Growing Investor Appetite, Growing Fast Casual IPOs

PiggyBank

The fast-casual sphere has shown solid growth in consumer and investor demand. When Zoës Kitchen Inc. first graced the New York Stock Exchange last April with an initial public offering of $87.5 million, industry experts saw this strong entry as an indicator of financial shifts in the limited-service restaurant industry.

This prediction was further bolstered toward the end of 2014, when another fast casual made a stunning debut. Habit Restaurants LLC, the operator of Habit Burger, saw an initial offering of $100 million. And then the West Coast Mexican chicken chain El Pollo Loco priced 7.4 million shares and brought in $107 million.

John Gordon, principal with Pacific Management Consulting Group in San Diego, believes the public hunger for restaurant stock, especially fast casual, is unquestionable. New brands, he said, drive the marketplace by driving excitement. As more limited-service brands choose to meet investment demand with IPOs, there will be a greater temptation for smaller players to enter the market.

However, going public too soon will be more detrimental than not going public at all, he warned. He advised that an IPO must hover between $80 to $100 million in order to be viable. Read More

New Fast-Casual, Fried-Chicken Concept Hatching

fried chicken

Consumers may be getting ready to start throwing their "buck, buck, buck"-s at this new fast-casual, fried chicken concept. The POST Brewing Company in Colorado, known its chicken offerings and owned by restaurant group Big Red F, is jumping onto the fast-casual fried chicken bandwagon by launching several joints called GoodBird Kitchen. The first, to be located in Longmont, has construction slated for September and an opening scheduled for November. 

"The GBKs will be a smaller, more streamlined version of The Post Brewing Company," Big Red F founder, Dave Query, said. "GBK will offer our great fried and rotisserie bird and our award-winning POST beers. Guests will order at a counter prior to being sat and full-service will be available from that point forward."

Prices will start around $7 and will top off at $14 for platters. Family meals will also be available at walk-up to-go windows. Beer, chicken-friendly wines and a straightforward, classic cocktail drinks will be decorating the menu.

"We are trying to create a simple, easy-to-use, value-driven chicken concept," Query said. Read More

Investor Interest in Chipotle Sizzling Out?

Must all good things come to an end?

burritos

Chipotle has been the longtime darling of the Fast Casual world. It's the poster child, the perfect model of what works in the industry, however Barron's, America's premier financial magazine, reported that Chipotle is "losing its spice." The company stock could lose another 15 to 20% as new obstacles to its growth are arising. 

The restaurant enjoyed multiple years of solid, double-digit revenue growth, with a stock price to match. Shares soared to $727 in February this year, an astonishing 1,516% increase since Chipotle's IPO in 2006. However, investors are steadily unlinking themselves from the chain. The company's stock has fallen 16% to $609 since February.

Perhaps loyal investors are becoming unsettled by the number of challenges Chipotle is enduring. From pork shortages, rising labor and beef costs, and an unexpected backlash following the company's decision to remove GMOs from its menu, this is going to be a bumpy road -- hopefully the path Chipotle goes on will lead to better destinations. Read More

Posted on July 14, 2015 and filed under Fast Casual, Fast Casual Nation.

Shake Shack's First Chicken Sandwich: Will It Rule the Roost?

Shake Shack

Investors on Wall Street may want to take another bite of Shake Shack's stock, because this chain just hatched a new item on its menu.

New Yorkers will get to enjoy Shake Shack's first-ever chicken sandwich. Along with its shakes and burgers, the ChickenShack is making its debut -- but only for a limited time at its three Brooklyn locations. The new, anti-biotic ChickenShack sandwich is topped with lettuce, pickles and buttermilk herb mayo. The rumor mill has been humming with the possibility this act is a response to Chick-fil-A, which is set to open its first major location in Midtown Manhattan later this summer.

"We have heard from guests for years that they would love to see a chicken sandwich from Shake Shack," Shake Shack Vice President of Marketing and Communication, Edwin Bragg, said. "We feel that it's a modern twist on the classic American chicken sandwich."

In a comment to MarketWatch, Chick-fil-A has welcomed Shake Shack's new addition.

"Danny Meyer and his team are known for their commitment to quality food. We celebrate all efforts to bring great food and remarkable service to the market," Chick-fil-A spokeswoman Carrie Kurlander said.

Market research firm NPD Group stated that chicken sales at fast-food restaurants had grown 3 percent to $5.4 billion for the year, steeper than the pace of burger sales, so the timing of Shake Shack's strategic release is ideal. Read More

Why Celebrity Chefs are Going Fast-Casual

glasses

It's not about the riches, but about getting back to the root of their passion.

