Customer satisfaction trends
The attributes that define Fast Casual – perceived freshness, enhanced food quality and more service – are where customers give the segment their highest satisfaction ratings. This indicates that Fast Casual is meeting customer expectations when it comes to food quality, service and atmosphere.
How they compare
Even with its high-quality positioning, Fast Casual is vulnerable because of the higher average check size. QSR clearly holds a competitive advantage over Fast Casual when it comes to the cost of a meal. At the other end of the spectrum, casual dining has been promoting lower-priced menu options to compete more aggressively with Fast Casual. For all restaurant operators outside of the Fast Casual arena, there is an opportunity to focus on providing quality products and service at a low price.
Attracting the millennials
Millennials – those consumers between 18 to 34 years of age – will soon overtake Baby Boomers as the most sought-after target for restaurateurs. Even though roughly half of Millennials are students, they are strong drivers of growth in the Fast Casual segment. Their contribution to U.S. Fast Casual sales in 2014 was a whopping 35 per cent, up by 16 per cent since 2007. They also spend more per visit – an average of $7.99 at Fast Casual, $2.00 more than they spend when visiting a traditional QSR.
As the Fast Casual concept grows, so do opportunities for manufacturers. To do well, products will need to be compatible with those already popular or growing in popularity at existing Fast Casual chains. Despite the popularity of healthy options, a diverse range of products will be required. Consumers appear to appreciate the choices they are able to make when visiting a Fast Casual chain.
Currently, alcohol is not high on the radar screen at Fast Casual outlets. However, it is definitely not out of the realm of possibility with these concepts. In the U.S., more and more Fast Casual concepts are serving alcohol. While not widespread, service of alcohol is on the rise and represents an opportunity to further develop Fast Casual menus. It’s the perfect pairing: an elevated atmosphere that encourages group dining, along with quality, craveable products just crying out for a craft beer or a “big red” wine.
Fast Casual represents a sizeable opportunity for manufacturers’ food and beverage offerings as they continue to capture a greater share of the market. However, it is a two-way street that manufacturers will need to drive carefully. Opportunity will exist among these growing concepts, but at the same time, current key accounts will be looking for assistance to counter the competitive threat posed by Fast Casual.
Is there a promising future for Fast Casual in Canada? Absolutely.
The concept meets the needs of consumers by delivering great-tasting food – prepared the way they like it – in an atmosphere that’s new and exciting. Furthermore, the core user demographic, the Millennials, is forecast to have an ever-growing presence in this segment in the next few years.
However, it won’t all be smooth sailing for Fast Casual. Other segments will serve up strong competition aimed at Millennial consumers, and QSRs in particular can be expected to fight back with new-and-improved menus and interiors.
While relatively new, it’s clear that Fast Casual has earned its place in the industry and is here to stay. Competitors looking to do well and manufacturers looking for growth opportunities would be smart to follow Fast Casual’s every move.
About the author:
Mark Dempsey is Director, Foodservice Canada for The NPD Group. The NPD Group has more than 25 years of experience providing reliable and comprehensive consumer-based market information and insights to leaders in the foodservice industry. For more information, visit www.npd.com or contact Mark at Mark.Dempsey@npd.com.