In my career, I have never seen this much change in our industry. In fact, it could best be described as a DISRUPTIVE time. Now I happen to like change, so this excites me because it’s a time to evolve, transform, and determine “what’s next” for your brand. In May, I headed to Chicago for ideas/insights at NRA and wanted to share a few highlights from the NRA sessions, the Floor, and the City of Chicago itself. Some Show summaries have been written already, but I am confident that you will find at least 1-2 new ideas here.
➡️ There were two strong NRA sessions on Fast Casual (FC) – one by Technomic and one featuring 3 FC CEO’s. Recent headlines have implied that the newest segment is having trouble… and may be falling like all of the others. My view is that while FC is maturing, it has by no-means, peaked.
- FC has doubled in share from 2007–>2016. It is now 18% of total QSR/Fast Casual and nearly $50 Billion annually. Technomic forecasts it will exceed 20% share by 2021.
- While both “better burger” and FC pizza chains seem to have proliferated, they only represent 4-5% of total QSR/FC burger or pizza sales. Unit expansion may slow down here, but these share numbers will increase
- Finally, 7 of the 10 fastest growing chains over the past 5 years have been Fast Casual.
➡️ Carl Howard, CEO of Fazoli’s, Adam Goldberg, CEO of Fresh Brothers, and Paul D’Amico, President of Focus Brands, all agreed that today’s biggest challenges are traffic and turnover. Their brands, despite being relatively new, are continuing to innovate and “push” towards the next level in order to stay out in front of its competition:
- Fazoli’s is currently rolling out a menu with no artificial ingredients or preservatives following a $1.5 Million investment to do so.
- Focus Brands has taken all of its brands OFF of national TV and appears to be delving into “big data” as the basis for its Marketing efforts.
- Fresh Brothers – with 18 units – is including pick up areas in its newest units to meet some of their guests’ needs to get in and out without talking to anyone! (Yes, really!)
Best quote from Paul D’Amico of Focus Brands:
“I’m still trying to figure out how to get the calories on Cinnabon’s menu boards.”
➡️ I enjoyed participating in NRN’s Beverage Marketing Roundtable sponsored by Whirley DrinkWorks! and lead by NRN Senior Editor, Ron Ruggless. I learned a great deal from beverage experts Andrea Benzschawel of Buffalo Wild Wings, Eric Brown of Mellow Mushroom, Nate Grover of Applebee’s, Jessica Osborne of McAlister’s Deli, David Morgan, VP F&B, of Omni Hotels, and Ira Gleser of Whirley DrinkWorks!. Watch for the major article in NRN coming out later this summer.
➡️ It would not be a National Restaurant Show without Nancy Kruse, President –The Kruse Company – who gave her annual “State of the Menu” and it was superb. Here are my highlights:
- Nancy shared a Datassential forecast that Prepared Foods will be the fastest growing segment for grocery stores in 2017 at +3.8%
- NPD Recount reported the biggest decrease in US restaurants since 2008 declining -2%. We all knew that supply had outstripped demand, and this is a positive signal for the future.
Here are six trends that Nancy highlighted – and brands that are leading the way:
- Clean, Free-Form Foods: Panera, Fazoli’s; Chipotle – 51 Real ingredients; Papa Johns – testing organic ingredients
- Veggie Centric: Hard Rock – Cauliflower Burger, California Pizza Kitchen – Spicy Buffalo Cauliflower
- Protein Expansion: PF Chang – Chengdu Spiced Lamb, Arby’s Smokehouse Pork Belly, Free Range Venison
- New Sides: Quinoa +39%, Tater Tots +30%, Kale +27%
- Portion Options: Au Bon Pain “Petit Plates” (snack portions)
- Fun with Your Food: Burger King Froot Loop Shake
➡️ Roister is a highly rated new restaurant in Chicago. What struck me here (beyond the terrific food and service) was the restaurant design. Roister is the best example I have seen of making the kitchen the center of the restaurant. It literally projects into the dining room, providing a heightened energy, and the ability for their chefs to interface with the guest. The open fire cooking adds to the excitement, and a unique experience, which Zagat describes as “upbeat dining”.
➡️ A good friend recommended I stop into Mariano’s Fresh Market, which Google calls an “elevated local grocery chain”. What I saw here was absolutely incredible: the first floor was 90% foodservice offerings with dedicated “shops”: fresh oyster bar, sushi, pizza, grill – burgers, chicken and $1 hot dogs, made-to-order salads, gelato, chocolates and a full bar! I felt that the ambiance was a little wonky, while my colleague was smitten with the scene of shoppers sipping wine and a gentleman playing a grand piano. The experience was difficult to define being a combination of hipster bar, foodservice-to-go and grocery store. But the variety, convenience, and value were there. The competitive set for our industry has clearly expanded, and we have to take this into account, as we look at our own brands.
I did not get to walk the entire show this year, but here are a few things that caught my eye:
So if you could use someone who’s comfortable with DISRUPTION/CHANGE and how to make it work for your business, or you want to talk about anything described here, call or text me at 303-885-3467. And, don’t forget to follow me on Facebook @growthpartnersllc.
For nearly fifteen years, Growth Partners, LLC has provided outsourced Chief Marketing Officer consulting to restaurant companies. I am a fresh set of eyes for current CMOs, as well as an Interim or Part-Time CMO for concepts looking to grow their businesses and brands. Learn more at www.growthhq.com.