Fast Casual Restaurants - US - October 2013


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Mintel

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Due to consumers’ budgets still being constrained, fast casual restaurants must find a way to provide more value in order to justify higher prices. This value proposition includes quality items and upscale yet casual experience at an affordable price. Corporate responsibility initiatives will play an increasingly important role, as will deals meant to promote trial and build loyalty.
Table of Content

Scope and Themes
What you need to know
Definition
Data sources
Market size and forecast
Consumer survey data
Abbreviations and terms
Abbreviations
Terms

Executive Summary
Market size and forecast
Figure 1: Total US sales and fan chart forecast of fast casual restaurants, at current prices, 2008-18
Market drivers and competition
Insights and opportunities
Marketing strategies
Menu analysis
Figure 2: Food items by menu section at fast casual restaurants, by incidence, Q2 2010-13
Figure 3: Top 10 geographical claims for food at fast casual restaurant menus, by incidence, Q2 2010-13
The consumer
Figure 4: Drivers for fast casual restaurants, July 2013
Figure 5: Effectiveness of deals at fast casual restaurants, July 2013
Figure 6: Important value-added attributes of fast casual restaurants, July 2013
What we think

Issues and Insights
How fast casuals provide value through quality to justify higher prices
Issues
Insights
How fast casuals build brand loyalty among consumers
Issues
Insights
The corporate responsibility initiatives that resonate most with consumers
Issues
Insights

Trend Applications
Trend: Moral Brands
Trend: Factory Fear
Mintel Futures: Human

Market Size and Forecast
Key points
Market size insight
Sales and forecast of fast casual restaurants
Figure 7: Total US sales and forecast of fast casual restaurants, at current prices, 2008-18
Figure 8: Total US sales and forecast of fast casual restaurants, at inflation-adjusted prices, 2008-18
Fan chart forecast
Figure 9: Total US sales and fan chart forecast of fast casual restaurants, at current prices, 2008-18

Market Drivers
Availability of capital
Economic indicators
Figure 10: Changes in behavior at fast casual restaurants, by increased behavior, July 2013
Rising commodity prices
Calorie disclosure legislation
Food allergies
Gluten-free claims defined by government
Healthy diet and active lifestyle
Millennials drive usage

Competitive Context
Quick service restaurants
Full-service restaurants
Grocery stores
Food trucks
Convenience stores
Fast casual restaurants

Featured Companies
Altruistic concepts
BFY
Grilled cheese concepts
American concepts
Asian concepts
Other concepts

Innovations and Innovators – Menu Items
Upscale items
Unique protein
Customization
Sandwiches
Beverages
Alcohol offerings
LTOs

Innovations and Innovators – BFY
Calories
Gluten free
Freshness
Functional
Local sourcing
Healthful protein

Innovations and Innovators – Operational
Treatment of people
Mobile technology
Eco-friendly
Renovations
In-store technology

Marketing Strategies
Overview of the brand landscape
Visual media
Out of home
Social media
Sweepstakes and contests
Retail items
Entertainment and sponsorships
Causes and charitable programs
Local community involvement

Coupons and Loyalty Programs
Freebies
Loyalty programs
Figure 11: Drivers for fast casual restaurants, by more deals, July 2013

Menu Analysis – Food Analysis
Segment overview
Figure 12: Segment breakdown of food menu items, by incidence, Q2 2010-13
Menu sections
Figure 13: Food items by menu section at fast casual restaurants, by incidence, Q2 2010-13
Geographical claims
Figure 14: Top 10 geographical claims for food at fast casual restaurant menus, by incidence, Q2 2010-13
Marketing claims
Figure 15: Top 10 marketing claims for food at fast casual restaurants, by incidence, Q2 2010-13
Nutritional claims
Figure 16: Top 10 nutritional claims for food at fast casual restaurants, by incidence, Q2 2010-13

