The Fast Casual Dining Phenomenon: What’s New and What’s Next

Inside a restaurant

In just a few years, fast casual — a cross between fast food and casual sit-down restaurant dining — has grown to become a multi-billion dollar market.

Following in the footsteps of Chipotle and Panera Bread, dozens of new fast casual chains have opened up to offer high-quality, inexpensive meals for self-service or takeout. According to QSR Magazine many of them — from Dig Inn and Luke’s Lobster in New York City, to Luna Grill in San Diego and Fresh to Order in Atlanta — are thriving.

These chains are vying for their share of what QSR Magazine reports is the “fastest growing food service segment” worldwide. In the U.S. alone, the fast casual market is expected to top $66 billion by the year 2020, according to research firm Technavio.

Shop Owner Delivering Food Over Counter

HEALTH-CONSCIOUS EATERS AND MILLENNIALS DRIVE THE TREND

These restaurants appeal to the growing consumer demand for meals that are quick, inexpensive, and healthier than traditional fast food fare. Increasingly, consumers seek healthy meal options they can grab on their lunch break without breaking the bank.

The Washington Post notes that the average receipt at a fast casual restaurant rings up between $9 and $13 dollars, compared with $5 at a traditional fast food chain. Many fast casual chains offer bowls filled with noodles, vegetables, and grains, while others sell food that’s vegan and gluten-free. For just a few dollars more than a fast food burger, diners can get more diverse menu options. Those often include seasonal, farm- to-table food sourced locally through partnerships with regional farms.

This value for healthier and broader choices appeals to the millennial cohort in their 20s and 30s. Technomic shows that 84% of millennials order from a restaurant at least once a week — far more than other generations. They also visit fast casual restaurants 2% to 5% more often than the general population.

New Restaurant Locations Open for Business

Drive thru Neon Sign

For restaurant developers looking for a new business opportunity, a fast casual chain represents a good investment. Technomic’s Top 500 Chain Restaurant Report for 2018 reveals that fast casual sales growth reached nearly 9%last year.

Additionally, the real estate market is currently working in restaurant developers’ favor. In its restaurant industry trends report earlier this year, consulting firm RSM International noted that due to declining sales and traffic, many store owners are shuttering under performing locations. That presents an opportunity for restaurant developers to snap up these storefronts at a reduced cost.

Another potentially cost-effective option is to open a fast casual restaurant in a shipping or storage container. Restaurant Hospitality Magazine reports that both fast casual and higher end eateries have opened inside containers in San Francisco, Las Vegas, and Portland, Oregon. In addition to providing access to bustling streets and neighborhoods that haven’t seen an uptick in vacant storefronts, this approach has benefits from a speed-to-market standpoint — there’s no need to wait for lengthy construction projects before opening your doors.

Best Practices for a Fast Casual Restaurant

For a brick-and-mortar fast casual restaurant, on-site storage containers are still invaluable when it comes to storing and transporting supplies and equipment. Since most fast casual restaurants do a booming takeout or curbside pick-up business, their storefronts tend to have a smaller footprint than traditional sit-down joints. On-site storage means restaurant managers always have kitchen staples, back-up cookware, and spared innerware on hand without equipment being under foot.

Customer and Shop Employee

To succeed with a fast casual business, owners and managers must also prioritize speed. Fast casual chains are known for their quick meal prep, and that kind of reliable service helps owners attract and retain busy customers on the go. In a recent interview with CNBC’s Power Lunch, Morning star restaurant analyst R.J. Hottovy said of Chipotle

Mexican Grill, “The speed of service is something the company is squarely focused on right now.” According to Chipotle, revenue was up 8.3% in the second quarter of this year.

It’s also important that menu items are healthful and fresh. The International Food Information Council (IFIC) Foundation’s 2018 Food and Health Survey shows that when choosing a restaurant, knowing that the food contains only natural ingredients ranked highly among the 1,000 American consumers surveyed, as does “knowing where the food comes from” and”understanding how the food is produced.”

Growth in the competitive restaurant market

This explains the growth of the farm-to-table movement, which is largely behind the success of fast casual restaurants like New York and Boston’s Dig Inn, Tennessee’s Kitchenette, and Modern Market, which now has locations in six states and was recently acquired by a private-equity firm.

Those entering the fast casual business face an increasingly competitive market, but one that shows no signs of halting soon. Armed with an understanding of these restaurants and their customers — along with a good location and storage solution — business owners stand an excellent chance of success. 

Here at PODS®, we understand the challenges of opening a new location and we’re waiting to streamline your logistics to make sure everything runs smoothly. With almost two decades’ worth of experience, our specialist team is ready to help.

To learn more about how PODS can help with moving and storage for your restaurant business, visit PODS for Business or call 877-BIZ-PODS for a free quote.

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