Restaurateurs and segment-savvy foodies know these categories like the back of their hand, able to pinpoint industry trends and financial projections better than some economists. But what happens when the lines between these segments start to blur, and a hybrid of sorts begins to develop?
Enter the fine casual restaurant.
Most commonly developed by fine dining entrepreneurs expanding their business and branching down into fast casual market, the fine casual segment is starting to show some legs. Examples include establishments like Shake Shack — the ever-growing brainchild of Danny Meyer, the man behind such fine dining restaurants as New York’s Gramercy Tavern and Union Square Cafe — or Xoco and Tortas Frontera — both fine casual offshoots of the perennially admired Topolobampo in Chicago.
Fine casual spots are meant to be that perfect blend of fine dining’s high quality food and atmosphere with the efficient service and cost structure of a fast casual or quick service restaurant. They have been growing in popularity just as American eaters are starting to express doubts about the quick service model (otherwise known as fast food).
Already, fast casual restaurants like Chipotle, Panera Bread, and Corner Bakery have been gaining market share by comparison to traditional fast food brands like McDonalds, KFC, and Arby’s. And a lot of quick service franchises are making moves to reject the language of fast food in response.
For instance, Arby’s has recently labeled itself “fast crafted,” and describes its line of grilled sandwiches as “artisan.” McDonald’s has picked up that same language for its newest chicken sandwich, and introduced “Chef Crafted” hamburgers that can be customized with added flavors like maple bacon Dijon and buffalo bacon.
But what this shift in language doesn’t indicate is a shift in basic operations for the fast food restaurants: at its core, every burger patty is still made from the same quality of ingredients, no matter what it’s called.
True fine casual operations like Shake Shack, Xoco, and ‘wichcraft are distinguishing themselves from traditional quick service and fast casual chains (not to mention their fine dining siblings) in four key areas: their chef-focus, their pricing, the cost of doing business, and the quality of ingredients they stock.
The advent of the celebrity chef — particularly those made famous through television competition and promotion — is certainly nothing new. We’ve been seeing its effects on the restaurant industry for many years, through fine dining and upscale casual establishments known specifically for their head chef or visionary. Throw a dart in Las Vegas, for instance, and you’ll land at the steps of a celebrity chef-helmed restaurant.
But the trickle-down into what’s now known as fine casual is relatively new, and gaining more momentum as chefs branch out into even more uncharted waters. Rick Bayless, owner of fine dining establishment Topolobampo and its upscale casual mirror Frontera Grill, has recently opened a brand new offshoot of his popular brand at O’Hare International Airport of all places. Called Tortas Frontera, this fine casual outpost encountered a lot of skepticism around its opening, but has proven to be a massive success for the multiple James Beard award winner.
“When we opened [Tortas Frontera] at O’Hare, there were three things we were told,” shared Bayless. “One: no one will wait so it all has to be pre-made. Two: no one wants anything spicy so take out all the spices. Three: no one wants anything aromatic. We gave them food that was made to order, spicy, and very aromatic and it was the most successful thing that ever happened at O’Hare.”
Not every fine casual restaurant with a key focus on chef vision has celebrity helping to drive its success, however.
According to Erik Oberholtzer, co-founder and CEO of Tender Greens, the goal is really to differentiate itself from fast casual restaurants like Chipotle, Panera, and Chop’t with a “farm-to-fork identity.” His 21 restaurant chain has maintained direct ties with local farms and food suppliers throughout its home state of California and varies its menus based on availability and seasonality. How do they manage that in a quick service setting? By employing a formally trained chef at every single location.
2. Consumer Pricing
Across the board, fine casual establishments obviously skew closer in consumer pricing to quick service than their ritzy older sister, the fine dining restaurant. The average Shake Shack ticket is between $10 and $11, very comparable to most fine casual per person check sizes.
“[Customers can] try it without a lot of risk when your average check is $10 and change,” said George Frangos, owner and operator of Farm Burger restaurants. “It’s an opportunity to try something people have heard about without having to throw down 30 bucks for a grass-fed steak.”
Rick Bayless believes the call for more sophisticated food, even on a smaller budget, the Food Network effect: younger generations raised on food TV understand and appreciate food and its origins much more than the diners of 30 years ago. And because there are more affordable versions available, “they’re choosing to spend their money on interesting, quality food on a regular basis,” he added.
3. Cost of Doing Business
But how can it be so affordable if the provenance of most fine casual restaurants rises out of a business model with traditionally the lowest profit margins in the industry? Accessibility and scale have a lot to do with it.
Thomas Salamunovich, owner of seven Larkburgers, plus superstar restaurant Larkspur, acknowledges that the former fine casual restaurants do about 20 percent of the business the latter fine-dining restaurant does. However, opening a new quick service restaurant costs about $450,000, while a fine-dining establishment can cost upward of $4 million to get on its feet. Frankly, the simplicity of quick-service concepts makes them easier to operate, not to mention more accessible to the average consumer.
And overall costs just aren’t comparable. Larkburger’s kitchens have an inventory of about 150 items. Larkspur has about 14,000 ingredients to account for in its complex recipes, shifting menus, and its guests’ expensive expectations. Waste in an environment like this is likely more prevalent, and serving staff require a level of skill not necessary for a fine casual environment, so it is undoubtedly more expensive to employ them.
Brian Ahern, co-owner and executive chef of Boeufhaus in Chicago, concurs. “For a lot of places opening up, as much as the chef, restaurateur, or front-of-house person aspires to white tablecloth, they simply can’t afford what it really takes to do that right now.” The barrier to opening and running a fine casual restaurant successfully is just so much more achievable, especially in tougher economic times.
4. Quality of ingredients
Where fine casual restaurants aren’t cutting costs is in the quality of their ingredients. While national brands like McDonalds and Chipotle don’t exclusively acquire their ingredients by local means, fine casual success stories like Dig Inn in New York City and Boston and Tender Greens are working hand-in-hand with local farmers, sometimes even managing their own farm land to produce ingredients for their menus. That’s a level of involvement and care unseen at many of their quick service contemporaries.
“I care as much about the ground beef hamburger as I do cooking foie gras or caviar,” Larkburger’s Salamunovich elaborates. French fries are hand cut at every location, with a so-called “french fry whisperer” overseeing their quality. Ingredients such as white truffle oil, truffle salt, and Parmesan cheese are in high demand and Larkburger still maintains its lower price point across the board.
The same is true for Tom Colicchio’s fine casual venture ‘wichcraft, with turkeys for the turkey sandwich cooked precisely the same way as those at his fine dining establishment Craft. Even the lemon confit on the tuna sandwich is prepped identically to Colicchio’s now 20 year-old recipe. These ingredients, familiar to upscale casual and fine dining adherents, let diners experience more sophisticated flavor profiles, but still step away from the table for under $10.
Fine casual is undoubtedly trendy now, but will it solidify into a new segment of the restaurant industry, or ultimately collapse into uncool? Explore how trendiness can accent — or undermine — your restaurant’s profits.