Seafood sees Big Opportunity with Fast Casual

April 22, 2015 by Leave a Comment

Fast casual has crossed many boundaries in the past few years–from burritos to pizza–and seafood might be next.  Chicago-based research firm Technomic has released a report noting that seafood consumption is on the rise; nearly three-fourths of consumers who ordered more seafood entrees over the past two years said they did so to eat more healthfully, the report says.

Consumers see seafood as healthier than beef, pork, and poultry, and as in line with vegetarian and vegan meals.  Half of respondents indicated that these meals–pescatarian, vegetarian, and vegan–are as satisfying as meals with meat.  Sixty-two percent of consumers surveyed have a beef, pork, or poultry-free meal at least once a week, and 69% have a seafood entree at lease once every 90 days.  Furthermore, about half of the respondents said they would like restaurants to offer a wider variety of seafood, vegetarian, or vegan entrees.

“Health will continue to drive the seafood and vegetarian menu mix, and it can be leveraged both to spur interest in these options and to benefit the concept as a whole, by broadening appeal, reducing the ‘veto vote’ and creating a health halo,” said Kelly Weikel, director of consumer insights for Technomic. “These options also provide a point of differentiation that younger consumers look for as inventive, yet satisfying vegetarian and seafood items featuring on-trend ingredients to create a contemporary, unique and better-for-you positioning,” she added.

While chains such as Pret A Manger, Au Bon Pain, and Panera Bread have introduced items with shrimp or lobster in the past year, only 6% of seafood entrees on US menus are found in fast-casual restaurants.

“Currently, seafood is mostly the province of casual-dining chains, and with few limited-service brands able to approach the size of Long John Silver’s and Captain D’s, the white space in between those segments leaves plenty of room for young fast-casual restaurants to develop quickly in urban, affluent areas,” said Darren Tristano, executive vice-president for Technomic. “Securing a supply of fresh fish and managing price points are certainly challenges for limited-service seafood brands, but this type of cuisine lets new chains leverage many attributes people love about fast casual, including perceptions of greater ingredient quality, bold flavors and customization.”

To read more, click here.

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Ten Fast-Casual Challenges

January 27, 2015 by Leave a Comment

According to Nick Vojnovic, president of Little Greek Restaurant (a fast-casual, Greek-themed, multiunit concept with an American influence based in Tampa, Florida with 19 locations in Arkansas, Florida, and Texas), the fast-casual category will be seeing constant change and challenges in 2015. Below is a list of what Vojnovic considers to be the ten most challenging aspects the fast-casual industry will be facing in the year ahead.

1. Real estate. Real estate will be becoming tighter and tighter. Landlords are in a position where they have the upper hand; it is not a black-or-white scenario. “Will landlords kill the golden goose by charging more than operators can bear?” Strong negotiating skills will become a very important tool this year.

2. Technology arms race. New social media tools may emerge this year, and the existing ones are constantly changing. Social media has the potential to have a direct return on investment and sales. Fast-casual operators will have to closely monitor trends and be smart with allocating resources accordingly.

3.Private equity dollars. A good example is the growth in the fast-casual burger and pizza categories. “How many more of these concepts can the industry handle before it bottoms out?”

4. Obamacare. While there wasn’t a clear or strong impact in 2014, the impact it will have in 2015 is still unknown.

5. Fuel prices. Fuel prices have being going down significantly but we know they must start going back up at some point. As a positive for the industry, lower prices boost consumer disposable income. The Organization of the Petroleum Exporting Countries (OPEC) will have to jump in to protect pricing at some point which will have an impact on the industry.

6. External threats like terrorist attacks and natural disasters. “These are “black swan” scenarios and are all but impossible to predict.”

7. Labor costs and joint employer mandates. The possibility of returning to a tight labor market is real and it could occur throughout 2015. It could be influenced by the new immigration deal, or joint employer rulings could also take place with unpredictable consequences.

8. Credit card fees. Credit card fees take a pice of an establishment’s profits. Realistically, taking into account today’s technology, this will not change. While usage continues to dramatically increase, expenses are failing to drop. The industry will need to find a way to ‘bypass this draining.’

9. Commodity prices. This year we saw prices go up for shrimp, limes, avocados and beef. Other foods will also see climbing prices this year that operators cannot predict.

