December 20, 2011
December 22, 2011

While 2011 marked another year of operational challenges for the restaurant industry, there is a renewed sense of optimism as fast casual operators head into 2012.

As we look back on 2011 and reflect on its impact on the industry, several stories and trends stand out among the rest. Here are five successes.

1. Fast Casual heats up. This was the year of fast casual for casual-dining chains which have jumped to launch their own versions of the eateries.  Even quick-service restaurants have attempted to compete with their fast casual counterparts, upgrading interior designs and menus to reflect a higher quality experience for guests. In fact, visits to fast casual restaurants grew 17 percent throughout the last three years while the rest of the industry experienced its steepest traffic declines in decades. The increase and consumer demand for fast casual offerings exceeded the unit growth of leading fast casual chains.  Look for more casual-dining chains to launch fast casual restaurants in 2012.

2. Social responsibility. Stores do not tell customers what to pay for their meals. Rather, guests are asked to pay what they’d like to donate, whether it’s the full suggested price, less or more. A large coffee company led an industry-wide initiative to help victims of Japan’s tsunami and earthquake in March. Meanwhile, other chains partnered with Share our Strength to help end childhood hunger. National Restaurant Association partnered with the organization to help further its goals.

3. International growth. Chains in the fast casual segment set their sights on international shores as concepts signed franchise agreements for the Middle East, Singapore, Australia and Mexico. The increase of franchise agreements for international markets proves fast casual is not just a U.S. phenomenon. The expansion plans are a step in the right direction considering that for the past two years restaurant chains scaled back their expansion efforts in the United States, opting to wait out the recession. But toward the end of 2010 and throughout 2011, announcements were made almost weekly communicating franchise agreements destined to expand the dining footprint in countries across the globe.

4. Children’s nutrition. The trend of offering healthier menus for children has been mentioned for several years in the National Restaurant Association’s industry forecast. More chains in 2011 launched or expanded their children’s menu. NRA unveiled its Kids LiveWell healthy menu initiative in partnership with Healthy Dining. So far, 28 restaurant chains have signed up for the program, designed to offer healthier menu selections to children. The primary focus of the program is to encourage an increase in consumption of fruits and vegetables, lean proteins, grains and low-fat dairy, and to limit unhealthy fats, sugars and sodium.

5. Consumer health. The USDA has replaced its 19-year-old Food Pyramid with MyPlate. While no specific action was taken by fast casual operators, the USDA’s new MyPlate guideline was unveiled in June by First Lady Michelle Obama and Agriculture Secretary Tom Vilsack. The USDA’s MyPlate icon is designed to be a guide to help Americans make healthier food choices. The initiative promotes an increase in fruit and vegetable intake, and encourages a switch to whole grains and fat-free or low-fat milk, and a reduction in sodium intake and sugary drinks. One-quarter of the plate is devoted to protein intake, including lean meats, fish and poultry.

One flop.  Americans were taken with America’s Next Great Restaurant and its winner, Soul Daddy, but not enough to keep the 3-unit chain afloat. Upon winning as America’s Next Great Restaurant in May, Soul Daddy opened locations in New York, Los Angeles and in Minnesota’s Mall of America. Two of those locations closed in early June with the Minnesota location closing a few weeks later.

Soul Daddy was the brainchild of Detroit resident Jamawn (Jay) Woods. The restaurant’s original premise was soul food such as fried chicken and waffles; however, several menu changes were made to reflect a healthier offering of items.

While the show’s four judges/investors, Bobby Flay, Curtis Stone, Lorena Garcia and Steve Ells, did not publicly reveal the level of their investments in Soul Daddy, each one was expected to contribute the same amount for a total of $880,000. In addition to Ells’ contribution, Chipotle also plunked down $2.3 million in exchange for equity interest. The closures gave a momentary black eye to the restaurant industry and its judges. Here’s hoping 2012 is a better year.

Source: 12/16/11

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