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How Reviews Shape the US Food Industry: Case Studies of Rise and Fall

Online reviews now shape success in the $1.1T US food industry, where customer trust and social buzz decide which restaurants rise or fall in the online era of food and dining.

How Reviews Shape the US Food Industry: Case Studies of Rise and Fall

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Online reviews and social media virality dictate fortunes in the $1.1 trillion US food industry, where 90% of consumers rely on peer feedback, per 2024 Nielsen insights. The pandemic accelerated this, with QSR and fast-casual segments seeing traffic swings tied to sentiment. Positive reviews spark loyalty and expansion, while negative ones fuel boycotts and losses. This updated essay balances narratives with added positive cases: Red Lobster's promo flop, McDonald's AI mishap, Popeyes' sandwich surge, Chili's TikTok revival, and Panera's lemonade lawsuits, plus new positives like Poppi's gut-health hype, Crumbl Cookies' dessert dominance, and Liquid Death's edgy water wave. These highlight agility, authenticity, and community in harnessing reviews for triumph or averting downfall.


Case Study 1: Red Lobster—Endless Shrimp Overload and Bankruptcy Fallout (2023-2024)

Red Lobster, a seafood restaurant chain operating 650 outlets and generating sales of $2.6 billion, had a hard time adjusting to the post-COVID situation. By 2023, it experienced a 20% decline in customer traffic primarily due to inflation and changing eating habits. To rekindle consumer interest in management, the leading shareholder, supported by Thai Union Group, decided to make its $20 Endless Shrimp promotion, traditionally a temporary bait, permanent in June 2023. The idea was twofold: to dispose of excess shrimp and increase the number of customers, but the plan did not account for the operational limitations.

The reaction surprised the stores, as the number of people coming in increased by 40% more than what was expected. The kitchens could not cope with the demands, and due to a lack of workers, the waiters had to attend to three to ten tables each. Yelp ratings dropped from 3.2 to 2.8 stars, with the discontent focusing on "miniature shrimp" and an hour-long wait. The outcry was further amplified on platforms such as Reddit and X, with the hashtag #EndlessShrimpFail even trending at 150,000 mentions, including posts about undercooked food and customers being pressured to buy more. Thai Union's exclusive supply agreement, which did not involve competitive bidding, was a double-edged sword, as it ensured a steady supply but also led to higher costs, resulting in food expenses accounting for 38% of revenue. 

Financially, the promo cost $11 million in Q3, contributing to a $76 million quarterly loss. Annual deficits hit $100 million, exacerbated by $1.5 billion in lease debt from a 2014 sale-leaseback. By May 2024, Red Lobster had filed for Chapter 11 bankruptcy, closing 100+ locations and shedding $300 million in leases. Same-store sales crashed 30% in affected markets, ceding share to rivals like LongHorn Steakhouse. Post-bankruptcy, new CFO Damola Adamilekun streamlined menus and decor, stabilizing comps at +2% by mid-2025. However, 40% of diners cited trust issues in surveys, per Restaurant Business. Red Lobster's lesson: untested promotions, ignoring customer feedback, and operational limits can precipitate existential crises, necessitating rigorous pilot testing and real-time sentiment monitoring.

Case Study 2: McDonald's—AI Drive-Thru Debacle and Recovery Pivot (2021-2024)

McDonald's, which has a staggering 13,500 outlets and sales of $25 billion in the United States, introduced the AI-powered IBM Automated Order Taker system in 2021 to simplify the drive-thru process because of the shortage of workers. The system that recognized human voice was promised for 85% accuracy in taking orders, and it was implemented at more than 100 locations by 2023. However, the practical application of the technology was not very successful, and the mistakes made became so widespread that they affected the brand's reliability and even went viral.

