Chipotle Cuts Into a New Pie

The concept of fast casual has been one that I have studied, analyzed and reported on since 1993. In fact, I authored the very first book, The Chipotle Effect, on the subject matter of fast casual and the impact this effect has had on the American food consumer. Additionally, if you haven’t checked out my show “Fast Casual Nation,” we explore this very topic of expanding levels of service in the fast casual segment.

Pizza Heats Up

The Chipotle interpretation of bringing a reformatted pizzeria onto the playing field of fast casual is one that we will need to watch in the coming year. Pizza has been on the radar of being the next big fast casual trend – with Fresh Mex leading the way with more than 100 concepts being tracked by our publication The breakdown is impressive if you look at the number of consumers flocking to the pizza segment. In fact, it is currently the hottest segment next to sandwich in which consumers are increasing visits year over year.

Consumers have increased visits 34% in the sandwich segment over the past year, where Fresh Mex has only had a 14.5% increase, and bakery/cafe, an increase of 8.4%. The trends in consumer habits around fast casual are tracked heavily by the social behavior in the Restaurant Social Media Index. As we look into this data from a pizza perspective, the trend has been one on the upswing for the past 18 months. There has been a 62.3% increase in consumer habits on visits to fast casual pizza. Sentiment on pizza has risen over the past year as well, now ranking No. 3 behind category leaders like sandwich, Fresh Mex, and then bakery/cafe.

The real test in the fast casual pizza category is one that may challenge the very roots of the pizza business. Pizza has been dominated by the independents for over four decades with secret recipes, science behind the water and dough mixture – all the way to creating a “war of cities” of who really has the best pizza in the land, Chicago or New York. Many other cities are jumping into the mix with rivals from Los Angeles, Miami, Dallas, D.C., and even Phoenix that claim supreme. 

The X-Factor

Styles are also in contention from the big box boys of Papa John’s and Domino’s, to the coal-fired gurus and many more. Ingredients have always been the element that most could emulate, though dough is a bit tougher. But the real X-Factor? (See page 17 in my book):

“Fast Casual X-Factor is the combination of the perfect product, the perfect experience and the perfect match to the consumer.”

This factor is one that few brands have been able to duplicate. Even Chipotle has struggled with the Asian experience in the six-unit Shop House experiment. Can (and will) Steve Ells spin dough out of this new venture with Pizzeria Locale?

From Full-Service to Fast Casual

The original Pizzeria Locale in Boulder opened in 2011 and was created by Frasca Food and Wine founders Stuckey, a master sommelier, and executive chef Mackinnon-Patterson. The full-service restaurant is a contemporary pizzeria inspired by the traditional pizzerias of Naples, Italy. The new creation of the fast casual version draws from the same inspiration. It also draws from a commitment to premium ingredients and an interactive service format similar to Chipotle.

My observation is simply this: Can Chipotle time the fast casual explosion of pizza like they did with Fresh Mex? There are several good players like L.A.-based Blaze, 800 Degrees, and a few upstarts that might have something to say about Chipotle’s eye on the pie. Eventually it will be up to the fickle consumer to determine who wins in fast casual pizza. But the real question is: Has the shine of Chipotle already started to wear off?

My estimate is that there will be a few players that change the game on them while Chipotle is in development of their pizza concept. Kind of like how they changed the game on Baja Fresh with the “pick your ingredient” and simplification model. The fast casual segment is evolving with some interesting, new twists that seem to be splitting the herd into two major factions. One is the ultra quality experience, ingredients and menu, and the other is the downstream version focused on speed and value just above QSR.

One thing is for sure – the evolution of the more than 700 concepts in fast casual today has proved to be so successful because of a few ingredients. Consumers love the choice, the quality, and the experience of fast casual so much that they continue to increase meal occasions as much as 25% per year, according to our own Fast Casual Social 100 Report. The next power segment could be pizza with the right mix of all the key attributes that consumers love.