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Fast Casual Restaurants - US - October 2012

“The competitive foodservice landscape emphasizes a few key issues that face fast casual operators. To begin with, the number of fast casual concepts entering the market has forced operators to seek greater differentiation. As such, there’s a range of service styles within the fast casual realm, which is causing confusion among some consumers. The segment’s notoriety as an appropriate lunchtime destination is positive, yet it’s also limiting. Looking to nontraditional avenues (like beverages and snacks) can drive incremental sales throughout the day and will resonate with core fast casual users. Finally, integrating technology and digital media into brand concepts and marketing strategies can boost sales and brand perception.”

– Bethany Wall, Foodservice Analyst

Some questions answered in this report include:

  • What is the fast casual service style?
  • How can fast casual be more than just a lunchtime destination?
  • How can technology be better utilized to boost sales?

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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

                        • The market
                          • Figure 1: Fan chart of market value for fast casual restaurants, at current prices, 2007-17
                        • Market factors
                          • Sluggish consumer sentiment
                            • Figure 2: Consumer Sentiment Index, January 2007-August 2012
                          • Rising food prices
                            • Figure 3: Changes in Food Price Index, 2009-12
                          • Calorie disclosure legislation
                            • Young adult population
                              • Figure 4: U.S. population by age, 2012
                            • Competitive context
                              • Food menu trends
                                • Figure 5: Top five food items on fast casual menus, by incidence, Q2 2009-Q2 2012
                              • The consumer
                                • Fast casual restaurant usage
                                  • Figure 6: Fast casual restaurant usage frequency, June 2012
                                • Changes in fast casual restaurant usage
                                  • Figure 7: Changes in fast casual restaurant usage, June 2012
                                • Important attributes for fast casual restaurants
                                  • Figure 8: Important attributes for fast casual restaurants, June 2012
                                • What we think
                                • Issues in the Market

                                    • What is the fast casual service style?
                                      • How can fast casual be more than just a lunchtime destination?
                                        • How can technology be better utilized to boost sales?
                                        • Insights and Opportunities

                                          • Let’s talk about health
                                            • Reaching new customers
                                            • Trend Applications

                                                • Trend: Mood to Order
                                                  • Trend: Extend My Brand
                                                    • 2015 trend: Access Anything Anywhere
                                                      • Access Anything Anywhere
                                                      • Market Size and Forecast

                                                        • Key points
                                                          • Market size insight: Unit growth drives sales
                                                            • Sales and forecast of fast casual restaurants
                                                              • Figure 9: Total U.S. sales and forecast of fast casual restaurants, at current prices, 2007-17
                                                              • Figure 10: Total U.S. sales and forecast of fast casual restaurants, at inflation-adjusted prices, 2007-17
                                                            • Fan chart forecast
                                                                • Figure 11: Fan chart of market value for fast casual restaurants, at current prices, 2007-17
                                                            • Market Drivers

                                                              • Fast casual accelerating growth
                                                                • Foodservice sales take a slow progression upward
                                                                  • Figure 12: Adjusted foodservice and drinking places sales, January 2008-July 2012
                                                                • Restaurant performance index stabilizes
                                                                  • Figure 13: Restaurant Performance Index, January 2009-July 2012
                                                                • Consumer sentiment takes one step forward, two steps back
                                                                  • Figure 14: Consumer Sentiment Index, January 2007-August 2012
                                                                • Disposable income has shown marginal growth
                                                                  • Figure 15: Real personal disposable income, January 2007-July 2012
                                                                • Unemployment inched up
                                                                  • Figure 16: Unemployment and underemployment rates, January 2007-August 2012
                                                                • Rising food prices
                                                                    • Figure 17: Changes in food price index, 2009-12
                                                                  • Government intervention to help Americans decrease health risks
                                                                    • Total population growth will drive long-term sales
                                                                        • Figure 18: Population, by age, 2007-17
                                                                    • Competitive Context

                                                                      • Overview
                                                                        • All eyes on fast casual: new competition
                                                                          • Quick service restaurants upgrading to offer fast casual experience
                                                                            • Casual dining players taking signature dishes to on-the-go fast casual formats
                                                                              • Fine dining leveraging quality equities for a gourmet fast casual option
                                                                                • More competition on the horizon
                                                                                • Selected Companies