Celebrated Atlanta chef Kevin Gillespie is one of those who packed up his knives and left the world of luxury dining. And he remembers the exact moment he realized he needed to -- he noticed his parents had stopped coming to Woodfire Grill, where he was the co-owner and executive chef.

The elegant restaurant served meals on fine china, with exquisite creations such as foie gras with banana and cashews, octopus tempura and squab fowl with saffron potatoes. The tab for dinner could run up to $100-200 per person, but it wasn't the price tag that drove his parents away. They could stop by whenever they wanted and the meal would be on the house.

"When I asked my dad what was going on, it suddenly became clear that he felt that as an average blue collar worker, Woodfire Grill was just not a place he was comfortable spending time at," Gillespie said. "It broke my heart. My parents mean a lot to me and I hated to think that I was part of a world that they didn't feel like they belonged to. As chefs, we are blue collar workers ourselves and at fine dining restaurants, we aren't cooking for our own people." 

It wasn't long after that painful conversation that Gillespie switched gears. He waved farewell to his post at Woodfire Grill in 2013 and later that year, he opened the Southern-inspired restaurant called Gunshow. He brought the same creativity without the hefty bill, or sacrificing his commitment to using fresh, local produce. Read More  

Posted on July 2, 2015 and filed under Fast Casual, Restaurant Trends.

Fast Casual Chains Chomping on a Bigger Portion of the Food Industry

fiveguys

McDonald's has once again hit the news. Recently, this fast-food icon revealed it is doing something it hasn't done for at least 40 years -- the chain is downsizing.

Perhaps it's a bit obsessive how media is circling the Golden Arches, but no one can deny that McDonald's is an industry titan. The company has been a model for fast-food chains to follow, so the fact that it will have to close more restaurants than open in the United States simply to fight against dwindling number sales is something worth talking about.  On the other hand, fast casuals such as Five Guys Burgers and Fries and Chipotle Mexican Grill are continuing to pop up.

By now, it's no surprise that consumer trends are leaning toward fresher, nutritional menu options and McDonald's does not fit into the mold customer perception has created. Even its national campaign launched last year that was designed to make the company more transparent, called "Our Food. Your Questions," did not seem to help.  Read More

Posted on June 26, 2015 and filed under Fast Casual, Fast Casual Trends.

Sorry, McDonald's -- In Chipotle We Trust

burrito

Right now, consumers are just not Lovin' It.

If you know anything about fast casual, it's that Chipotle is king, while fast-food-icon-of-the-ages McDonald's is steadily losing steam as the health-conscious, millennial generation is on the rise. A recent report by the Reputation Institute confirms this notion. Reputation Institute, a global consulting firm, researches the customers' emotional connections to a brand and in turn studies how those sentiments affect their willingness to buy the company's product. In their annual survey, they asked 27,000 people to chime in on some of the most talked about U.S. companies.

Which of the chains came out on top? Panera leads the top ten list, followed by Dunkin' Brands. Of course, Chipotle made the list, along with Wendy's and Subway, but (maybe not-so) surprisingly enough, food tycoon McDonald's did not.

In one year, on scale from 0 to 100, Chipotle's reputation score jumped to 74.2 in 2015 from its previous 69.4 score, whereas McDonald's dropped to 55.3 from its former 64. Read More

Posted on June 22, 2015 and filed under Fast Casual, Fast Casual Trends.

Fast-Casual Restaurants Trumping Retail

coffeeshop

At least in sunny southern California, restaurants are reigning supreme and taking over the scene. The only "tail" part of the retail business may be the fact that this sector is being sent packing with its tail between its legs. 

Brokerage company Kennedy Wilson has recently completed three lease transactions with Jersey Mike's Subs. Although these three leases only total 4,100 square feet, the restaurant's rapid crop-up in the greater Los Angeles area illustrates how the dining experience is steadily being more prioritized than the shopping experience. 

"Today, restaurants are the anchor tenants and people are going to retail destinations specifically for restaurants, whether that is a fast-casual experience or a sit-down experience," Kennedy Wilson VP Michael Pakravan said. "Overall, people eat out a lot more. It used to be that you would eat out two to three meals a week, but millennials are now eating out two to three meals a day. When planning a shopping center or a mixed-use development, it is important to have both the fast casual and the sit-down restaurants to cater to different needs."

Due to the rise in popularity of fast-casual restaurants, there has been a shortage of quality spaces. More players in the game are trying to fit in the field. With twice as many quick-service restaurants as there were five years ago, competing businesses are taking spaces at higher rates. How does a restaurant's reputation help it stay competitive in the retail space? Read More

Posted on June 15, 2015 and filed under Fast Casual, Fast Casual Trends.

