In the past two decades, there has been a new entrant in the restaurant vertical: fast casual establishments.
Not quite fast food. Not quite full-service restaurant.
Fast casual is a blend of the speedy service elements that has made fast food chains like McDonalds legendary. Unlike many of the fast food restaurants, fast casual tends to feature healthier, fresh ingredients despite the speed at which their meals are prepared. There’s an emphasis in fast casual brands that promote healthier, farm-fresh ingredients. Often, you can see the meal prepared as you slide down a queue abutted by glass full of the ingredients you’re most hungry for.
While fast food restaurants price points fall around $5, patrons visiting fast casual restaurants spend between $7 and $12 dollars -- they’re willing to spend a few more bucks to get a healthy meal made quick to match the demands and pace that fit their busy life.
“Dual-income families, people having less time, people eating away from home more than ever” all inspired the explosive growth of this fast casual movement, says Brett Schulman, chief executive officer of Cava, a Washington-based fast casual brand. People were “also demanding higher quality as well as better nutrition profiles.”
Fast casual is becoming one of the most popular segments of America’s massive restaurant industry worth approximately $799 billion in sales a year and employing 14.7 million employees at more than 1 million locations across the country.
Photo: Clem Onojeghuo on Unsplash
Very few American restaurants reach the pinnacles of chain success where their brands become domestic success stories and exponential growth. And those that do typically see their original founders shed ownership as the restaurants they lovingly saw from the first location grow and expand rapidly. That’s been true for many of today’s iconic fast food brands like McDonalds -- most recently a story that was featured in a major motion picture about its famous ownership change.
The others tend to stay rooted with family or the original entrepreneurs who helped create the restaurant.
There have been a few notable exceptions in the fast food domain, including In-N-Out, which has famously eschewed public ownership to remain privately held by a contingent of original family members.
In the fast casual world, the best example -- and one of the first -- was Panda Express. The first store, Panda Inn, was founded in Pasadena in 1973, long before its meteoric rise of a $3 billion dollar empire that is ubiquitous in mall food courts, shopping centers, plazas, and most recently, in territory that has long encompassed chain stalwarts. The first Panda Express -- a quick-service concept opened inside the Glendale Galleria which exposed the brand to a captive, mall audience.
While In-N-Out has remained privately owned, it has also developed a cult following in a very defined geographic range of the American West from California, extending as far east as Texas. The smaller footprint allows food trucks to deliver the freshest ingredients which meet In-N-Out’s notoriously high standards at more than 1,800 store locations across the United States, Canada, and Mexico that employ more than 25,000 people.
Panda Express remains very much a family business, it’s CEO is Andrew Cherng, Panda’s original founder. Andrew’s wife, Peggy (co-chair and co-chief executive) handles the important logistics that keep the business churning along -- everything from managing the supply-chain to managing growth. In the earliest days, Peggy, a computer scientist, programmed a POS system -- considered the first of its kind in the industry, where front-line cashiers could manually key in menu items on a computer keyboard. Andrea, their daughter, serves as CMO.
86’ing Industry Challenges
Fast casual’s rocketing success created quite the stir in the restaurant industry, and was seen by some to represent the future of American dining. During the recession, fast casual restaurants weathered the storm quite well, but last year, they started to face some challenges.
The pressure was exerted from entirely new entrants to the restaurant industry, fueled by developments in technology, delivery, demand from ever-changing habits of consumers, and even a nostalgic taste for the mom and pop independent restaurants of yesteryear.
While fast-casual brought relatively inexpensive foods that didn’t sacrifice nutritional value, today, families in search of their next meals are starting to be plied by the on-demand mobile ordering and meal-preparation kits that are defining the scene.
As Americans are increasingly looking to save time and have meals prepared or delivered for them, it’s not unlike many of the challenges retailers are facing -- how do these locations attract consumers? It’s all about how they embrace the consumer and customer service, incorporate unique experiences and ingredients, build loyalty, and stay in-tuned with the rapid advances in technology and the industry legislative updates.
Photo: Credit Emily Berl for The New York Times
Panda keeps its customers constantly thinking about them top of mind by changing menu items, promotions, and testing out new concepts. Last year, a food truck roamed the country, their social media account got people thinking about #OrangeChickenLove, and they tested out new and exclusive food choices in a special ‘innovation’ kitchen in Southern California. These moves are more likely to be seen in the playbook of a Silicon Valley startup, than an upstart restaurant chain. Um, Orange Chicken Burrito? Yes, please!
Today, fast casual establishments are heading in two separate directions: those that are fronted by big name celebrity chefs like David Chang of Momofuku fame, and those that remain very affordable -- places like Halal Guys and &Pizza -- establishments that focus on creative, authentic food.
