Fast Casual Restaurants - US - September 2009

Table of Contents

• 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
• 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
• Appendix: Trade Associations