While some would say it was Subway’s Eat Fresh concept that pioneered the fast-casual dining concept in 1965, the industry trend of restaurants falling somewhere between fast-food, drive-thru (such as McDonald’s, Taco Bell and Burger King) and classic sit-down casual (along the lines of Applebee’s or Olive Garden) is growing at an unprecedented rate. From burgers to burritos, as more and more of these establishments pop up across the U.S. and Canada, the fast-casual hybrid is quickly dominating a significant share of the food and beverage market.
A new study by restaurant consulting and research firm Technomic Inc. (Technomic), “Future of Casual Dining Consumer Trend Report,” shows just how sizable the fast-casual scene has become: “85 percent of consumers surveyed said they eat at fast-casual restaurants at least once a month, and 82 percent reported visiting a traditional casual-dining brand once a month.” The large majority of 85 percent is impressive for a market sector that barely existed in the 20th century.
The Makings of an Industry Giant
Over the past decade, the emergence of the fast-casual eatery has become a force to be reckoned with; however, what are popular chains like Chipotle, Panera Bread and Five Guys doing to be ahead of the pack? The promise is relatively high-quality, fresh, comparably healthier food at a moderate price, which has attracted hordes of customers away from the fast-food market.
Dan Tristano, executive vice president of Technomic, says fast-casual’s blend of quality, speed and value has been an evolution, not a revolution. Earlier chains like Subway, Fazoli’s, Fuddruckers and others had the elements of fast-casual, and the assembly-line delivery style isn’t anything new. “Subway deserves the credit for that,” says Tristano. “But it was the next generation, chains like Chipotle and Panera Bread, which managed to pull all of the elements together.”
Tristano adds that what Chipotle has done, unlike many others, is to open the kitchen. “Everything, not just the burrito assembly, is done in front of the customer, creating the feeling of a more upscale experience with the sights and sounds of the grill sizzling and the smells of cooked meat,” he explains. “That creates engagement between the customer and the preparer.”
Room to Grow
Bonnie Riggs, an analyst for consumer market research firm NPD Group Inc. (NDP), says the fast-casual segment evolved to fit a specific need in terms of quality and price; she also says there’s plenty of room to grow in the market for restaurants to position between fast food and casual dining. “This was a self-starter,” adds Riggs.
In the U.S., NPD found that fast-casual establishments in Colorado and Florida are doing particularly well by tracking markets around the country with the highest proportion of fast-casual restaurants per resident; the three densest areas were in Colorado. The Fort Collins-Loveland metro area had 13.14 fast-casual units per 100,000 residents; followed by the Denver-Aurora-Broomfield metro area with 12.76 restaurants per 100,000 residents; and Boulder with 12.53 units per 100,000 residents.
“Many of the fast-casual chains have been adding units in an otherwise soft restaurant environment,” shares Greg Starzynski, NPD food service director of product management. “Traditional quick-service restaurants have taken notice and are working to compete with the fast-casual chains’ offerings, especially in terms of the freshness and quality of food. All of these efforts will benefit both the consumer and the industry.”
That might explain why KFC, one of the most famous fast-food chains, is starting up KFC-Eleven, a unique fast-casual concept. The new menu is a nod to global cuisine, including flatbreads, salads and rice bowls in flavors such as sweet orange ginger, Caribbean tango and southwester Baja; all made with the chain’s signature grilled or fried chicken.
“People are eating very broadly,” notes Anne Fuller, KFC’s senior director of concept development, in an interview with the Huffington Post. “They will have Mexican food one night, American food another night…we can accommodate a diverse group.”
The same trend is growing all over North America and well into Canada, as well. Build-your-own menu items are one of the hallmarks of the fast-casual segment; it’s this consumer customization that’s helped to propel industry growth across Canada and the U.S.
“The surging popularity of concepts riding the personalization wave is hardly surprising,” explains Jessica Cravero, senior business development associate for Technomic. “After all, today’s consumers are used to customizing everything from their social media displays to the temperature of their car.”
In 2011, fast-casual restaurants on Technomic’s list of Canadian Top 200 Chains posted sales growth more than 10 percent. The list’s standouts include: Mucho Burrito Fresh Mexican Grill, which spotlights build-your-own burritos; Hero Certified Burgers, with half a dozen cheeses and unconventional toppings such as cranberry sauce and zucchini relish; Booster Juice, which delivers a premium smoothie bar experience; and the beloved Smoke’s Poutinerie, a Toronto-based chain offering 28 different styles of the classic Canadian dish. Fast-casual is rapidly taking over throughout the provinces.
As the fast-casual scene continues to spread across North America, the result is better options and a diverse selection of high-quality, fresh food for hungry consumers.