The rise in popularity and success of fast casual restaurant brands like Panera, Chipotle and sweetgreen have substantially altered the dining industry and consumer perceptions of eating out. Much of the success of fast casual formats stems from the fact that fresh food experiences — which the chains specialize in delivering — are the essence of consumer evaluations of quality in restaurants today.
Concentrating on upping fresh perimeter experiences, food retailers have been savvy to the fresh trend for some time, and a small number, like Mariano's, Wegmans, Whole Foods Market and HEB's Central Market have even emerged as talented grocerant operators, bridging the gap between restaurants and supermarkets. And yet, while shoppers are flocking to both dine-in and take out from prepared foods sections staged by grocerants, there is still much to be learned from fast casual restaurant operators: This is especially true for conventional food retailers hoping to capitalize on shoppers seeking prepared foods and in-store dining.
One aspect of change food retailers should recollect is that over the past decade or so, consumer expectations of restaurant chains have evolved beyond seeing them as sources of fast, cheap and easy sustenance or familiar, indulgent comfort foods. Fueled in part by innovations in fast casual formats that have helped bridge the convenience of eating out with aspirations for healthier diets, The Hartman Group’s Dining Out 2016 report finds that consumers now list “freshness” as a key marker of quality in restaurants. Across the four restaurant channels we examined (fast food/QSR, fast casual, coffee shops and casual dining/full service), when consumers talk about food that tastes “fresh,” they describe the experience of eating food that is:
- Made with simple, “real” ingredients (simple, fresh vegetables, fruit, whole grains, all natural/no artificial ingredients)
- Minimally processed (cooked to order, open production, not sitting under heat lamps)
Freshness is also linked to health and provides a halo of safety by signaling food that:
- Is minimally processed, all natural, free from artificial ingredients
- Is more nutritious
- Has not sat around (thus less prone to food-borne pathogens)
With these points in mind, it is important for food retailers to also understand that restaurants have become fully woven into the fabric of American’s daily food lives and consequently consumers have become very savvy diners: Though many are regulars at restaurants, it is the rare consumer who visits only one restaurant channel and they do, in fact, seamlessly visit different types of restaurants for different occasions. The rise of fast casual formats tracks the broader cultural shift away from highly processed foods and toward “fresh,” “real” and “simple” foods. While still meeting the demand for speed and convenience, these formats trade on evolving notions of freshness and quality offering:
- Open production and customizable, made-to-order food
- A focus on higher-quality, sometimes unique, menu items, ingredients and flavors
- Enjoyable yet healthier, better-for-you menu options
- Attributes of purity, sustainability and transparency
- Clean, modern design — including light, natural and reclaimed materials — combine with fun, playful décor.
Overall, Dining Out 2016 finds that consumers rank taste, quality, cleanliness and value in a list of favorite fast casual chain attributes: 52 percent cite "the good taste of foods/beverages" and 47 percent cite "the good quality of foods/beverages."
For supermarket operators hoping to capture some of the opportunities presented by fast casual operators, there are several important points to consider going forward:
- For prepared and take-away meals, foods and beverages: Understand your value proposition. Price represents a potential hurdle for trial and one of the biggest opportunities for increasing customer satisfaction in the Fast Casual segment. Various Fast Casual chains tap different aspects of modern food culture through cues of freshness, quality, indulgence, discovery, experimentation, health and sustainability. Consider what the appropriate mix and emphasis on these attributes are and how those are connected to the value proposition of your brand. Ultimately, retailers should not lose sight of the notion that value, speed and convenience are important priorities for consumers and areas of competition with restaurant operators.
- Make “freshness” a continuous line across all consumer touchpoints. The fast casual segment has already taken the lead in innovating around “freshness” via open production, customizability and made-to-order food.
- For in-store dining and serving areas ensure that atmosphere and design are fully integrated into the eating experience. Among fast casual's many disruptive innovations has been the ability of such restaurants to integrate design, décor and atmosphere into their brand identity and narrative. Successful fast casual operators delight consumers with touches such as clean, modern design and the use of light as well as natural, reclaimed materials to evoke an emphasis on quality and freshness and distinguish themselves from the uniform, impersonal experience of a wide array of outdated dining experiences ranging from QSR outlets to aging grocery cafe's.
As CEO of The Hartman Group, Demerit drives the vision, strategy, operations and results-oriented culture for the company's associates as The Hartman Group furthers its offerings of tactical thinking, consumer and market intelligence, cultural competency and innovative intellectual capital to a global marketplace.
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