10. Shrinking margins. “As an already extremely tight business model gets squeezed, which chains will not survive 2015? Industry players will have to run, not walk, to survive.”

The way to take in these challenges is not to be skeptical or gloomy, but simply to emphasize that industry leaders shouldn’t take things for granted or take a back seat. No matter how successful the concept, there will always be challenges. The operators who adapt and watch for these obstacles will be the success stories in the coming year.

To read the full article about these challenges for the fast casual industry in 2015, click here

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Three Fast Casual Must-Haves

January 26, 2015 by Leave a Comment

During the past decade there has been a significant increase in the number of fast casual enterprises because of the changing habits of the consumer; this new generation of consumer values convenience above everything. The modern food consumer seeks out a smart balance of convenience, quality product, appealing aesthetics and of course, affordability. The guest wants an experience that is as close to a full-service experience as possibly, without the same price and time commitment. In order to distinctly differentiate themselves from their competition, fast casual enterprises need to offer 1) fresh ingredients, 2) five star customer service and 3) an inviting environment.

1. Fresh ingredients: The new generation of consumer values quality food, with a special emphasis on the choice of ingredients and how fresh they are. Consumers are also more aware about the cooking techniques and menu variety.

2. First-Rate Customer Service: Counter service should be available so that the guest can place an order quickly, and enjoy the experience longer. The consumer looks for an experience that is as close to full-service as possible, so the staff needs to meet this demand in as friendly of a manner as possible.

3. Inviting Atmosphere: Aside from looking aesthetically pleasing and modern, the staff needs to be as high-energy and outgoing with the guest as possible while still maintaining accuracy and speed.

To read more about the evolving nature of fast casual enterprises and how to keep up with the new consumer demands as well as some predictions for the future of fast casual, click here

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US Demand for Ethnic Flavors

January 7, 2015 by Leave a Comment

The US foodservice market is very attractive to international operators looking to expand globally. According to the National Restaurant Association, restaurant industry sales last year surpassed $680 billion, with the limited-service sector accounting for a third of the total. Due to the rise of importance of the millennial generation, ethnic flavors have become more in demand than they ever have before, which is causing international brands to be able to boom and grow their brands across the US.

As the popularity of the global fast casual concepts grows, chains from Brazil, Asia, Europe and South Africa are jumping into the US foodservice space to compete and expand their concepts. For example, London-based Pret A Manger is thriving by marketing their healthy and fresh products in urban areas with a high pedestrian traffic count. Lauren Hallow, associate editor of news and concept analysis for research firm Technomic states that Pret “really lets people know they use natural, preservative-free ingredients, so the fresh factor is still there. They do have a higher price point, and I think that’s why they’re sticking to these urban areas with affluent consumers.”

Le Pain Quotidian is another chain, from Belgium, that has grown exponentially in the US last year. Aside from the fresh, healthy menu items, what has made LPQ attractive in large urban areas which can at times feel lonely, is their store layout which always includes a large communal table. CEO Vincent Herbert was excited by the challenge of breaking into the US market and was confident they would succeed given their strong core values of enjoying the hospitality aspect and not just the service aspect. LPQ faced higher rent terms than accustomed to in Europe, so Herbert explains that the chain had to ensure that each location would yield high profits quickly, and that their success really came from the brand’s ability to not look like a chain.

Giraffas, a Brazilian steak and burger brand also chose to take on a challenge and enter the US market, but before doing so realized they needed a fast casual makeover to succeed. João Barbosa, CEO of Giraffes, says that the key to keeping the food costs low lays in the cut of the beef known in Brazil as a ‘piranha,’ which is relatively inexpensive in the US and has become popular in their first locations in Florida. The brand is looking to target more urban areas this year such as New York and Boston which will serve as a gateway to these expand westward and eventually franchise.

To read more about international concepts that aim to expand their brands in the US market due to an increased demand for global flavors, click here

 

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QSR Chains Seeking New Image

January 5, 2015 by Leave a Comment

Quick-service chains will be attempting to reinvent a fresher image for the New Year by dropping their reputation of serving ‘junk food.’ The masses have spoken, expressing an aversion to overly processed and reheated foods. Chains such as Taco Bell and McDonald’s will be rethinking their choice of ingredients by removing the amount of artificial preservatives in their foods. Greg Creed, CEO of Yum Brands (owners of Taco Bell, KFC and Pizza Hut) realizes that, “This demand for fresh and real is on the rise.”

