Feb. 27, 2013
By Matt Bodnar, Fresh Hospitality
A new breed of restaurant is fast approaching on the horizon and starting to catch people’s attention. These concepts buck the traditional fast casual model in so many ways that it’s time to create a name for this new segment.
Who are the market leaders in Fast Casual? Despite all the up and comers, three stand apart as the dominant players in the space. Chipotle, Panera Bread, and Five Guys. These three goliaths dominate the market and the consumer’s mindshare when it comes to fast casual, the same way McDonald’s does for QSR.
I’ve heard people at restaurant industry conferences occasionally say things like “fast casual plus” or “premium fast casual” to try and describe this emerging market – but that doesn’t go far enough to capture its essence.
I’m officially drawing a line in the sand and calling this new segment Fresh Casual. Like Fast Casual before it, which sits definitively closer to the QSR side on the spectrum between QSR and Casual Dining, Fresh Casual sits on the same spectrum but definitively closer to the casual or in some cases even the fine dining side.
In essence, Fast Casual is casual dining quality food served in a QSR environment. Fresh Casual is a full casual dining experience with a limited (usually QSR) service model.
This may seem trivial at first, but the gulf between “Fast Casual” concepts and “Fresh Casual” competitors in the same exact space is so wide that it can no longer be ignored.
Here is how Fast Casual and Fresh Casual stack up on the MAJOR differences in market point. (These are general categorizations and I realize that not every restaurant fits each definition perfectly).
Menu: Fast Casual: Customer-driven menu. Most commonly featuring a “build your own” style menu where customers choose their protein, starch and flavor. Fresh Casual: Chef-driven menu. The menu is designed by a chef or culinary team to have specific dishes and flavor profiles. Often the menu is designed by a corporate chef and then executed by a kitchen staff in store.
Service Model: Fast Casual: Fast Casual differs little from the QSR service model – having customers order at a counter and pick their food up there. Fresh Casual: Fresh Casual retains counter ordering but then adds an additional layer of service - running food to customers, refilling drinks, and bussing tables. Once a customer orders at the counter, the rest of their service experience takes place at the table.
Décor & Design: Fast Casual: Differs little from a traditional QSR design and décor, very sparse clean interiors, often with promotional materials and posters on the walls. Fresh Casual: Mimics a casual dining interior with a ocus on higher- quality furniture and fixtures as well as art and artifacts in store to create a relaxing and comfortable atmosphere.
Food Quality: Fast Casual: Delivers higher quality than QSR, but still sometimes reheating and using frozen product. Prep and cooking is usually as simplified as possible. Fresh Casual: Delivers food consistent with top-quality casual or fine dining, often fresh and locally sourced and rarely frozen. More complex prep and cooking is required to deliver a higher quality of food
Platewear: Fast Casual: Served with traditional QSR paper and disposable service ware. Fresh Casual: Served on plateware and with glass (excluding to-go orders) similar to casual dining
Price Point: The price point is the same for both market segments – $8-12 dollars per meal.
Buildout: The square footage, which obviously varies between concepts, is similar in both Fast and Fresh Casual. Between 1500 and 4000 square feet in a shopping center.
Now that you’ve got a better sense of this distinction, I want to point out six specific examples of the restaurants with the same type of food – currently both considered “fast casual” that are a world apart.
Italian: Vapiano vs. Nooi Pasta
Vapiano is a fresh casual Italian concept that hails from Europe. Despite their counter-based service model, their food quality is astounding and the ambiance is very much that of casual dining. The cooks hand make pasta daily and boil it to order, pizzas are made from scratch before your eyes. The flavors are bold and delicious and so fresh.While Fast Casual Italian is still a very young and under-served market, the fledging competitors in the space can’t hold a candle to Vapiano in terms of food quality or ambiance. (Learn more about fast casual Italian.)
Burgers: Shake Shack vs. Five Guys
I personally think the burger space is ahuge bubble right now, and there are too many concepts for all of them to survive. That said, one of the survivors will almost certainly be Danny Meyer’s Shake Shack. Meyer of Setting The Table fame is one of New York’s premier restaurateurs and arguably one of the guys who kicked off the entire “better burger” craze. After building a near empire in NYC’s restaurant scene Meyer finally decide to scale one of his concepts – and he chose Shake Shack. The chef-driven deliciousness of Shake Shack is a fresh casual triumph over the build-your-own burgers of Five Guys. The freshness, quality and flavor of Shake Shack’s food creates an unquestionable gulf between the plethora of fast casual burger joints and the big boys like Shake Shack.
Mexican: Xoco vs. Chipotle
If you want to see what the future of restaurants looks like – visit Rick Bayless’ Xoco in Chicago. This beast of a Mexican concept is the most stark example distinguishing Fresh Casual from Fast Casual. As soon as you walk in the door you will realize exactly what I’m talking about (read here, my site report on Xoco). Xoco is just on another level compared to Chipotle, Moe’s or the other fast casual Mexican and burrito players. The ambiance, food quality and the service all fit perfectly into the fresh casual mold. The open kitchen showcases the handmade breads as well as the freshly prepared torta and soup. The ambiance is warm and cozy like a sit down restaurant – and after you order from the counter the service model is indistinguishable from top level casual dining.
Asian: Pei Wei vs. Panda Express
Pei Wei, one of the older players in the space, fits the Fresh Casual mold to a tee. It is a full blown casual dining restaurant that simply begins your order at a counter. The look, the feel, the service, the food quality, etc., all stand apart from a Panda Express (or even Chipotle’s new entry into the market Shop House) to such a degree that you can’t help but put Pei Wei in another category all to itself.
Bakery Cafe: Wildflower vs. Panera Bread
Wildflower is a 10,000-ton missile aiming straight for Panera. I first ate here out in Phoenix in 2012. I had heard several people hyping Wildflower up and I was convinced that there was no way it could live up to the hype: Wrong. Wildflower is a Panera with great food, a full kitchen, a much sexier ambiance and tremendous customer service. One spicy chipotle egg sandwich or order of pancakes (oh those fluffy, fluffy pancakes) at Wildflower and you will know the difference between Fresh Casual and Fast Casual.
Mediterranean: Taziki’s vs. Garbanzo
OK, I know: I put Taziki’s on the list. But at Taziki’s we set out every day to define ourselves as Fresh Casual – to bring a new and better experience to our customers. Taziki’s food is all made completely fresh every day, no freezers and no fryers in the entire store. Our entire menu is designed by our team of chefs to craft delightful, different, and delicious flavor combinations. The décor is soft and inviting like a casual dining restaurant. The service model delivers much more to the customer than a traditional counter model: Food is delivered to the customer’s table, drinks are refilled, and the table is bussed for the customer. Similar players in the Mediterranean space like Garbanzo and Roti are both focused on assembly line style build your own menus, with sparse metallic interior and counter only service (essentially replicating Chipotle’s model but replacing the proteins and starches with Mediterranean ones).
See For Yourself
Words can only do this distinction so much justice. Get out in the world and see these concepts for yourself. Eat at one and then the other and you will see what I’m talking about when I say that “Fresh Casual” is here to stay. After travelling across the country week after week and personally visiting all of these concepts, I can say hands down that Fresh Casual is a serious force to be reckoned with.
Matt Bodnar is a venture capitalist, investor, and author focused on fast casual restaurants. He is a partner at Fresh Hospitality, a Restaurant Incubator focusing on the fast casual segment with more than 8 restaurant brands boasting 70+ nationwide locations.
Photo credits: Matt Bodar, chris.corwin, whitneyinchicago, roboppy, Pei Wei Asian Diner, and C-Bunny
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