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Fast Casual Restaurants - US - October 2011

Mintel’s exclusive consumer research finds that fast casual restaurants have a modest reach with 55% of respondents visiting a fast casual restaurant in the past month. Frequency of use proves to be steady, averaging 6.18 monthly visits or 1.5 times per week. Notably, availability of fast casual restaurants is a leading deterrent for use.

With total U.S. sales of $24.2 billion expected in 2011, fast casual sales have grown 35% since 2006, producing an impressive 23% growth when adjusted for inflation.. In this report, Mintel presents sales trends and market analysis of fast casual restaurants while incorporating proprietary research featuring consumer attitudes and behaviors toward the market.

Among the topics covered in this report are:

  • Insight into how fast casual operators can leverage the strong use and above-average annual spending on dining out by American families through greater innovation on the kids’ menu and tailored marketing strategies
  • Influence of the recession, shifts in population by age and health and wellness trends on the market’s growth
  • A look into the competitive advantages between fast casual players and their counterparts among quick-service restaurants (QSRs) and casual dining restaurants
  • Performance of the three fast casual segments, as well as restaurant analysis of leading chains from each segment
  • Discussion of trends on fast casual restaurant menus, and how items are being marketed to consumers, supported by industry examples
  • A look into the limited scope of fast casual media investment, as well as common themes in marketing strategies of select fast casual players
  • Usage of fast casual restaurants by restaurant segment and frequency, as well as insight into why consumers don’t use fast casual chains
  • Discovery of the most widely-used fast casual restaurant chains and usage by segment
  • Usage of fast casual restaurants by dining occasion, with brand usage by dining occasion
  • Dollars spent on most recent visit to a fast casual restaurant by dining occasion
  • Perceptions of value, quality and health of fast casual food compared to QSRs and casual dining chains
  • Factors that influence fast casual restaurant-goers’ decisions on where to dine, and how consumers rate restaurant performance on these attributes
  • Marketing strategies that would be most valuable to consumers and provide incentive to go to a fast casual restaurant

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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 market overview
                        • Market attracts high-income households; recession slows growth
                          • Young market attracts young users
                            • Fast casual answers demand for healthier dining choices
                              • Competition for fast casual restaurants
                                • Segment performance
                                  • Breaking down the fast casual menu
                                    • Marketing strategies
                                      • Fast casual usage
                                        • Weekly visits are the norm among fast casual users
                                          • Lunch is the most popular dining occasion at fast casual
                                            • Fast casual users spend the most at lunch
                                              • Taste and quality are the most influential selection factors
                                              • Insights and Opportunities

                                                • Key points
                                                  • Families provide best route for fast casual to continue sales growth
                                                    • Figure 1: Average annual expenditures for food away from home, all consumer units vs. parents, 2005-09
                                                    • Figure 2: Average annual expenditures per consumer unit for food away from home by marital status and presence of children, 2005-09
                                                    • Figure 3: Index of average annual expenditures per consumer unit for food away from home by marital status and presence of children, 2005-09
                                                  • Fast casual is missing the kids’ meal opportunity
                                                      • Figure 4: Incidence of kids’ menu items, by restaurant segment, Q2 2009-Q2 2011
                                                    • Fast casual can target families to drive usage of snack and dinner occasions
                                                      • Figure 5: Dining occasions at fast casual restaurants by presence of children, June 2011
                                                      • Figure 6: Chili’s email alert, August 2011
                                                  • Inspire Insights

                                                      • Trend: “Let’s Make a Deal”
                                                          • Figure 7: Chick-fil-A coupon announcement, January 2011
                                                        • Trend: “Experience is All”
                                                            • Figure 8: Dunkin’ Donuts mobile food truck
                                                        • Market Size

                                                          • Fast casual restarts growth momentum
                                                              • Figure 9: Total U.S. sales at fast casual restaurants, at current prices, 2006-16
                                                              • Figure 10: Total U.S. sales of fast casual restaurants, at inflation-adjusted prices, 2006-16
                                                            • Fan chart forecast
                                                                • Figure 11: Fan chart of market value for fast casual restaurants, at current prices, 2006-16
                                                                • Figure 12: Best and worst case forecast for fast casual restaurants, at current prices, 2011-16
                                                            • Market Drivers

