Thursday 29 September 2016

Innovations come from the land Down Under as portly Australians gobble up fast food

Jane Wardell

Published 17/08/2015 | 02:30

A Domino’s store in Sydney advertising its driver-tracking app
A Domino’s store in Sydney advertising its driver-tracking app

Fast food may be falling out of favour in many countries but companies are making healthy profits and boldly innovating in the unlikely market of Australia.

  • Go To

Contrary to stereotypes of a beach-going community of fitness fanatics, new official data shows 40pc of Australian adults are dangerously obese and have a poor diet filled with fast food.

That makes Australia a hotbed for innovation by companies including Domino’s Pizza Enterprises, McDonald’s and Yum Brands Inc’s KFC and Pizza Hut as they struggle to win over health-conscious diners in other countries.

“We’ll continue to push the boundaries of digital innovation this year, creating barriers to entry for our competitors,” Domino’s chief executive Don Meij said last week after reporting a 40pc jump in annual profit globally. Domino’s, which operates in six countries, is adopting ideas from the new sharing economy to grow its slice of the A$14bn ($10.33bn) quick service restaurant trade in Australia.

In what it claims as a world-first, Domino’s in May launched a driver-tracking system inspired by Uber Technologies’  ride-sharing app that lets customers follow their pizzas’ journeys using smartphones, tablets and TV screens. It aims to use that technology to charge customers extra for guaranteed 15-minute delivery, a premium service designed to steal customers from drive-through outlets.

Domino’s plans to roll out its driver tracking service to the Netherlands by Christmas and to Japan, France and Belgium by the end of next year. It also offers crowd-sourcing app Pizza Mogul. Launched a year ago, it lets customers  design pizzas, market them on social media and pocket a cut of the sales.

McDonald’s has 750 stores around Australia with touchscreen kiosks, another world first, allowing customers to customise burgers. Don’t like pickles? Skip them. Want a different condiment? Choose from a selection. In some outlets the “create your own taste” burgers are presented on wooden boards and the fries come in a basket.

“We are going to learn a lot of how that works and when something works we can transport it from market to market at pace,” McDonald’s chief executive Steve Easterbrook told reporters.

Australia is a perfect testing ground for ideas because the country of about 23 million people has a mature food market, educated consumers and its isolation affords clear analysis of how innovations  perform.

“Opportunity costs are low, global competitors don’t closely track the market, so you can camouflage what you’re doing,” said Rohan Miller, a business expert at Sydney University.

There’s demand for fast food. The government-backed Commonwealth Scientific and Industrial Research Organisation (CSIRO) found that on average Australians ate three times more junk food than the recommended daily allowance.

“What we’re finding is people are having larger portions of junk food, more often,” CSIRO’s  Manny Noakes said. So far, consumers have gobbled up the new products and technology.

McDonald’s Australian business bucked the US downward trend to post 10 consecutive months of positive sales in June. It also quietly opened The Corner cafe in Sydney last year, a rebranded outlet with white frontage, rustic wooden seating, potted plants on the counter and fashionable South American grain quinoa on the menu.

Sales at KFC have rebounded in Australia since 2010 after it launched ordering apps and social media marketing.

Sales for its parent Yum, which also owns Pizza Hut and Taco Bell, have been rising about 3pc a year.

KFC opened its own gourmet trial store in Sydney in February, a concept it intends to roll out nationally if it proves successful. Australians can expect to be subjected to even more tests as companies look to diversify from traditional offerings.

The change is reflected in McDonald’s latest national ad campaign: “How very unMcDonald’s.” (Reuters)

Reuters

Read More

Promoted articles

Editors Choice

Also in Business