Taco Bell's Move to Sell Hard Drinks: Fast Food to Fast Casual?

Tacos

With Taco Bell's late night hours and inexpensive menu featuring filling foods such as the crunchy Nachos Bellagrande and the Cheesy Gordita Crunch, this chain has long accepted its reputation as the perfect ending to a typical millennial's night, where there may have been dancing, dining and a drink or two.

But this week, Taco Bell is planning to join the ranks of its competitors, such as Burger King, Starbucks and Chipotle, with a move that could elevate this fast-food restaurant into one with a touch of fast-casual flair. The company announced that it aims to sell hard drinks for the first time in the United States, more specifically by a new franchise opening this summer in Chicago's Wicker Park neighborhood.

While it doesn't expect the drinks themselves to be a huge source of revenue, Taco Bell acknowledges that beverage options are driving a consumer's restaurant choices. In a survey conducted by Technomic Inc., 21 percent of people said that drink choices played a deciding factor on where they took their business. 

This company has largely aligned itself with the millennial generation, and its decision to dabble in beer, wine and frozen cocktails is probably a step that further caters to the young professional's needs, however it is a choice that could mar its image as an affordable place for late-night munchies.

"We are always trying to stay relevant and listen to what the people want," Rob Poetsch, Taco Bell's director of public affairs, said. "I think it's no secret that Taco Bell and late nights are synonymous. This model we're testing is much more experiential." Read More
 

Posted on June 11, 2015 and filed under Fast Casual, Restaurant News, Restaurant Trends.

Inside the "Build Your Own" Meal Revolution

Fast Casuals like Chipotle and Panera continue to thrive while McDonald's and the traditional fast food brands still suffer. The hottest trend within the fast casual segment is proving to be "build your own". 22.5% of fast casuals offer the build-your-own option. Even though this is relatively a low percentage– these concepts have doubled in growth compared to non-BYOs. 

So what does this growth drive from?

Millennials love to customize so its no surprise that Chipotle ignited the trend with its assembly line style burrito ordering process. This format has shown success beyond Mexican food in make your own pizza shops such as Blaze Pizza and Pieology Pizzeria. And next up in this style of fast casual is the Asian inspired ShopHouse, brought to you by the creators of Chipotle. With currently 10 shops and growing, ShopHouse features customizable rice, noodle, and salad bowls. But, the competition is fierce with plenty of copycats are out there following the format and trying to be the next Chipotle. Ghengis Grill boasts build your own stir fry with 115 restaurants to date. There's even a fast casual called My Ceviche where customers can build their own raw fish bowls. What BYO concept do you think will be the next success in this thriving segment? Read More

Can Starbucks Become the Next McDonald's?

In yet another case of customers demanding great tasting and high-quality food, Starbucks is planning to expand its food offerings in hopes to become "The New McDonald's." Long gone are the days when quality suffered at the hands of speed and convenience.  As McDonald's sales continue to suffer, Starbucks looks to step in, and with more than 20,000 locations, they have the size and power to compete.  The coffee chain has been adding sandwiches and salads to its menu, and they're ones customers won't feel guilty about ordering. 

Analysts say Starbucks is the only large chain that offers millennial parents foods that they can feed their children without embarrassment or hesitation, all with the convenience of a fast-food chain. Starbucks knows the importance of capturing the millennial audience and their kids by serving organic, kid-friendly snack options such as greek yogurt and fruit squeezes. Today's kid consumers are savvier and more aware of what they are eating -- they aren't just looking for a happy meal with a toy.  Read More   

No Toss-Up: Restaurants Jumping on Fast-Casual Pizza Trend

pizza

Step aside burritos, freshly-baked baguettes and gourmet burgers. A new fast casual contender has arrived on the scene and it wants to be on top -- with extra toppings, of course.

Pizza. It's no shock that it's made it's way to the fast casual sphere. Pizza is a classic, consumer favorite for its convenience and for the fact it's meant to be shared. But now, individual-sized pizzas can be customized and fired up in a few minutes to cater to the customer.

National Restaurant News has selected some of the rising stars of fast-casual pizza. They are currently small regional chains, but have large appeal. Unlike traditional pizzerias, known for quick deliveries and large pies, these restaurants allow guests to assemble smaller pies to how they see fit.

Get to know Arizona's Fired Pie, California's Blast 825 and &Pizza in the Washington, D.C., area. Read More

Posted on May 29, 2015 and filed under Fast Casual, Fast Casual Trends, Restaurant Trends.