                                                              • Lackluster consumer confidence supports instability in restaurant industry
                                                                • Figure 13: Consumer Sentiment Index, March 2007–July 2011
                                                                • Figure 14: Real personal disposable income, January 2007–June 2011
                                                                • Figure 15: Unemployment and underemployment rates, January 2007–July 2011
                                                                • Figure 16: NRA performance indices, January 2009-June 2011
                                                                • Figure 17: Adjusted foodservice and drinking places sales, January 2008–July 2011
                                                              • Implication for fast casual market
                                                                • The youthfulness of the market reflects its users
                                                                  • Figure 18: Population, by age, 2006-16
                                                                • Implication for fast casual market
                                                                  • The call for healthy fast food
                                                                    • Figure 19: Age-adjusted prevalence of being overweight, obese, or extremely obese, among adults aged 20 or older, 1988-2008
                                                                  • Implication for fast casual market
                                                                  • Competitive Context

                                                                    • Key points
                                                                      • Competing with QSRs
                                                                          • Figure 20: Attitudes toward fast casual compared to fast food, June 2011
                                                                        • Competing with casual dining
                                                                            • Figure 21: Attitudes toward fast casual compared to casual dining restaurants, June 2011
                                                                        • Segment Performance

                                                                          • Key points
                                                                            • Bakery/Café
                                                                              • Panera Bread continues to produce impressive results
                                                                                  • Figure 22: Systemwide U.S. restaurant sales of leading bakery/café fast casual chains, 2008 and 2010
                                                                                • Ethnic
                                                                                  • Chipotle’s growth seems unstoppable
                                                                                    • Figure 23: Systemwide U.S. restaurant sales of leading ethnic fast casual chains, 2008 and 2010
                                                                                  • Traditional and other
                                                                                    • Buffalo Wild Wings heats up segment sales
                                                                                      • Figure 24: Systemwide U.S. restaurant sales of leading traditional and other fast casual chains, 2008 and 2010
                                                                                  • Restaurant Analysis—Panera Bread

                                                                                    • Overview
                                                                                      • Solid growth in 2010
                                                                                          • Figure 25: Panera Bread’s systemwide comparable restaurant sales growth, percentage increase, 2006-Q2 2011
                                                                                        • Defining brand qualities
                                                                                          • Menu development
                                                                                              • Figure 26: Panera Bread’s menu, Q2 2011
                                                                                            • Panera Bread dominates at lunch
                                                                                                • Figure 27: Dining occasions usage at Panera Bread, June 2011
                                                                                              • Panera Bread marketing strategies
                                                                                                  • Figure 28: Valuable marketing efforts of fast casual restaurant chains by Panera Bread users, June 2011
                                                                                              • Restaurant Analysis—Chipotle

                                                                                                • Overview
                                                                                                  • Double-digit sales growth returns
                                                                                                    • Figure 29: Chipotle’s systemwide comparable restaurant sales growth, percentage increase, 2006-Q2 11
                                                                                                  • Food With Integrity defines the Chipotle brand
                                                                                                    • Streamlined menu with customizable opportunities
                                                                                                        • Figure 30: Chipotle’s menu, Q2 2011
                                                                                                      • Chipotle users are most likely to visit during lunch
                                                                                                        • Figure 31: Dining occasions at Chipotle, June 2011
                                                                                                      • Chipotle marketing strategies
                                                                                                          • Figure 32: Valuable marketing efforts of fast casual restaurant chains by Chipotle users, June 2011
                                                                                                      • Restaurant Analysis—Buffalo Wild Wings

                                                                                                        • Overview
                                                                                                          • Sales dipped in 2010 but regain footing in 2011
                                                                                                            • Figure 33: Buffalo Wild Wings company-owned* comparable restaurant sales growth, percentage increase, 2006-Q2 2011
                                                                                                          • Sports and entertainment are defining brand qualities
                                                                                                            • Launch of customizable menu
                                                                                                                • Figure 34: Buffalo Wild Wings menu, Q2 2011
                                                                                                              • Buffalo Wild Wings marketing strategies
                                                                                                              • Menu Analysis—The Fast Casual Menu

                                                                                                                • Key points
                                                                                                                  • Traditional American fare dominates fast casual menus
                                                                                                                      • Figure 35: Top five fast casual menu item cuisine, by incidence, Q2 2009-Q2 2011
                                                                                                                    • Italian fare commands highest price
                                                                                                                        • Figure 36: Top five fast casual menu item cuisine, by incidence and average price, Q2 2009-Q2 2011
                                                                                                                      • The sandwich is king of fast casual menu
                                                                                                                          • Figure 37: Top 10 fast casual menu items, by incidence, Q2 2009-Q2 2011
                                                                                                                        • Premium salads drive up salad prices
                                                                                                                          • Figure 38: Top 10 fast casual menu items, by incidence and average price, Q2 2009-Q2 2011
                                                                                                                      • Menu Analysis—Marketing the Fast Casual Menu

