before January 1996, kids’ meals were about 4% of sales, now they’re 6.5- 7%, and went up to 14% during an Easter promotion,” he says. Arctic Circle did cut the price on its kids’ meals, from $2.59-2.99 to $1.99, causing some concern among its franchisees “since a $1.99 kid’s meal is a very high food cost,” he acknowledges. But, Roberts points out to franchisees, the company’s research shows “the average ring with a kid’s meal is $13.50. Without a kid’s meal, it’s $6.50. If you get a kid, you’ve got a family.” The equipment, purchased from a supplier to school playgrounds for durability, costs about $30,000, plus the addition of the 700-1,000-sq.-ft. area to the 3,000-sq.-ft. typical Arctic Circle. To Roberts’ surprise, adding the playgrounds did not significantly affect insurance costs. “The liability is based on the square footage,” and insurance for the playground area costs the same per square foot as the rest of the restaurant. Arctic Circle added playgrounds at two more restaurants this spring and expects to have 10 remodeled by year-end. “All new stores will have them,” he adds. MAKING A RESTURANT appealing to children obviously will attract their parents as well. At the Rainforest Cafe, “16-18% of the menu items ordered are off the children’s menu,” says Jean Golden, director of marketing and public relations for the Hopkins, MN, company. Families with children are a big part of the company’s business. “The challenge,” notes Ron Pal, president of Technomic, the Chicago consulting firm, “is to do it without alienating the customer who would rather not be around children, maybe with a separate family area.” Restaurant operators also need to consider what age group they are trying to attract, says Paul. “It’s a moving target, with perhaps video games for older kids and game rooms for younger ones.” Sid Good, president of Good Marketing, a Cleveland consulting firm specializing in marketing to children, notes, “for years people have been following the McDonald’s model-appeal to the kids and the rest of the family follows.” “But with a sit-down restaurant, where the check may be a little higher, it’s just as important the parents have a good time. Restaurants shouldn’t miss the opportunity to make parents happy directly,” Good says. RESTAURANT OPERATORS tend to agree. Jon Rice, VP of marketing – at ShowBiz, notes Chuck E. Cheese’s restaurants have upgraded the pizza quality and added a salad bar. “Parents go to Chuck E. Cheese’s because the kids have fun. It is not an adult experience, but it has to be acceptable to the gatekeeper. Generally, parents’ expectations are low and they are pleasantly surprised,” says Rice. “People go to Peter Piper as a reward for the kids and as a family bonding experience. If the kids don’t have fun, the experience won’t work,” comments Robert Selby, VP of marketing for Peter Piper Pizza, Phoenix, where about 80% of the dinner business is families. “But our image and decor are not kiddy. It’s very mainstream family – upbeat, fun, bright.” And, the quality of the food is important: 30-50% of a Peter Piper’s volume is take-out; evidence families aren’t just visiting for the video games. Virtua Café, an entertainment concept with rides, video games, and virtual reality stations, opened in March in Coconut Grove, FL. It is an over-21 destination after 9 p.m., “but the family is a very important part of our business during the day, particularly Week-end days,” says president Joseph Sabga. “We are planning to market Sunday as Family Day,” with extra activities appealing to kids, he notes. “It’s too early to tell what percentage of our business is with kids. I’d guess 20-30%.” Good suggests several ways restaurants can increase their appeal to families with children. “Look at the entire dining experience and identify opportunities to engage the family,” he says. “For example, if there’s a long wait for a table, how do you entertain the whole family?” Coloring placemats don’t work at that point, and waiting in the bar is fine for adults, but not for children. Once the family is seated, Good would opt for “entertaining stuff to do at the table” rather than children’s activities, such as game rooms, away from the table. “Those involve adult supervision and parents don’t want to have to search for the kids and be jumping up and down.” In addition to kids’ menus and placemats, he suggests restaurants explore options such as puzzles and games. “In food presentation, do fun things with straws, cups, plates, and garnishes. It’s the whole reason for being there.” Finally, “fun desserts are especially important for kids, but also for the adults, though they may not admit it. Part of the experience is indulging in something special,” Good says. The element of