Menu Analysis – Drink Items
Segment overview
Figure 17: Segment breakdown of non-alcoholic beverage menu items, by incidence, Q2 2010-13
Menu items
Figure 18: Top 10 beverage item types at fast casual restaurants, by incidence, Q2 2010-13
Marketing claims
Figure 19: Top 10 marketing claims for beverage items at fast casual restaurants, by incidence, Q2 2010-13
On-premise alcohol overview
Figure 20: Segment breakdown of alcoholic beverage menu items, by incidence, Q2 2010-13
On-premise alcohol items
Figure 21: Top 10 alcoholic beverage types at fast casual restaurants, by incidence, Q2 2010-13

Consumer Trends Overview
Key points
The most popular fast casuals are pizza, burger, and Mexican concepts
Figure 22: Fast casual restaurant usage and dayparts, July 2013
Figure 23: Fast casual restaurant usage and dayparts – Nets, July 2013
Consumers are cooking more at home and visiting fast casuals less
Figure 24: Changes in behavior at fast casual restaurants, July 2013
People select fast casuals by variety of items, freshness, and convenience
Figure 25: Drivers for fast casual restaurants, July 2013
Consumers are encouraged by BOGOs, printed coupons, and daily specials
Figure 26: Effectiveness of deals at fast casual restaurants, July 2013
Food safety and treatment of employees is of top importance to consumers
Figure 27: Important value-added attributes of fast casual restaurants, July 2013
Consumer behavior at fast casual restaurants
Figure 28: Consumer behavior at fast casual restaurants, July 2013

Consumer Trends by Daypart
Key points
Usage behavior and cross-over opportunities between dayparts
Figure 29: Fast casual restaurant usage and dayparts, by daypart usage, July 2013
Figure 30: Dayparts restaurant usage, by daypart usage, July 2013
Breakfast users have increased their usage of coupons at fast casuals
Figure 31: Changes in behavior at fast casual restaurants—More, by daypart usage, July 2013
Breakfast users indifferent to combos; late night users seek portion options
Figure 32: Drivers for fast casual restaurants, by daypart usage, July 2013
Breakfast users like online coupons; late night users like mobile coupons
Figure 33: Effectiveness of deals at fast casual restaurants, by daypart usage, July 2013
Dinner users find nutritional claims, charity, and cause marketing important
Figure 34: Important value-added attributes of fast casual restaurants, by daypart usage, July 2013
Dinner users are least likely to use deals, while late night users find frequent visits too expensive
Figure 35: Consumer behavior at fast casual restaurants, by daypart usage, July 2013

Consumer Trends by Gender
Key points
Men lead in usage of fast casual restaurants
Figure 36: Fast casual restaurant usage and dayparts, by gender, July 2013
Figure 37: Dayparts restaurant usage, by gender, July 2013
Women are eating healthier at fast casuals, but also cooking at home more
Figure 38: Increases in behavior at fast casual restaurants, by gender, July 2013
Women prefer fresh ingredients and healthfulness; men prefer fast service
Figure 39: Drivers for fast casual restaurants, by gender, July 2013
Women are more likely than men to use printed coupons
Figure 40: Effectiveness of deals at fast casual restaurants, by gender, July 2013
Women are more likely than men to find value-added attributes important
Figure 41: Important value-added attributes of fast casual restaurants, by gender, July 2013
Women are influenced by deals, while men visit often due to their routines
Figure 42: Consumer behavior at fast casual restaurants, by gender, July 2013

Consumer Trends by Age
Key points
Older Millennials are key users among most concept types and for dinner
Figure 43: Fast casual restaurant usage and dayparts, by age, July 2013
Figure 44: Dayparts restaurant usage, by age, July 2013
Millennials have increased fast casual usage and on-the-go snacking
Figure 45: Increases in behavior at fast casual restaurants, by age, July 2013
Young users seek speed and customization; older users value freshness
Figure 46: Drivers for fast casual restaurants, by age, July 2013
Millennials are encouraged by punch cards, LTOs, and group deals
Figure 47: Effectiveness of deals at fast casual restaurants, by age, July 2013
Millennials consider nutritional claims significant while sourcing and green packaging decrease in importance with age
Figure 48: Important value-added attributes of fast casual restaurants, by age, July 2013
Millennials are concerned with corporate responsibility of fast casuals
Figure 49: Consumer behavior at fast casual restaurants, by age, July 2013