                                                                                                                        • Key points
                                                                                                                          • Freshness is integral to fast casual brands
                                                                                                                              • Figure 39: Top 10 ingredient marketing claims on fast casual menus, by incidence, Q2 2009-Q2 2011
                                                                                                                            • Fast casual operators give more attention to signature menu items
                                                                                                                                • Figure 40: Top 10 ingredient marketing claims on fast casual menus, by incidence and average price, Q2 2009-Q2 2011
                                                                                                                              • Gluten-free and vegetarian are gaining traction at fast casual
                                                                                                                                  • Figure 41: Top 10 ingredient nutritional claims on fast casual menus, by incidence, Q2 2009-Q2 2011
                                                                                                                                • Premium charges for nutritional menu items are negligible
                                                                                                                                  • Figure 42: Top 10 ingredient nutritional claims on fast casual menus, by incidence and average price, Q2 2009-Q2 2011
                                                                                                                              • Menu Analysis—The Fast Casual Beverage Menu

                                                                                                                                • Key points
                                                                                                                                  • Little change on fast casual beverage menu
                                                                                                                                      • Figure 43: Top 10 beverages on fast casual menus, by incidence, Q2 2009-Q2 2011
                                                                                                                                    • Highest price increases for smoothies, lemonade, and coffee beverages
                                                                                                                                        • Figure 44: Top 10 beverages on fast casual menus, by incidence and average price, Q2 2009-Q2 2011
                                                                                                                                    • Menu Analysis—The Fast Casual Kids’ Menu

                                                                                                                                      • Key points
                                                                                                                                        • Fast casual restaurants offer kids sandwich choices
                                                                                                                                          • Figure 45: Top 10 kids’ menu items on fast casual menus, by incidence, Q2 2009-Q2 2011
                                                                                                                                        • Macaroni and cheese is the most expensive kids’ menu item
                                                                                                                                          • Figure 46: Top 10 kids’ menu items on fast casual menus, by incidence and average price, Q2 2009-Q2 2011
                                                                                                                                      • Marketing Strategies

                                                                                                                                        • Overview
                                                                                                                                          • Defining the fast casual difference
                                                                                                                                            • Freshness
                                                                                                                                              • Figure 47: Panera Bread TV ad, June 2011
                                                                                                                                            • Ingredients
                                                                                                                                              • Figure 48: Jason’s Deli TV ad, February 2011
                                                                                                                                            • Customization
                                                                                                                                              • Figure 49: Moe’s Southwest Grill TV ad, January 2011
                                                                                                                                            • Focus on fun
                                                                                                                                              • Adult beverages
                                                                                                                                                • Figure 50: Taco Cabana TV ad, July 2011
                                                                                                                                              • Atmosphere
                                                                                                                                                • Figure 51: Buffalo Wild Wings TV ad, March 2011
                                                                                                                                              • The value in price
                                                                                                                                                • Figure 52: Steak ’n Shake TV ad, June 2011
                                                                                                                                              • Zaxby’s—Integrating marketing efforts
                                                                                                                                                • Figure 53: Zaxby’s TV ad, January 2011
                                                                                                                                                • Figure 54: Zaxby’s ad, 2011
                                                                                                                                                • Figure 55: Zaxby’s homepage highlight, 2011
                                                                                                                                                • Figure 56: Zaxbys.com monthly people, July 2010-June 2011
                                                                                                                                            • Fast Casual Valuable Marketing Strategies

                                                                                                                                              • Key points
                                                                                                                                                • Coupons by mail is the most valuable marketing effort
                                                                                                                                                    • Figure 57: Valuable marketing efforts of fast casual restaurant chains by household income, June 2011
                                                                                                                                                  • Men younger than 35 value apps and social networking deals
                                                                                                                                                    • Figure 58: Valuable marketing efforts of fast casual restaurant chains by gender and age, June 2011
                                                                                                                                                  • Facebook deals could help incentivize breakfast use
                                                                                                                                                    • Figure 59: Valuable marketing efforts of fast casual restaurant chains by dining occasion, June 2011
                                                                                                                                                  • Frequent diner rewards and brand apps are valued by high-frequency fast casual users
                                                                                                                                                    • Figure 60: Valuable marketing efforts of fast casual restaurant chains by usage frequency, June 2011
                                                                                                                                                • Fast Casual Usage

