Concepts come and concepts go, some are hot and some are not but, whatever the state of play, early spotting of trends is key for industry players and observers alike.
e, “What’s the next Chipotle?”, referring, of course, to the fast-growing Mexican grill concept. Everyone involved, from trade suppliers to operators and industry watchers wants to be first in the loop when it comes to early identification of what’s emerging as interesting and innovative up-and-coming concepts.
Technomic has identified thousands of innovations over the years, identifying where it thinks there will be growth and then tracking those chains to see which will succeed or fail. It can be difficult to define and predict a “hot concept.” There are, however, elements that most of these chains have in common.
We look at those with three or more locations and a couple years of growth. Strong unit economics have also proved important, as it is key to continued growth and profit at the unit level in order for a chain to succeed.
Unit growth in 2012 was a mixed bag in terms of success and failure. Of the 1,500 chains Technomic is tracking, 592 expanded. But nearly a third of the chains (471) saw no growth, and 437 of the chains’ unit counts actually declined.
Looking at the fastest-growers – the 205 whose total units increased by 20% or more – 84 are fast-casual chains, despite that sector being the smallest segment in the industry. There were 59 casual-dining chains with store-count increases of 20% or better, and 53 quick-service chains. As expected, there was not much growth in the family-style segment, with only nine players experiencing at least 20% growth.
As it is expanding at the quickest rate, the fast-casual segment is worth looking into more deeply. The sector is very broad in terms of menu, with everything from burgers to salads seeing growth.
Out of 84 growth concepts, better burgers came out on top with 18 restaurant chains reporting 20%-plus growth. There were 13 really healthy concepts recording 20% increases or better, while the sandwich, Mexican, bakery-café and chicken menu segments each had several fast-growers as well.
The following are a dozen concepts that Technomic believes are worth watching for future expansion, along with a description of the trend that each exemplifies.
Limited-service growth concepts
PDQ excels at freshness. The Tampa, Florida-based fast-casual chicken chain is dedicated to quality, as evidenced by its use of fresh ingredients, hand-tossed salads and hand-cut fries in a premium, healthy menu offer. An interesting feature within the chain is the location of cleaning stations outside the toilets where customers can wash their hands. PDQ had five units open at the end of 2012, with total sales of $8m (£5.3m).
BurgerFi excels at natural. Based in North Palm Beach, Florida, BurgerFi had 14 units and $14m (£9.2m) in sales in 2012. The fast-casual better-burger concept uses all-natural, grass-fed beef and gourmet toppings and offers craft beer and wine. Its all-natural focus extends to its use of environmental, sustainable construction materials.
100 Montaditos excels at authenticity. This Spanish import had 2012 sales of $7m (£4.6m) within 10 units open in the United States (with about 250 in Europe, Mexico and Columbia). The fast-casual chain offers mini sandwiches on baked-to-order imported bread and an authentic Spanish experience.
Top That! Pizza excels at customisation. The Tulsa, Oklahoma-based, nine-unit chain with 2012 sales of $4m (£2.6m) offers pizza with 40 unlimited toppings, all at one price. The individual pizzas are then cooked in three to five minutes. Customers looking for lighter fare can choose one of the PieLite Pizzas, which have fewer than 600 calories.
Cups Frozen Yogurt excels at creativity. While the average frozen yogurt restau-rant attracts 16 to 35-year-old women, Cups targets men with its staff, or “cast members”, dressed in provocative uniforms. The menu offers creative flavours such as honey lavender, while the décor is contemporary and sophisticated for its adult following. The Livingston, New Jersey-based quick-service chain had 10 units and $3.5m (£2.3m) in sales in 2012.
Little Greek excels at quality. This fast-casual Mediterranean chain offers Americanised Greek food with a healthy spin. Items are prepared from scratch on-site daily with fresh and often local products on offer. Tampa, Florida-based Little Greek had 11 units at the year’s end and 2012 sales of $5m (£3.3m).
Full-service growth concepts
Carmel Café & Wine Bar excels at small plates. Based in Sarasota, Florida, Carmel is a casual-dining wine bar and restaurant chain serving modern Mediterranean cuisine in a stylish and inviting atmos-phere. Consumers order via iPad, which holds pairing and flavour notes for the wines on its large list. Sales at its four restaurants totalled $10m (£6.6m) in 2012.
Quaker Steak & Lube excels at energy. With a NASCAR theme and strong family appeal, the Sharon, Pennsylvania-based casual-dining chain earned $143m (£93.8m) at its 57 units in 2012. It has a varied menu but specialises in chicken wings, with a choice of 23 different sauces.
Rotolo’s Pizzeria excels at fresh ingredients. The casual-dining pizzeria touts its fresh ingredients, home-made sauces and authentic Italian heritage. With 27 restaurants and 2012 sales of $18m (£11.8m), the Prairieville, Louisiana-based chain makes the official pizza of the New Orleans Saints professional football team.
Twin Peaks excels at attentive service. This varied-menu casual-dining chain based in Addison, Texas, has a lodge setting and its servers wear “lumberjack”-inspired uniforms that appeal to its mostly male customers. Twin Peaks, which had 28 units and $68m (£44.6m) in sales in 2012, serves generous portions of sophisticated comfort food and beer served at 29˚F.
The Egg & I excels at business meetings. This family-style breakfast-and-lunch concept based in Centennial, Colorado, attracts businessmen and women for small and large meetings by offering free private rooms and complimentary Wi-Fi in the restaurant. It had 69 units and $57m (£37.4m) in sales last year.
Rosa Mexicano excels at contemporisation. Just as fast-casual emerged as a better limited-service experience, polished-casual is gaining traction as a better full-service experience. Rosa Mexicano is a polished-casual Mexican concept in New York City that offers modern, innovative cuisine with authentic roots in an atmosphere that is festive but not kitschy. Its 15 units earned 2012 sales of $40m (£26.4m).
Key takeaway
A look at America’s innovative and fast-growing concepts – as well as the consumer drivers that are enabling their success – can point to opportunities for UK operators to answer their customers’ demands and innovate within their own concept.
Darren Tristano is senior managing director of Technomic Inc, a Chicago-based foodservice consultancy and research firm. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations. For more information, visit www.technomic.com.
