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Report: LTOs Build Excitement, Drive Engagement

Limited-time offers play a pivotal role in generating buzz, fostering variety, and influencing consumer behavior in the foodservice industry, according to Circana, which analyzed more than 30 unique LTOs.

As part of the study, the market researcher used its longitudinal receipt panel and buyer recontact surveys to delve into the nuances of purchasing behavior across diverse foodservice categories, including beverages, main dishes, side dishes, desserts, and breakfast items.

Its study finds that LTOs build excitement for all consumers and drive engagement with existing, heavier buyers. As heavy buyers fade, LTOs emerge as tactical approaches to maintain engagement and boost spending. The report highlights the balance of addressing cannibalization risks by implementing strategic pricing, targeting specific behaviors, and introducing LTOs with premium features, or targeting new behaviors such as individual portions or breakfast items.

“Nostalgia is a powerful ingredient in the recipe for LTO success, targeting older consumers by resurrecting previously discontinued menu items,” said David Portalatin, senior vice president and industry advisor, food and foodservice, Circana, in a statement. “While LTOs are designed to be temporary, their impact on the perception of a brand is lasting, contributing to maintaining a positive brand image even after the limited-time offer concludes.”

Innovation doesn’t always demand a revolutionary concept; sometimes, simplicity prevails, according to Circana, which cited Chipotle's introduction of the Chicken al Pastor (pictured above) as an LTO earlier this year. "The Chicken al Pastor not only engaged existing buyers, but also drove those buyers to spend more compared with their previous visits," according to Circana.

Priced slightly higher than the regular chicken offering, over two-thirds of purchasers considered it to be of very or fairly good value for the price, contributing to an increased party check. Nearly 80 percent of Chicken al Pastor buyers expressed an intention to visit Chipotle more frequently, showcasing the LTO’s influence in reshaping consumer behavior and fostering brand loyalty.

"Chipotle’s success with the Chicken al Pastor underscores the role that carefully crafted and strategically priced LTOs can play in driving customer engagement and market competitiveness," according to Circana.

Related: DoorDash Releases Trend Report; Natural Grocers Predicts Trends.