                                                                                                                                                  • Key points
                                                                                                                                                    • Mediocre usage of fast casual restaurants provides room to grow
                                                                                                                                                      • Figure 61: Fast casual usage, by age, June 2011
                                                                                                                                                    • More-affluent consumers are drawn to fast casual
                                                                                                                                                      • Figure 62: Fast casual usage, by household income, June 2011
                                                                                                                                                    • Asians are most apt to use fast casual
                                                                                                                                                      • Figure 63: Fast casual usage, by race/Hispanic origin, June 2011
                                                                                                                                                    • Panera Bread is the most widely used fast casual brand
                                                                                                                                                      • Figure 64: Fast casual restaurant brand usage, by restaurant segment, June 2011
                                                                                                                                                    • Reasons for not visiting a fast casual restaurant
                                                                                                                                                        • Figure 65: Reasons for not visiting fast casual restaurants, by household income, June 2011
                                                                                                                                                      • Men older than 55 prefer wait staff and don’t like menu options at fast casual
                                                                                                                                                        • Figure 66: Reasons for not visiting fast casual restaurants, by gender and age, June 2011
                                                                                                                                                    • Fast Casual Usage Frequency

                                                                                                                                                      • Key points
                                                                                                                                                        • Fast casual restaurants visited 1.5 times per week
                                                                                                                                                          • Figure 67: Number of visits to fast casual restaurants in past month, by household income, June 2011
                                                                                                                                                        • Men who are younger than 35 visit fast casual restaurants most frequently
                                                                                                                                                          • Figure 68: Number of visits to fast casual restaurants in past month, by gender and age, June 2011
                                                                                                                                                      • Fast Casual Dining Occasions

                                                                                                                                                        • Key points
                                                                                                                                                          • Lunch is the most popular dining occasion at fast casual restaurants
                                                                                                                                                            • Figure 69: Dining occasions at fast casual restaurants, by age, June 2011
                                                                                                                                                          • Low incomes less likely to eat lunch at fast casual
                                                                                                                                                            • Figure 70: Dining occasions at fast casual restaurants, by household income, June 2011
                                                                                                                                                          • Panera Bread succeeds during breakfast and lunch dayparts
                                                                                                                                                            • Figure 71: Dining occasions at fast casual restaurants, by restaurant brand, June 2011
                                                                                                                                                        • Spending at Fast Casual Restaurants

                                                                                                                                                          • Key points
                                                                                                                                                            • Fast casual users spend most per person during lunch
                                                                                                                                                              • Figure 72: Spending at fast casual restaurants, by dining occasion, June 2011
                                                                                                                                                            • Consumers who are younger than 35 have the highest check average during lunch
                                                                                                                                                              • Figure 73: Spending at fast casual restaurants for lunch, by age, June 2011
                                                                                                                                                            • Consumers aged 45+ have the highest average spend per person during dinner
                                                                                                                                                              • Figure 74: Spending at fast casual restaurants for dinner, by age, June 2011
                                                                                                                                                          • Fast Casual Selection Factors

                                                                                                                                                            • Key points
                                                                                                                                                              • Taste and quality are driving factors in choice of fast casual restaurant
                                                                                                                                                                • Figure 75: Fast casual selection factors, by gender, June 2011
                                                                                                                                                              • Older fast casual users are most influenced by quality, variety, and special offers
                                                                                                                                                                • Figure 76: Fast casual selection factors, by age, June 2011
                                                                                                                                                              • Variety and speed of service drive choice among lower-income users
                                                                                                                                                                • Figure 77: Fast casual selection factors, by household income, June 2011
                                                                                                                                                              • Variety is an important selection factor among high-frequency users
                                                                                                                                                                • Figure 78: Fast casual selection factors by usage frequency, June 2011
                                                                                                                                                              • Fast casual restaurants receive high rating in taste and quality
                                                                                                                                                                • Figure 79: Fast casual restaurant performance, by household income, June 2011
                                                                                                                                                              • Asians give high marks to fast casual for value
                                                                                                                                                                • Figure 80: Fast casual restaurant performance, by race/Hispanic origin, June 2011
                                                                                                                                                            • Health, Quality, and Value Perceptions

