Forecasting the Future of Fast Casual

It’s no secret that fast casual has experienced a remarkable amount of growth, attracting an increasing number of players to the segment. So what’s next for this powerhouse segment within the industry? Well, if the fast-casual sector has a natural growth limit, we’re not seeing it yet, but what we do see are some challenges emerging for fast-casual brands as they continue to battle for consumer spend.

Of the total $466 billion in sales the restaurant industry recorded in 2014, fast casual’s portion was small at about 8%, or $39 billion, but the segment grew at a rate of 13%, more than three times the 3.8% growth rate by the industry overall, according to Technomic’s latest industry research.

In Technomic’s Top 150 Fast Casual Chain Restaurant Report, there are a number of insights gleaned from emerging trends and how the top players—with sales at $32 billion, an increase of 13.2%—in the segment have performed.

Here are some emerging opportunities/challenges highlighted in the report:

  • Fast-casual chains must defend their points of differentiation. Seeing the success in fast casual, full-service restaurants are experimenting with spinoffs and alternate formats, while quick-service chains are upgrading menu items and adding customizable options to compete.
  • New menu niches and foreign chains will grow. Consumers understand the basics of fast casual’s “made-for-you” format and will be searching for novel tastes in Mediterranean and salad brands and concepts from abroad such as Nando’s and Caffébene.
  • Investments in technology and unit upgrades will begin to pay off. Fast-casual restaurants have been ahead of the curve when it comes to technology upgrades—from mobile ordering and payment apps to experiments with in-store kiosk ordering. Technology-enabled delivery may be the new frontier.
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Sarah Janssen

Sarah Janssen is an Assistant Editor at Technomic Inc. in Chicago. She is responsible for writing and editing content for the company’s newsletters, blog and other publications. Prior to joining Technomic, she held various roles reporting and editing for daily and weekly newspapers.

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