                                                                                    • Fazoli’s
                                                                                      • Corner Bakery Café
                                                                                        • Smashburger
                                                                                          • Concepts to watch
                                                                                            • Energy Kitchen
                                                                                              • Stacked
                                                                                                • Sushi Freak
                                                                                                  • Garbanzo Mediterranean Grill
                                                                                                  • Marketing Strategies

                                                                                                    • Overview
                                                                                                      • Brand awareness
                                                                                                        • Firehouse Subs
                                                                                                          • Figure 19: Firehouse Subs TV ad, Hook & Ladder, July 2012
                                                                                                        • Market positioning
                                                                                                          • Chipotle: Eco-friendly and health
                                                                                                            • Figure 20: Chipotle TV ad, A Better World, February 2012
                                                                                                          • Buffalo Wild Wings: Social and sports
                                                                                                            • Figure 21: Buffalo Wild Wings TV ad, Too Caught Up, June 2012 – August 2012
                                                                                                          • New product launches
                                                                                                            • Boston Market
                                                                                                              • Figure 22: Boston Market TV ad, A Real Meal, September 2012
                                                                                                            • California Tortilla
                                                                                                              • Value
                                                                                                                • Moe’s Southwest Grill
                                                                                                                  • Figure 23: Moe’s Southwest Grill TV ad, Parenthood, June 2012 – August 2012
                                                                                                                • Taste
                                                                                                                  • Culver’s
                                                                                                                    • Figure 24: Culver’s TV ad, Flavor of the Day, June 2012-August 2012
                                                                                                                  • Social media
                                                                                                                  • Menu Analysis—The Fast Casual Food Menu

                                                                                                                    • Key points
                                                                                                                      • Breakfast sandwiches have a growing presence on fast casual menus
                                                                                                                          • Figure 25: Top 10 food items on fast casual menus, by incidence, Q2 2009-Q2 2012
                                                                                                                        • Steady increase in food items
                                                                                                                            • Figure 26: Average price of top 10 food items on fast casual menus, by incidence and price, Q2 2009-Q2 2012
                                                                                                                          • Hot new item: Frozen custard
                                                                                                                            • Figure 27: Top new items at fast casuals, by incidence, Q2 2012
                                                                                                                        • Fast Casual Restaurant Usage

                                                                                                                          • Key points
                                                                                                                            • Strong overall usage of fast casual restaurants
                                                                                                                              • Figure 28: Fast casual restaurant usage frequency, June 2011 and June 2012
                                                                                                                            • Fast casual restaurants are visited often
                                                                                                                              • Figure 29: Fast casual restaurant usage frequency, June 2012
                                                                                                                            • Young men are frequent fast casual users
                                                                                                                              • Figure 30: Fast casual restaurant usage frequency, by gender and age, June 2012
                                                                                                                            • More-affluent consumers are drawn to fast casual
                                                                                                                              • Figure 31: Fast casual restaurant usage frequency, by household income, June 2012
                                                                                                                          • Fast Casual Restaurant Brand Usage

                                                                                                                            • Key points
                                                                                                                              • Growth across all fast casual brands
                                                                                                                                  • Figure 32: Fast casual restaurant brand usage, June 2011 and June 2012
                                                                                                                                • Men aged 18-34 have stronger-than-average usage of all fast casual brands
                                                                                                                                  • Figure 33: Fast casual restaurant brand usage, by gender and age, June 2012
                                                                                                                              • Reasons for Not Dining at Fast Casual Restaurants

                                                                                                                                • Key points
                                                                                                                                  • Eating at home the biggest “competition” for fast casual restaurants
                                                                                                                                      • Figure 34: Reasons for not dining at fast casual, June 2011 and June 2012
                                                                                                                                    • Less-affluent consumers think fast casual restaurants are too expensive
                                                                                                                                      • Figure 35: Reasons for not dining at fast casual, by household income, June 2012
                                                                                                                                  • Changes in Fast Casual Restaurant Usage

                                                                                                                                    • Key points
                                                                                                                                      • More fast casual users are cooking at home this year
                                                                                                                                        • Figure 36: Changes in fast casual restaurant usage, June 2012
                                                                                                                                      • Behavior shifts among women aged 18-34 damaging for fast casual
                                                                                                                                        • Figure 37: Changes in fast casual restaurant usage, by gender and age, June 2012
                                                                                                                                      • Middle-income earners cooking at home and using coupons
                                                                                                                                        • Figure 38: Changes in fast casual restaurant usage, by household income, June 2012
                                                                                                                                      • High-frequency fast casual users use coupons more this year
                                                                                                                                        • Figure 39: Changes in fast casual restaurant usage, by total frequency, June 2012
                                                                                                                                    • Important Attributes for Fast Casual Restaurants