"Fast Casual Nation: Changing the Way America Eats" Premiered in Chicago

Foodable WebTV Network reached a major milestone this past Saturday. As part of the 2015 NRA Show, Foodable unveiled its first screening of "Fast Casual Nation: Changing the Way America Eats," a full-length documentary that leads the viewer through the cinematic tale of how the fast casual segment rose to its glory.

Not only were guests treated to a cocktail reception and an intimate VIP dinner of American-comfort-food classics at the Virgin Hotel's Miss Ricky's, attendees were also privy to be the first to hear more great news: Foodable and the National Restaurant Association revealed their partnership. As of now, their two new ventures include a film festival and the Foodable 5-Star Awards, which will be taking place at the NRA's Restaurant Innovation Summit in San Diego this coming October. Can't wait to see what other exciting things this teamwork will bring to the table of the food industry!

Missed out? Check out photos from the premiere and watch the trailer here.

Dining Out Trends Shifting to Fast Casual

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Just when we thought fast casual couldn't possibly grow any faster than it already has, this sector is surprising us yet again with its astronomical success. According to Technomic, the fast casual segment experienced a 12.8 annual growth. Americans spent $30 billion last year dining at fast-casual restaurants -- nearly double the No. 2 grown sector in the industry.

"The money is there," restaurateur Steve Zhao, who described his newest venture as an Asian spin on Chipotle Mexican Grill, said. "This demographic is the younger folks. They want good food, creative atmosphere and fast -- fast is always better."

The fast casual business model promises limited table service, but higher-quality food. Unlike fast food, these restaurants aim to serve meals with few or no frozen or processed ingredients. An average receipt runs $9 compared to a $5 bill at a drive-thru. And instead of cracking, upholstered booth seats, fast-casual establishments are also elevating the eating experience with cutting-edge décor and flexible menu offerings.

"It's changing the eating world out there," Jay Kitterman, director of Lincoln Land Community College's Culinary Institute, said. He pointed to a recent National Restaurant Association report that indicated for the first time, consumers last year spent more of their food budget at restaurants than grocery stores.

Not only has that changed, but the language of food marketing has, as well. Customers want customization, they want made-to-order dishes, but most importantly, they want something that aligns with their values -- something healthy, fresh.

"I was in an airport...and the Wendy's ad said, 'We value fresh ingredients,'" Illinois Stewardship Alliance program director Lindsay Record said. "The whole language, narrative with fast food is changing." Read More

Posted on May 12, 2015 and filed under Fast Casual, Fast Casual Trends.

Investors Willing to Pay for Fast-Casual Restaurant Shares

Shake Shack

You'd be hard-pressed to find someone who doesn't think fast casual is here to stay. In this past year, the restaurant industry has risen to feed the growing appetite that millennials and affluent diners have for fast casual. Consumers have become more health-conscious and more keen on being aware of where their foods are sourced from, but are also more selective on how to spend their time -- the busy millennial generation is one of constant motion. They're running around and they want their food to keep up with them.

The fast casual sphere is where those two priorities meet in the middle: healthier than fast food, with service nearly as quick. It's no surprise with this growing popularity that investors are willing to pay just whatever for fast-casual restaurant shares. Will another restaurant crop up and match the success of Chipotle Mexican Grill Inc., which has opened up 1,800 restaurants since it opened its doors in 2005? 

In shares, Shake Shack has shook things up and is the shining performer. Its growth has gone up 260 percent since the end of January. Shake Shack's current stock price values each of its restaurants at $40 million -- four times more than the stock market value of a Chipotle restaurant and 15 times the value of a McDonald's restaurant. Read More

Posted on May 6, 2015 and filed under Fast Casual, Fast Casual Trends.

Chipotle: The First U.S. Chain to Phase out GMOs

CHIPOTLE.COM

CHIPOTLE.COM

Chipotle is used to the limelight. From being the model of how a top fast casual should be run, to its recent news last week that revealed it would begin taking to the streets by offering delivery, Chipotle is a brand name that is used to branding itself across news headlines. If you're on this blog, you should know that the Chipotle phenomenon inspired an entire book of theory. Regardless of whether a consumer is a Chipotle fan, there is no denying that this fast casual has made its mark on the foodservice timeline.

This week, it's no different. Chipotle has once again made history as the first national food chain to completely rid its menu of genetically-modified ingredients. While the Food and Drug Administration insists GMOs are safe, activists have been questioning this claim. Due to the "lack of consensus" over these concerns in recent years, Chipotle co-CEO Steve Ells said that the company felt it was best not to use GMOs at all. 

