It's a good time to be in the business of slinging bowls of food for office lunch crowds.
— Erika Adams
Slowing traffic may be a concern for traditional quick service restaurants but the pain has yet to hit the fast casual market, where consumers are lining up for responsibly-sourced salads and grain bowls with increasing regularity.
According to new data released by market research firm the NPD Group, there are 25,312 total fast casual units in operation in the US, based on the firm’s most recent restaurant census data collected in fall 2018. The total unit count is up one percent from last year. Traffic is up by 3 percent in the fast casual sector, while total U.S. foodservice traffic remained flat.
The top five markets for fast casual chains by sheer number of locations are Los Angeles, Dallas-Fort Worth, New York City, Chicago, and Washington D.C., respectively. The sector is starting to branch out into much smaller markets as well. In the report, NPD called out an 100 percent jump in fast casual market growth in North Platte, Nebraska, where the town went from supporting one to two fast casual restaurants.
The Big Winners
In the past year, the fast casual market darlings have been sweeping up funding and expanding at a rapid rate. Sweetgreen topped a $1 billion valuation last fall (and then pivoted away from going the route of a public offering), Dig Inn recently closed another funding round to bring its total amount raised to $71.5 million, Cava snapped up ailing full service chain Zoe’s Kitchen to triple its total footprint, and several legacy casual dining chains have started to experiment with fast casual offshoots.
Runway for Growth
The sector has a long way to go before it eats up a significant amount of market share compared to traditional quick service restaurants, however. Behemoth chains like McDonald’s and Taco Bell scoop up 75 percent of restaurant traffic, while quick service retail (prepared foods available in grocery chains, etc.) takes up 17 percent of traffic. Fast casual chains claim just 8 percent of total restaurant visits, according to the NPD Group.
Combined, the fast casual and overarching quick service restaurant industry is expected to generate $246.7 billion in food and beverage sales in 2019, according to data from the National Restaurant Association. The figure is a 3.2 percent gain on sales estimations from the previous year.