Food Trends - Fast Food Industry Moving Upscale

Pioneering QSR brands see upscale as the differentiator

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Fast Food Industry is Going Upscale

Pret A Manger best illustrates the fast food industry food trend moving to upscale. The UK based sandwich shop chain with locations in New York, Chicago and Washington DC is an urban restaurant concept catering to upscale, urban, time starved, health conscious consumers. Fast food or Quick Service Restaurants (QSR) menu offerings are super-sized meals which add to the already alarming obesity rate in the US.

Pret A Manger is one QSR brand that is bucking the trend successfully.

I visited the Union Square Pret in Manhattan and it struck me that the menu and ambiance felt like fast casual yet it also operated like a quick service restaurant. Their menu offering was what I call "right-sized"… not supersized. I walked away with thinking Pre is pioneering a new segment called Upscale QSR.

Upscale QSR Food Trends

The fast food industry does not have a designator of Upscale QSR. But upscale fast food is one of those things that "when you see it, you know it". Why is this happening? Fast Casual has been the driving force of foodservice growth and Panera Bread and Chipotle Mexican Grill are highly visible examples to the consumer. Chipotle got a boost of free PR in the NBC Reality TV series, Americas Next Great Restaurant (which was a major flop) - Steve Ells, the founder, was one of the celebrity judges picking the next to-be successful fast casual restaurant.

QSR Restaurants McCafe and Tim Horton's moving Upscale

City TV in Toronto did a short news report on Fast Food Goes Upscale. Check out the video. The reporter visits a new McDonalds with what appears to be a new McCafe format. Besides the successful McCafe line of espresso beverages, the new McCafe format has soft lighting, plush chairs, granite countertops, jet black designer food trays and free WiFi.

The Canadian Donut Shop chain, Tim Horton is following suite with similar changes in plush seating and significant changes in restaurant ambiance. Tim Horton will be expanding their menu with upscale espresso drinks, ala McCafe.

So, Why is the Fast Food Industry Moving Upscale?

Fast Food Industry is Slowly Moving Upscale

Consumers don't say …"let's go out tonight for fast food… fast casual… or casual?". Consumers base their decisions on convenience, ambiance, budget, what their family wants, menu options, and the brand of restaurant. Some quick service restaurants have shown they can move up the chain to be more upscale in menu and ambiance. McCafe has proven this driving McDonalds same store sales consistently .

Brands like a Subway may have a more difficult time pulling this off. Food trends are at best, educated guesses, so it is still too soon to predict fast food trends for 2012… so it will be something I will be following closely in the future.

Food Trends - Upscale QSR

Steven Johnson, the Grocerant Guru, is my go to person for foodservice insight so here is Steve's take on the fast food trend of Upscale Fast Food :

"There is a universal commonality in consumer retail food preferences, particularly in flavor profiles and acceptable ambiance. The Quick Service Restaurants (QSR) were all alike in look, feel, menu and price. Today most legacy food retailers are playing catch-up. They are catching up to Starbucks, who captured a huge share of food and beverage market share by moving "up-scale". The global success of Starbucks reflects the universal commonality of "up-scale" QSR's. McDonalds began the process of "up-grading" ambiance on a global basis as well and the results have been stellar for both the top and bottom line.

The cycle of up-grading food offerings and ambiance has not been limited to the restaurant sector. Retailing trends show that convenience stores have dramatically improved food and beverage quality, service and ambiance producing higher per-unit sales than many legacy QSR's. Sector leader Sheetz and Wawa have both attained "up-scale" status in the mind's eye of the consumer.

Grocery sector companies the ilk of Wegman's, Whole Foods and Central Market are offering high quality ready-2-eat and heat-N-eat fresh prepared food in store driving an increase in customer frequency and loyalty. What's important for all retailers to understand is the consumer is dynamic not static and always moves forward."

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