The Rapid Ascent of Fast Casual Dining

Americans have had a love affair with fast food since the golden arches first arose on the landscape. But some newcomers are giving fast food a run for its money. National chains such as Panera, Chipotle Mexican Grill, Sweetgreen, Freshii and Verts Mediterranean Grill, have taken the idea of food served quickly and put a fresh spin on it.

The emphasis for fast casual dining is on fresh ingredients, often locally sourced, and the customer’s ability to customize her meal. Whether the menu theme is Mexican or Mediterranean, the options are healthier than the traditional burger and fries. Even for a fast casual chain like Shake Shack that does deal in burgers and fries, ingredients are high quality (like 100% all-natural Angus beef) and vegetarian options are aplenty.

The concept resonates with health-conscious and environment-conscious millennials Since 1999, the fast casual market has grown by 550 percent. And with millennials comprising the nation’s largest living generation, that trend is likely to continue.

In addition to their menu concepts, fast casual restaurants appeal with their hip décor. Reclaimed wood, recycled materials, artwork from local artists, big communal tables, and of course free wi-fi create an environment that is more earth-tone and less primary color. One chain, Sweetgreen, treats every site a little differently so that each location’s style reflects the community and in some cases, the architecture of the building they’re located in.

And what exactly are these fast casual restaurants looking for when they scout locations? In the case of Verts Mediterranean Grill, opening a location in Center City Philadelphia was an easy decision: Philadelphia has one of the country’s largest populations of millennials, and Center City has the lunchtime density that fast casual restaurants want.

Verts worked with Metro to find a location with high visibility in the heart of the business district. So far, so good. When it opened in March, the line was literally around the corner–during a snow squall.

The sweet spot for the square footage of these fast casual restaurants is 1,500 to 2,000 square feet. And the model has proven attractive for even established chefs and investors. Although the average receipt is far less than a restaurant with table service ($9 to $15), the volume is far greater and the investment to finish and furnish fast casual is far less.   Customers are also very loyal when they find a place and a menu they like. That kind of loyalty can create a halo effect for other businesses in the area, a big plus for landlords.

The picture looks good for fast casual in urban areas and in dense suburbs with the lunch business to support them. And even fast food giants like McDonalds are tweaking their menus so that they offer not just fast, but fresh.



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