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Black Consumers and Fast Casual Dining - US - February 2016

"Black consumers enjoy dining out, not only as a leisure activity but because many of them lead very busy lives and dining out saves time and in some instances money. Fast casual dining can be a healthier alternative to dining out than eating at a quick-service restaurant."

This report looks at the following areas:

  • Limited number of locations in Black community isn't feeding into their love for food
  • Is the glass half empty or half full? Opportunity exists on both sides
  • Blacks starving for technology innovations to make life easier
  • Taste, quality, and fresh food will win over Blacks

There are more options for consumers to choose from than there ever has been, and while many Blacks tend to stick to national chain restaurants, many prefer dining at local independent fast casual restaurants because of the proximity to where they live, and the perception that these restaurants may provide more authentic food they prefer at home.

This report covers expenditures by Black consumers for food and drink at full-service restaurants and limited-service eating places as defined below:

  • Full-service restaurants are establishments with waiter/waitress service, in which customers order and are served while seated. They may also sell alcoholic beverages and offer carryout services.
  • Limited-service eating places include quick service/fast food restaurants and fast casual dining establishments (food services where customers usually select and order items and pay before dining) and snack and non-alcoholic beverage bars, such as coffee or juice bars, donut shops, and ice cream shops. Cafeterias (other than school or employer) and buffets are also included in this category.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Limited service represents 63% of Blacks’ dining out expenditures
          • Figure 1: Segment share of expenditures by black households on dining out, at current prices, 2015
        • The issues
          • Limited number of locations in Black community isn’t feeding into their love for food
            • Figure 2: Attitudes toward fast casual restaurants in the last year, December 2015
          • Is the glass half empty or half full? Opportunity exists on both sides
            • Figure 3: Blacks’ use of fast casual restaurants in the past month and population distribution, by generation, December 2015
          • Blacks starving for technology innovations to make life easier
            • Figure 4: Receptivity to fast casual restaurant promotions and amenities, December 2015
          • Taste, quality, and fresh food will win over Blacks
            • Figure 5: Types of fast casual restaurants Blacks have dined at in the past month – Indexed against the total population, December 2015
          • The opportunities
            • Messaging is key…Blacks see fast casual differently than others
              • Figure 6: Words associated with fast casual restaurants – Blacks versus the total population, December 2015
            • Consider expansion into Black communities, leverage Black franchise owners
              • What it means
              • The Market – What You Need to Know

                • At $28 billion in sales, limited-service restaurants are a force to reckon with
                  • Weeding crops to produce fruit bears a harvest for brands who target Blacks
                  • Market Size and Forecast

                    • Currently at $44 billion, Blacks’ dining out expenditures projected to reach nearly $58 billion by 2020
                      • Figure 7: Expenditures and fan chart forecast of Black consumers on dining out, at current prices, 2010-20
                    • This decade could boast a 65% gain in dining out expenditures
                      • Figure 8: Expenditures by Black households on dining out, at current prices, 2010-20
                  • Market Breakdown

                    • Two thirds of every dining out dollar spent is on limited-service restaurants
                      • Figure 9: Expenditures by Black households on dining out, by segment, at current prices, 2013 and 2015
                    • Limited-service restaurant expenditures forecast to reach $36.5 billion by 2020
                      • Figure 10: Expenditures and fan chart forecast of Black consumers on limited-service restaurants, at current prices, 2010-20
                    • Full-service restaurant expenditures forecast to reach $21.2 billion by 2020
                      • Figure 11: Total expenditures and fan chart forecast of Black consumers on full-service restaurants, at current prices, 2010-20
                  • Market Perspective

                    • Blacks’ value equation is different, quality always trumps cost
                      • Food is how they demonstrate love … even if they didn’t cook it
                      • Market Factors

                        • Single households, hectic lives
                          • Figure 12: Family households with own children, by race/Hispanic origin of householder, by type, 2014
                        • Opportunity to build loyalty among Black men and Millennials
                            • Figure 13: Brand loyalty segments, September 2015
                        • Key Players – What You Need to Know

                          • Fast casual restaurants step up tactics to win the game
                            • Experiences broaden horizons, restaurants rewarded
                            • What’s Working?

                              • Food is the gateway to experiencing other cultures
                                • Authenticity…taste is everything
                                  • Delivery works, but the restaurant’s location may be a barrier to delivery
                                  • What’s Challenging?

                                    • Social media…it can make or break a brand
                                      • Few fast casuals offer kids menu, a huge miss
                                        • Figure 14: Family households with own children, by race and Hispanic origin of householder, 2014
                                    • What’s Next?

