In 2015, sales in fast casual were up 11.3 percent while quick-serve was only up 4.1 percent, according to Forbes. In casual dining, the industry has now reported two consecutive months of negative year-over-year growth, according to Restaurant Intelligence April 2016, Black Box Intelligence. It’s certainly not news that the fast-casual segment is doing something right, capturing market share while making the space between fast food and casual dining a dynamic, profitable segment that continues to surprise the industry and delight consumers.
Its definition varies, but we see fast casual as: counter service with minimal table service; broader menus and more customization options than quick-serve; freshly prepared-in-front-of-you foods; high-quality ingredients and flavor-forward choices. Panera Bread and Chipotle are two of the godfathers in fast casual, setting the tone, the pace and the innovation around values, flavors and accessibility.
Newcomers in fast casual are continuing to stretch flavor boundaries while staying within the segment’s winning formula. At The Chickery, with outposts in Washington, D.C., and Toronto, guests can pair buttermilk chicken fingers with a choice of five dipping sauces, including ginger-jalapeño plum sauce and smoky ancho barbecue sauce. Cava Grill, a Mediterranean fast casual with locations in Maryland, California, Virginia and Washington, D.C., offers big flavors in its six spreads, which accompany a number of options, including grain bowls, salads and pitas. Guests are encouraged to pick three per order with options like: Harissa Spread; Crazy Feta, made with jalapeño-infused feta mousse; or the Eggplant and Red Pepper Spread, with roasted baby eggplant, roasted red pepper, Greek yogurt and fresh herbs.
“The simplicity of the value proposition in fast casual is resonating with consumers, especially younger ones,” says Mindy Armstrong, director of insights and innovation for Food IQ, based in Springfield, Mo. “Consumers feel good about the experience, so fast-casual concepts are winning in the emotional realm, too.”
Lessons for Casual Dining
Casual dining has been taking notes for a while, looking to adapt successes where they can. It’s a tall order, but it seems that the surest adaption strategy lies in flavor innovation. “There are things that casual dining can borrow from that segment,” says Armstrong. “Fast casual is always evolving, always pushing into newer flavor combinations and interesting formats.”
Market research firm Datassential continues to remind the industry about the acceleration of the menu adoption cycle, which sees flavor trends move from inception to adoption to proliferation to ubiquity. Today, the time it takes for a flavor, format or cuisine to move from inception all the way through to ubiquity is about half the time compared to a decade ago. Think how long it took us to move from teriyaki to chipotle, but how quickly we glided from habanero to Sriracha. That speed is significant and cannot be overstated—it indicates the voracity and enthusiasm of today’s consumers.
“Casual dining and QSR’s sweet spot has always been the proliferation stage of the cycle, where trends are adjusted for mainstream appeal,” says Brian Darr, managing director at Datassential. “Fast casuals are at the adoption phase, where trends grow their base through lower price points and simpler prep methods. These trends often feature premium and/or authentic ingredients. Fast casuals are edgier, earlier to market. We’ve been saying for a long time that casual dining does not want to risk losing its core customer base so they are less likely to adapt. They should probably reach earlier into the adoption cycle and be edgier.” Fast casuals have actually helped pave the way here, making flavor exploration exciting and fun rather than daunting, and raising consumer expectations—wherever they choose to dine.
Who’s Got Skin in the Game?
There’s a dizzying and impressive number of newer fast-casual concepts, like Mad Greens, Pigwich, PhoNatic and Seoul Taco, to name a few. In the blazing hot pizza category, standouts include Pie Five, Blaze Pizza, PizzaRev and 800 Degrees. But a few casual dining concepts are throwing their hat in the ring, too. Of course, P.F. Chang’s was a pioneer with its Pei Wei offshoot, but it’s interesting to see more chains looking to the fast-casual segment as a way to expand their brand family and tap into the profit potential.
Cracker Barrel Old Country Store launched Holler & Dash last spring, a breakfast/lunch biscuit house that captures both country cooking and the modern Southern trend. Offerings include sandwiches tucked into scratch-made biscuits, like the Pork Rambler, with fried pork tenderloin, blackberry butter and fried onion straws, or the Kickback Chicken, with fried chicken, goat cheese, green onion and sweet pepper jelly. The concept is in test mode, with one unit in Homewood, Ala.
Outback Steakhouse’s founder, Tim Gannon, has recently opened Bolay in Royal Palm Beach, Fla. This build-your-own bowl concept serves nutrient-rich super foods. Base options include cilantro noodles and Peruvian quinoa. Flavor-forward toppings include Paleo Brussels Sprouts with Pork as well as Broccoli with Ginger-Orange Glaze.
With its Kitchen Counter, Romano’s Macaroni Grill launched a different take on fast-casual, housed in the same footprint as the casual dining restaurant. It runs a limited menu for $7 in seven minutes, focusing on lunch-friendly dishes prepared in an open “counter-style” kitchen.
The Chef Goes Casual
Fueling momentum in flavor-forward menu innovation is the trend in chef-driven fast-casual concepts. Wolfgang Puck was an early adopter here, introducing Wolfgang Puck Cafe more than 20 years ago. Rick Bayless got in the game early with Tortas Frontera and Frontera Fresco. Now, more chefs are seeing the opportunity in fast casual. David Chang expanded his New York empire with Fuku, a fried chicken sandwich shop that stands out with habanero-marinated chicken thighs served in a steamed potato roll with pickles and Fuku butter, which is spiked with fermented chickpea. José Andrés opened Beefsteak in Washington, D.C., where “vegetables are unleashed.” And Gerard Craft recently opened Porano Pasta in St. Louis, an Italian fast casual where guests get to choose from five bowl bases, from organic pasta to farro to Italian rice. They then choose a sauce, like Pumpkin Seed Pesto, Smoky Sunday Sugo and Roasted Red Pepper, and their choice of four proteins and 11 toppings, including Spicy Honey and Crispy Garlic. Notice the pattern here: There’s a world of choice, and the choices are enticing, a little thrilling and craveable, but still in the realm of familiar formats.
“The ‘premium’ or chef-driven fast casual continues to meet consumer demand with higher quality menu items, alcoholic offerings, modern design, and offers a differentiator from traditional fast-casual and casual dining,” says Armstrong. “It’s at a higher price point, but better food is still a value.” She points out that these chef-driven concepts are particularly good at tethering bolder flavors with familiar ones. “The art of pushing unfamiliar flavors is balancing them with common ones,” she says. She points to Nate Weir, director of culinary operations at Modern Market, a 17-unit, Denver-based fast casual, as an example. “He says he accomplishes this by limiting one unfamiliar flavor or ingredient per dish.” For instance, escarole is the unfamiliar ingredient nestled among more common ones in the Steakhouse Salad (escarole, Angus steak, pickled red onion, Gorgonzola, walnuts, cucumbers, roasted tomatoes and a buttermilk-horseradish dressing).
“Just the nature of being a fast casual seems to give you license to do some of those things,” says Darr. “They have credibility in this space. The choose-your-own adventure is a powerful thing.”
Fast casual appeals to changing consumers, who expect flavor innovation and actively seek it out. They want mobility, premiumization, customization and value. “The opportunities for innovation are ripe for adoption,” says Armstrong.