Fast Casual CEOs predict the future

Jan. 6, 2017 | by Cherryh Cansler
Fast Casual CEOs predict the future

When it comes to predicting the restaurant trends of the year, it's great to hear from consultants and researchers, but we thought it would be an even better idea to see what some the industry's leaders were expecting. We reached out to several CEOs of fast casual brands to compile the industry's 2017 top trends.

Artificial is in — and out

Artificial Intelligence will play a larger role in consumer ordering behaviors, predicted Carl Howard, CEO of Fazoli's.

"Mobile payments and online ordering will continue to gain share in the traditional FC and QSR space," he said. "Really, the next wave is going to be the ability to have the ordering experience that you want. You can use the personnel at the unit, order online, order on your phone or order at an ordering station. Due to the cost, it may not flourish in 2017, but you will see a lot of brands start to bring this up more frequently."

Tony Gioia, chairman and CEO of Togo's Eateries, agreed, predicting that mobile technology would contribute to increased transactions.

"It will continue to be a traffic driver where those concepts offering quick, seamless and user-friendly applications will have a stronger gravitational pull to attract new guests, while retaining loyalists," he said.

"If you are not figuring out every way possible to service the on-demand consumer you will be lost in five years," Howard said. "If a consumer can order it, you better provide it. And if they can receive it you better be able to deliver it the way they want — at their home, at their office, curbside and pre-order counter pick up."

He also predicted that single-order delivery is going to expand beyond Jimmy John's.

"We will be doing all of this soon and my goal for the dine-in consumer is to just come in and sit down and the order comes to you," Howard said. "You place and pay for the order in advance, come in and grab the pre-assigned pager, place it on your table, and we deliver it to you."

While concepts are embracing artificial intelligence, they are ditching artificial ingredients, said Howard, who pointed out an ad he saw last week from Papa John's. The ad contained no coupons, but instead, it boasted menu items containing no artificial ingredients.

"McDonald's is on this full force," Howard said. "And we will be 100-percent artificial ingredient-free by July 1. Look for several other brands to race to clean up their menu in 2017."

Taste and source still matter

Coinciding with Howard's prediction about the removal of artificial ingredients, Gioia said food trends will evolve to more flavorful, ethnic menu choices. Slapfish CEO Andrew Gruel agreed, saying Indian food is going to get more mainstream.

"Consumers will be more demanding to know where ingredients come from [locally preferred] and why they are 'good for me,'" Gioia said.

But farm-to-table is dead?        

Gruel said farm-to-table is dead, but not in terms of the mission dying. Although it's still a great cornerstone of a restaurant, the term has been manipulated, overdone and misused.

"Like many other once-worthy buzzwords, this one has lost value because everyone is using it and not appropriately," he said. "What once was meant to represent a local relationship between a farmer and a chef — typically by independent restaurants — is now being used for mass-produced chains. While it is technically true — as most restaurants do buy from some ‘farm' — it's not farm-to-table in its original form. 

"I say the same about sustainable seafood. We are getting away from that term because it means nothing." 

Gruel compared the trend to the bacon craze.

"Bacon, a staple for breakfast, became 'cool' and started to show up in odd areas on hip menus," he said. "Then when Denny's launched baconalia and every fast food joint in town started to jam bacon into every buzz item, it lost its stickiness.That's not to say anyone loves bacon any less, it just means it won't draw a crowd when pitched, similar to farm-to-table."

A new relationship with government

With the election year behind us and the new administration taking shape, Matt Andrew, CEO of Uncle Maddio's, predicted that the concerns over labor and business expenses becoming overwhelming will start to subside. 

"We all want to do the right thing by our people, and the current climate has initiated healthy conversation around a balance between the two," he said.

Minimum wage laws and accelerated economic growth, however, will continue to create wage inflation, creating both opportunities and risks, Gioia said.

"The opportunities are in increased traffic as consumers shift away from full-service dining to seek more value," he said. "The risk is around difficulties to attract qualified employees and having to pay higher wages, dampening 4-wall profitability. Real estate sites will also come under pressure where landlords will continue to have leverage in negotiating lease costs."

Third parties will continue to disrupt the delivery industry

The customer demand for more delivery options will continue to help grow third-party delivery business.

"In our platform, it is a perfect marriage of a high-quality product, delivered on demand without the burden to our franchisees," said Andrew. "The consumer is demanding the brands that they want, fast and convenient. You will see new players take over the earlier adopters and the technology be forced to catch up. For example, software that allows the order to be integrated into the POS system."   

Premium fast casuals will win

With the rapid growth of fast casual over the past few years, there is an emerging category of premium fast casual, Andrew said.

"This speaks to the pressure from consumers to have fresh 'real food' options in an atmosphere that doesn't feel like a fuel stop," he said. "At Maddio's, we serve these needs by offering a flexible model, in a welcoming atmosphere, where we bring your food and clear your dishes."

Only the strong will survive

Dovetailing on Andrew's prediction was another from Gioia, who thinks that the continued expansion of the fast casual segment will intensify pressures to retain traffic counts. 

"There will be a further shake-out from concepts that do not offer sufficient consumer value or are highly leveraged from debt," he said.

Loyalty is stronger than ever

This past year proved that loyalty programs work, Andrew said.

"Brands are seeing there is a higher spend and a higher frequency from guests, who are loyal consumers," he said. "It also allows for us to understand who our core consumers are and go find more people who represent that same lifestyle segmentation."

Photosource: istock.com


Topics: Trends / Statistics



Cherryh Cansler
Before joining Networld Media Group as director of Editorial, where she oversees Networld Media Group's nine B2B publications, Cherryh Cansler served as Content Specialist at Barkley ad agency in Kansas City. Throughout her 17-year career as a journalist, she's written about a variety of topics, ranging from the restaurant industry and technology to health and fitness. Her byline has appeared in a number of newspapers, magazines and websites, including Forbes, The Kansas City Star and American Fitness magazine. She also serves as the managing editor for FastCasual.com. wwwView Cherryh Cansler's profile on LinkedIn

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