Why Fast Casual Is Not The Future Of The Restaurant Business

A new breed of restaurant is fast approaching on the horizon and starting to catch people’s attention. These concepts buck the traditional fast casual model in so many ways that it’s time to create a name for this new segment.

Who are the market leaders in Fast Casual? Despite all the up and comers, three stand apart as the dominant players in the space. Chipotle, Panera Bread, and Five Guys. These three goliaths dominate the market and the consumer’s mindshare when it comes to fast casual, the same way McDonald’s does for QSR.

I’ve heard people at restaurant industry conferences occasionally say things like “fast casual plus” or “premium fast casual” to try and describe this emerging market – but that doesn’t go far enough to capture it’s essence.

I’m officially drawing a line in the sand and calling this new segment FRESH CASUAL. Like Fast Casual before it, which sits definitively closer to the QSR side on the spectrum between QSR and Casual Dining, Fresh Casual sits on the same spectrum – but definitively closer to the casual or in some cases even fine dining side.

In essence, Fast Casual is casual dining quality food served in a QSR environment. Fresh Casual is a full casual dining experience with a limited (usually QSR) service model.

This may seem trivial at first, but the gulf between “Fast Casual” concepts and “Fresh Casual” competitors in the same exact space is so wide that it can no longer be ignored.

Here is how Fast Casual and Fresh Casual stack up on the MAJOR differences in market point (these are general categorizations and I realize that not every restaurant fits each definition perfectly).

Menu

Fast Casual – Customer driven menu. Most commonly featuring a “build your own” style menu where customers choose their protein, starch and flavor.

Fresh Casual – Chef driven menu. The menu is designed by a chef or culinary team to have specific dishes and flavor profiles. Often the menu is designed by a corporate chef and then executed by a kitchen staff in store.

Service Model

Fast Casual – Fast Casual differs little from the QSR service model – having customers order at a counter  and pick their food up there.

Fresh Casual – Fresh Casual retains counter ordering but then adds an additional layer of service –  running food to customers, refilling drinks, and bussing tables.  Once a customer orders at the counter, the rest of their service experience takes place at the table.

Décor & Design

Fast Casual – differs little from a traditional QSR design & décor, very sparse clean interiors, often with promotional materials and posters on the walls.

Fresh Casual – mimics a casual dining interior. Focus on higher quality furniture and fixtures as well as art and artifacts in store to create a relaxing and comfortable atmosphere.

Food Quality

Fast Casual – delivers higher quality than QSR, but still sometimes reheating and using frozen product. Prep and cooking is usually as simplified as possible

Fresh Casual – delivers food consistent with top quality casual or fine dining, often fresh and locally sourced and rarely frozen. More complex prep and cooking is required to deliver a higher quality of food

Platewear

Fast Casual – served with traditional QSR paper and disposable service ware

Fresh Casual – served on plateware and with glass (excluding to-go orders) similar to casual dining

Price Point

The price point is the same for both market segments – $8-12 dollars per meal.

Buildout

The square footage, which obviously varies between concepts, is similar in both Fast and Fresh Casual. Between 1500 and 4000 sq ft in a shopping center.

Now that you’ve got a better sense of this distinction, I want to point out 6 specific examples of the restaurants with the same type of food – currently both considered “fast casual” that are a world apart.

Mexican: Xoco vs. Chipotle

 

If you want to see what the future of restaurants looks like – visit Rick Bayless’s Xoco in Chicago. This beast of a Mexican concept is the most stark example distinguishing Fresh Casual from Fast Casual. As soon as you walk in the door you will realize exactly what I’m talking about (read here my site report on Xoco). Xoco is just on another level compared to Chipotle, Moe’s, or the other fast casual Mexican and burrito players.  The ambiance, the food quality, the service all fit perfectly into the fresh casual mold. The open kitchen showcases the handmade breads as well as the freshly prepared torta and soup. The ambiance is warm and cozy like a sit down restaurant – and after you order from the counter the service model is indistinguishable from top level casual dining.