The errors in the TikTok videos were really astounding: a client ordered a McFlurry and received "bacon on ice cream," another one got nine sweet teas instead of one, and a guy was charged more than $1000 for 260 McNuggets. The AI was confused by the accents and the noise, leading to the mishearings, such as McDouble" being heard as "McBubble." The Google ratings at the places where the tests were conducted decreased by 0.5 stars to 3.5, while the reviews on Yelp were criticizing "AI nightmares." The hashtag #McDAIFail got 500,000 views and trended, which resulted in calls for a boycott; 60% of the consumers surveyed by YouGov said they did not trust food-service AI. There was a reduction of 1.5% in same-store sales for Q2 2024, with a 3% decline in drive-thru traffic, which accounts for 40% of the revenue; hence, the loss of $150 million in development and PR damage, according to the NDP Group.

McDonald's shut down the program in June 2024, and CEO Chris Kempczinski acknowledged the problems with the accuracy. The $300 million shift to human-AI hybrid systems and app incentives increased loyalty sign-ups by 15%. Comps had a +4% rebound by Q4 2024, but competition like Shake Shack took over share with human-centric models. This debacle illustrates the danger of introducing lap tech without extensive beta testing, as the negative virality could destroy trust faster than innovation could create it.

Case Study 3: Panera Bread—Charged Lemonade Lawsuits and Trust Erosion (2023-2025)

Panera Bread, a 2,100-unit fast-casual chain with $5 billion in sales, launched Charged Lemonade in 2022, a 390 mg caffeine drink marketed as a "clean" energy boost. Vague labeling obscured risks, leading to the three lawsuits by October 2023. The first, from Sarah Katz's family, alleged the drink caused fatal cardiac arrest in a 21-year-old with a heart condition, mistaken for regular lemonade. Two more suits followed, citing deaths and injuries from undercollected caffeine levels.

Social media erupted: #PaneraPision trended with 300,000 mentions, and TikTok's warning of "lethal lemonade" hit 50 million views. Yelp ratings fell 0.4 stars from 3.7, with reviews decrying "hidden dangers." Health experts noted risks like arrhythmias in 20% of young consumers. Q1 2024 sales dropped 2%, with a $200 million market cap hit, per Fast Company. Panera discounted the drink in May 2024, setting lawsuits for a million by July 2025.

Recovery focused on transparency: new low-caffeine options and clear labels lifted ratings +0.3 stars and comps +3% by 2025. Panera's misstep highlights the necessity of explicit health disclosures to prevent negative narratives from derailing trust.

Case Study 4: Popeyes-Chicken Sandwich Frenzy and Market Domination (2019)

Popeyes Louisiana Kitchen, with 1,200 stores and $3.3 billion in sales, launched its $3.99 fried chicken sandwich in August 2019 via a tweet: "Y'all tried the new #PopeyesChickenSandwich yet?" The brioche-bun, pickle-topped breast sparked the #ChickenSandwichWar, with 1.2 million Twitter (now X) mentions and 10 million TikTok views of sold-out lines. Yelp ratings soared from 3.4 to 4.1 stars, with fans praising its "life-changing" crunch. Technomic reported 51% new customers, driving 300% traffic spikes.

Q3 2019 sales surged 63%, adding $65 million in earned media value. Parent Restaurant Brands International's stock rose 10% to $65, and comps sustained +15% into 2020 despite lockdowns. The shortage forced a six-week pause, but the November relaunch cemented dominance. By 2025, the sandwich drives 20% of revenue, inspiring menu expansions like wings. Popeyes proves a quality product amplified by organic buzz can outpace ad budgets, redefining market share through viral advocacy.

Case Study 5: Poppi-Prebiotic Soda's Viral Leap to Billion-Dollar Brand (2020-2025)

Poppi, a low-sugar, prebiotic soda founded by Allison Ellsworth, transformed from a niche product to a $2 billion brand by 2025. A 2021 TikTok repost of its 2018 Shark Tank pitch went viral, with Gen Z raving about flavors like Strawberry Lemon. Amazon reviews hit 4.5 stars, and #DrinkPoppi garnered millions of views for its gut-health pitch. Sales jumped from $10 million in 2020 to $500 million in 2024, fueled by influencers' collabs and humorous X posts.

