Web Exclusive | June 2012 | By Robert Lillegard

Stepping Up to Fast Casual

Quick-serve companies roll out fast-casual concepts to serve new demographics.

Yoshinoya hopes its Asiana Grill fast-casual concept draws new demographics.
Yoshinoya hopes its Asiana Grill fast-casual concept draws new demographics.
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On May 30, Yoshinoya America opened the first-ever Asiana Grill Yoshinoya in Fullerton, California. While the company has long been known in California and Nevada for its quick-service concept, the Asiana Grill Yoshinoya marks its first foray into fast casual.

But Yoshinoya isn’t the only quick-serve company trying its hand at a more upscale fast-casual concept. Pie Five, a fast-casual offshoot of Pizza Inn, is celebrating its sixth store and one-year anniversary. And Pittsburgh, Pennsylvania-based Eat’n Park is bringing its famed smiley-face cookies and potato soup to a new line of fast-casual bistros called Hello Bistro.

Dennis Lombardi, executive vice president of foodservice strategies at WD Partners, says it’s a smart move for quick serves to get into the fast-casual business. By planning a new brand with a higher price point and slower service model, he says, companies can reach entirely new market segments.

But while having an experienced parent company can make for an easier concept roll out, Lombardi cautions that the fast causal needs to have plenty of appeal by itself.

“The fast-casual brand has to stand on its own two feet,” Lombardi says. “Don’t expect the parent brand to do any more than help introduce it.” He praises Pie Five as one fast-casual offshoot that has strong potential.

Flynn Dekker, vice president of marketing for Pie Five parent Pizza Inn Holdings, says Pie Five ended up developing a stronger brand identity than originally planned.

“The initial thought was we were going to expand the Pizza Inn brand,” Dekker says. “We really found out from customers that it didn’t work.”

Since existing customers strongly associated the Pizza Inn name with the chain’s buffet format, the new brand went a different direction. Pie Five offers nine-inch, made-to-order pizzas and cooks them in less than five minutes.

“We really had to come up with a new process, a new product, and serve it at a new pace,” Dekker says. “It’s just a completely different model for us.”

“For the company to expand nationally, we need a little more than just a bowl.”

Lombardi says it’s important for quick serves to recognize the unique challenges they’ll face as they transition to a fast-casual model. Though reaching a new market segment has its advantages, Lombardi says, companies should think carefully before making any big changes.

“It’s not necessarily as easy as they think it might be,” he says.

To help with its transition, Pizza Inn hired a handful of dedicated specialists. It also looked to its franchisees for best-practice tips. Pizza Inn has 56 express locations, and those provided several key insights in developing the Pie Five model.

“We took a lot of our best practices from that model,” Dekker says. “We had to develop this product very quickly.”

With 93 restaurants, Yoshinoya America has plenty of experience serving food fast and at a low price point. For Asiana Grill Yoshinoya, the challenge is ramping up that experience for a new clientele, says executive vice president Manuel Villarreal.

Villarreal says the company is hoping its low-priced beef bowls catch on with different demographics through the new fast-casual concept.

“Our main customers are Hispanic and Asian customers,” Villarreal says. “For the company to expand nationally, we need a little more than just a bowl.”

Asiana Grill Yoshinoya, Villarreal says, was designed to appeal to groups like Anglo-Americans, women (the existing customer based is 65 percent male), and the upper middle class. Instead of ready-to-eat bowls, the new restaurant offers an exhibition-style kitchen, where workers will assemble highly customizable salads, soups, and sandwiches right in front of customers.

Of course, plenty of challenges await a chain that targets a new market segment; Villarreal and Dekker both say launching their new brands took a lot of work. But offering a good product and pricing it competitively usually succeeds, they say.

“The most important thing is to create a product that has value for the consumer,” Villarreal says. “Anybody can open a restaurant, but it’s not so simple. The competition is huge.”