Top 100 Fast Casual Innovators Report Released

Our release of the Top 100 Fast Casual Innovators Report breaks down the top fast casual restaurant performers in the segment as analyzed by our Foodable Labs data index. I got a chance to look back on the fast casual pioneers who edged their way into the fast casual restaurant industry in the mid-90’s and changed it forever to become the 21st-century behemoth of fast casual that we know it to be today.

The Innovators Who Envisioned Our Dining Future

Over 20 years ago I had the opportunity to meet and work with these pioneers early on in my career and see the hidden gems of restaurant brands and fast casual trends that they were forging. Today we see an entirely new crop of Top 100 fast casual operators that are being led by a new group of young execs that are destined to create a new benchmark for the top fast casual restaurant brands and their future. Brands like Sweetgreen, Mod Pizza, Tender Greens, Shake Shack are just a few of the innovators leading the way.

When I look back at the 25 years of analysis of fast casual trends and fast casual concepts, the one area that continues to rise to the top is the adoption of technology that these fast casual brands continue to drive home. Changes in technology continue to cause major shifts in the space with recent origin party delivery strategies with Modern Market that could start an entirely new approach to how delivery will be managed by fast casual restaurants in the future. These kinds of strategies could spell doom for the likes of Grub Hub and Uber Eats should the top fast casual restaurant brands create a new roadmap for on demand delivery.

Fast Casual Set to hit 100 Billion by 2025

Our Foodable Labs study finds a growth track that could exceed 100 billion in sales by 2025 for fast casual and potentially as many as 1,500 concepts in the U.S. alone. This growth is attributed to a massive adoption of food away from home and the on demand market by the emerging market of consumers in the 25-34 demographic.

Additionally the explosion of fast casual and emerging restaurant brands is due to the low cost of entry, digital marketing opportunities and now even ghost and virtual kitchens will lead a pioneering era for fast casual growth in the next decade. Technology adoption by consumers will assist in this massive shift and the continued desire by consumers to eat cleaner and more consciously.

Make sure to download the Top 100 Fast Casual Restaurant Innovators Report to get all the insights to the future of the fast casual restaurant business. See more reports and market insights on The Modern Chef Network brought to you by Tyson Foods.

 

Why Are Chain Restaurants Losing Foot Traffic?

Exterior of Pizza Hut 

Exterior of Pizza Hut 

Unfortunately, some major players in the industry have had a tough 2016.

Cosi just filed for bankruptcy and YUM Brands (the parent company of Taco Bell, KFC and Pizza Hut) just announced a sales decline at Pizza Hut.

“The US market was influenced by an unsuccessful promotion and the competitive environment,” said Greg Creed, CEO of YUM Brands.

Sonic drive-in is also not performing as its executives and investors hoped. “The shortfall was largely driven by lower-than-expected traffic, reflecting lower consumer spending in restaurants and continued aggressive competitive activity,” said Cliff Hudson, CEO of Sonic in a press release.

Both of these executives have said their chains are under major pressure from the competitive landscape, meaning other emerging concepts are taking away their customers.

But for some established brands, trying to attract the distracted consumer is the least of their worries. Chipotle, for example, is in full-on recovery mode. The “fresh mex” chain sales have drastically declined due to its food safety crisis, specifically, the brand saw sales decline by 27% for the first half of the year.

So what is costing consumers to not visit these establishments as much? Well, one contributing factor is that commodity prices are down. So eating at home is more appealing to consumers, especially as “food away from home” is on the rise according to this study. Even though lower food costs is also a good thing for restaurants, promotional costs evidently have increase to compete in the market.

The increase in wages has also attributed to the sales decline.

Wage inflation rose by 5% in July, according to William Blair Research. 12 states have increased their minimum wage this year. California, the largest restaurant state experienced a 11% spike in wages from $9 to $10. Read more