fun is essential, Good emphasizes, noting the increased use of fun to sell products to adults, “particularly in the automobile market, where the image used to be performance, now it’s performance with fun.” Restaurant operators take a variety of approaches to key elements of catering to the kids’ market-from children’s menus and premiums to the entertainment aspects to hosting birthday parties. They’ve also come up with a number of ways to promote their children’s business, particularly getting involved with local schools. PICKY EATERS There’s no room for gourmet on children’s menus. MOST young children are not adventuresome eaters, and most children’s menus acknowledge that fact. The basics predominate- hamburgers, hot dogs, chicken fingers, pizza, and pasta. The creativity comes in the presentation, from clever names for meals to puzzles on the menu. Restaurants also are experimenting with the way kid’s meals are packaged and priced. Offering prizes or premiums is another aspect of the kids’ dining experience. Ground Round Restaurants, in Braintree. MA, has moved away from its strong children’s orientation in past years, when it included such promotions as children’s meals priced at a penny per pound of the child’s weight. The 163-restaurant chain is now positioning itself in both its Ground Round and new and future format, Gold Fork, as a casual-dining experience. The children’s menu is still important, however, and Ground Round expanded it last fall, developing a kid’s menu with photographs of each item, so non-readers can still choose what they want. The menu also includes an erasable drawing pad to entertain young customers until the food arrives. Ground Round developed kids’ entrees that are easy to manage, such as miniburgers and hot dogs, fusilli pasta instead of spaghetti and the pizza sliced in advance. NEW KIDS’ DESSERTS were added to the menu. There’s the Ooey Gooey Flower Pot-chocolate pudding and crushed chocolate sandwich cookies in a take-home flower pot with artificial flower and gummy worms -and the Wiggly Jiggly Worm Island- blue gelatin, whipped cream, sprinkles, and gummy worms, with a take-home umbrella. Friendly Ice Cream Corp., Wilbraham, MA, has long appealed to children and their families with its variety of ice cream desserts. About a quarter of the business in Friendly’s 707 stores involves kids, notes Vivian Brooks, a spokesperson for the chain. The chain recently introduced a new kids’ menu that combines food and ice cream into a package for easier ordering. The kids’ meals- entree, drink, and sundae-are priced at $3.49, and Friendly’s is testing a $2.49 price on weekday evenings to build family dinner traffic. Two new sundaes were developed to go with those packages. The Monster Mash combines mint chocolate chip ice cream with candies, hot fudge, whipped topping, and a cherry, while the Volcanic Explosion has an inverted vanilla ice cream cone with whipped topping and hot fudge cascading like molten lava down the side of the ice cream cone. At the Pizza Factory, an 86-unit chain based in Oakhurst, CA, the kids’ meal package includes a paper automobile with a piece of pizza bread and a coloring book and crayons in a pizza wedge box to amuse children until the pizza arrives. “Our menu has a lot of fairly fast things, because that’s important with children,” notes Nikki Van Velson, operations director. Bread sticks and a salad bar also make the wait easier. RAINFOREST CAFE, notes Golden, appeals to children because of its very concept-dining in a rainforest, complete with thunder and rain, live parrots, animatronic animals, and its environmental emphasis. Recently, the company introduced eight proprietary animal characters that are initially being used on apparel but eventually will appear in stuffed animal versions in the restaurants’ retail shops. Rainforest’s children’s menu is basic, with meals priced at $3.95 and $4.95. The entrees are given fanciful names – Buried Treasure is a peanut butter and jelly sandwich, and there is Planet Earth Pasta and Gorilla Grilled Cheese. Peter Piper, notes president Ron Petty, is focusing on value in its predominantly pizza menu. “For a family of four, there’s a large, two-topping pizza, four drinks, and 40 game tokens for $18.99.” “Our large, one-topping pizza is about $5 less than the competition, We don’t lose business to Pizza Hut,” adds Selby. Peter Piper is currently testing a Value Pack deal in five Utah restaurants, with pizza, drinks, and a choice of 40, 60, or 100 attraction tokens, with strong early reaction. “We’ve kept hearing from parents that the kids were begging for more tokens. This way they can decide how much to spend and when it’s over, it’s over,” says Petty. Chuck E. Cheese’s, is also