Creed stated at an investor and analyst presentation last month that the company should begin to use less preservatives and be more transparent about their use of ingredients. The objective to re-market fast-food into anything other than will be challenging as it has forever been perceived as fattening, cheap and unhealthy. Packaged food and beverage companies have already begun to reformulate their products by removing chemical ingredients. The transformation from junk food to ‘real,’ ‘fresh’ or ‘healthy’ food will be a tricky one. To read a few examples of QSR chains that are making moves towards this challenging recasting of their brands, click here.

 

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José Andrés to Enter Fast Casual Segment in D.C.

October 16, 2014 by Leave a Comment

José Andrés, the Ferran Adrià prodigy who popularized Spanish cuisine in the U.S., will be launching a vegetable-focused fast casual concept. The first location of ‘Beefsteak” (play on the tomato variety), will open on campus at George Washington University in Washington D.C. early next year. José Andrés, aside from having his own course on food at the university, also serves as an advisor on food initiatives and has been testing dishes with his staff for months.

José Andrés would like to clarify that his concept is not “vegetarian,” it is vegetable-centric. As Jose says, “We don’t like to call it vegetarian. We want to call it tasty, fun, sexy, good-looking.” Vegetables has been around forever, so this concept is not about ‘the next big thing,’ so much as it is re-inventing and converting people’s ideas about vegetables. Roy Choi, the Los Angeles food-truck chef, recently posted on his Instagram about the future of vegetables and how he is, “trying to make vegetables relevant to a new generation by just making them fun.” Batali and Bastianich also have a portion of Eataly dedicated solely to dishes prepared with vegetables, and world famous chef Rene Redzepi of Noma is always preaching the virtues of vegetables.

Vegetable restaurants do exist, such as Vedge in Philadelphia, where chef Richard Landau reaffirms that vegetables are beginning to ‘move from the side of the plate to the center.” Jose Andre’s Beefsteak will be the first of its kind in Washington D.C. and if it is successful, will expand and open more locations. Before opening his now wildly successful Jaleo, people had their doubts about tapas and small portions; now small plates are a nationwide phenomenon. José Andrés is confident that despite the doubts about a vegetable-centric fast casual, he will be successful in giving the people “what they don’t know they are craving.”

To read more about the new fast casual concept and other vegetable-focused eateries, click here

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Fine Dining Chefs Entering Fast Casual Space

October 9, 2014 by Leave a Comment

While many chefs have made the transition from fine dining to fast casual before the term was even coined, there has been a recent increase of chefs wanting to enter this market as it continues to grow at an impressive rate. Chef Wolfgang Puck launched Wolfgang Puck Express in 1991, and Chef Tom Colicchio created the sandwich-focused “witchcraft” in 2003 and now operates 16 locations. Infamous New York City restaurateur Danny Meyer launched his “Shake Shack” burger concept in 2004 (now with 56 locations worldwide) with a business model that is highly sought after to emulate.

Going from fine dining to fast casual is very appealing as it opens up a completely new market in a sector with incredible growth and potential. The National Restaurant Association has reported a total of $173.8 billion in sales for fast casual restaurants, which is an 11% growth increase in 2013. While Michelin starred chefs are excited for the challenge, it is definitely not an easy transition from fine dining. Adam Fleischman of Umami Burger, who has announced he is partnering with chef Joshua Skenes of San Francisco’s ‘Saison’ to launch a fast casual noodle chain (Fat Noodle), has said that, “the tricky thing is that just because you’re a name chef, [it] doesn’t translate into being a fast-casual person.”

Chef Ethan Stowell of Seattle operates nine restaurants plus his fast casual pizza concept, Ballard Pizza Company. Stowell describes the draw to the fast casual market which so many chefs are currently experiencing, “I think that sometimes as a chef you get kind of pigeonholed into just being a chef, and there are a lot of chefs out there who are chefs and businessmen at the same time. That’s why I did it, because I like the business aspect of it. I like the model. I like the idea of potentially multiplying it out and growing that business.”  Stowell points out what fine dining chefs can bring to the operation from past experience which can make a true impact: the approach to product and guest’s experience; “I don’t think they are much different than running higher-end places, the goals are still the same. The goals are have somebody come in to have a good time, try to offer them good value for what they get. Treat them wth respect, they treat you with respect, and everybody leaves happy with the transaction.”