Consumer Trends by Income
Key points
Likelihood of visiting a bakery café grows with income
Figure 50: Fast casual restaurant usage and dayparts, by household income, July 2013
Figure 51: Dayparts restaurant usage, by household income, July 2013
Low-income consumers are cooking at home, middle class is using more coupons, and the affluent are seeking healthy items
Figure 52: Increases in behavior at fast casual restaurants, by household income, July 2013
Poor users value speed and combo meals; middle-class users value variety and customization; the affluent value high-quality, upscale items
Figure 53: Drivers for fast casual restaurants, by household income, July 2013
The affluent prefer group deals and low-income consumers like daily deals
Figure 54: Effectiveness of deals at fast casual restaurants, by household income, July 2013
Low-income consumers more likely to find value-added attributes to be important; middle class places emphasis on nutritional claims
Figure 55: Important value-added attributes of fast casual restaurants, by household income, July 2013
Low-income groups find fast casuals too expensive for regular use, while the affluent seek out favorite brands
Figure 56: Consumer behavior at fast casual restaurants, by household income, July 2013

Consumer Trends by Race
Key points
Asians dominate fast casual usage specifically for breakfast and lunch
Figure 57: Fast casual restaurant usage and dayparts, by race origin, July 2013
Figure 58: Dayparts restaurant usage, by race, July 2013
Blacks cook at home more; Asians increase loyalty program usage
Figure 59: Increases in behavior at fast casual restaurants, by race, July 2013
Whites seek variety and convenience, while Asians look for healthfulness
Figure 60: Drivers for fast casual restaurants, by race, July 2013
Whites prefer printed coupons, Blacks like mobile ordering, and Asians are encouraged by online coupons, reward points programs, and group deals
Figure 61: Effectiveness of deals at fast casual restaurants, by race, July 2013
Blacks are more focused on community and charity, while Asians find ingredients and environmental initiatives to be important
Figure 62: Important value-added attributes of fast casual restaurants, by race, July 2013
Blacks visit brands with similar values, while Asians budget to afford visits
Figure 63: Consumer behavior at fast casual restaurants, by race, July 2013

Consumer Trends by Hispanic Origin
Key points
Hispanics use each concept type and daypart more than non-Hispanics
Figure 64: Fast casual restaurant usage and dayparts, by Hispanic origin, July 2013
Figure 65: Dayparts restaurant usage, by Hispanic origin, July 2013
Hispanics purchase more healthy meals and snack items than last year
Figure 66: Increases in behavior at fast casual restaurants, by Hispanic origin, July 2013
Hispanics are more likely driven by combo meals and gourmet ingredients
Figure 67: Drivers for fast casual restaurants, by Hispanic origin, July 2013
Hispanics are enticed by daily special pricing and mobile payment
Figure 68: Effectiveness of deals at fast casual restaurants, by Hispanic origin, July 2013
Hispanics look for brands that support artists, the community, and charity
Figure 69: Important value-added attributes of fast casual restaurants, by Hispanic origin, July 2013
Hispanics budget for routine visits to brands that do good for the world
Figure 70: Consumer behavior at fast casual restaurants, by Hispanic origin, July 2013

Consumer Trends by Region
Key points
Northeasterners use bakery cafés and visit for breakfast and late night, while Westerners are more likely to visit Mexican and Asian concepts
Figure 71: Fast casual restaurant usage and dayparts, by region, July 2013
Figure 72: Dayparts restaurant usage, by region, July 2013
Northeasterners have increased ordering healthy items
Figure 73: Increases in behavior at fast casual restaurants, by region, July 2013
Midwesterners find customization at fast casuals to be important
Figure 74: Drivers for fast casual restaurants, by region, July 2013
Midwesterners prefer printed coupons and Southerners like BOGO deals
Figure 75: Effectiveness of deals at fast casual restaurants, by region, July 2013
Northeasterners value fair treatment of animals, sourcing, and local artists
Figure 76: Important value-added attributes of fast casual restaurants, by region, July 2013
Northeasterners are less likely to value fast casuals over fast food restaurants, while Westerners are least likely to justify the higher prices
Figure 77: Consumer behavior at fast casual restaurants, by region, July 2013