                                      • Coming soon…more chains to open in Black communities
                                        • Time-saving extras: drive-throughs, delivery, and ordering in advance
                                          • Fast casual as an entertainment venue
                                          • The Consumer – What You Need to Know

                                            • Blacks eat at fast casuals more frequently, especially men and Millennials
                                              • Quality and taste trumps low cost
                                                • Buy Black by Black…Blacks enjoy eating at Black-owned fast casual restaurants
                                                  • TV and word of mouth highly effective at feeding awareness
                                                  • Incidence of Dining at Fast Casual Restaurants

                                                      • iGeneration/Millennials dine at fast casuals more than others
                                                        • Figure 15: Incidence of Blacks dining at fast casual restaurants in the past month, by generation, December 2015
                                                      • Pizza, chicken, and burger are leading fast casual restaurants
                                                        • Figure 16: Types of fast casual restaurants Blacks have dined at in the past month – Indexed against the total population, December 2015
                                                      • Blacks more likely than others to eat at leading fast casual restaurants
                                                        • Figure 17: Fast food/fast casual Blacks have eaten at in the last 30 days – indexed against the total population, July 2014-September 2015
                                                    • Fast Casual Dining Dayparts

                                                        • Three in 10 Blacks dine at fast casual for breakfast and snack
                                                          • Figure 18: Types fast casual restaurants Blacks have dined in the past month, by dining daypart, December 2015
                                                          • Figure 19: Correspondence analysis – Types of restaurants by dining out daypart, December 2015
                                                      • Frequency of Dining at Fast Casual Restaurants

                                                          • Blacks dine at fast casuals more often than others, nearly every other day on average
                                                            • Figure 20: Average number of times dined at a fast food/fast casual restaurant in past 30 days, by race/Hispanic origin, July 2014-September 2015
                                                          • Blacks eating at fast casuals more
                                                            • Figure 21: Changes in frequency of dining at fast casual restaurants in the last year, December 2015
                                                            • Figure 22: Changes in eating healthier options at fast casual dining in the last year, December 2015
                                                          • Value menu may not be as effective as coupons promoting fast casual
                                                            • Figure 23: Spending changes at fast casual restaurants in the last year, December 2015
                                                          • Technology is up, delivery still may help drive sales
                                                            • Figure 24: Changes in using mobile technology and delivery services at fast casual restaurants, December 2015
                                                        • Attitudes toward Fast Casual Restaurants

                                                            • Quality food and ingredients justifies higher cost
                                                              • Figure 25: Impact price has on dining at fast casual restaurants, December 2015
                                                            • Quality may draw Blacks in, but brands’ advocacy may drive loyalty
                                                              • Figure 26: Attitudes toward dining at fast casual restaurants, December 2015
                                                          • Brand Health of Fast Casual Category

                                                              • Good taste, advance ordering, and good value messages are working for fast casual
                                                                • Figure 27: Correspondence analysis – Restaurant association, December 2015
                                                              • Fast casuals can work on strengthening efforts for kids’ options, LTOs
                                                                • Figure 28: Restaurant association, by type of restaurant December 2015
                                                            • Preferences for Chain vs Independent Restaurants

                                                                • Seven in 10 Blacks eat at Black-owned restaurants
                                                                  • Figure 29: Preferences for dining at chain, independent and Black-owned restaurants, December 2015
                                                                • Men more likely than women to dine at fast food and fast casual
                                                                  • Figure 30: Level of enjoyment of dining at restaurants, by gender, December 2014
                                                                • Millennials more likely to dine at independent and fast food restaurants
                                                                  • Figure 31: Level of enjoyment of dining at restaurants, by generation, December 2014
                                                                • Blacks enjoy eating at chain restaurants more so than others
                                                                  • Figure 32: Preferences for dining at fast casual versus fast food and casual dining restaurants, December 2015
                                                                • Women more likely to dine at Black-owned casual dining
                                                                  • Figure 33: Level of enjoyment of dining at fast casual versus fast food and casual dining restaurants, by gender, December 2014
                                                              • Pizza Restaurants

                                                                  • Pizza is the #1 fast casual restaurant visited, family portions attributed
                                                                    • Figure 34: Time of day Blacks eat at a pizza fast casual restaurant, by gender, December 2015
                                                                  • Millennials twice as likely than Boomers to eat at pizza fast casual for lunch
                                                                    • Figure 35: Time of day Blacks eat at a pizza fast casual restaurants, by generation, December 2015
                                                                  • Pizza fast casual competition is strong – Independents may be biggest threat
                                                                    • Figure 36: Fast food and fast casual pizza restaurants people dine at, by race/Hispanic origin, July 2014-September 2015
                                                                • Chicken Restaurants

