Food and beverage trends within the Canadian gaming industry

By Jeff Dover

Today, non-gaming amenities including foodservice represent 26 to 60 per cent of revenues for the largest casino operators. According to the Las Vegas Convention and Visitors Authority, visitors to Las Vegas in 2014 spent an average of US$282 per trip on average on food and beverage, which represents 53.2 per cent of the average spend on gambling. Moreover, spending on food and beverage is growing at a much faster pace than spending on gaming. Spending on non-gaming amenities in Las Vegas has exceeded gaming revenue since 1999.Food and beverage offerings in casinos have changed. Once considered an amenity to attract gamers to casinos and, when they got to the casino, to extend their length of stay, food and beverage offerings and other non-gaming amenities have become the source of a large portion of casino profits.

In the early days of casino gaming in Canada, many jurisdictions hoped to generate economic impact from tourist visits to casinos. Not surprisingly, this did not occur. Few Canadian casinos had the non-gaming amenities to attract visitors from outside the local area.

Further, gaming has expanded rapidly across North America and the world. Very few jurisdictions have become gaming destinations. “Locals” make up the significant portion of gamblers at domestic casinos and, as they live close by, do not need to use casino restaurants. Casino food and beverage offerings must attract these patrons to the restaurants. Equally as important, casino food and beverage offerings must leave patrons wanting to return. Mediocre food or service becomes a risk in terms of competing for consumer entertainment dollars.

Difficult to please

The entertainment industry has conditioned casino patrons to expect high-end, complimentary food and beverage. These expectations have created quality and service expectations with respect to food and beverage offerings at casinos that cannot be easily met at price points acceptable to these patrons.  Casino food and beverage managers are constantly challenged in meeting gamer demands. Value is important in casino environments.

A casino’s food and beverage program should be designed with four goals in mind:

  • Provide a quality experience for diners;
  • Attract destination dining demand to the casino restaurants, which provides an opportunity to generate gaming demand;
  • Extend the length of stay of casino patrons thereby increasing gaming spend; and
  • Provide a further reason for patrons to revisit.

Casino patrons are typically a diverse group. Many casinos often try to be everything to everybody in their foodservice outlets. Such positioning will not attract destination gamers to the casino. Foodservice industry trends, however, provide some clues as to how to position casino foodservices.

The move to fast casual

Consider the movement from casual restaurants (think Swiss Chalet) to fast casual (think Five Guys Burgers and Fries and Chipotle Mexican Grill). Fast casual restaurants generate similar average store sales to casual restaurants but do so with a smaller footprint with a lesser staff complement. Several Canadian casinos are contemplating fast casual outlets.The NPD Group tells us that on average, Canadians eat at restaurants 207 times per year. While that is significant, it is 10 fewer visits than a year ago or 72 million fewer visits. In 2014, only young adults aged 18 to 24 increased their frequency of restaurant visit. This young adult group (and Millennials) are frequent restaurant diners; however, restaurant tastes and experiences sought by this demographic group are much different than those of the next largest group of restaurant patrons, Baby Boomers.  The challenge for operators is many of their core clientele are Baby Boomers while they are targeting Millennials for the future of the industry. Millennials represented 28 per cent of total restaurant visits in Canada in 2014, more than any other group (Baby Boomers represented 27 per cent of total restaurant visits).

Menu innovation is key

As restaurant visits are relatively flat (projected to increase by about one per cent per year), restaurants are attempting to steal share from competitors through menu innovation. The NPD Group indicates that 31 per cent of Canadian restaurant consumers look forward to trying new things and that 22 per cent will try a restaurant because of unique menu items. For casino restaurants, this means regular, limited-time-offer, menu specials to drive demand to the restaurants. These specials must be communicated to gamers through the loyalty program but also to the public at large to generate destination restaurant demand.

Thanks to travel, the Food Network, etc., consumers are well educated. They, especially the Millennials, demand authenticity in food items. Ethnic foods are increasingly popular; however, they must be authentic as opposed to the Canadianized dishes that were acceptable in the past. Consumers also want to know about a restaurant’s ethics. This means preparing food from scratch using local foods and authentic recipes. Many restaurants are communicating their environmental practices, food sourcing and clean ingredient decks and this trend is likely to continue. Restaurant operators need to ensure sound environmental and ethical practices in their foodservice operations and communicate these practices to their clientele and potential clientele.

Embracing technology

Technology is changing the way restaurants operate. Restaurants now have mobile apps, ordering kiosks and tablets available to place orders. Technology is being used to attract restaurant customers. Perhaps an app allowing patrons to place an order at a restaurant from the gaming floor combined with a text message when it is time to come to the restaurant to eat would be popular, especially with the key younger demographic. Millennials embrace the introduction of technology to restaurants, especially when it provides convenience and the chance to customize orders, has a loyalty program and provides information on deals and specials.

Another key trend is providing healthier items. In Canada, over half the population is overweight or obese. Time famine means that Canadians eat out more often than in the past. For restaurants, including casino restaurants, healthy options on the menu are required for a significant percentage of the potential market. Where a vegetarian menu option was sufficient 20 years ago, operators today must provide options for a variety of dietary needs.

The three square meals a day that we grew up with is no more. The fastest growing meal periods in restaurants are morning and evening snacks. Consumers, particularly Millennials, want to eat what they want, when they want it and where they want it.

In conclusion, one of the greatest challenges facing casino operators is attracting younger demographics.  These consumers, however, desire a different dining experience than their parents (many of whom fit the demographic of the core Canadian gamer). Providing an exciting, authentic, customizable and ethical dining experience will be the key to attracting Millennials to casino restaurants.


About the author:

Jeff Dover is a Principal with fsSTRATEGY, an alliance of senior consultants focusing on business strategy support – research, analysis, innovation and implementation – for the foodservice industry. Their team has extensive consulting experience in foodservice across Canada. They also offer international experience, having worked in the United States, Australia, South America, Africa and Europe. The fsSTRATEGY team is unique in that they provide service to all foodservice sectors (restaurants, attractions, hotels and resorts, gaming establishments and institutions) and all levels of the foodservice supply chain (growers, processors, distributors and operators). For more information, visit www.fsstrategy.com.

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