Fast Casual Restaurants - US - September 2009

SCOPE AND THEMES
What you need to know
Definition
Figure 1: Fast casual companies comprising market size, by segment, 2009
Changes to 2009 fast casual market size
Data sources
Sales data
Mintel Menu Insights
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
The challenge of a recession
Fast casual same-store sales trends suggest trade out/trade down pressure
Tapered growth still cause for celebration
Competitive context
Segment performance: Bread-based, ethnic, and traditional
Restaurant brand qualities
Panera Bread
Chipotle
Steak ‘n Shake
Boston Market
The united colors of fast casual
Menu innovation
Open the door wider: Ethnic is not just Mexican or Chinese
Fast casual restaurant usage and usage frequency
Fast casual restaurant selection factors
Consumer healthfulness self-perceptions
Quality, healthfulness and proximity comparisons to fast food
Fast casual restaurant use by beverage attribute
INSIGHTS AND OPPORTUNITIES
 OPEN THE DOOR WIDER: ETHNIC IS NOT JUST MEXICAN OR CHINESE
Key points
Ethnic food will never be the same: Chipotle opens door to world cuisines
Drilling down: “Food with Integrity” melds quality with healthfulness
Bottom line
Next stop, Mediterranean
Why Indian? Why now?
Indian lags other Asian cuisines on the menu—by a mile
The case for a push into the mainstream
Chutney Joe’s: Chipotle, meet Punjab
The Decor: Chipotle, meet Punjab
The food: Slowly cooked—consistently prepared
The Feel: Punjab, meet Main Street
Figure 2: Chutney Joe’s, fast casual restaurant menu snapshot, May 2009
INSPIRE INSIGHTS
 IN SEARCH OF THE STREAMLINED LIFE
Looking to the future: Life Hacking
Web-based and apps-based mobile ordering will reshape LSR segment
There’s an app for that
Mobile ordering and smartphone applications ramping up
What’s next?
MARKET SIZE AND FORECAST
Key points
Tapered growth still cause for celebration
Same-store sales trends suggest trade out/trade down pressure
Figure 3: Selected fast casual restaurant same-store sales growth trends, 2006-09
Figure 4: Total U.S. fast casual sales and forecast, at current prices, 2004-12
Figure 5: Total U.S. fast casual sales and forecast, at inflation-adjusted prices, 2004-12
COMPETITIVE CONTEXT
Key points
Can I have premium with my value?
Premium and unexpected food items
Breakfast, please
QSR and coffeehouse beverage menus flex premium muscles
And about that value…
Responding in kind
While lines may be blurring, clear differences remain
First things, first—a price difference, while smaller, still exists
Figure 6: Average price per entrée, by restaurant segment, 2007, 2008, and 2009
And fast casual leads on quality and healthfulness—at least its users think so
Figure 7: Food attitudes, fast food versus fast casual, May 2009
As for food and drink differences, the facts speak for themselves
Figure 8: Top five cuisine types, by restaurant segment, Q1 2009
Figure 9: Top 10 beverage types, by restaurant segment, Q1 2009
SEGMENT PERFORMANCE
Growth on the menu—whatever the cuisine
Figure 10: U.S. sales of leading fast casual chains, by “food” segment, 2006-08
SEGMENT PERFORMANCE—BREAD-BASED RESTAURANTS
Key points
Oh, to be a bread-based chain
Figure 11: U.S. sales of leading bread-based fast casual chains, 2006 and 2008
Au Bon Pain takes private equity money to the bank
Jason’s Deli adds its voice to healthful marketing
Einstein Bros. Bagels
Bruegger’s on the upswing
Cosi and Atlanta Bread on the downswing
SEGMENT PERFORMANCE—ETHNIC RESTAURANTS
Key points
Approaching Hispanic cuisine from the inside out, and from the outside in
Figure 12: U.S. sales of leading ethnic fast casual chains, 2006 and 2008
Qdoba continues growth plans despite same-store sales declines
Taco Cabana and Pollo Tropical: Hispanic brands with Hispanic intentions
Pollo Tropical
Figure 13: Pollo Tropical sales metrics, 2006-08
Taco Cabana
Figure 14: Taco Cabana sales metrics, 2006-08
Going forward
Figure 15: Pollo Tropical and Taco Cabana company-owned same-store sales, 2009
Pei Wei—the Pan Asian alternative
Rubio’s Fresh Mexican Grill: more than fish, but fish remains the core
Figure 16: Rubio’s Fresh Mexican Grill same-store sales, 2006-08
Going forward
Moe’s Southwestern Grill
SEGMENT PERFORMANCE—TRADITIONAL RESTAURANTS
Key points
Old traditionalists versus new traditionalists?
