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Fast Casual Restaurants - US - August 2010

The fast-casual restaurant segment of the $580 billion foodservice industry is a tribute to the American desire to find middle ground, a hybrid that seeks to keep the best of both fast food and casual dining restaurants, while still being its own very contemporary niche. Fast casual recognizes that service speed still is important, while also believing that product quality is key and never should be compromised. Fast casual caters to consumers who grew up dining away from home often and who still want the convenience that a restaurant offers but at as modest a price as possible. Fast casual exists because it meets consumer demands about food quality, service and atmosphere. But while some of its largest concepts have fared well, the category overall has been hampered by the same recessionary factors slowing the industry as a whole.

This report seeks to give a state-of-the-category overview of what fast casual is about and includes the following insights:

  • Sales data, used to estimate annual revenue for each of the leading 23 fast casual chains, a market size and forecast and segment trending.
  • Consumer analysis gleaned from exclusive Mintel research, which is placed not only in themed consumer-specific sections, but also woven throughout the report. From these survey results, a host of custom groups has been created, analysis of which is sprinkled throughout the report.
  • Mintel Menu Insights, which provides flavor, ingredient, preparation and price trend analysis, drawing from the largest 350 chain restaurants, as well as 150 independent restaurants, 50 restaurants run by top chefs, and 25 beverage-focused restaurants.
  • Experian Mosaic USA, which classifies all U.S. households and neighborhoods into 60 unique Mosaic types within 12 groupings that share similar demographic and socio-economic characteristics.
  • Mintel also compares both the Experian Simmons National Consumer Survey and custom consumer historical data in this report to assess trends over time.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Mintel Menu Insights
            • Consumer survey data
              • Advertising Creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Fast casual establishes itself as a viable hybrid restaurant category
                        • Fast casual has weathered the recession better than have other restaurant-industry categories
                          • Several key demographic and psycho-demographic shifts have helped build fast casual
                            • Fast casual has evolved into three primary menu subcategories
                              • Fast casual is leveraging its menu advantages
                                • Social media have mitigated fast casual’s marketing deficit
                                  • Fast casual is a solid contender for restaurant lunch business
                                    • Panera Bread’s patronage pattern, like its sales data, skews results for the whole category
                                      • Food taste, freshness and quality drive fast casual decisions
                                        • What’s not to like?
                                        • Insights and Opportunities

                                            • Does fast casual still exist?
                                              • Does fast casual still matter?
                                                • What is fast casual’s most beneficial point of difference?
                                                  • If it survives, will it become more like fast food or casual dining?
                                                    • If it survives, will it see a shakeout of brands?
                                                      • Is price or quality more important to its survival?
                                                        • What is the biggest threat to fast casual’s growth?
                                                          • What is the biggest social factor in fast casual’s favor?
                                                            • Will bakery-cafés continue to be fast casual’s dominant style?
                                                              • Lunch is fast casual’s biggest daypart. Does the category have more growth potential at breakfast or dinner?
                                                                • Can fast casual expand customer base to include kids without alienating adults?
                                                                  • Where are the new fast casuals?
                                                                  • Inspire Insights

                                                                      • Inspire Trend: The Fresh Factor
                                                                        • Freshness communicates multiple qualities
                                                                          • Figure 1: Top 10 ingredient marketing claims on fast casual menus, by incidence, Q1 2008-Q1 2010
                                                                        • Restaurants in action
                                                                          • Implications
                                                                            • Figure 2: “Important” reasons for selecting a fast casual restaurant, April 2010
                                                                        • Market Size and Forecast

                                                                          • Sales slowed but expected to grow
                                                                            • Figure 3: U.S. sales at fast casual restaurants, at current prices, 2006-14
                                                                            • Figure 4: U.S. sales at fast casual restaurants, at inflation-adjusted prices, 2006-14
                                                                        • Market Drivers

                                                                            • Population impact
                                                                              • Figure 5: Annual estimates of U.S. population, by five-year age groups, 2000 and 2009
                                                                            • What is value?
                                                                              • Figure 6: Top five restaurant qualities in terms of importance, November 2008 and October 2009
                                                                            • Affordable luxury
                                                                              • Figure 7: U.S. disposable personal income growth, 2007-10
                                                                            • The confidence game
                                                                              • Figure 8: University of Michigan Consumer Sentiment Index, 2007-10
                                                                            • Lighter is better
                                                                              • Figure 9: Percentage of population who are overweight or obese—20-74 year olds, 1988-2006
                                                                              • Figure 10: Incidence of presently watching/controlling diet, 2003 and 2008
                                                                            • Transparently healthy
                                                                            • Segment Performance: Bakery-café