This Monday, Chipotle posted an ad on its website that proclaimed it provided "Food with Integrity" and that it was "G-M-Over It." The Denver-based chain had already been using mostly non-GMO ingredients, but made its final changes on its tortilla products. Chipotle said that suppliers plant non-GMO corn varieties for its tortillas, and that instead of using soybean oil --which may be made from genetically-modified crops to be resistant against disease --, the company is now using sunflower oil to cook its chips and taco shells. 

Best of all? These changes did not result in significantly higher costs, so the prices will remain the same for consumers. In the future, Chipotle plans on removing additives from its tortillas, as well. What other steps will Chipotle take to meet the growing consumer-consciousness on good ingredients? Read More

Posted on April 28, 2015 and filed under Fast Casual, Fast Casual Nation, Restaurant News.

"Fast Casual Nation: Changing the Way America Eats" Premiering at NRA 2015!

FCNDoc

Fast casual fans, time to call in for seat reservations because you won't want to miss out on this! FoodableWebTV Network is teaming up with the National Restaurant Association to bring you the biggest film to hit the food service industry.

For one night only, "Fast Casual Nation: Changing the Way America Eats" is premiering at the 2015 NRA Show. The different flavors of the restaurant segment's progression and the upcoming of fast casual will be served to you in one plate of this entertaining, artistic, informative, easy-to-digest and revolutionary documentary. 

Guests to this May 16 premiere event will enjoy a cocktail reception and step and repeat before the screening. Notable attendees include Chief Innovation & Member Advancement Officer Phil Kafarakis, as well as representatives from more than 75 different restaurant brands around the world.

Watch and be inspired by the rise of fast casual to the food service throne. How did this segment become king? Sample a small taste of this sweeping story in this bite-sized trailer below! 

The Healthy Fast Casual Challenge: Good For You vs. Good Taste

Salad

Celebrity chefs are taking on the healthy fast casual challenge: how will the food service industry keep up with the consumer demand for good-for-you food without sacrificing the good tastes they love? On top of that, these hungry mouths want it fast, want it fresh and want it on a frugal budget. 

"Make it better for me, but I don't want to give anything up. I want less salt, no antibiotics, no trans-fats, more fruits, more veggies. I don't go out to restaurants to give stuff up; I go to restaurants to be tantalized," Greg Dollarhyde, CEO of Veggie Grill, said to summarize the modern-day customer.

That's a tall order, but the fast casual segment is ready to dish out. With the support of celebrity chefs and the farm-to-table trend that is popularizing across the nation, sales at healthy fast casual chains totaled an estimated $384 million in 2014 -- almost a 30 percent increase from the previous year. 

Rather than choosing foods based on what's being left out, such as fat, sodium and carbs, most people are choosing foods on the benefits added in, such as antioxidants and omega-3s. Fast casual restaurants are responding to this switch from avoidance diet to add-in diet by packing in the locally-sourced vegetables, grains and meats.

The marketing message is earth-friendly. Rather than alienating customers by labelling themselves with terms such as vegan or vegetarian, restaurants prefer catchy phrases like "veggie-centric."

How else has fast casual responded to this desire for "honest foods"? Read More

"Which Wich" Makes Ordering Sandwiches Fun, Expands In the Northeast

This growing sandwich franchise with a progressive ordering concept already has 330 locations nationwide, the majority in California and the Southwest, and it's  still growing!  

So what makes "Which Wich" special and different from the other generic sandwich chains out there? In today's competitive  Fast Casual market, everyone is trying to make their mark. Fresh ingredients, good prices and quick service are becoming the standard shtick for these sandwich chains. Which Wich has a fun concept marketed to millennials where the guest is in control of their ordering process. Their order is completely customizable. Upon entry, each guest picks out a sandwich bag with either a build-your-own option or a signature sandwich design. They then grab a sharpie to mark which style they choose, add ingredients or any other modifications. The customer writes their name on the bag, hands it in and waits for their name to be called, while doodling during wait time. Doodled bags can then be hung in the "art gallery". This is truly an interactive Fast Casual experience that consumer can't seem to get enough of. Read More 

22-Year-Old Entrepeneur Starts Wokworks

With the rise of fast casual comes many entrepreneurs and their new ground-breaking concepts, ready to take the fast casual crown and become the next Chipotle. That is exactly what Brennan Foxman decided he was going to do at the age of 22. This New Jersey native started an Asian-inspired restaurant serving up predesigned and build-your-own stir-fry entrées. While studying abroad in college, his friends may have been out partying, but Brennan chose to work on restaurant business models instead. He noticed that the majority of fast food used wok cooking with high heat and fresh ingredients.  He loved the idea and brought it back to the states.  After a year and a half of business planning and being turned down by more than 20 banks, Wokworks was born on 1935 Chestnut St in Philly.  Read More