Never happy to stand still, the restaurant industry is continually redefining itself. Kerstin Kuhn looks at the latest sub-sector to emerge – that of fast fine outlets.
The phenomenon of fast casual dining has been taking the US restaurant sector by storm. Positioned somewhere between fast food and casual dining, sort of a hybrid of the two, the sector has increasingly gained market share over the last couple of years. Data from analyst firm Technomic suggests it grew from $8b to $35b between 2002 and 2013, with sales in 2013 alone up 11%.
Led by brands such as Chipotle Mexican Grill, Panera Bread, Five Guys and Baja Fresh, fast casual restaurants typically have counter service without the frills of a full-service restaurant but provide a much higher quality food offer in a more upscale setting than their fast food rivals.
“The movement started in the mid-1990s and grew around the turn of the millennium but it really picked up steam during the recession when other restaurants struggled,” says Darren Tristano, executive vice president at Technomic. “It is driven by consumers trading down from full-service casual dining restaurants to a lower price point but similar quality, as well as consumers trading up from fast food to a slightly higher price point but much better quality. We forecast around 10% growth for this segment over the next five years as it continues to steal [market] share from both casual dining and fast food restaurants.”
So the fast casual segment was born as a blurring of the lines between fast food and casual dining driven by increased consumer demand for both quality and convenience. And of course it was only a matter of time before the sector would evolve as consumers became more familiar with it.
Today, a growing number of operators are pushing things further. They are at the forefront of a new segment at the upper end of fast casual dining category, with elevated emphasis not just on food but also on both service and restaurant design, while still offering a competitive price point. They’re being labelled as “fast fine”.
“Restaurant operators want their brand to stand out from the crowd, so they’re always thinking about how to push the envelope,” says Lisa Jennings, West Coast bureau chief at Nation’s Restaurant News. “These concepts are putting more emphasis on more gourmet ingredients and curated wine lists, as well as restaurant design that borrows elements more commonly seen in the casual dining world, such as real silverware and china and no plastic seats.”
Pioneers of the segment
One of the pioneers of this more premium fast casual segment is Fresh To Order, a chain started in Atlanta in 2006, which currently has 14 sites in Georgia, Florida, Tennessee and the Carolinas and plans to open 50 more in the next two years. The brand defines itself through a finer dining taste profile at a fast-casual price point with a higher level of service. Dishes are made to order on a flame grill, while dressings and soups are prepared from scratch twice daily in each restaurant.
Fresh to Order incorporates not only aspects of casual dining — such as bussing tables — but also of fine dining, with dishes such as bourbon filet with balsamic cabernet reduction and garlic jack grit cake. Restaurants also serve wine by the glass and beers, adding to its upscale perception among consumers.
The initial motivation for the brand, according to its CEO Pierre Panos, was to create a better-tasting product that did not break the bank. “When developing the Fresh To Order concept, I envisioned a restaurant that could offer its guests a highly-refined cuisine, an upscale environment and an enhanced service level that previously couldn’t be found within the operating platforms and price points of the growing fast casual segment,” he explains.
“By design, and a bit unwittingly, Fresh To Order’s concept evolution has created a whole new category between fine dining and casual dining. “Fast-Fine” takes finer dining quality, prepared to order, flavourful food and served to our guests’ tables in under 10 minutes for around $10 dollars.”
A more recent addition to the fast fine segment is Chicago-based chain LYFE Kitchen, which launched three years ago. It is the brainchild of Mike Roberts, the erstwhile global president of McDonald’s, Mike Donahue, McDonald’s USA’s former chief of corporate communications, and Stephen Sidwell, who helped found the meat substitute Gardein, and currently has 10 outlets in California, Colorado, Illinois, Nevada and Texas, with ambitious plans to grow to up to 250 sites within the next five years.
Healthy and authentic
Short for Love Your Food Everyday, LYFE Kitchen bills itself as a “lifestyle restaurant in between fast casual and fine dining”. “Firstly we want to be known as a great restaurant, with a great ambience and with great tasting food that is healthy but authentic to everybody,” says Donahue, the group’s partner and brand relations officer.