                                                                              • Impressive results for the leader mask stalled growth for whole category
                                                                                • Figure 11: Systemwide restaurant sales of leading bakery-café fast casual chains, 2007 and 2009
                                                                              • Both quick-service and full-service restaurants are making changes to regain customers lost to bakery-cafés
                                                                              • Segment Performance—Ethnic

                                                                                • Chipotle continues to be the segment’s bright spot
                                                                                  • Figure 12: Systemwide restaurant sales of leading ethnic menu fast casual chains, 2007 and 2009
                                                                                • Uncertain ownership means uncertain future for many
                                                                                  • QSRs have made inroads on fast casual menus
                                                                                  • Segment Performance—Traditional and Other

                                                                                    • Not dominated by just one leading concept, the traditional-menu sector is the one to watch
                                                                                        • Figure 13: Systemwide restaurant sales of leading traditional fast casual chains, 2007 and 2009
                                                                                      • Quick-service and casual dining chains already are making quality, price changes
                                                                                      • Company Profile—Panera Bread

                                                                                        • Overview
                                                                                          • Performance summary
                                                                                            • Figure 14: Panera Bread sales, 2005-09
                                                                                            • Figure 15: Percent change in Panera Bread same-store sales, 2005-09
                                                                                          • Core customers
                                                                                            • Figure 16: Usage of Panera Bread, by gender and age, April 2010
                                                                                          • On the menu
                                                                                            • Figure 17: Makeup of Panera Bread café menu, Q2 2010
                                                                                          • Marketing and promotions
                                                                                          • Company Profile: Chipotle Mexican Grill

                                                                                            • Overview
                                                                                              • Company performance
                                                                                                • Figure 18: Chipotle Mexican Grill financial performance, 2005-09
                                                                                              • Core customers
                                                                                                • Figure 19: Usage of Chipotle Mexican Grill, by gender and age, April 2010
                                                                                              • On the menu
                                                                                                • Figure 20: Makeup of Chipotle Mexican Grill menu, Q2 2010
                                                                                              • Marketing and promotion
                                                                                              • Company Profile—Pei Wei Asian Diner

                                                                                                • Overview
                                                                                                  • Company performance
                                                                                                    • Figure 21: Pei Wei Asian Diner financial performance, 2005-09
                                                                                                  • Core customer
                                                                                                    • Figure 22: Usage of Pei Wei Asian Diner, by gender and age, April 2010
                                                                                                  • On the menu
                                                                                                    • Figure 23: Makeup of Pei Wei Asian Diner menu, Q2 2010
                                                                                                  • Marketing and promotions
                                                                                                  • Company Profile: Einstein Noah Restaurant Group

                                                                                                    • Overview
                                                                                                      • Company performance
                                                                                                        • Figure 24: Einstein Noah Restaurant Group financial performance, 2005-09
                                                                                                      • Core customers
                                                                                                        • Figure 25: Usage of Einstein Bros. Bagels, by gender and age, April 2010
                                                                                                      • On the menu
                                                                                                        • Figure 26: Makeup of Einstein Bros. Bagels menu, Q2 2010
                                                                                                      • Marketing and promotions
                                                                                                      • Menu Insights Analysis: The Fast Casual Menu

                                                                                                          • Fast casual takes sandwiches upscale
                                                                                                              • Figure 27: Top 10 fast casual menus item sections, by incidence, Q1 2008-Q1 2010
                                                                                                              • Figure 28: Top 10 fast casual menus item sections, by price, Q1 2008-Q1 2010
                                                                                                            • Fast casual at breakfast
                                                                                                                • Figure 29: Top 10 fast casual menus items, by incidence, Q1 2008-Q1 2010
                                                                                                              • Fast casual’s salad expertise tosses rivals
                                                                                                                  • Figure 30: Top 10 fast casual menus items, by price, Q1 2008-Q1 2010
                                                                                                              • Menu Insights Analysis: Marketing the Fast Casual Menu

                                                                                                                  • Figure 31: Top 10 ingredient marketing claims on fast casual menus, by incidence, Q1 2008-Q1 2010
                                                                                                                  • Figure 32: Top 10 ingredient marketing claims on fast casual menus, by price, Q1 2008-Q1 2010
                                                                                                                  • Figure 33: Top 10 nutritional claims on fast casual menus, by incidence, Q1 2008-Q1 2010
                                                                                                                  • Figure 34: Top 10 nutritional claims on fast casual menus, by price, Q1 2008-Q1 2010
                                                                                                              • Menu Insights Analysis: The Beverage Menu

