2020 Future of Fast Casual Report: Asian & Barbecue

    Can niche fast-casual categories rise to prominence across the country? These brands are trying to find out. 

    Mighty Quinn’s
    Mighty Quinn’s
    Mighty Quinn's has found a willing audience in urban markets.

    Asian: Still growing up

    Asian fast casual is still in its adolescence.

    “Asian cuisine is considered ethnic since it is still a niche market. However, when ethnic foods go mainstream, no one sees them as ethnic anymore—good examples are pizza, tacos, and burritos,” says Alex Wu, co-owner of Bao’d Up, a Chinese fast casual that specializes in bao—soft, steamed buns filled with savory or sweet flavors.

    The umbrella term “Asian fast casual” actually represents a plethora of individual cuisines—from traditional Chinese fare to Hibachi to Korean barbecue—that are still coming into their own in the U.S. Today, the category has yet to fulfill its growth potential, with brands like Austin-based, three-unit Bao’d Up in their early stages. In the future, though, the diversity of this category means that individual cuisines could emerge as frontrunners, taking market share from mainstream segments and integrating fully into the U.S. fast-casual scene.

    This is why Wu doesn’t name other Asian brands as Bao’d Up’s top competitors, but instead looks to compete with more established fast-casual categories.

    “Bao’d Up is not competing with other Asian cuisines; rather, we believe that bao—the most popular food item in China—has the potential to go mainstream and become its own category someday,” he says.

    America already has a history with Asian food, and with Chinese cuisine in particular. For Asian brands, capitalizing on the familiarity that U.S. diners already feel with the cuisine could provide valuable growth opportunities.

    Junzi Kitchen, a modern Chinese fast casual based in New York, is working to leverage existing casual Chinese restaurants to grow its own system and popularize Chinese cuisine in the U.S. As traditional Chinese restaurant owners near retirement and younger generations venture into different careers, Junzi is offering to buy these family-run spots. The brand raised $5 million in 2019 for this purpose and hopes that revitalizing the older concepts will increase consistency and scalability.

    “The intrinsic way of making Chinese food is very labor- and skill-intensive. Basically, the future is a simplification of the menu that will help these restaurants scale, and also better machinery and automation that will increase consistency and reduce cost of labor,” Junzi CEO Yong Zhao says.

    And, of course, off premises plays a large role in future growth opportunities for Asian cuisine. Delivery and takeout have long been integral to Asian foodservice businesses in the U.S., and portability is a perk in today’s off-premises boom.

    “While we do provide a very unique yet comfortable dine-in experience, Bao’d Up is carrying forward the tradition of Chinese takeout restaurants of last generation, with more focus on food quality,” Wu says. “China is the second biggest economy in the world, and it is part of Americans’ life now, whether you like it or not. There is no better way to get to know a culture than through its food.”

    Tristano’s Take

    "Chinese- and Japanese-focused concepts have continued to see strong sales growth, fueling the nearly 6 percent rise in fast-casual Asian category sales in 2019. Expect to see more success from Vietnamese, Korean, and Indian concepts that will focus on regional growth at the expense of other existing brands."

    How often do you plan to visit fast casuals within this category?

    Asian

     
    Same
    53%
    Not Applicable
    19%
    More Frequently
    17%
    Less Frequently
    12%

    Barbecue

     
    Same
    54%
    More Frequently
    22%
    Less Frequently
    15%
    Not Applicable
    9%

    Barbecue: An experience for all

    Nearly every food under the sun has been given the fast-casual treatment, from poke to Peruvian and teriyaki to TexMex. Indeed, fast casual has become an opportunity for restaurant entrepreneurs to stretch the boundaries of what is possible in a counter-service setting.

    Barbecue has likewise found new life in fast casual. Once a regional staple, barbecue was perhaps perfectly positioned to capitalize on fast casual, considering its authentic roots, its low-and-slow cooking preparations, and the broader experience it offers. And while barbecue frequency is low, plenty of American consumers simply don’t have access yet to the category.

    “There are of course a lot of great mom-and-pop barbecue joints, but not many big emerging brands,” says Rick Malir, founder of Columbus, Ohio–based City Barbeque. “The opportunity for growth is tremendous.”

    Aside from Texas-based Dickey’s Barbecue Pit and Maryland-based Mission BBQ, City Barbeque is leading the pack in barbecue fast casual, with nearly 50 locations in seven states. The brand was founded in 1999 as a catering operation, and catering remains a strong business—and one of the brand’s best marketing tools, Malir says. Now with physical store footprints that offer details like a stack of firewood out back, a row of proprietary barbecue sauces at the condiment station, and rolls of paper towels at every table, City Barbeque is aiming to reach all demographics in some way, shape, or form.

    “Often, our delivery customer is different than our in-store customer, who’s different from our catering customer, and so on,” Malir says. The brand is reaching all by “focusing relentlessly on craft barbecue and a great menu; we’re always looking at menu innovation to both bring in new guests and provide folks with different options on those repeat visits.” While barbecue staples like brisket, pulled pork, and smoked turkey sandwiches and plates adorn the menu—along with sides like hush puppies and mac ‘n’ cheese—the brand also changes things up from time to time, like it recently did with turkey “taqos” with pulled turkey, smoked green chile sauce, cilantro-lime slaw, and crispy jalapeños.

    Mighty Quinn’s is a relative newcomer to the barbecue scene, having opened in New York City in 2012. It’s since expanded to 12 domestic locations and one in Dubai, and is looking to continue scaling through franchising. Cofounder Micha Magid doesn’t think barbecue will reach the same customer frequency as burgers and pizza, both because of its niche nature and because it’s “get-your-hands-dirty food” rather than portable.

    Magid says fast-casual barbecue restaurants will have to diversify the menu beyond sandwiches and ribs if they want to reach more customers in more corners of the country. “It’s evolving the category into rice and salad bowls where, if you’re in a commercial business lunch district, you’re probably not going to be selling a lot of spare ribs at lunch,” he says. “But from our own experience, when we offer burnt ends on jasmine rice with some crispy Brussels and pickled Fresno chilies, that’s just a great lunch option.”

    Barbecue restaurants can balance authenticity with the fast-natured trends of fast casual, Magid says. But he adds that the barbecue fast-casual space will thrive if it doubles down on the experience of barbecue. “Barbecue is all about coming together with a big group of friends, sitting around and enjoying a meal, as opposed to trying to get in and out of there in 5 minutes,” he says. “Our menu was deliberately created to cater to both that on-the-go, need-to-get-in-and-out customer, but also the groups of people who just want to sit in and relax and dine.”

    Tristano’s Take

    "The fast-casual barbecue is slowing as more consumers see barbecue added to traditional quick- service and casual-dining restaurants. Moderate sales growth in 2019 was offset by fewer restaurants resulting from closures from more mature chains. The category did see unit additions from Mission BBQ and City Barbeque, which indicates there are still some regional growth opportunities."