Fast Casual Restaurants - US - October 2011

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