The Fast-Casual Foodscape
Garrett Martin, Dartmouth Business Journal
Since starting school in Hanover, every time I return home for break I am invariably struck by the changes that have taken place in my absence. The gradual and otherwise imperceptible are made prominent when given a term to develop.
On this most recent trip home for the holidays I was greeted by a handful of new restaurants that had seemingly materialized from the ether. Recommendation and convenience lured me to one of these fresh entrants: Mendocino Farms. Offering gourmet sandwiches and salads, I expected a pleasurable if unexceptional dining experience. The sandwich was above average, but my attention was occupied by the restaurant itself rather than the food. I had never before seen such a blatantly contrived space in my life. It seemed as though every aspect of décor and detail of service was carefully engineered to sell an image of high-minded responsibility, integrity and chic. What was being sold here was a philosophy that the customer could righteously ascribe to themselves with the purchase of a meal. The centerpiece of the restaurant was not the sandwich, but the customer himself there to be seen with his arsenal of Apple products. Prominently displayed on a wall of the establishment is Jean Brillat-Savarin’s famous aphorism, “Tell me what you eat, and I will tell you what you are,” seemingly a public acceptance of their shallow pandering to the self-obsessed.
Though founded in 2003, Mendocino Farms is a borderline hyperbolic incarnation of the “fast-casual” category of dining. While boasting high quality and local ingredients, sustainability, and high-integrity labor practices, it seemed that they exemplified the very philosophical heart of the fast-casual industry.
The fast-casual category is somewhat nebulous. With no hard and fast rules or definitive definition, it is largely an ontological distinction. Even so, the industry has been ravenously accumulating market share, growing 550 percent between 1999 and 2015 (chart included). They tend to be limited service operations providing made-to-order meals at higher price points but with comparable preparation time to that of traditional fast food restaurants. What is uniquely attractive about this sector is its perceived integrity and purpose, as is made abundantly clear in the example of Mendocino Farms. To have a business model built on a foundation of conscientious business practices is feasible at smaller scales but inherently leads to fragility as the operation is scaled up.
This weakness has been exposed in Chiptole’s recent health debacles. After successive E. coli breakouts and a norovirus outbreak in December that resulted in a grand jury subpoena, Chipotle’s stock has been reeling (though at the time of this writing rebounded slightly upon news that they would be closing all of their stores to perform food safety instructions). As of Jan. 6, Chipotle’s stock price stood at losses of 41.93 percent YTD. This is in contrast to gains seen by various competitors like Panera Bread Company, which is up 6.66 percent over the same period. In a frenzy to quell public concern about the safety of their food, Chipotle reported that they will begin limiting their use of locally-sourced ingredients as well as centralizing much of their food processing. This fundamental dilemma between the logistics of scalability and the righteous philosophy that defines the business model is at the core of the fast-casual industry’s DNA. So far, however, Chipotle has been the only such company to have to reckon with this as few other fast-casual establishments have scaled up so much. Despite a spate of fast-casuals losing ground this past year, it would be safe to maintain a bullish view on the industry as a whole.
At the beginning of 2016, the National Restaurant Association surveyed 1,600 professional chefs asking what they felt the top food trends would be in the upcoming year. The top six were as follows: 1. Locally sourced meats and seafood, 2. Chef-driven fast-casual concepts, 3. Locally grown produce, 4. Hyper-local sourcing , 5. Natural ingredients/minimally processed food, 6. Environmental sustainability. This is practically an outline of the fast-casual ethos, suggesting the sector has a very bright year ahead of it.
The lack of a concrete definition for inclusion in the sector and the very promising outlook for the industry mean that it is possible for existing restaurants to rebrand themselves in the hopes of cashing in on the cache of the “fast-casual” classification. What this means is that a lot of the growth we can expect will be attributable to cannibalization in addition to new development. This rebranding is happening right now as fast-food chains flee from the now pejorative classification of “fast-food” from Dairy Queen’s “fan-food” and Arby’s “fast-crafted” fare to the striving “modern, progressive burger company” otherwise known as McDonald’s.
This center-ward shift is not only happening at the bottom end of the spectrum but also at the very top. As observed by New York Magazine’s Alan Sytsma, fine dining, at least as we conceive of it now, may be on its way out. Citing a devastating review of Per Se in this week’s New York Times that downgraded the paragon of fine dining from four to two stars, Sytsma pointed out the increasing aversion to the immense complexity and labor involved in providing the multi-hour tasting menu format generally expected from a fine-dining experience. Several fixtures of the fine-dining landscape are planning on adopting more casual formats in the near future and innovative, skilled chefs are increasingly abandoning the trials and tribulations of the elite foodscape for the fame and fortune promised them closer to the middle of the road.
So it seems as though this nebulous class of restaurant, “fast-casual” is the midpoint in this convergence theory of food. As everything trends towards homogeneity, however, we as a society will not be able to repress the taxonomic instinct that birthed “fast-casual” to begin with. So what do we have to look forward to? More and more similar restaurants distinguished from one another by a soup of hyphens.