Hot Concepts in a Hot Segment

Technomic has identified hundreds of fast-casual concepts over the years, identifying where we think there will be growth and then tracking these chains to see which will succeed or fail. There is no set definition for a growth concept—sometimes it’s a case of “we know it when we see it.” There are, however, elements that most of these chains have in common.

We tend to track concepts with three or more locations and a couple of years of growth. Unit economics have also proven important, as it is key to continue to grow and profit at the unit level in order for a chain to succeed. In terms of the actual brand, most of the “hot concepts” have broad consumer appeal, a well-defined menu and a differentiated approach, offering something unique to drive the customer experience.

Examining the sub-segments that are seeing the most growth, we believe the following concepts represent those that are livening up fast casual.

La Boulange Bakery: With 2011 sales of $8.5 million and 16 units, this bakery café concept offers breads, pastries and gourmet coffees made with high quality ingredients with no additives. Community-conscious, it aims to support the neighborhoods in which it operates.

Hot Heads Burrito: The 22-unit Mexican Grill concept had sales of $17 million in 2011. It touts its “awesome” food and “cool” atmosphere. Like many Mexican-grill chains, it uses an interactive preparation format. It differentiates itself by offering more than a dozen sauces to choose from.

Nando’s Peri Peri: This 7-unit concept, whose 2011 systemwide sales were $8.5 million, offers Portuguese flame-grilled chicken. The concept aims to exemplify pride, passion, courage, integrity and family, just as it does in the more than 30 other countries in which it operates.

Newk’s Express Café: This sandwich concept, with 45 units and 2011 sales of $75 million, was developed by the former McAlister’s team. Freshly prepared sandwiches, salads and pizzas are prepared in an open kitchen, then delivered to customers’ tables.

How Do You Roll?: With seven units and 2011 systemwide sales of $4 million, this Asian concept offers custom-made sushi prepared to order in front of customers. Ingredients include typical raw fish and vegetables, as well as unique fillers such as grilled chicken and seasonal fruits.

Elevation Burger: With 21 units and $15 million in 2011 systemwide sales, Elevation Burger uses only high-quality, 100% organic, grass-fed beef and other authentic, sustainably produced ingredients. Its restaurants also try to be environmentally friendly, using reclaimed wood and sustainable building materials.

Piada Italian Street Food: As its name implies, the 5-unit concept with $5 million in sales offers authentic Italian street food, such as custom wraps, salads and pasta bowls. Dishes are custom made in front of guests, unless they choose to order at the drive-thru window.

Roti Mediterranean Grill: Touting its “food that loves you back,” Roti’s 12 units earned 2011 sales of $14 million. Fresh customizable food is served to customers in long lunchtime lines in urban and suburban locations, as well as through its strong catering program.

Native Foods Café: This 11-unit concept generated $18 million in sales in 2011, all without using any animal products. Chef-crafted dishes are nonetheless hearty and tasty, and many emulate meat through the use of seitan. The vegan concept is passionate about the environment and animals.

What To Expect

Examining the concepts and segments that have grown over both the long- and short-term, we expect health and wellness concepts to become more relevant. At the same time, new ethnic concepts are finding their place with consumers, and authenticity will further enhance differentiation by segment. In comparison, watch for mature segments to continue to slow.


Darren Tristano

Darren Tristano is Executive Vice President of Technomic Inc. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations.

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