Figure 17: U.S. sales of leading traditional fast casual chains, 2006 and 2008
Buffalo Wild Wings floors the gas
Figure 18: Buffalo Wild Wings sales metrics, 2007-09
Zaxby’s stays true to roots
Figure 19: Zaxby’s same-store sales growth trends, 2006-08
MARKET DRIVERS
Restaurant industry recession continues, but the bottom may be in sight
Figure 20: Restaurant Performance Index, current situation, and expectations, May 2007-July 2009
Consumer confidence undermines willingness to spend at restaurants
Figure 21: Consumer Sentiment Index, by quarter, 2001-09
Figure 22: Fast casual restaurant spend compared to last year, by selected demographics, May 2009
Aggressive expansion plans a recession gamble
Figure 23: Top five fast casual brands, by U.S. system-wide unit growth, 2007-08
The united colors of fast casual
RESTAURANT BRAND QUALITIES: PANERA BREAD
Performance summary
Figure 24: Panera Bread system-wide same-store sales growth trends, 2005-08
The environment
Panera users more apt to value healthfulness, quality, and customization “important” in an LSR
Figure 25: Important limited service restaurant attributes, selected responses, Panera Bread Users, May 2009
Panera users skew to affluence, female, suburbia, and blue-collar singles and couples
Figure 26: Panera Bread top demographics and cohort groups, October 2007-December 2008
On the menu
Figure 27: Panera Bread, top five cuisine types, Q3 2007-Q2 2009
Figure 28: Panera Bread, top five general marketing claims, Q3 2007-Q2 2009
Bakery items, sandwiches, soups and salads rule the menu
Figure 29: Panera Bread, new menu introductions, food, by menu course, Q2 2007-Q2 2009
Growth trajectory: positive; conservative
Figure 30: Panera Bread company-owned same-store sales growth trends, 2009
RESTAURANT BRAND QUALITIES: CHIPOTLE
Performance summary
Figure 31: Chipotle company-owned same-store sales growth trends, 2006-08
The environment
Chipotle users more apt to value a variety of restaurant attributes “important” in an LSR
Figure 32: Important limited service restaurant attributes, selected responses, Chipotle users, May 2009
Youth, ethnic/racial diversity, and affluence are hallmarks of user base
Figure 33: Chipotle top demographics and cohort groups, October 2007-December 2008
On the menu
Growth trajectory: positive, with slightly positive same-store growth and solid expansion
Figure 34: Chipotle company-owned same-store sales growth trends, 2008 versus 2009
RESTAURANT BRAND QUALITIES: STEAK ‘N SHAKE
Performance summary
Figure 35: Steak ‘n Shake company-owned same-store sales growth trends, 2007-08*
The environment
When choosing an LSR, it’s more about the finding a specific kind of menu item
Figure 36: Important limited service restaurant attributes, selected responses, Steak ‘n Shake users, May 2009
Steak ‘n Shake: Racial and economic diversity at the table
Figure 37: Steak ‘n Shake top demographics and cohort groups, October 2007-December 2008
On the menu
Leveraging the drive-thru
Goodbye to 24/7
Growth trajectory: Better days ahead?
RESTAURANT BRAND QUALITIES: BOSTON MARKET
Performance summary
Important LSR factors: finding specific menu item and lower prices for group purchases
Figure 38: Important limited service restaurant attributes, selected responses, Boston Market users, May 2009
Blacks drive usage; leading usage economic and educational backgrounds vary widely
Figure 39: Boston Market top demographics and cohort groups, October 2007-December 2008
On the menu
Growth trajectory: Positive, but conservative
ADVERTISING AND PROMOTION
Overview
Value message
Baja Fresh definitely makes the “fresh” point
Figure 40: Baja Fresh: freezers and microwaves or taco trio, September 2009
Fazoli’s stakes brand image on anti-fast food
Figure 41: Fast food is being blown away by Fazoli’s new menu, June 2009
Fuddruckers—burgers “stacked high”
Steak ‘n Shake introduces low cost meals options, supports with taste satisfaction
Figure 42: Steak 'n Shake: good fresh meat, June 2009
Zaxby’s lures with informal humor and relaxation
Figure 43: Zaxby’s: boneless wings—knock ‘em back, January 2009
Boston Market extols the value of chicken
Figure 44: Boston Market: Twins love chicken, September 2008
No low-cost proposition, just a quality message
Jason’s Deli
Panera Bread
Qdoba Mexican Grill
Figure 45: Qdoba: dancing vegetables create a Signature Burrito, June 2009
Branding excitement
INNOVATIONS AND INNOVATORS: ON THE MENU
Key points
Sophistication and healthfulness marketed hand in hand
Figure 46: Top 10 general marketing claims, top fast casual restaurants, Q2 2007-Q2 2009
If traditional American is the hub, ethnic/world flavors are the spokes