Despite an $8.9 million settlement in 2025 over health claim scrutiny, Poppi's community-driven buzz sustained 100%+ YoY growth, culminating in Pepsi's acquisition. Distribution reached 50,000 stores, with social media driving 70% of sales. Poppi's ascent shows how authentic, health-focused branding and viral reviews can catapult startups to mainstream success, provided legal risks are navigated transparently.

Case Study 6: Crumbl Cookies—TikTok-Fueled Dessert Empire (2020-2025)

Crumbl Cookies, launched in 2017 by Jason McGowan Hemsley, exploded in 2020 via TikTok unboxings of weekly flavors like Churro or Pink Velvet Cake. Videos of gooey textures hit billions of views, boosting app rankings and ratings to 4.7 stars on Google. From one Utah store, Crumbl scaled to 1,000+ locations by 2025, with a $1 billion valuation.

Flavor drops drove 300% traffic spikes, with social-first strategies like vibrant X posts and franchise models fostering loyalty. Despite copycats, Crumbl's scarcity-driven model and shareable content maintained dominance, contributing 15% to dessert market growth. The case illustrates how user-generated buzz and innovation rotation can turn positive reviews into exponential scaling, outpacing traditional competitors.

Case Study 7: Wendy's—Roasting Rivals for Social Media Supremacy (2017-Present)

While scandals dominate headlines, positive reviews can propel underdogs. Wendy's, a 1969-founded QSR with $1.9 billion in sales in 2016, lagged McDonald's in buzz. Enter its Twitter (now X) "roast" ers, starting in 2017, which weaponized sass into viral gold.

The pivot began with a small social team noticing fans' love for memes. Responding to a McDonald's tweet with "Our beef is why too cool to freeze," Wendy's unleashed burns like calling competitors' nuggets "sad" or fake accounts "impostors." #NuggsForCarter—a 2017 reply to teen Carter Wilkerson's retweet quest—garnered 3.5 million engagements, setting a record and yielding free nuggets for charity. Reviews shifted: Twitter (now X) sentiment rose 25%, per Brandwatch, with users praising "savage" wit.

Impact was tangible. Q1 2018 same-store sales surged 3.5%, outpacing rivals by 200 basis points, and the stock climbed 15% to $16. Mention hit 1.2 million monthly, driving 20% app download growth. By 2022, social drove 15% of traffic, adding $200 million in revenue. The strategy's genius? Humanizing a 50-year-old brand, fostering loyalty amid stale ads.

Wendy's ascent proves positive, edgy engagement turns casual fans into evangelists, boosting visibility without big budgets.


Conclusion

These case studies—Red Lobster and its unsuccessful Endless Shrimp, the AI drive-thru McDonald's failure, the deadly lemonade lawsuits by Panera, the viral sandwich hit by Popeyes, the prebiotic soda craze by Poppi, and the TikTok empire of Crumbl cookies—have shown the tremendous strength of reviews in the US restaurant sector. Social media, especially X and TikTok, intensified negative feedback, which may lead to immediate financial and reputational harm, such as the loss of sales of up to 30 percent and the loss of market capitalization of up to $200 million. On the other hand, positive buzz may drive brands to billions of valuations and market leadership, and viral campaigns may lead to 300 percent spikes in traffic. It all depends on how agile you can be: either respond to criticism in a transparent manner, as Panera and McDonald's did, or use genuine interaction, as Popeyes, Poppi, and Crumbl did, with 90 percent of market respondents believing the reviews and a vast potential market of 1.1 trillion. Brands need to track sentiment in real time, test new ideas carefully, and match the cultural currents to make digital whispers become a roar of loyalty or to recover after misjudging the course.