Consumer Trends by Presence of Children
Key points
Consumers living with children visit pizza fast casuals and for snacks
Figure 78: Fast casual restaurant usage and dayparts, by presence of children in household, July 2013
Figure 79: Dayparts restaurant usage, by presence of children in household, July 2013
Consumers living with children increased spending and items purchased
Figure 80: Increases in behavior at fast casual restaurants, by presence of children in household, July 2013
Respondents that do not live with children value variety and convenience; respondents that live with children seek customization
Figure 81: Drivers for fast casual restaurants, by presence of children in household, July 2013
Respondents with children prefer online coupons, rewards points programs, mobile coupons, and mobile payment
Figure 82: Effectiveness of deals at fast casual restaurants, by presence of children in household, July 2013
Consumers living with children value artists, charity, and community
Figure 83: Important value-added attributes of fast casual restaurants, by presence of children in household, July 2013
Presence of children increases visitation of brands doing good for the world and the propensity to research corporate responsibility initiatives
Figure 84: Consumer behavior at fast casual restaurants, by presence of children in household, July 2013

Appendix – Other Useful Consumer Tables
Figure 85: Fast casual restaurant usage and dayparts, by consumers who increased usage, July 2013
Figure 86: Dayparts restaurant usage, by consumers who increased usage, July 2013
Figure 87: Drivers for fast casual restaurants, by consumers who increased usage, July 2013
Figure 88: Effectiveness of deals at fast casual restaurants, by consumers who increased usage, July 2013
Figure 89: Important value-added attributes of fast casual restaurants, by consumers who increased usage, July 2013
Figure 90: Consumer behavior at fast casual restaurants, by consumers who increased usage, July 2013
Figure 91: Fast casual restaurant usage and dayparts, by consumers who increased eating elsewhere, July 2013
Figure 92: Dayparts restaurant usage, by consumers who increased eating elsewhere, July 2013
Figure 93: Changes in behavior at fast casual restaurants, by consumers who increased eating elsewhere, July 2013
Figure 94: Drivers for fast casual restaurants, by consumers who increased eating elsewhere, July 2013
Figure 95: Effectiveness of deals at fast casual restaurants, by consumers who increased eating elsewhere, July 2013
Figure 96: Important value-added attributes of fast casual restaurants, by consumers who increased eating elsewhere, July 2013
Figure 97: Consumer behavior at fast casual restaurants, by consumers who increased eating elsewhere, July 2013
Figure 98: Fast casual restaurant usage and dayparts, by consumers who increased deal usage, July 2013
Figure 99: Dayparts restaurant usage, by consumers who increased deal usage, July 2013
Figure 100: Increases in behavior at fast casual restaurants, by consumers who increased deal usage, July 2013
Figure 101: Effectiveness of deals at fast casual restaurants, by consumers who increased deal usage, July 2013
Figure 102: Important value-added attributes of fast casual restaurants, by consumers who increased deal usage, July 2013
Figure 103: Consumer behavior at fast casual restaurants, by consumers who increased deal usage, July 2013

Appendix – Market Drivers
Consumer confidence
Figure 104: University of Michigan’s index of consumer sentiment (ICS), 2007-13
Unemployment
Figure 105: US unemployment rate, by month, 2002-13
Figure 106: US unemployment and underemployment rates, 2007-13
Figure 107: Number of employed civilians in US, in thousands, 2007-13
Food cost pressures
Figure 108: Changes in USDA Food Price Indexes, 2011-14
Obesity
Figure 109: American adults by weight category as determined by BMI (body mass index), 2008-June 20, 2013
Childhood and teen obesity – highest in decades
Figure 110: Prevalence of obesity among children and adolescents aged 2-19, 1971-2010
Racial, ethnic population growth
Figure 111: US population by race and Hispanic origin, 2008, 2013, and 2018
Figure 112: Households with children, by race and Hispanic origin of householder, 2012
Shifting US demographics
Figure 113: US population, by age, 2008-18
Figure 114: US households, by presence of own children, 2002-12

Appendix – Trade Associations