Figure 47: Top five cuisine types, top fast casual restaurants, Q2 2007-Q2 2009
New menu introductions reflect trends afoot
Figure 48: New menu dish introductions, top fast casual restaurants, Q1 and Q2 2009
Drilling down: Trending specific food menu introductions
Figure 49: Menu innovation trends, fast casual chain participation, 2009
Growing breakfast
Building out from breakfast
Adding a twist to traditional
Going “mini”
Comfort/hearty fare
Going upscale
Health and “unhealth”
Au Bon Pain has been actively experimenting with “petite portions”
Doing good: Bruegger's goes cage-free in D.C. and Corner Bakery stays local
A decidedly diversified beverage selection
Figure 50: Top 10 beverage types, top fast casual restaurants, Q2 2007-Q2 2009
RESTAURANT USAGE OVERVIEW
Key points
Restaurant usage
Figure 51: Restaurant usage in last year, by selected demographics, May 2009
Restaurant usage, by segment
Demographic analysis
Figure 52: Usage of restaurant segments in past three months, by gender, May 2009
Figure 53: Usage of restaurant segments in past three months, by selected HH income groups, May 2009
Addendum: Consumer question explanation
FAST CASUAL RESTAURANT USAGE AND USAGE FREQUENCY
Key points
Overview
Figure 54: Fast casual usage and usage frequency, by restaurant, May 2009
Demographic analysis
Figure 55: Fast casual usage and usage frequency, top eight restaurants, by gender, May 2009
Figure 56: Fast casual usage, top eight restaurants, by age, May 2009
Figure 57: Fast casual usage and usage frequency, top eight restaurants, by HH income, May 2009
FAST CASUAL RESTAURANT USAGE—RACE AND ETHNICITY
Key points
Fast casual usage by race/ethnicity
Figure 58: Top seven fast casual usage, by race/ethnicity, October 2007-December 2008
Acculturated versus non-acculturated Hispanics
Figure 59: Top seven fast casual Hispanic usage, by degree of English spoken in home, October 2007-December 2008
FAST CASUAL RESTAURANT SELECTION FACTORS
Key points
Section methodology
2008 versus 2009
General food attributes
Value and variety
Where and what?
Specific food choices
Figure 60: “Important” reasons for selecting a fast casual restaurant, 2008-09
General food attributes
Figure 61: Fast casual selection factors—general food attributes, by age, May 2009
Figure 62: Fast casual selection factors—general food attributes, by HH income, May 2009
Value and variety
Figure 63: Fast casual selection factors—value and variety, by gender, May 2009
Figure 64: Fast casual selection factors—value and variety, by age, May 2009
Where and what?
Figure 65: Fast casual selection factors—where and what, by gender, May 2009
Specific food choices
Figure 66: Fast casual selection factors— specific food choices, by age, May 2009
Figure 67: Fast casual selection factors—specific food choices, by ethnicity, May 2009
CONSUMER HEALTHFULNESS SELF-PERCEPTIONS
Key points
Health: consumers’ perceptions
Figure 68: Consumer diet self-perceptions, degree of healthfulness, May 2009
Figure 69: Importance of eating healthfully, degree of importance, May 2009
Figure 70: Restaurant segment usage, by diet healthfulness, May 2009*
QUALITY, HEALTHFULNESS AND PROXIMITY COMPARISONS TO FAST FOOD
Key points
Attitudes toward fast casual restaurants
Figure 71: Attitudes toward fast casual restaurants, 2008-2009
Figure 72: Attitudes toward fast casual restaurants, by age, May 2009
Figure 73: Competitive attitudes toward fast casual restaurants, by HH income, May 2009
CUSTOM CONSUMER GROUPS: FAST CASUAL RESTAURANT USE BY BEVERAGE ATTRIBUTE
Key points
Premium coffee drinkers
Figure 74: Fast casual usage, selected chains, by premium coffee usage, May 2009
Smoothie lovers
Figure 75: Fast casual usage, selected chains, by smoothie enjoyment, May 2009
CLUSTER ANALYSIS
Quality Queens
Convenience Kids
Casual Seniors
Cluster characteristics
Figure 76: Fast casual clusters, May 2009
Figure 77: Important limited service restaurant attributes, by fast casual clusters, May 2009
Figure 78: Fast casual restaurant spend compared to last year by fast casual clusters, May 2009
Figure 79: Quality, Healthfulness and Proximity Comparisons to Fast Food, by fast casual clusters, May 2009
Figure 80: Attitudes toward fast casual restaurants, by fast casual clusters, May 2009
Cluster demographics
Figure 81: Fast casual clusters, by gender, May 2009
Figure 82: Fast casual clusters, by age group, May 2009
Figure 83: Fast casual clusters, by hh income group, May 2009
Figure 84: Fast casual clusters, by race, May 2009
Figure 85: Fast casual clusters, by Hispanic origin, May 2009
Cluster methodology
APPENDIX: TRADE ASSOCIATIONS