                                                                    • Two in three Blacks have eaten at a chicken fast casual – Particularly men
                                                                      • Figure 37: Time of day Blacks eat at a chicken fast casual restaurant, by gender, December 2015
                                                                    • Millennials twice as likely to eat at chicken fast casual for lunch
                                                                      • Figure 38: Time of day Blacks eat at a chicken fast casual restaurant, by generation, December 2015
                                                                    • Blacks significantly more likely than others to eat at chicken restaurants
                                                                      • Figure 39: Fast food and fast casual chicken restaurants people dine at, by race/Hispanic origin, July 2014-September 2015
                                                                  • Burger Restaurants

                                                                      • Men eat at burger fast casual restaurants more than women
                                                                        • Figure 40: Time of day Blacks eat at a burger fast casual restaurant, by gender, December 2015
                                                                      • Boomers less likely to eat at burger fast casuals, opportunity with healthier options
                                                                        • Figure 41: Time of day Blacks eat at a burger fast casual restaurant, by generation, December 2015
                                                                      • Fast casual burger restaurant struggle to compete with fast food chains
                                                                        • Figure 42: Fast food and fast casual burger restaurants, by race/Hispanic origin,
                                                                    • Bakery, Sandwich, and Salad Restaurants

                                                                        • Blacks less likely to have eaten at salad fast casual, opportunity for brands
                                                                          • Figure 43: Time of day Blacks dine at fast casual sandwich shops, bakeries, and salad restaurants, by generation, December 2015
                                                                        • Millennials significantly more likely than others to eat at sandwich shop for lunch
                                                                          • Figure 44: Time of day Blacks dine at fast casual sandwich shops and delis in the past month, by generation, December 2015
                                                                        • Millennials nearly 3x as likely to pick up a snack or dessert from bakery fast casual
                                                                          • Figure 45: Time of day Blacks dine at fast casual bakeries in the past month, by generation, December 2015
                                                                        • Panera Bread is the leader, but there’s significant room for growth in category
                                                                          • Figure 46: Fast food/fast casual deli, bakery, and salad restaurants people have dined at in the last 30 days, by race/Hispanic origin, July 2014-September 2015
                                                                        • Coffee shops may be a bigger threat than the category realizes
                                                                          • Figure 47: Coffee shops and ice cream parlors people have dined at in the last 30 days, by race/Hispanic origin, July 2014-September 2015
                                                                        • Boomers less likely to eat at salad restaurant, suggests opportunity
                                                                          • Figure 48: Time of day Blacks dine at fast casual salad shops in the past month, by generation, December 2015
                                                                      • Asian and Mexican Fast Casual Restaurants

                                                                          • Millennials twice as likely to eat at a Mexican fast casual for lunch and dinner
                                                                            • Figure 49: Time of day Blacks eat at Mexican fast casual restaurants, by generation, December 2015
                                                                          • Blacks more likely to eat at Asian restaurants, lunch and dinner primarily
                                                                            • Figure 50: Time of day Blacks eat at Asian fast casual restaurants, by generation, December 2015
                                                                          • Chipotle and Panda Express are leaders in ethnic fast casual
                                                                            • Figure 51: Fast food and fast casual Mexican and Asian restaurants people dine at, by race/Hispanic origin, July 2014-September 2015
                                                                        • Impact of Marketing Tactics

                                                                            • Word of mouth and TV are the leading ways Blacks find out about fast casual restaurants
                                                                                • Figure 52: Resources used to learn about fast casual restaurants, December 2015
                                                                              • Promotions could work, but may not drive repeat visits – Other factors in play
                                                                                • Figure 53: Impact of promotions, delivery, and drive-through on fast casual restaurant visits, December 2015
                                                                            • Appendix – Data Sources and Abbreviations

                                                                              • Data sources
                                                                                • Sales data
                                                                                  • Fan chart forecast
                                                                                    • Consumer survey data
                                                                                      • Correspondence analysis – Methodology
                                                                                        • Abbreviations and terms
                                                                                          • Abbreviations
                                                                                            • Terms
                                                                                            • Appendix – The Market

                                                                                                • Figure 54: Expenditures by Black households on dining out, at inflation-adjusted prices, 2010-20
                                                                                                • Figure 55: Expenditures by black households on dining out, by segment, at current prices, 2010-20

                                                                                            Companies Covered

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                                                                                            Black Consumers and Fast Casual Dining - US - February 2016

                                                                                            £3,199.84 (Excl.Tax)