Asian: Pei Wei vs. Panda Express

Pei Wei, one of the older players in the space, fits the Fresh Casual mold to a tee. It is a full blown casual dining restaurant that simply begins your order at a counter. The look, the feel, the service, the food quality etc all stand apart from a Panda Express (or even Chipotle’s new entry into the market Shop House) to such a degree that you can’t help but put Pei Wei in another category all to itself.

Italian: Vapiano vs. Nooi Pasta

 

Vapiano is a fresh casual Italian concept that hails from Europe. Despite their counter based service model, their food quality is astounding and the ambiance is very much that of casual dining. The cooks hand make pasta daily and boil it to order, pizzas are made from scratch before your eyes. The flavors are bold and delicious and so fresh.  While Fast Casual Italian is still a very young and under-served market, the fledging competitors in the space can’t hold a candle to Vapiano in terms of food quality or ambiance. (Learn more about fast casual Italian.)

Burgers: Shake Shack vs. Five Guys

 

I personal think the burger space is a huge bubble right now and there are too many concepts for all of them to survive. That said, one of the survivors will almost certainly be Danny Meyer’s Shake Shack. Meyer of Setting The Table fame is one of New York’s premier restaurateurs and arguably one of the guys who kicked off the entire “better burger” craze. After building a near empire in NYC’s restaurant scene Meyer finally decide to scale one of his concepts – and he chose Shake Shack. The chef driven deliciousness of Shake Shack is a fresh casual triumph over the build-your-own burgers of Five Guys. The freshness, quality , and flavor of Shake Shack’s food creates an unquestionable gulf between the plethora of fast casual burger joints and the big boys like Shake Shack.

Bakery Cafe: Wildflower vs. Panera Bread

 

Wildflower is a 10,000 ton missile aiming straight for Panera. I first ate here out in Phoenix for the RLC 2012. I had heard several people hyping Wildflower up and I was convinced that there was no way it could live up to the hype. Wrong. Wildflower is a Panera with great food, a full kitchen, a much sexier ambiance, and tremendous customer service. One spicy chipotle egg sandwich or order of pancakes (oh those fluffy, fluffy pancakes) at Wildflower and you will know the difference between Fresh Casual and Fast Casual.

Mediterranean: Taziki’s vs. Garbanzo

 

Ok ok I know,  I put Taziki’s on the list. But at Taziki’s we set out every day to define ourselves as Fresh Casual – to bring a new and better experience to our customers. Taziki’s food is all made completely fresh every day, no freezers and no fryers in the entire store. Our entire menu is designed by our team of chefs to craft delightful, different, and delicious flavor combinations. The décor is soft and inviting like a casual dining restaurant. The service model delivers much more to the customer than a traditional counter model, food is delivered to the customer’s table, drinks are refilled, and the table is bussed for the customer. Similar players in the Mediterranean space like Garbanzo and Roti are both focused on assembly line style build your own menus, with sparse metallic interior and counter only service (essentially replicating Chipotle’s model but replacing the proteins and starches with Mediterranean ones).

See For Yourself

Words can only do this distinction so much justice. Get out in the world and see these concepts for yourself. Eat at one and then the other and you will know exactly what I’m talking about when I say that Fresh Casual is here to stay. After travelling across the country week after week and personally visiting all of these concepts, I can say hands down that Fresh Casual is real and it’s a serious force to be reckoned with.

Marketing Lessons From Denver’s Top Fast Casual Chains

This is the third post in a series about Fresh Hospitality’s latest trip to Denver, Colorado to scout out some big competitor and learn more about them. These are just the raw facts and our thoughts from the trip – hope you enjoy. (Find Part One and  Part Two here)

Now that I’ve reviewed the two major fast casual concepts we wanted to visit – I am going to share a few of the key lessons from our visit.

Lesson #1: Telling The Customer Your Food is FRESH, HEALTHY, and LOCAL

Every concept we visited was very forward and upfront about telling the customers how fresh, local, and healthy their food was. Signs, posters, and even entire walls were dedicated to this. These concepts really drilled home how fresh and healthy their food was.