To read more about different chefs interested in entering the fast casual market and what they can bring to the table, click here

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Pizza On The Rise In Fast-Casual

August 27, 2014 by Leave a Comment

According to Telsey Advisory Group, pizza will be the next trend in fast-casual dining. Perhaps the reason this is not yet a craze in fast casual concepts is because the cooking time for pizza is typically longer than say a sandwich or a burrito. A research firm, NDP Group, has showed that new pizza chains are using smaller ovens that can cook pizza in a shorter amount of time. Tom Ryan, founder of Smashburger, also is the founder of a fast-casual pizza chain called Live Basil Pizza. In it’s six restaurants the company uses gas-fired brick ovens that enable the pizzas to be produced at a faster pace. According to Tom Ryan, another reason the chain is successful is because guests are opting for Neapolitan pizzas over deep-dish pizzas which have a longer cooking time.

Warren Solocheck, vice president at NPG states that, “The concept of being able to have a fast casual pizza restaurant has been proven..it is now all about who has the capital to expand.” Buffalo Wild Wings has invested $9 million dollars in an L.A-based pizza chain, PizzaRev, and now operates 11 locations throughout California as well as five franchised restaurants in Utah and Minnesota. Chipotle has also invested in Pizzeria Locale which is mostly focused in Denver.

To read more about the rise of pizza in fast casual dining, click here

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American Chains To Expand In The U.K.

August 15, 2014 by Leave a Comment

In the U.K. as in America, health and lifestyle restaurant and fast casual concepts are becoming increasingly popular. The demand for innovation is high in both countries as the customer is mainly concerned with convenience, customization and movability. The fast casual segment in the UK had a year-over-year sales growth of 8.3% in 2013, and a five-year sales growth of 12.6% according to Technomic’s Top 100 U.K. Chain Restaurant Report.

Some fast casual concepts in the USA also operate in the U.K. such as Nando’s, the portuguese grilled chicken piri piri concept, and Pret A Manger, the healthy sandwich chain who is also currently the second largest fast casual operator in the U.K. Pret’s customers are very loyal because they appreciate the healthy recipes and preservative-free ingredients that are sourced fresh daily. In 2013, the 270 Pret A Manger stores generated £391 million. Of the Top 100, the fastest growing U.K. fast casual chain is Patisserie Valerie. The patisserie’s units grew by 24% in 2013 and sales increased 25% to £53 million. The concept is a patisserie/café that is known for their handmade celebration cakes, sandwiches, pastries and gelato. The design differs from restaurant to restaurant but the general decor theme is influenced by the 1950’s and some outposts have outdoor seating available.

A few American chains are considering expanding their unit counts in the U.K. such as Shake Shack, Smashburger and Five Guys Burgers and Fries; all budget chains whose main competitor in the U.K. would be Gourmet Burger Kitchen. The concept consists of made-to-order gourmet hamburgers that use only high quality ingredients. Total sales in 2013 for Gourmet Burger Kitchen were at  £46 million. Over the next years Technomic predicts that sales and unit growth for the segment will continue to grow and will perhaps promote an implementation of more global foods and advanced technologies.

To read more about the fast casual segment in the U.K. and America, click here

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Umami Restaurant Group Under New Leadership

July 8, 2014 by Leave a Comment

Adam Fleischman, founder and chair of the Umami Restaurant Group, stepped down as CEO earlier this year to grow another restaurant company called AdVantage Restaurant Partners. His new group just launched a new brand last month named ChocoChicken; a fried chicken meets chocolate concept in downtown Los Angeles. Umami Burger was founded in 2009 in Los Angeles and started as a single store that grew to 22 stores in California in the first five years. The chain is still growing across the USA and by the end of the year is expecting to add units in Chicago, Las Vegas, Irvine,Ca., and Brooklyn, NY. The fast-casual pizza concept, 800 Degrees Neapolitan Pizza, is also owned by Umami Restaurant Group.

Paul Clayton was named last month as the new chief executive of Umami Burger. Flesichman believes his successor “has the vision, expertise and instincts to grow Umami Burger into one of the most creative and forward-thinking restaurant groups in the world.”Clayton has had an impressive career in the food industry including years spent as president of Burger King North America and CEO of Jamba Juice.

To read more about the changes in the restaurant group, click here

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