Fast-casual growth poses produce opportunity

01/17/2014 10:19:00 AM
Tim York

Tim York, Markon CooperativeTim York, Markon CooperativeA year or so ago, Forbes named one company “America’s Most Promising.”

Was it a technology start up? A resurgent U.S. automaker? Actually, it was Smashburger, a shining star among many bright lights in the fast-casual segment of foodservice.

Fast-casual concepts continue to outpace overall restaurant sales. The segment accounts for around $31 billion of the $660 billion restaurant industry (less than 5%), but is driving industry growth, posting sales increases of 13.2% in 2012, compared to an average of 3%, according to FastCasual.com and Technomic.

Forbes credits the segment as a whole for offering more interesting food in a nicer environment than quick-service restaurants and for doing so at just a modest premium over the average quick-service restaurant ticket.

What does this mean to the produce industry?

Depending on how we respond — in terms of production, operations and outreach — fast-casual dominance is great news for specialty crops.

Chipotle’s approach is well documented: promoting “food with integrity,” it offers made-to-order meals with a variety of fresh produce.

Panera Bread, alongside its namesake carbs, offers produce-rich pastas and soups and a wide range of salads, from Caesar and Cobb to seasonal favorite Signature Strawberry Poppyseed.

Many fast-casual restaurants are also showcasing health and wellness prominently in their marketing, and highlighting fresh produce on menus.

Many in the industry cite the salad subsegment for helping foodservice meet demand for quick, healthy options. A recent Technomic report emphasized the importance of bold flavor and unique menu selections to salad shop core customers.

At Markon, we’ve seen regional chains Freshii and Mad Greens — which recently received a significant investment by the Coors family — grow by focusing on the quality and variety of their fresh produce.

Another subsegment, Mediterranean, was showcased in United Fresh Produce Association’s debut “Fresh Insights Report.” Encompassing Greek, Indian and Middle Eastern restaurants, these stores use vegetables on the menu and in marketing to invoke the benefits of the Mediterranean diet.

Smaller, niche concepts like these may have more need for fresh produce product experts at their sides, given their smaller or still-developing food safety and product development teams.

Worried you’ll be less relevant if you’re not offering “on-trend” products like kale or the next new thing?

Not necessarily. Some of our colleagues have succeeded by making what’s old new again.

Mann Packing reports that demand exceeds supply for its Better Burger leaf, an iceberg and romaine hybrid developed in response to demand for leaves closer in shape to burgers.

Church Brothers’ Teen Greens and Misionero’s Lettuce Stackers likewise target specific needs for ready-to-use greens.

Bottom line: It can pay to take a fresh look at your production, core products and communications plan in light of fast-casual’s success.

How can your products capitalize on the growth of fast-casual restaurants? What about specific segments? What steps are you taking to make sure operators know how your products fit into their strategy and, more ambitiously, see you as a menu development resource?

Crystal ball readers say 2014 will mark the year when new “better pizza” outpaces “better burgers.”

Concepts offering customizable, made-to-order pies have been proliferating (for example, Blaze). Chipotle announced it’s working on a pizza concept.

QSR operators are responding to the growth in fast-casual. Taco Bell, Wendy’s and McDonald’s are upgrading their interiors and the nutritional profile of their menus. If those major chains remain your targets, understanding the competitive threat is equally important.

No matter how you slice it, the growth of fast-casual restaurants is not waning, and the produce industry is well positioned within the segment.

Tim York is CEO of Salinas, Calif.-based Markon Cooperative, which is made up of eight North American foodservice distributors. Centerplate is a monthly column offering a peek at “what’s now and next” for foodservice and the implications for the produce industry. York’s mission is to help the produce industry capitalize on opportunities and expand the role of produce on foodservice menus. Send Tim your suggestions at timy@markon.com, or start a dialogue in the comments section on this column.

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