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.

Devouring 9 Restaurants In 22 Hours – Lessons In Fast Casual From Our Chicago Adventure

This past weekend I traveled with the Fresh Hospitality crew up to Chicago to visit a few friends and scout out some fast casual spots to see what the competition was up to. Our gracious hosts for the weekend were Chicago native Billy Dec and Dave Gilbert of the National Restaurant Association.

I will spare you the gory details but from the time our plane touched down around 5pm until we took off at 3pm the next day – we ate at a grand total of nine different restaurants.

We scoped out several Mexican concepts to see how the competitors stacked up to Little Donkey (our new Mexican concept) but I wanted to share my thoughts on two particularly impressive Fast Casual competitors that we visited. Roti Mediterranean Grill and Rick Bayless’s new Mexican fast casual concept – Xoco.

I am a very strong believer that restaurants live and die on their identity. Both concepts knew what they wanted to be to their guest and executed flawlessly.

Roti

http://roti.com/

I thought that Roti did a nice job. They were fast, friendly, and the food was very good. They are definitely a legitimate competitor in the Mediterranean space . The kabob plate was a really good, well thought out plate of food. The sandwich was great too. Roti is centered around a “build your own” menu (similar to Chipotle) where you take 1 protein and have it on a sandwich, plate, or salad etc. The chain has 12 locations in Chicago and DC and is founded by Bill Post (former president of Levy Restaurants). Store was very busy, line almost out the door when we walked in and it took ~4 minutes to clear the entire line. Very fast and streamlined operation. Food was tasty and relatively healthy. No tipping option available, which more and more fast casual concepts seem to be migrating towards.

Despite the manager and staff’s objections that “no photos were allowed” I managed to snag several good shots of their store and the lunch crowd.

Chipotle Style Build-Your-Own Menu

Busy Line (Under 4 Mins Wait)

A few shots of their line

 Making Fresh Flatbreads

Food – Sultan Sandwich

Food – Chicken Kebab

Food – Chicken Salad

XOCO

http://www.rickbayless.com/restaurants/xoco.html

As far as Xoco, there is no doubt who they are and what they are trying to be to their guest. What intrigues and impresses the hell out of me about Rick Bayless is how he can put three Mexican restaurant side by side and pull it off. Fast casual (Xoco) casual (Frontera Grill) Topolobampo (fine dining) Why does this work? Because all of these brands have an identity, it’s called Rick Bayless, and what he stands for . He sources his food right. He has great recipes. He cooks one type of cuisine… Mexican.

It doesn’t matter how he delivers the food to his guest, whether its fine dining or you have to stand in line. What matters is his reputation of delivering high quality food, sourced right and great recipes and it’s all about Mexico. You will not find Chicago’s famous deep dish pizza on his menu. He does one thing and does it well. Another thing that boggles my mind – there isn’t a single taco or burrito on the menu at Xoco. A couple operational notes I made as well below.

The aftermath…

SEATING

Xoco used bar seating to accommodate a large number of seats in a very tight area. Something to consider for spacing constraints or seating limitations going forward. This pic doesn’t capture it perfectly but I’m telling you they packed about 20 seats into what most people would consider a winding hallway.

CHALK BOARDS

Xoco extensively used chalk boards all over the store to tell its story and convey important information to the guests, often used chalk boards in the line itself so customers could read about the local sources of food etc while in line.

CUSTOMER LINE / VISIBLE COOKING & PREP

Xoco did a fantastic job making their entire cooking and prep process visible to customers, the structure of the line forced customers to walk by as employees were making fresh dough, cooking food, etc – showing that they are proud of their cooking and they want to display how fresh and homemade everything is. You can also see from the pictures that the kitchen is exposed on the outside so people walking by can also peer in and see the fresh food being cooked.

Both of these brands really showcase the direction that fast casual is moving in. Restaurants with a strong identity that know exactly what they want to be to their guest and focus on executing top quality food at a very high level.

Let me know what you think below and Follow Me on Twitter to hear about my adventures in real time.