                                                                                                                                      • Key points
                                                                                                                                        • Quality and taste paramount in restaurant selection
                                                                                                                                          • Figure 40: Important attributes for fast casual restaurants, June 2012
                                                                                                                                        • Kid-friendly atmosphere/menu important to women aged 18-54
                                                                                                                                          • Figure 41: Important attributes for fast casual restaurants, by gender and age, June 2012
                                                                                                                                        • Affluent fast casual users favor freshness
                                                                                                                                          • Figure 42: Important attributes for fast casual restaurants, by household income, June 2012
                                                                                                                                        • Speed of service significantly more important to frequent fast casual restaurant users
                                                                                                                                          • Figure 43: Important attributes for fast casual restaurants, by total frequency, June 2012
                                                                                                                                      • Attitudes of the Fast Casual Consumer

                                                                                                                                        • Key points
                                                                                                                                          • Fast casual compared to fast food
                                                                                                                                              • Figure 44: Attitudes toward fast casual compared to fast food, June 2011 and June 2012
                                                                                                                                            • Women aged 35-54 more likely to favor fast casual for quality and health
                                                                                                                                              • Figure 45: Attitudes toward fast casual compared to fast food, by gender and age, June 2012
                                                                                                                                            • More-affluent fast casual users agree fast casual is healthier than fast food
                                                                                                                                                • Figure 46: Attitudes toward fast casual compared to fast food, by household income, June 2012
                                                                                                                                              • High-frequency users agree fast casual is healthier and a better value than fast food
                                                                                                                                                • Figure 47: Attitudes toward fast casual compared to fast food, by total frequency, June 2012
                                                                                                                                              • Fast casual compared to casual dining
                                                                                                                                                  • Figure 48: Attitudes toward fast casual compared to casual dining, June 2012
                                                                                                                                                • Men younger than 35 perceive fast casual as a better value and healthier
                                                                                                                                                    • Figure 49: Attitudes toward fast casual compared to casual dining, by gender and age, June 2012
                                                                                                                                                  • High-frequency fast casual users agree fast casual is healthier than casual dining
                                                                                                                                                    • Figure 50: Attitudes toward fast casual compared to casual dining, by total frequency, June 2012
                                                                                                                                                  • Majority of fast casual users think of it as a lunch destination
                                                                                                                                                      • Figure 51: Attitudes toward fast casual restaurants, June 2012
                                                                                                                                                    • Users younger than 35 consider fast casual for lunchtime dining
                                                                                                                                                      • Figure 52: Attitudes toward fast casual restaurants, by gender and age, June 2012
                                                                                                                                                    • Less-affluent fast casual users say these restaurants are too expensive for regular use
                                                                                                                                                      • Figure 53: Attitudes toward fast casual restaurants, by household income, June 2012
                                                                                                                                                  • Fast Casual Valuable Marketing Strategies

                                                                                                                                                    • Key points
                                                                                                                                                      • Fast casual users still want coupons by mail
                                                                                                                                                          • Figure 54: Marketing effectiveness at fast casual restaurants, June 2011 and June 2012
                                                                                                                                                        • Fast casual’s core audience receptive to digital marketing efforts
                                                                                                                                                            • Figure 55: Marketing effectiveness at fast casual restaurants, by gender and age, June 2012
                                                                                                                                                          • Integrated loyalty rewards/social media strategies needed
                                                                                                                                                            • Figure 56: Marketing effectiveness at fast casual restaurants, by total frequency, June 2012
                                                                                                                                                        • Correspondence Analysis

                                                                                                                                                          • Methodology
                                                                                                                                                            • Perceptions of better quality lead to better sales
                                                                                                                                                              • Figure 57: Fast casual restaurants correspondence analysis, June 2012
                                                                                                                                                              • Figure 58: Fast casual brand attributes, June 2012
                                                                                                                                                          • Appendix—Trade Associations

                                                                                                                                                            Companies Covered

                                                                                                                                                            • CBC Restaurant Corp.
                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                            • Fazoli's Restaurants, Inc.
                                                                                                                                                            • Häagen-Dazs
                                                                                                                                                            • New Belgium Brewing Company Inc.
                                                                                                                                                            • Smashburger Master LLC

                                                                                                                                                            Fast Casual Restaurants - US - October 2012

                                                                                                                                                            £3,199.84 (Excl.Tax)