Industry News | May 17, 2014

FROM THE FLOOR: Fast Casual is Talk of the Town

Fast-casual exectuives discuss the booming category during a panel at the National Restaurant Association's annual Restaurant, Hotel-Motel Show.
Bookmark/Share this post with:
Email this story Email this story
Printer-friendly versionPrinter-friendly version

 

Fast casual continues to be the hottest segment of the restaurant industry, so there’s no surprise that it’s drawing plenty of attention during the National Restaurant Association’s annual Restaurant, Hotel-Motel Show.

The four-day annual event kicked off today at Chicago’s McCormick Place, and a look at the fast-casual business through the eyes of a trio of the sector’s chief executives was among the first of numerous educational sessions scheduled throughout the show’s run. The focus on this growing segment began even before the show started, with the third annual Fast Casual Trends & Directions Conference on Friday. That symposium gave restaurant execs a view of where the segment is headed and its opportunities. And on Sunday, the popular industry takes center stage again with an hour-long session hosted by QSR, starting at 11:30 a.m., featuring high-profile restaurateurs Rick Bayless, Jeremy Barlow, and Alfredo Sandoval, all of whom have added fast-casual restaurants to their hospitality companies.

“Although there are pockets of growth in the larger restaurant segments, fast casual continues to be a growth engine in terms of units, sales, and appeal,” says Darren Tristano, executive vice president of Chicago market research firm Technomic.

The sector continued to steal share away from full-service restaurants last year and propelled limited-service restaurant growth, according to Technomic, rising to 15 percent of the $231 million limited-service sector. Fast-casual sales jumped 11 percent last year.

“We expect fast casual to continue to grow at a rate of about 9­-10 percent annual over the next five years,” said Tristano, who was one of the speakers at the Trends & Directions conference. “A lot of it has to do with growth and expansion of existing brands and the addition of new brands.”

Even with this growth, fast casual is evolving.

“The shift is more and more on the quality of the food and the quality of the service,” said Geoff Alexander, executive vice president and managing partner of Chicago-based Wow Bao, a six-unit division of Lettuce Entertain You Enterprises, during today’s fast-casual executive panel.

Panelist Marc Simon, president and chief executive of Rubio’s Restaurants, based in Carlsbad, California, added that customers also increasingly “want to know the provenance of their food.” That trend, along with the demand for sustainable products and responsible practices, “is here to stay,” he said, and is ingrained in the chain’s more than 190 restaurants.

The idea of knowing where the food originates also goes to the healthy halo that fast casuals have cultivated. “It’s a perception of healthy,” Alexander said. While the word low is important for older generations’ view of healthy food—low fat, low calorie, low sugar—Millennials “are all about sustainability and where the food comes from.”

Still, taste remains at the core of the fast-casual experience. “The key for us is flavor,” said Don Fox, chief executive of Firehouse Subs, which has 769 restaurants. “It’s something you can’t replicate at home.”

As fast-casual restaurants continue to grow, all three panelists said, it’s important to maintain the brand’s culture. When Fox announced a long-term goal several years ago for Firehouse to be at 2,000 units in 2020, “I made the observation that as successful as we were in the past, it will depend on four of five people I’ve never met. If you can’t coach your culture, you’re in trouble.”

 

Captain D’s vies for honor

Speaking of fast casuals, Captain D’s is a finalist for one of the NRA’s Operator Innovation Awards, which is a program in which foodservice operators recognize their peers for innovative changes in the industry.

The Nashville, Tennessee­-based company is competing in the Menu Development category for its menu revamp, which was integral to the brand’s shift from a fast-food fish chain to a fast-casual seafood one, featuring grilled as well as fried items.

In many ways, the chain hasn’t strayed far from its roots, says Jonathan Muhtar, chief marketing officer.

“From the beginning, the meals have mostly been sit-down [quality] and in the range of $7,” he says. “It’s always been more of a dining room than drive-thru restaurant. Thirty years ago, however, there was no such term as fast casual.”

Another limited-service company, Subway, is also a finalist, but in the Marketing division. The sandwich chain is being recognized for its unique New York Fashion Week project that challenged designers to create dresses out of recyclable Subway packaging.

The winners will be announced tonight.

 

Pepsi’s turn

For the past several years, the Coca Cola booth has drawn the attention of attendees, media, and others for its Freestyle fountain beverage-dispensing machine that gives consumers more than 100 different drink options by pushing a few buttons.

This year, Pepsi is catching showgoers’ eyes with its answer: the Spire portfolio of touch-screen dispensers that allow consumers to create more than 1,000 personalized beverages.

There are three models that pour a range of PepsiCo carbonated and non-carbonated drinks, such as Pepsi, Mountain Dew, Sierra Mist, and Brisk Iced Tea. In addition, there are various flavorings available, such as lemon, strawberry, and vanilla.

By Barney Wolf

 

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.