running value packages to boost its non-party business. A typical deal is a large pizza, four drinks, and 60 tokens for $29. Restaurants trying to appeal to a generation of children, which has grown accustomed to prizes with their fast-food meals, should consider some sort of take-home item, notes Sid Good, the marketing consultant. “But if you’re going to give something away, it should reinforce the name of the restaurant.” He also suggests “having the kids leave something there”as an incentive to come back to a restaurant – perhaps a spot where decorated placemats or photos of kids can be displayed. Restaurant kids’ clubs, he adds, are effective “only if you are truly committed to managing them, doing the mailings and keeping it going. You need to follow through” if promises are made to kid customers. THAT’S ENTERTAINMENT Keep kids busy, keep them happy. OPINION on the level of entertainment to offer children varies. For some chains, such as Peter Piper, Chuck E. Cheese’s, and entertainment concepts such as Virtua Cafe, Hard Rock Cafe, and Planet Hollywood, the video games, playgrounds, ball pits, and other activities are a prime reason to choose them. Others, including Friendly’s, Rainforest Cafe, and Pizza Factory, focus more on food in a child-friendly atmosphere. Chuck E. Cheese’s activities are aimed primarily at young children. “Even though they do have some really cool video games, by the time kids are in their teens, we’re no longer cool,” says Rice. The entertainment aspects “are a good part of what sets us a part from other restaurants,” Rice notes. “Children perceive that most restaurants are for adults, but that Chuck E. Cheese’s caters to them, not to adults. From the minute they enter, they’re having a blast.” ShowBiz spent about $80 million to upgrade and enhance the game area of over 200 units, including tubular sky crawl mazes suspended over the arcade game areas. Peter Piper is targeting a slightly older crowd, though there are ball pits and kiddy, rides for the preschoolers. “The teens and ‘tweens come because we can attract the hottest video and simulator games. Kids love to play them and we have the best ones,” says Selbv. Petty adds that executives checked out the new Gameworks attraction in Seattle and found that their chain had a similar selection. “We are very much focused on the entertainment. There’s such a proliferation of choices out there today, that food alone is not the answer,” says Petty. For the adults, Peter Piper includes big-screen TVs tuned to major sporting events and finds, on weekends particularly, “you’ll see dads watching the game while the kids are in the game room. “You find very few dads who don’t have to be dragged kicking and screaming into Chuck E. Cheese’s,” he adds. PETER PIPER Restaurants are large – in the 10,000 – to 12,000-sq.-ft. range-seating 350-450. Each features 30-55 of the latest games. “We don’t own the games,” notes Petty. The chain has an agreement with a games supplier, which rotates in fresh games and splits the revenue with the restaurants. In its prizes area, Peter Piper tries to offer brand-name merchandise to enhance the value aspect. Customers can also save prize coupons over many visits and redeem them for brand-name merchandise such as audio equipment, sporting goods, and mountain bikes, even, in some markets, washers, dryers, and refrigerators. When Arctic Circle decided to go after young families, it opted for playgrounds instead of video games to appeal to younger children. “Video games are one kid, one machine and appeal to a different age group,” notes Roberts. The Pizza Factory stores offer video games, but on a lesser scope, anywhere from four or five to a roomful, says Van Velson. Some stores also have Lego tables for the little kids. Pizza Factory restaurants are oriented to local kids’ sports teams and encourage those teams to bring in game videotapes and play them on the restaurant’s large-screen TVs. Friendly’s, on the other hand, limits the activities to coloring books and placemats. “Our focus is a good meal and great ice cream, not video games,” says Brooks. Rainforest Cafe also opts for at-table activities, though, Golden points out, there are continuous happenings in the restaurant’s rain forest environment to entertain customers, and parents frequently, take children for a look around the restaurant before the meal comes. CLOWNING AROUND Putting on parties is lucrative. While CHUCK E.CHEESE’S has made a business out of children’s birthday parties, other restaurant operators vary in their enthusiasm for the party, business. Chuck E. Cheese’s has developed a new Showroom 2000 party-room prototype that includes a stage, animatronic characters, and video entertainment, but the chain is