FINANCE
THE POST-PANDEMIC FAST-FOOD BUSINESS: MORE BEVERAGES, SNACKS AND CHICKEN, LESS PIZZA AND SANDWICHES FAST-CASUAL AND QUICK-SERVICE RESTAURANTS ON THE TECHNOMIC TOP 500 HAVE GROWN SALES BY 33% OVER THE PAST FIVE YEARS. BUT THAT GROWTH WAS NOT CREATED EQUALLY AS CONSUMERS SHIFTED THEIR SPENDING.
HERE'S A LOOK AT THE SECTORS AND THEIR GROWTH OVER THE PAST FIVE YEARS: QSR/FAST CASUAL SALES BY SECTOR CHICKEN AND OTHER BEVERAGE AND SNACK CONCEPTS HAVE LED GROWTH OVER THE PAST FIVE YEARS WHILE SOME TRADITIONAL SECTORS HAVE GROWN MORE SLOWLY.
BY JONATHAN MAZE
S andwiches and pizza are out. Smoothies and chicken ten- ders are in. That’s at least based on a look at limited-service restau- rant sales over the past five years, using data from the Technomic Top 500 Chain Restaurant Report. Over the past five years, for in- stance, fast-casual chicken sales have grown nearly 87%, thanks largely to the strength of brands like Raising Cane’s and Dave’s Hot Chicken. On the other end of the spec- trum: Quick-service sandwiches, where sales have grown just 6% over that period. Overall, limited-service restau- rants on the Top 500 have grown total sales by 33% over the past five years. But the data shows that con- sumers have shifted their spending away from some legacy concepts to- ward newer, hotter brands in differ- ent sectors. Or they shifted spend- ing away from full meals to snacks and drinks.
We probably don’t appreciate Tropical Smoothie Café nearly enough. The smoothie chain has more than doubled in size over the past five years, ultimately justifying its sale to Blackstone earlier this year for $2 billion—a rare, for this year anyway, sale of a restaurant chain at a premium valuation. The chain has led growth in the “other beverage and snack” category of the quick-service sector. Cookie chains have surged, led by the ultra-fast growing Crumbl, which has grown by more than 1,800% over the past five years. But there are other, more under-the-radar concepts like Nothing Bundt Cakes, which has grown consistently for years and is 72% bigger than it was in 2019. And consumers are also buying a wider array of beverages from a growing group of restaurant chains seeking to provide them. For instance, the sector includes some of 2023’s fastest-growing chains such as HTeaO (54%), Swig (39%) and Gong Cha (29%).
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RESTAURANT BUSINESS OCTOBER 2024
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