                                                                                                                  • Figure 35: Top 10 beverages on fast casual menus, by incidence, Q1 2008-Q1 2010
                                                                                                                  • Figure 36: Top 10 beverages on fast casual menus, by price, Q1 2008-Q1 2010
                                                                                                                • A toast to health
                                                                                                                  • Figure 37: Top five beverage nutritional claims on fast casual menus, by incidence, Q1 2008-Q1 2010
                                                                                                                  • Figure 38: Top five beverage nutritional claims on fast casual menus, by price, Q1 2008-Q1 2010
                                                                                                              • Advertising and Promotion

                                                                                                                • Overview
                                                                                                                  • Panera Bread uses its “Signature”
                                                                                                                    • Figure 39: Panera Bread signature ad, 2009
                                                                                                                    • Figure 40: Panera Bread and Einstein Bros. Bagels email alerts, 2010
                                                                                                                    • Figure 41: Panera Bread Via Panera ad, 2010
                                                                                                                  • Fazoli’s makes the case for fast Italian
                                                                                                                    • Figure 42: Fazoli’s oven-baked pasta ad, 2010
                                                                                                                    • Figure 43: Fazoli’s point-of-purchase ad, 2010
                                                                                                                  • El Pollo Loco defines “grilled”
                                                                                                                    • Figure 44: El Pollo Loco grilled ad, 2010
                                                                                                                  • Zaxby’s adds Southern charm to its Zalads
                                                                                                                    • Figure 45: Zaxby’s zalads ad, 2010
                                                                                                                • Consumer Restaurant Segment and Daypart Usage

                                                                                                                    • Figure 46: Types of restaurants visited in the past month, by daypart, April 2010
                                                                                                                    • Figure 47: Types of restaurants visited in the past month, by age, April 2010
                                                                                                                    • Figure 48: Types of restaurants visited in the past month, by race/Hispanic origin, April 2010
                                                                                                                    • Figure 49: Types of restaurants visited in the past month, by household income, April 2010
                                                                                                                  • Addendum: Consumer question explanation
                                                                                                                  • Fast Casual Restaurant Usage and Usage Frequency

                                                                                                                    • Fast casual continues to score highest at lunch
                                                                                                                      • Figure 50: Fast casual daypart usage, April 2010
                                                                                                                    • Consumers know Panera Bread best
                                                                                                                      • Figure 51: Fast casual usage and usage frequency, by restaurant, April 2010
                                                                                                                      • Figure 52: Fast casual usage and usage frequency, by restaurant, by gender, April 2010
                                                                                                                      • Figure 53: Fast casual usage, by restaurant, by age, April 2010
                                                                                                                  • Fast Casual Selection Factors

                                                                                                                    • What fast casual means to consumers
                                                                                                                      • Figure 54: “Important” reasons for selecting a fast casual restaurant, 2008-10
                                                                                                                      • Figure 55: “Important” reasons for selecting a fast casual restaurant, by gender, April 2010
                                                                                                                      • Figure 56: “Important” reasons for selecting a fast casual restaurant, by age, April 2010
                                                                                                                    • Who doesn’t like fast casual?
                                                                                                                      • Figure 57: Reasons for not eating at fast casual restaurants, April 2010
                                                                                                                      • Figure 58: Reasons for not eating at fast casual restaurants, by household income, April 2010
                                                                                                                  • Fast Casual Comparisons to Fast Food and Casual Dining

                                                                                                                    • The price/value relationship: Fast casual vs. fast food
                                                                                                                      • Figure 59: Attitudes toward fast casual compared to fast food, by age, April 2010
                                                                                                                    • The price/value relationship: Fast casual vs. casual dining
                                                                                                                      • Figure 60: Attitudes toward fast casual compared to casual dining, by gender, April 2010
                                                                                                                      • Figure 61: Attitudes toward fast casual compared to casual dining, by age, April 2010
                                                                                                                  • Custom Groups: Light, Medium and Heavy Users

                                                                                                                    • Key points
                                                                                                                        • Figure 62: Fast casual daypart usage, April 2010
                                                                                                                        • Figure 63: “Important” reasons for selecting a fast casual restaurant, by usage, April 2010
                                                                                                                        • Figure 64: Attitudes toward fast casual compared to fast food, by usage, April 2010
                                                                                                                        • Figure 65: Attitudes toward fast casual compared to casual dining, by usage, April 2010
                                                                                                                    • Cluster Analysis