also working hard to position itself as a family entertainment destination as well as a party site, Says Rice. “Birthday party packages directly account for 12-15% of sales, plus related adult sales,” he says. That business is growing since Chuck E. Cheese’s, established a toll-free phone number and a dedicated staff for party reservations. Birthday party pricing runs $7.99-9.99 per child and includes pizza, drinks, cake, 16 tokens per child, decorations, a gift for the birthday child, balloons for all, and a staff member to manage the party. “We’d like every child to have a party at Chuck E. Cheese’s, but we don’t want to be exclusively a birthday, party place. It’s an issue of frequency,” says Rice. Advertising and promotions for value packs, coupons, and family specials are designed to build non-party, business. Peter Piper offers birthday parties and parties in general, for sports leagues or other groups. Cost depends on whether the party is for adults or children; a child’s birthday party runs about $3.75 per child. “Parties are a significant business, but not more than 5% of sales,” says Selby, who also views them as marketing opportunities. “If you have six to eight kids at a party, maybe half haven’t been to Peter Piper before.” ONE OF THE risks to having lots of parties is becoming known as a destination place for parties, notes Petty. “Our frequency is 24 times a year, versus one or two times” for a birthday party destination like Chuck E. Cheese’s. “We’re in the party business because we are located primarily in small towns,” says Pizza Factory’s Van Velson. The company produced a video for franchisees on how to run the party business, and about 5% of sales come from parties- birthday, after-the-game, and other occasions. Pizza Factories are furnished with tables and benches, making it easy to accommodate groups, and have a balloon man character for parties. Several party packages are available, for kids, teens, adults, and teams, and custom packages also are offered. In its first three months of operation, Virtua Cafe found itself in demand for birthday parties from age 5 up, says marketing manager Jill Weiner. There’s a themed room suitable for parties and the restaurant is running five or six birthday parties every weekend with no promotion. The kid’s birthday package, at $14.95 per child, includes lunch, decorations, balloons, and five virtual reality experiences. Arctic Circle offers parties in the stores with playgrounds and has contracted with a local clown association to entertain, says Roberts, but party business is still small, perhaps one a month. Other restaurants have opted out of the organized party business to avoid disrupting other customers. Friendly’s, says Brooks, has party rooms in some larger locations, but concentrates its birthday business instead on ice cream cakes to take home. READN’, WRITIN’ & RESTAURANTS Linking up with schools makes for effective marketing Many restaurants targeting the children’s market have linked up with schools in a variety of ways to get their name in front of kids. Each Rainforest Cafe location, for example, has a $150,000 budget for educational outreach and has involved over 300,000 children, says Golden. “Our curators take the parrots to schools and teach kids about the rainforest and vanishing habitats,” she says. A local third grade class even attended the company’s annual meeting in Minneapolis. “There’s a real value in educating children and building an awareness of the environment,” says Golden. Friendly’s has contracted with certified teachers to develop lesson plans for schools to use. “A lot of school budgets have been cut. This program provides teachers with additional material. We also feel it’s important to give to kids and families outside of the restaurant environment,” says Brooks. Before last fall’s presidential election, Friendly’s offered schools an Ice Cream Poll, creating sundaes representing Clinton and Dole and asking fourth graders to vote for their favorite, along with information on voting and citizenship. (The Clinton sundae, made with rocky road ice cream, won.) A second program, Friendly’s Flavor Fanatics, stressed persuasive writing, says Brooks. Students wrote essays telling in 50 words or less why their classroom should be chosen as a flavor fanatic. Each classroom chose one essay and submitted it to the company. “We chose a winning class from each state in which we operate and treated the class to an ice cream social.” In a different, but still school-related, effort, Peter Piper supplies a lot of school lunch programs, says Petty. “We’re principally afternoon and evening business, so that fills the morning piece, and it’s a great marketing tool.” Copyright © 1997 Restaurant Business 