What Businesses Should Learn from Fast Casual Success

The fast casual restaurant industry continues to steal market share from QSR concepts, which have either plateaued or declined in customer traffic in the past five years.

Fast casuals, a market lying between fast food and casual dining on the restaurant spectrum, one-up their QSR rivals with more customized meals, healthier options, and more counter service. They’re not going anywhere anytime soon, with consumers choosing to spend a little extra for perceived fresher, healthier, and more natural ingredients. 

Forbes reports that fast-casual chain sales rose 11% in 2013 due to higher guest count and average ticket spend, while fast food sales rose only 2%. In latest news, Habit Restaurants Inc. more than doubled in their trading debut, according to a recent Reuters article. Five concepts raised $486 million in U.S. IPOs in one year, four of which were fast-casuals, reports Reuters’ Neha Dimri and Sruthi Ramakrishnan.

Photo courtesy of Nation's Restaurant News

So what’s the key to their success?

The fast casual concept’s business model is the way of the future. A Northwestern University IMC student and industry insider with a focus in brand management, my interest is in restaurant concept development and forecasting trends in the fast casual field. Fast casual concepts have proven, both within their industry and in the consumer packaged goods space holistically, that consumers expect so much more out of brands than simply the receipt of an exceptional product.

There’s an increase in consumer demand to “do more.” Restaurants like Chipotle Mexican Grill, Sweet Green, and Panera are not only praised for their food, but also their operations, marketing and sustainability efforts. Fastcasual.com points to Panera which now focuses on three verticals: people, community, and planet, by expanding their recycling team, decreasing energy use, seeking emerging technologies, building non-profit partnerships, removing artificial foods, and investing in its people.

Photo courtesy of Fast Company

Consumers’ expectations for their food have only increased. The most successful brands combine, sustainability, community engagement and social service, as well as perceived wholesome foods to create an unbeatable experience that fits in line with the consumer’s morale. The restaurants who show they are committed to these three initiatives, will continue to see growth and increased guest loyalty.

Rule #1: Health and hygiene trump cost. People are showing they’re willing to pay more for higher quality ingredients and fresher preparation.

Rule #2: Make sustainability a priority. Discover how sustainability can fit into your company culture. Live it, breathe it, and promote it to your consumers.

Rule #3: Devote time to a non-profit cause that fits with your brand’s goals and devote yourselves to them – quality trumps quantity here. Create partnerships that last so your company can really make an impact, driving consumer engagement to this cause.

Consumers stand behind brands that fit in line with their social, environmental, and health standards. The fast casual industry is a perfect example of consumers’ greater expectations. In the restaurant industry and outside it, companies need to reassess their priorities and create value outside of the product itself. The idea that you can only be as good as your taste, is no more.

Lauren Neuschel is a part-time IMC Masters student at Northwestern University and Brand and Communications Manager for one of the Top 20 Fastest Growing Small Chains in America. In her current role, Lauren led the vegan restaurant concepts recent re-branding efforts, selected and managed multiple digital agencies, executed public relations initiatives, and built content across social platforms. Lauren has a strong background in branding and creative content creation with a bachelor’s degree in journalism from Northwestern’s MedillSchool of Journalism.