                                                                                                                        • Maintainers
                                                                                                                          • Opportunity
                                                                                                                            • Foodies
                                                                                                                              • Opportunity
                                                                                                                                • F.C. Fans
                                                                                                                                  • Opportunity
                                                                                                                                    • Cluster characteristics
                                                                                                                                      • Figure 66: Fast casual restaurant clusters, April 2010
                                                                                                                                      • Figure 67: Fast casual usage, by fast casual restaurant clusters, April 2010
                                                                                                                                      • Figure 68: “Important” reasons for selecting a fast casual restaurant, by fast casual restaurant clusters, April 2010
                                                                                                                                      • Figure 69: Usage compared to last year, by fast casual restaurant clusters, April 2010
                                                                                                                                      • Figure 70: Attitudes toward fast casual, by fast casual restaurant clusters, April 2010
                                                                                                                                    • Cluster demographics
                                                                                                                                      • Figure 71: Fast casual restaurant clusters, by gender, April 2010
                                                                                                                                      • Figure 72: Fast casual restaurant clusters, by age, April 2010
                                                                                                                                      • Figure 73: Fast casual restaurant clusters, by household income, April 2010
                                                                                                                                      • Figure 74: Fast casual restaurant clusters, by race, April 2010
                                                                                                                                      • Figure 75: Fast casual restaurant clusters, by Hispanic origin, April 2010
                                                                                                                                    • Cluster methodology
                                                                                                                                    • Appendix: Additional Consumer Tables

                                                                                                                                        • Figure 76: Fast casual usage, by restaurant, by household income, April 2010
                                                                                                                                        • Figure 77: Fast casual usage, by restaurant, by race and ethnicity, April 2010
                                                                                                                                        • Figure 78: “Important” reasons for selecting a fast casual restaurant, by household income, April 2010
                                                                                                                                        • Figure 79: Reasons for not eating at fast casual restaurants, by age, April 2010
                                                                                                                                        • Figure 80: Attitudes toward fast casual compared to casual dining, by household income, April 2010
                                                                                                                                    • Appendix: Trade Associations

                                                                                                                                      Companies Covered

                                                                                                                                      • American Dietetic Association (ADA)
                                                                                                                                      • Bureau of Economic Analysis
                                                                                                                                      • Burger King Corporation
                                                                                                                                      • CKE Restaurants Inc.
                                                                                                                                      • Culinary Institute of America (CIA)
                                                                                                                                      • Del Taco, Inc.
                                                                                                                                      • Einstein Noah Restaurant Group Inc.
                                                                                                                                      • Facebook, Inc.
                                                                                                                                      • Food and Drug Administration
                                                                                                                                      • Food Distributors International
                                                                                                                                      • Food Marketing Institute
                                                                                                                                      • International Food Information Council Foundation (IFIC)
                                                                                                                                      • International Food Service Executives Association (IFSEA)
                                                                                                                                      • International Foodservice Distributors Association (IFDA)
                                                                                                                                      • International Foodservice Manufacturers Association (IFMA)
                                                                                                                                      • International Franchise Association (IFA)
                                                                                                                                      • International Hotel and Restaurants Association (IH&RA)
                                                                                                                                      • KFC Corporation
                                                                                                                                      • Luby's Inc.
                                                                                                                                      • McDonald's Corporation
                                                                                                                                      • National Council of Chain Restaurants (NCCR)
                                                                                                                                      • National Nutritional Foods Association
                                                                                                                                      • National Restaurant Association (NRA)
                                                                                                                                      • National Retail Federation (NRF)
                                                                                                                                      • Organic Trade Association
                                                                                                                                      • Panera Bread Company
                                                                                                                                      • Pizza Hut Inc
                                                                                                                                      • Produce Marketing Association
                                                                                                                                      • Rubio's Restaurants Inc.
                                                                                                                                      • Starbucks Corporation
                                                                                                                                      • Sun Capital Partners, Inc.
                                                                                                                                      • Taco Bell Corp.
                                                                                                                                      • The Vegetarian Resource Group
                                                                                                                                      • The Wendy's Company
                                                                                                                                      • Twitter, Inc.
                                                                                                                                      • U.S. Bureau of Labor Statistics
                                                                                                                                      • YouTube, Inc.

                                                                                                                                      Fast Casual Restaurants - US - August 2010

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