Understanding and Working with Fast-Casual Part 1

The fast-casual segment seems to be the darling of the foodservice industry — and with good reason, if you look at some of the industry data. According to market research firm Technomic, the fast-casual segment is in the best position to achieve real growth this year and next.

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As you hear more about the fast-casual segment, have you ever found yourself wondering what it is all about? What's driving its success? And whether you are an operator or supplier, do you ever wonder how to position your business to ride this impressive wave? I have asked myself these questions on many occasions and over the next few posts, I would like to share with you some of my thoughts and observations about this burgeoning segment.

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First, I think it is important to understand that fast-casual is a morphing segment. Nowadays it seems as if concepts that 10 years ago would not have made the cut to be categorized as fast-casual are getting thrown into this mix. It used to be easy to recognize a fast-casual concept but that's no longer the case. There has clearly been a blurring of the lines between fast-casual and QSR in many of the benefits offered to the customers. When Subway started, it would have probably been categorized as QSR, yet now, with the advent of concepts like Firehouse Subs and others, it may be seen as a fast-casual concept.

If you look at what fast-casual originally was and compare it to what it seems to be today (more on that in the next post), you begin to wonder how concepts get labeled as fast-casual.

Perhaps a good portion of how concepts become categorized is based on the customers' perceptions of the operation. OK, you can say that perception is reality, which I buy, and the way an operator positions the concept significantly impacts how customers see the business.

Understanding the importance of perception, though, is critical if you want to be part of the segment either as an operator or as a supplier of industrial engineering or other consulting and design services, foodservice equipment and various other forms of technology.

So what makes a fast-casual concept? In an effort to answer this often-asked question, you can approach it from a variety of angles including:

• Is it the menu offering?

• Is it the ambiance and retail design?

• Is it the menu price?

• Is it the production process?

• Is it the service system?

• Is it the employees?

These are but a few of the questions one could pose but it seems like a reasonable place to begin our exploration of the topic. As a preview of the subsequent blog posts, consider that many fast-casual concepts now play in the drive-through arena, a service attribute that was typically the exclusive domain of the QSR. Perhaps that's still the case?

In my next post, I will expand on each of the points listed above further, providing some thoughts on how these attributes are materializing in the marketplace, which could provide support (or not) as to how a concept gets positioned and categorized as a fast-casual concept.

Stay tuned!

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