The fast casual Fresh-Mex segment is filled with competition as fierce, hot, and spicy as the food itself. Rubio’s Coastal Grill, Chipotle, Freebirds World Burrito, Tijuana Flats, and others have forged the way for the Fresh Mex fast casual food scene, but is there a new champion mixing things up?
Moe’s Southwest Grill is no greenhorn to the restaurant industry. Founded in 2000 and with over 600 locations in North America, Turkey, and Russia, this self-proclaimed Mexican and Tex Mex-inspired brand has been on a (burrito) roll these last 16 years. And Moe’s is definitely no stranger to Foodable. As a frequent favorite to show up in our top rankings based off of Foodable Labs data (the latest of Moe’s success being No. 48 in our Top 100 Fast Casual Brands 2016 Report and one of the Top 10 Fresh Mex Fast Casual Brands), Moe’s is without a doubt a high-performer — but is it on track for a total takeover?
Our data shows signs that, yes, Moe’s could be well on its way to become the fresh face of Fresh Mex. And no, not just because it passed Chipotle in a 2016 Harris Poll trend survey by being named “Fast Casual Mexican Restaurant of the Year.”
More to Taco ‘Bout Than Chipotle
Chipotle has been the poster child of fast casual for years, setting the tone for fresh ingredients and streamlined choices and service. That is, until the end of 2015, when the brand that made its name by boasting its “Food With Integrity” was plagued with E. coli outbreak after outbreak. But before Chipotle, there was Baja Fresh, a California-based brand that was already fulfilling the grass-fed promise Chipotle was working toward. However, with Chipotle opening twice as many locations as Baja Fresh, Chipotle led the pack.
Is it coming back full circle with Moe’s taking the throne? There are other brands like Rubio’s that are still charging ahead in the Fresh Mex segment, but Moe’s growth is unparalleled: Since the third quarter of 2015, Moe’s Overall Score through Foodable Labs has been steadily increasing, but from October to November alone this year, its Overall Score spiked 50.87 points — an impressive surprise jump in such a short amount of time.
What factors could have played a part in this? Was it Moe’s foray into in augmented reality? Was it the brand’s the newest, messiest burrito? Was it the latest relaunch of its customer loyalty app that came with a free burrito with each download? Or is it simply its promise of “Honestly Awesome Food” and more than 20 fresh ingredients that goes toe-to-toe with Chipotle’s “Food With Integrity”?
Either way, Moe’s is growing — and guests are going.
In the last 60 Days, Moe’s consumer crossover acquisition from Chipotle’s consumer audience was 36.4 percent. And of those newfound guests, 12.3 percent eat out an average of 11.2 times per month, one of the highest frequencies ever recorded in Foodable Labs.
Moe's Southwest Grill — Overall Score
But that’s not the only area that Moe’s has improved. In terms of social restaurant visits (SRVs), or socially-motivated, online consumers taking engagement in-store, the brand has improved 20.14 points from October to November.
And its SRV demographic has been shifting in the last six months, with 45.4 percent of Moe’s SRVs being done by the millennial sector. That’s up from millennials only contributing to 29.3 percent of Moe’s SRVs the same time last year. Why is this substantial? Millennials are known for eating out five times more per month than other generations, meaning a lot of return buying power for the brand.
Moe’s has topped Chipotle in another area, one that is typically considered Chipotle’s strong suit: mobile engagement. While Chipotle launched its first customer loyalty app, Chiptopia, likely to entice back guests after its unfortunate series of foodborne illnesses, its mobile engagement score still dropped toward the end of 2015 with minimal increases in 2016.
On the other hand, Moe’s mobile engagement score has risen significantly, its Rockin’ Rewards app drawing in consumers who want to earn points with every dollar they spend. As of the beginning of November, Moe’s surged ahead of Chipotle at 96.89 points compared to Chipotle’s 78.17 mobile engagement score.
Still, it’s not to say Chipotle isn’t a high-performing brand. It has taken tough hits since October 2015, and while most brands would have gotten crushed under that immense PR pressure, Chipotle is still working its way out of the rubble to stand strong on its feet. This role model for fast casual is still considered one of the top 10 in the Fresh Mex segment, but it definitely needs to watch out: Moe’s growth is billowing with even more momentum and may catch up to the fast casual giant in no time.
The Leadership Behind Moe’s: Paul Damico and FOCUS Brands
President Bruce Schroder has stepped up to the plate to lead Moe’s, and he has made some clever, quirky decisions when it came to competition with Chipotle, but he’s not the only one who has played an important role to the brand.
While Moe’s was founded by Raving Brands, it joined the FOCUS Brands family in 2007. Paul Damico may be president of Focus Brands, Inc., North America now, but before he began serving in 2015, he was the president of Moe’s Southwest Grill for almost six years. What about Damico makes him a unique leader? He’s had an intimate look at his brand.
Working at the top of the chain and being involved in many moving parts can often create a disconnect between employer and employee, but in 2013, Damico was featured on an episode of “Undercover Boss,” a series in which high-level executives discreetly take entry-level jobs in their company for a glimpse through their employees’ eyes.
The experience connected Damico with another point in his life that showed him the impact an employer can have. When he was younger, his brother was infected with hepatitis and needed an emergency, life-saving liver transplant. His family only had two hours to trek from Long Island to Pittsburg. Who came to the rescue? Northrop Grumman, his father’s employer. They flew his brother by helicopter to the procedure.
The show was an opportunity to pay that kindness forward, when Damico met an employee who was struggling as to raise his daughter. Damico rewarded him with money toward a new car, a college fund for his daughter, and assistance for his daughter’s day care. “Undercover Boss” also gave him a behind-the-scenes view on the work conditions of his restaurants.
“I’ve realized it’s okay for my employees to go slower, especially if that means getting to know the customers’ names and what’s going on in their lives,” Damico said.
In the hectic corporate world, it’s easy to forget the foundation of the restaurant industry: hospitality and customer service. With this reminder and this mindset for giving back, Damico, who is leading FOCUS Brands and Moe’s, will surely keep this rising Fresh Mex brand fresh.