The menu – which has been developed by Oprah Winfrey’s former personal chef Art Smith, together with Food Network star Jeremy Bringardner and vegan chef Tal Ronnen – includes vegan, vegetarian and gluten-free options but aims not to alienate diners with more traditional palates by also offering healthy pasta dishes, sandwiches, pizzas and burgers made from grass-fed beef. “Our aim is to dispel the myths that healthy food has to taste bad and be expensive and we are authentic to everybody because we don’t preach to anybody,” insists Donahue, adding that the restaurants also offer organic beer and wine on tap, with the average spend between $12 and $18.
Each dish contains less than 600 calories and below 1,000 milligrams of sodium, while butter, trans fats, white sugar and other food additives have been banned, and locally sourced produce is used when possible.
LYFE Kitchen’s service model, meanwhile, is a hybrid between fast casual and fine dining. Customers still order at a counter but food is delivered to the table and waiters work the floor, enabling guests to order additional items from them.
“Our service model is very much a hybrid between fast food and full service restaurants. You order at the counter but once you are seated you have the ability to order from the table and enjoy your meal without having to get up again,” adds Donahue.
Another operator making waves in the fast fine segment is Los Angeles-based Mendocino Farms, whose gourmet sandwiches embracing the Slow Food movement using organic ingredients and fine dining cooking methods, have gained it a loyal fan base. “We have the format of a fast food establishment and are 100% geared towards throughput but combine this with the design, feel, service and quality ingredients of the top end of the market,” says founder and CEO Mario Del Pero.
What sets Mendocino Farms apart is not just its food offer but also its service culture, which is very much that of a high end restaurant. As customers queue to order, front of house staff engage with them, allowing them to order from them. Staff consistently ask for feedback and interact with diners in a friendly, informed and attentive way that is unusual for a fast-casual restaurant. “We believe that 51% of what we’re selling in hospitality and 49% is food,” says Del Pero. “It is our culture and we don’t just sell sandwiches, we sell happy. We go through rigorous interviews and training programmes, in which I personally teach employees the core values of our brand and how we take care of our guests in a special way. Before someone is promoted into a leadership position, they return to base camp and learn how we speak Mendo – how we talk to each other and how that translates to guests.”
Indeed service as much as food is what separates fast fine operators, according to Tristano. “The experience and engagement with employees is a very important element of fast casual restaurants; it’s very friendly and attentive service,” he says.
Stylish, comfortable interiors
Restaurant design is another big aspect that puts fast fine operators above their competitors, with brands like LYFE Kitchen and Mendocino Farms investing heavily in providing both stylish and comfortable interiors. LYFE Kitchen restaurants typically offer a range of seating, from communal tables and patios to soft couches and traditional tables. Furniture has a focus on sustainability, with tables made from “rescued” sequoia trees and chairs made from recycled water bottles, and menu boards have been replaced with print menus computer monitors displayed at the counter.
Tristano says this is likely to influence the rest of the industry. “Ultimately we will see a shift internally with the atmosphere of many fast casual restaurants as they continue to age and look to update their décor,” he says. “This could include things like communal tables and more contemporary design based on higher consumer expectations.”
However, while the fast fine category continues to grow, with brands like LYFE Kitchen looking to expand across the USA, Jennings warns that for now, the sector remains restricted to regional players. “You could argue that the premium space remains to be proven,” she says. “There isn’t really a national chain yet offering more premium positioning but it may not be long,” says Jennings.
This is echoed by Tristano, who insists that due to a higher price point than average fast casual operators, fast fine players’ reach will be limited as far a national presence goes. “However, companies like Mendocino Farms and LYFE Kitchen will raise the bar of what consumers expect from fast casual,” he adds. “They will force other fast casual operators to continuously improve all the dimensions of their restaurant offering and it will also push fast food to do a better job to be competitive with fast casual so I think it will definitely have implications across the industry broadly.”
