The Future of Foodservice
Why Fast Casual Is
Changing Global Foodservice
PREPARED FOR:
© 2015 Technomic Inc.
4 NOVEMBER 2015 | DUBLIN, IRELAND
OCTOBER 29, 2015 | technomic.com
Only Technomic delivers
a 360° view of the food
industry. We impact growth
and profitability for our
clients by providing
consumer-grounded vision
and channel-relevant strategic
insights.
© 2015 Technomic Inc.
2
FACT
Today’s consumers are different
FACT
They value different things than previous generations
FACT
The restaurants that keep up with changing
consumer dynamics will win
© 2015 Technomic Inc.
3
FACT
These needs are global in nature
FACT
Many of the longstanding players in the industry
are having trouble addressing and meeting
these consumer needs
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What Do Consumers Want?
Price and convenience still
paramount but consumers
also want simplicity
and transparency
─ Fewer ingredients
─ Understandable ingredients
─ Less processing
─ Full disclosure
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The 10 Fs of Fast Casual
Full view
Preparation
Flexible
Offerings
Fine
Ingredients
“Fitter”
Wholesome
Food
Fast Casual
Appeals
Friendly
Employees
Fresh
Fast
Service
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Food
Quality
Fair
Price
First-rate
Decor
6
Fast Casual Drivers
Demographic
Alignment
Unique
Positioning
Strong
Consumer
Appeals
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Ingredient Transparency Helps
Drive Fast Casual
“The No No List is the latest step on our journey to
clean food and a transparent menu.”
- Ron Shaich, CEO
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Fast Casual Over-indexes On
Higher Income Groups and
Millennial Consumers
Demographic
Fast Casual
Quick Service
Income <$50k
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Income >$50k
Gen Z
Millennials
Gen X
Boomers/Matures
© 2015 Technomic Inc.
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Fast Casual Has Taken The
U.S. By Storm
FCR share of Fast Food
2004
2009
2014
2019(F)
© 2015 Technomic Inc.
FC Sales
8%
$13B
FC Sales
12%
$23B
FC Sales
16%
$39B
FC Sales
$62B
21%
10
Segments Continue to Blur
and Develop
Fast Casual
Food Quality/Craveability
Polished CDR
$9-$14
$20-50
Traditional CDR
$12-20
QSR+
$7–$10
Family Style
$10-15
QSR
<$9
Price
© 2015 Technomic Inc.
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Evolutionary Trends in Fast Casual
Build-your-own
finding great appeal
Proliferation of delivery
Technology enhancing
the experience
Increasing entry from
full-service operators
© 2015 Technomic Inc.
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2015 Private Equity Investments in
Fast Casual
These investments demonstrate a belief within the financial
community that fast casual chains are well positioned for growth
© 2015 Technomic Inc.
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How do You Identify
the Next Chipotle?
Up and Comers
Engaged
Nimble
Innovative, trend setter
Defined appeal
Access to capital
Strong unit economics
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U.S. Fast Casual Going Global
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But It’s Not Just Big U.S. Chains
Driving Global Expansion
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Ireland Has Homegrown Fast
Casual Concepts
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Fast Casual Generated Turnover
In Ireland Of €151M
2015 Consumer 2015 Operator
Spending (€M) Purchases (€M)
2015-2018
CAGR
Total
€ 151
€ 63
9.8%
Republic of Ireland
€ 105
€ 44
10.8%
Northern Ireland
€ 46
€ 19
7.3%
© 2015 Technomic Inc.
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Irish Operators Reacting to
Fast Casual
“The learnings from our
restaurant will now be
transferred to the mobile
food trucks. Because we
want it to be cooked to
order–there will be a
longer delay, but we want
to insist on quality. And
then we can expand that
offering.”
- Fast Casual Operator
© 2015 Technomic Inc.
Carefully considering target markets and
demographics that are not being
captured and creating QSR sister-brands
for established fast casual operations.
Following the food-truck trend and
creating mobile units to increase
brand awareness
Adding grab-and-go options such as
salads, sandwiches, and drinks.
19
Fast Casual Has Highest
Perception of Healthy Offerings
How healthy and nutritious do you think the prepared
food offerings are at the following establishment types?
Traditional fast-food
restaurants
Upscale, higher-end
fast-food restaurants
Coffee shops
Convenience store
Petrol station/forecourt
convenience store
14%
12%
18%
10%
12%
16%
23%
29%
14%
24%
26%
23%
40%
15%
8%
28%
31%
30%
21%
5 – Very healthy and nutritious
3 – Somewhat healthy and nutritious
1 – Not at all healthy and nutritious
4%
32%
32%
6%
12%
24%
4
2
Food from upscale/fast casual operators is perceived to be
healthier in general, as indicated in the chart above.
Q3. How healthy and nutritious do you think the prepared food offerings are at the following establishment types?
© 2015 Technomic Inc.
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Many other QSRs Are “Fast
Casualising” Their Business
Food
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Experience
21
In The US, “QSR Plus” Is
Indicative of Fast Casual Strength
Collectively up
9.2% in 2014
These chains have proven that QSRs can survive and prosper
in this environment.
© 2015 Technomic Inc.
22
Takeaways
Although FCR price points may be high for GenZ, Millennials
continue to drive sales frequency.
QSR continues to raise the bar, but FCR counters with greater
convenience, delivery.
Build-your-own engagement provides the control younger
consumers are looking for.
Underserved specialty niches will thrive as fast casual
continues to outperform the industry.
© 2015 Technomic Inc.
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Final Thoughts
Fast casual is aligned with the consumer
It is changing the way people eat
Growth will continue to be high
All restaurants will need to adapt to the evolution of fast
casual
© 2015 Technomic Inc.
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Questions?
David Henkes
Managing Director & VP
001-312-506-3927
dhenkes@technomic.com
www.twitter.com/davidhenkes
www.technomic.com
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