Branching Out to Employees
One of the tenets of Panda Express success has been the commitment Andrew and Peggy has made to their employees. Today, they’re known across the industry as a company that embraces and honors their employees and puts them above all else with the goal of providing exceptional service. Distancing themselves from industry competitors, Panda pays their employees higher wages and gives access to training and professional development courses.
In an interview last year with Business Insider, Cherng describes the foundation and motivation he sees in investing in his most precious and valuable asset -- people. "Our job is to develop people. When you have a good set of people and they're in a good place inside and out—in their livelihood and in who they are—then chances are they will take care of the customer better,” he explains.
In addition to a higher than average pay, Cherng ensures his employees receive health care, paid sick leave, vacation, 401(k), and company-subsidized college courses.
We spoke to a variety of Panda Express associates about how Branch Messenger has helped them alleviate some of the daily challenges they may face, from scheduling and shift-swapping, to staying motivated and helping ensure customers receive food exceptionally fast, delivered with exemplary customer service.
High Level of Customer Service
Panda distinguishes itself on high levels of customer service. When a customer enters a location, they’re likely to be greeted with a smile and a warm welcome -- these are supported by the brand’s desires to strive for dependability, politeness, and cleanliness.
Everything that an employee does is with the customer at top of mind. Peggy has long instilled and championed these ideals in Panda’s tens of thousands of employees. Her goal is to “to be recognized as a world leader in people development.” In an industry that is predicated on being in the business of serving people, Peggy and Andrew take their challenge seriously and it’s a huge key to their success. She routinely references internal mottos like “elevating guest love” which hits home the importance of building guest trust and loyalty.
“It makes the workplace run smoothly,” said Zachary, a Panda Express employee from Farmington, Utah who uses Branch. “I’m gonna be a assistant manager at a new store and plan to use it.”
With Branch, employees and managers are able to prioritize these critical customer service initiatives because many of the time-consuming tasks have been automated and simplified.
Low Wait Times
Whether in a drive-thru, or on the front lines, customers expect to have fresh food prepared in a quick, timely fashion so they can get on with their day.
In addition to helping employees focus on customer-facing requests and the rush in-store and at the drive-thru, Branch has also helped employees stay motivated while helping general managers to stay focused on the business side of running their establishment.
“Giving customers our 100% attention when it gets busy just because everyone always asks for this, asks for that and it's too many people at once. Also trying to keep waiting orders in order,” notes Maria Jose from Grandville, Michigan.
No more checking manually written paper schedules, tacked to the break room. No more endless phone call trees searching for employees or begging them to swap shifts. With Branch, employees are able to receive their schedules, get notifications of upcoming shifts, and trade with employees if they need to
“It has helped me come to work on time and show up on time all the time because it notifies me when I'm supposed to be here,” Maria told us. “Builds responsibility -- just because it's helped many of my coworkers get to work on time and actually show up,” says yet another Panda employee.
In the event of one scheduling snafu, Branch helped one Panda Express store because nearly every employee had quick access to the app and was able to plug a scheduling hole quickly. “Since 90% of the staff has the branch app, we are able to quickly communicate with majority of the people on the app. We had to inform our GM about someone not communicating and showing up. One of our hardworking coworkers immediately responded saying they can cover the shift since they're plans had been cancelled and they were looking for more hours. It was a win win situation,” recalled Ramiro, from McHenry, Illinois.
In our mobile age, it’s never been easier to communicate with people. But, for jobs that require our complete focus like fast casual restaurants, it’s difficult or impossible for employees to be on their mobile devices. Features like our group chat make it easier for them to communicate on down-times like breaks, or even when they need to be reached way from the store.
“Through the group chat, makes it easier for us to all talk to each other about things,” Maria says.
Because the application replicates some of the familiar social media and messaging apps that young workers are familiar with, it’s easy for anyone to hop into a discussion that can only be seen by a specific store and get caught up on updates, scheduling issues, or even to cheer employees up or celebrate a milestone. “It’s a good way to all stay connected outside of work,” Dallan told us, who uses Branch at a Farmington location.
Dynamic Industry Updates
In the food industry, things change rapidly. But, we’re accustomed to these changes when our livelihood has been predicated on dishing up quality food and service in wait times measured in minutes and seconds.
At Branch Messenger, we constantly keep our eyes on the trends that are impacting verticals just like the changes that we’ve seen ripple through the food industry like that of fast casual establishments. Our team is able to proactively adapt our enterprise offerings to suit any of these changes. Recently, the biggest concerns that we’ve seen crop up are that of scheduling legislation. Many states that hire hourly employees have seen regulations impact how, when, and where these people work.
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