The Upscale Fast Casual Segment Keeps On Climbing

With restaurant lunch sales suffering and chains like Chipotle taking a tumble in profits, it may seem like the entire food industry could be facing some challenging times ahead. Luckily, despite restaurant business seeing slow growth over the last year, there is one segment that continues to thrive. 

Some know it as high-end fast casual. Others have affectionally dubbed it fast casual 2.0. No matter what you call it, this segment, which includes brands like Panera Bread, Blaze Pizza and Shake Shack, is making steady headway into 2017. 

Earlier this month, Blaze Pizza announced its year-to-date highlights, “that include nearly doubling the brand's system-wide sales and restaurant locations when compared with this time last year.”

The California-based chain reported year-to-date sales of $130 million, up from $70 million last year; as well as 83 percent restaurant unit growth; and higher-than-ever Yelp scores (averaging 4.4 stars overall in September). 

“We are focused on building a brand with significant and meaningful competitive advantages,"  said Blaze Pizza President and COO Jim Mizes, according to Fast Casual. "It really started five years ago, when we invested heavily in talented team members and experienced franchise partners, developed scalable operations, and installed systems that would allow us to leverage technology far into the future.” 

In addition to implementing a mobile app with online ordering, loyalty, and nutrition information, Blaze has made a commitment to clean food. The chain’s menu is now free from “artificial colors, artificial flavors, preservatives and fillers.” They also serve nitrite-free pepperoni, ham, salami and bacon.

2016 is also proving to be a good year for Shake Shack, who, according to a recent press release, reported sales of $74.6 million for Q3 of 2016, a 40 percent total revenue increase.

Shake Shack's Q3 performance demonstrates the continued strength and opportunity of our brand,” said, CEO Randy Garutti. “With the recent test launch of our first ever Shack App, we are meeting our guests where they are, and are beginning to lay the groundwork to connect the digital experience with the community.”

Panera Bread is also relying on technology to develop a more convenient restaurant experience. And it certainly seems to be paying off. The chain is expected to generate $5.2 billion in sales for 2016. “These efforts should also allow Panera to better engage with consumers,” R.J. Hotly, CFA, wrote in Morning Star. “Making it one of the more compelling long-term cash flow stories in the restaurant industry.”