                                                                                                                                                              • Key points
                                                                                                                                                                • Fast casual trumps fast food in health, quality, and value
                                                                                                                                                                  • Figure 81: Attitudes toward fast casual compared to fast food, by household income, June 2011
                                                                                                                                                                • Men aged <35 positively associate health, value, and quality with fast casual
                                                                                                                                                                  • Figure 82: Attitudes toward fast casual compared to fast food restaurants, by gender and age, June 2011
                                                                                                                                                                • Casual dining has the edge over fast casual in health, quality, and value
                                                                                                                                                                    • Figure 83: Attitudes toward fast casual compared to casual dining restaurants, by gender and age, June 2011
                                                                                                                                                                • Appendix—Trade Associations

                                                                                                                                                                  Companies Covered

                                                                                                                                                                  • ABP Corporation
                                                                                                                                                                  • American Medical Association (AMA)
                                                                                                                                                                  • Applebee's International Inc.
                                                                                                                                                                  • Atlanta Bread Company International, Inc.
                                                                                                                                                                  • Boston Market Corporation
                                                                                                                                                                  • Brinker International Inc.
                                                                                                                                                                  • Bruegger's Enterprises Inc.
                                                                                                                                                                  • Buffalo Wild Wings Inc.
                                                                                                                                                                  • Bureau of Economic Analysis
                                                                                                                                                                  • Burger King Corporation
                                                                                                                                                                  • Centers for Disease Control and Prevention
                                                                                                                                                                  • Chipotle Mexican Grill Inc.
                                                                                                                                                                  • Darden Restaurants Inc.
                                                                                                                                                                  • Denny's Corporation
                                                                                                                                                                  • Digg Inc
                                                                                                                                                                  • Dunkin' Brands
                                                                                                                                                                  • Einstein Noah Restaurant Group Inc.
                                                                                                                                                                  • El Pollo Loco Holdings, Inc.
                                                                                                                                                                  • Facebook, Inc.
                                                                                                                                                                  • Fazoli's Restaurants, Inc.
                                                                                                                                                                  • Food Distributors International
                                                                                                                                                                  • Food Marketing Institute
                                                                                                                                                                  • Fuddruckers, Inc.
                                                                                                                                                                  • GE Capital
                                                                                                                                                                  • Green Mountain Coffee Roasters, Inc.
                                                                                                                                                                  • Groupon, Inc.
                                                                                                                                                                  • 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)
                                                                                                                                                                  • LinkedIn
                                                                                                                                                                  • McDonald's U.S.A.
                                                                                                                                                                  • Metromedia Restaurant Group
                                                                                                                                                                  • Moe's Southwest Grill, LLC
                                                                                                                                                                  • National Council of Chain Restaurants (NCCR)
                                                                                                                                                                  • National Football League Inc.
                                                                                                                                                                  • National Nutritional Foods Association
                                                                                                                                                                  • National Restaurant Association (NRA)
                                                                                                                                                                  • National Retail Federation (NRF)
                                                                                                                                                                  • O'Charley's Inc.
                                                                                                                                                                  • P.F. Chang's China Bistro Inc.
                                                                                                                                                                  • Panera Bread Company
                                                                                                                                                                  • Pizza Hut Inc
                                                                                                                                                                  • Qdoba Restaurant Corporation
                                                                                                                                                                  • Red Robin Gourmet Burgers Inc.
                                                                                                                                                                  • Rubio's Restaurants Inc.
                                                                                                                                                                  • Ruby Tuesday Inc.
                                                                                                                                                                  • Shoney's North America Corporation
                                                                                                                                                                  • Smashburger Master LLC
                                                                                                                                                                  • Taco Bell Corp.
                                                                                                                                                                  • TGI Friday's
                                                                                                                                                                  • The Wendy's Company
                                                                                                                                                                  • Tim Hortons (USA)
                                                                                                                                                                  • Twitter, Inc.
                                                                                                                                                                  • U.S. Bureau of Labor Statistics
                                                                                                                                                                  • U.S. Bureau of the Census
                                                                                                                                                                  • University of Michigan, The
                                                                                                                                                                  • US Department of Commerce
                                                                                                                                                                  • USA Today
                                                                                                                                                                  • Walt Disney Company, The
                                                                                                                                                                  • Zaxby's Franchising, Inc.

                                                                                                                                                                  Fast Casual Restaurants - US - October 2011

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