Special Report | December 2015 | By Sam Oches

Say Hello to Fast Casual 2.0

Fast casual changed the restaurant industry conversation. But it’s the next wave of limited-service restaurants that might change how we dine out entirely.
Top fast casual chains offer lessons to startup premium restaurant brands like Num Pang.
Ben Daitz (left) and Ratha Chaupoly didn’t want to create just another sandwich shop. The Num Pang partners are elevating the fast-casual experience with fine dining–influenced food, a distinct brand culture, and an investment in their employees. Donnelly Marks

I don’t make it to the movies much anymore. Like a lot of people, my wife and I find the price hard to justify; $25 for a night of entertainment where our only dining decision is which flavored spice to rain over burnt popcorn is far too steep in the age of Netflix, Hulu, and Redbox.

But I’ve got a bigger problem with movies these days.

Too many sequels. Too many reboots. Too many superheroes.

Hollywood, it seems, just doesn’t have many good ideas left. With theater traffic heading south and competition for consumers’ eyeballs more intense than ever, the pressure is on for studios to bankroll surefire hits—another comic book rip-off, say, or another ’80s-era franchise reboot. Instead of something fresh, something original, the box office is filled with imitators.

So I choose to stay home.

Call me crazy, but the limited-service restaurant industry is starting to feel a bit like Hollywood. Ever since Chipotle became a blockbuster with its elevated quality, chic ambiance, and invitation to customers to create their upscale meal exactly as they like it—and ever since the competition for customers’ foodservice dollars intensified in a post-recession foodie world—there’s been a flood of imitators hoping to capture some of its magic. And I’m not talking just in the burrito space; in the last decade, we’ve seen the “Chipotle of Italian,” the “Chipotle of sushi,” the “Chipotle of pizza,” and on and on. Everybody wants to be Chipotle.

Is that a bad thing? Absolutely not. From its branding to its sourcing to its growth strategy, Chipotle offers countless best practices on how to run a successful restaurant business. And trying to be like Chipotle isn’t necessarily a fool’s errand; just like in Hollywood, imitations can still make boatloads of money (earlier this year, Jurassic World, the fourth film in a 22-year-old franchise, became the fourth-highest-grossing film of all time).

But imitators can only go so far. Very few people would think Jurassic World is better than Jurassic Park; there’s something about the original that will always retain a certain magic, animatronics and all. Those brands hoping to be the next Chipotle have to remember that the secret to Chipotle’s success was always that it was the first one doing what it did. Nothing will ever change that.

OK, you say. We get it. What’s the point of all this?

Fast Casual 2.0

Some of the leaders driving the industry's next great wave.

My point is this: In a world of imitations, original ideas shine all the brighter. And after a decade of measuring success against the Chipotle model, we’ve arrived at the cusp of the next great wave of innovation in limited-service restaurants. A bevy of foodservice entrepreneurs are refining Chipotle’s model and rolling out premium concepts that are chef-driven, designed around a high-quality experience and long-term relationships with their vendors, employees, and communities.

It’s a new era for fast casual, a step above the phenomenal things Chipotle has accomplished.

Say hello to Fast Casual 2.0.

What is Fast Casual 2.0?

Just like the difference between quick service and fast casual, the difference between fast casual and Fast Casual 2.0 isn’t so black and white. The fast-casual industry pioneered a dining experience where higher-quality ingredients, enhanced hospitality, and cozier dining rooms could mesh with lower prices and counter service, and Fast Casual 2.0 retains those touch points.

But Fast Casual 2.0 brands take those touch points to a whole other level. While they sometimes offer the same kind of menu customization Chipotle made famous, they tend to be more chef-driven, with signature items crafted by a team of culinary professionals. These brands often focus on an overall experience rather than just the value of what they offer; that generally includes an enhanced beverage program with beer and wine. Their ingredients are high quality, often local, usually healthy or without additives. And their growth strategies are tempered, with new-unit expansion and profits becoming secondary ambitions to other long-term goals like community development and an investment in suppliers and vendors.

At QSR, we’ve watched as these brands have popped up in the last few years—a “fine-fast” restaurant here, a “gastro-fast” shop there. But as we head into 2016, it’s become clear to us that these upscale fast-casual concepts are no longer one-off novelties confined to urban foodie meccas. As the economy improves and American consumers become increasingly interested in convenient, quality food, the opportunities for upscale fast-casual brands to grow—both in their home markets and out—are greater than ever.

So we’re calling it now: In the next 10–20 years, Fast Casual 2.0 will change the restaurant industry as much as the original fast-casual category did in the last decade—if not more.

To flesh out the Fast Casual 2.0 idea a bit further, I reached out to Mike Ganino, a California-based consultant who specializes in small and midscale brands and who spent time running operations at upscale limited-service concepts like Potbelly, Protein Bar, Wow Bao, and HomeMade Pizza Co. He agrees that the age of Chipotle imitators seems to be playing itself out.

“One of the things we’re going to see less of is ‘Chipotle of X, Y, and Z.’ I feel like that’s still really closely tied to [fast casual] 1.0. It’s 1.5,” Ganino says. The new fast-casual wave, he says, will focus less on an assembly-line experience that encourages mostly lunch business and more on a holistic, universal dining occasion. “It’s still very much order at a counter, but you sit down, they bring [your food] to you—maybe they have a couple local IPAs or something on draft or in bottles. And it’s still limited; it’s still not a full menu, you don’t have waiters who are waiting on you. … I think the ambiance feels a little bit more removed from fast food, whereas I think Chipotle and that kind of group of ‘Chipotle of X, Y, and Z’ is still very closely tied to fast food.”



Excellent article....lots of good direction given with some nice examples and specifics
Well done Sam

Great deep dive into this really cool space. Thanks for including me in the research.

Great read.... You put a lot of work into this.
Crazy question what is the font used on quick casual 2.0

Great read.... You put a lot of work into this.
Crazy question what is the font used on quick casual 2.0

I feel you missed Sushi-teria that just opened their 2nd location at the Empire State Building.
They utilize customer facing, custom ipad ordering system for "Quality Sushi Quickly" as oppose to the current qsr sushi where it's premade prepackaged, Sushi-teria makes premium sushi to order within 7 minutes

Interesting article.

Extremely well researched and insightful . The movie theatre vs. Netflix analogy hits home across the age spectrum - heck my 84 year old Mom said to her 18 year old grandson " Thank God I lived long enough to see this " Netflix is a boon for our seniors in managed care housing .
Danny Meyer is that rare genius who melds his love of hospitality with making money .
One of those mentioned in the Better Burgerworld bares a striking resemblance to Fuddruckers.
The Fud's business model is Fast Casual 2.0 ! I believe we need to remember our foods in this industry and remember as you said in article , not every Hollywood Blockbuster is new or completely original . No dig at the Better burger guys , but let's give kudo's to the pioneers in our business , every good successful restaurateur had a mentor who believed in them , love this article , and thank you


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