I think this is something that we could do a better job of at Tazikis and our other fast casual concepts – we all know the food is healthy but we don’t tell the customers -we just assume they know it too but even a simple slogan like “No Freezers, No Fries – Always Fresh & Healthy” somewhere in line or near the front of the restaurant could help establish this in the customers mind. We saw signs like this at nearly every competitor.

Garbanzo had a huge focus on this – when you are standing in line they have an entire wall talking about how fresh and healthy the food is.

“Compromise is a bad word” is the slogan Garbanzo used on their wall:

Garbanzo also featured posters ALL over their walls alternating between the words “Fresh” and “Healthy” with paragraph descriptions about Garbanzo’s food.

The focus on healthy messaging to consumers is really a reflection of consumers continued shift towards healthier brands and making healthy choices. I think concepts that do a good job communicating a healthy message to their consumers are going to have a significant edge over brands that don’t focus on it. Tokyo Joes had a similar focus – right when you walk in the door there is a sign talking about how healthy, fresh, and local their food is.

We also stopped by Brothers BBQ in Denver – a locally owned Chain with ~10 locations that is considered by many to be the best BBQ in Denver. The food was pretty underwhelming, they do not cook anything on site and they commissary the BBQ in each day from a central location where they cook it. The only thing on site were fryers and some heating units.

One thing we really liked that they did do – they were selling t-shirts that had the following logo on them. This could be something to consider in Alabama for our brands – “Family owned and Alabama grown.”

Wanna see the next big takeaway from our Denver visit? Find part four of our scouting trip right here.

Let me know what you think about these lessons and stay tuned here and on Twitter to keep up with Fresh Hospitality’s adventures.

What 43 Hours In Denver Taught Me About Fast Casual

The Fresh Hospitality crew once again piled onto a plane for 3 hours for another crash course in Fast Casual restaurants. This time our destination was the mile high city – Denver – arguably the birthplace of Fast Casual itself (Chipotle, anyone?) and most definitely one of the most forward looking restaurant cities in America (especially in the fast casual space).

We strapped in on the AM Southwest Flight and go into Denver in time to eat lunch at least 3 or 4 times.

I will spare you the details of everywhere we visited (my stomach is still about to explode days later) but I wanted to share the highlights. I will tell you about the top 2 fast casual spots we visited and give you a couple lessons that we took away from the visit.

This is the first post in what will be a series about our trip to Denver to scout out some big competitors and learn more about them. These are just the raw facts and our thoughts from the trip – hope you enjoy.

Garbanzo

http://www.eatgarbanzo.com/

One of the main focuses of our journey was to check out Garbanzo – what we considered a major competitor to Taziki’s. Garbanzo has ~10 locations in and around Denver and is actually being developed by the founder of Panera Bread.

Fresh Baked Pitas For Sale

Garbanzo had a few strengths – mainly their almost overpowering emphasis on how FRESH and HEALTHY their food is (more on there here) and their use of Fresh Baked Pita’s. They sell the fresh baked pitas at the checkout and they also situate the pita machine so it’s the first thing you see when you are standing in line.

Close up of the Pita Oven

 Pita Oven At the Line

 Garbanzo emphasized a “try anything on our menu” sample policy encouraging customers to have a taste of their Falafel, fresh pita, etc. They had the below sign and also had employees basically begging us to take free samples (of the falafel in particular). The staff at both stores was also very friendly – sometimes so friendly they were almost in your face

Sample Anything

 Overall – Garbanzo seemed to be a more fast food version of Roti – featuring a “build your own” menu, serve your own drinks etc and the decor was sparse and felt like a converted McDonalds the service model felt almost purely fast food – no table interaction at all as you got your dish at the cash register and the food was served with plastic trays.

Wanna see where we went next? Find part two of our scouting trip right here.

Let me know what you think about these lessons and stay tuned here and on Twitter to keep up with Fresh Hospitality’s adventures.