One of the mainstays of the restaurant industry is the fast food concept but things seem to be changing in this market faster than you can say, “would you like fries with that?” An interesting industry dynamic affecting QSR’s is the growth of fast-casual concepts offering high-quality, creative and healthy menus at slightly higher price points and with more customization. As a result, QSR’s are evaluating menu items and whole concepts to attract this market. Conversely, full dining restaurants are responding to consumer interest in high-quality yet convenient fare by creating “quick stop” or mini versions of their full restaurants. Join us for a speedy look at what’s on the tray, in the bag or the bun of the limited service market.
The limited service restaurant market has proven its ability to be recession proof with an approximate 2.5% growth per year since 20091. With current QSR industry revenue at $261 billion2, these concepts have remained relevant by revamping menu options to be more healthful and by offering flavor-grabbing choices. Think grilled, Mediterranean-spiced marinated chicken with premium, unique, and flavor-packed sauces or dips that take a fast food ho-hum to humdinger.
Consumer Trends in QSR’s
- Health and wellness – Consumers, especially Baby Boomers and Millennials, are more health conscious than ever. To keep up, QSR’s are responding by posting calorie content on their menus, providing ingredient sourcing information and creating low/reduced fat and sodium offerings chock-full of great flavor. Healthier grain and vegetable ingredients in salads, breads, and sides will become the norm and gain widespread consumer acceptance.
- Gotta Stay Mobile – Today’s fast paced world is driven by convenience, mobility and speed. QSR’s are answering with apps that allow consumers to order on cell phones or from tablets, even while in the drive-thru. In addition, QSR loyalty programs will become routine offerings to keep customers coming back for more. 29% of chefs surveyed feel that ordering from a tablet is a hot trend along with 26% who believe an app will do the trick.3
- Food Truck 2.0 – Food trucks are the ultimate in QSR’s and today’s trucks more than compete with traditional concepts. Expect to see portable mini-carts at concerts, sporting events and entertainment venues make their way into smaller spaces where their older siblings can’t quite fit.
- Big Goes Casual – Full-scale dining concepts want their piece of the fast casual market. Players like Cracker Barrel and Applebee’s have announced plans to make mini-versions of their operations to extend their brand’s reach. Expect to see some of these concepts in mid-2016.
- Snack Joint Ventures – QSR’s are incorporating snack food favorites into lunchtime concepts. Think a favorite corn snack chip paired with a sandwich chain’s new creation like Subway’s Fritos Chicken Enchilada Melt or a Dunkin Donut’s iced coffee with flavors inspired by Baskin Robin’s favorite ice creams..4
- A Pie for all Pizza Lovers – The world of pizza has an exciting future ahead as concepts explore healthy artisanal toppings, crusts and flavor mash-ups. New to the category in the last few years and expected to explode, is the fast casual pizza concept. With investors like Chipotle and Buffalo Wild Wings, new fast casual pizza places that promise pies in 5 minutes are popping up nationally. Consumers, especially Millennials – who grew up with uniquely topped pies, will flock to these concepts as they are rolled out in the coming year.5
- Southern Comfort – head to Chicago for a pimento cheese burger seen at Big Jones or try a Southern style chicken sandwich for breakfast encased in a flakey biscuit.6 Either way, biscuits are hot right now and seen on all menu types like Carl’s Jr. with their April 2015 launched Mile High Bacon Egg and Cheese Biscuit and Taco Bell’s new Biscuit Taco introduced in March of this year.
- Fermented not Fried – Whether topping street tacos or accompanying fish n’ chips, slaws can be tasted everywhere. The popularity of fermented flavors is driving this obsession to the point of where DIY kits are popping up at gourmet food stores across the country. Fermented veggies are the royal crown responsible for fueling the consumer’s obsession with sandwiches like the banh mi. Kimchi is the darling of the food truck world especially in Austin, Texas where the Kimchi Fry is a favorite at local phenomenon, Chi’lantro.
- Ethnic Cuisines – America’s love for all foods international has traveled further east and deeper South to include dishes from Malaysia and Peru. Expect to see fine dining influences and ethnic ingredients make their way to QSR’s especially in the breakfast category, like Asian-flavored syrups or chorizo scrambled eggs.
- Hand held Everything – From SoCal comes Cream, a hot new ice cream sandwich concept is customizing the childhood favorite with 10 varieties of cookies and 20 flavors of ice cream. And if you love sushi but not chopsticks, visit New York’s Uma Temakeria where hand held seaweed sushi cones take customization and consumer creativity to a whole new level. You can play with your food and use your hands to eat it!
Consumers’ fast pace lifestyle and interest in healthy, flavor-rich ingredients and preparations shows no sign of slowing down. And their desire to be involved in the flavors and ingredients that make up their meals is only limited by the QSR’s and fast casual concepts ability to customize. We expect the fast casual category to continue to lead the industry in growth and innovation and are excited to see what else we might be eating out of hand. And of course, we think our ingredients could make it all taste even better!
- “What’s Hot in 2015” Survey, National Restaurant Association, 2015.
- http://www.qsrmagazine.com/marc-halperin/surprise-pies, September, 2014.