Without so much as a full moon, some of the biggest names in the business began a transformation this week that should have werewolves muttering, “Whoa, gnarly stuff.” The changeovers have the potential of significantly realigning competition, with established giants in one field charging hungrily into another, club in hand.
Here’s how the lines of engagement are being redrawn:
Two powerhouses turn into fast-casual challengers
Many, many dominant brands in other market segments have failed in their bids to crack what is and is likely to remain the hottest sector in the business. A quick recap of the chains that have given fast casual a try without rousing the concern (and possibly even the notice) of Chipotle or Panera: Taco Bell, Olive Garden, White Castle, Texas Roadhouse, Famous Dave’s, KFC, Pizza Hut, McDonald’s, IHOP, Denny’s, Lawry’s, Wendy’s, Sbarro, Red Robin, Village Inn, Bob Evans Farms, Subway—if it’s a chain outside of fast casual, chances are high it’s tried to elbow into the field.
This week brought instances of two more potent outsiders pledging their resolve to become contenders in the market.
Cracker Barrel told investors that development of a fast-casual spin-off is a priority for the next six months, and promised to reveal specifics in the very near future. It’s been talking about the development of a second concept for about two years, and failed in an earlier attempt, with a concept called Corner Market. Still, the chain has been a steady achiever, a force that shook up the sleepy family-dining market. Might it do the same in fast casual?
An entry into that market also raises the question of whether the company would get a taste of franchising, and how it might like it. All Cracker Barrel restaurants are run by the parent company.
Buffalo Wild Wings, meanwhile, wheeled out a new version, clearly built for speed, of its challenger to Chipotle. Rusty Taco, a nine-unit venture in which BWW holds a controlling interest, changed its name to R Taco, a name that doesn’t call to mind flaking oxidized metal. Of course, it’s also suggestive of a competitor, Qdoba, which began life with the name Z-teca.
A millennials’ darling calls first and last round
Taco Bell either is or isn’t exploring a transformation into more of a bar and less of a cheap place for the pierced and tatted to fuel up. But the smart money—indeed, pretty much all money--is on a “go.”
In the course of a week, the chain shuttered U.S. Taco Co., a fast-casual concept that intended to serve alcohol, and cleared the beer-tap lines for the first in a string of watering holes sporting the name Taco Bell Cantina. The chance to wash down Chalupas with a freshly drawn craft beer or frozen cocktail is likely to reorient the lives of male millennials. And if the places added flat screen TVs? Don’t even go there.
As one of our staff members remarked, “Imagine how a place like that would do near a college campus.”
Spilling into the home coffee market
Consider these newly released figures about what Americans are drinking to start their day. Before they even pass a Dunkin’ Donuts, McDonald’s or 7-Eleven on their way to work, they’re gulping gallons of Starbucks nectar, right in their own kitchens. The familiar streetside brand is turning into the titan of the at-home coffee market, with nearly a 17 percent share of the single-serve K-cup market, according to the investment news site Benzinga.com.
Sales of Starbucks ground coffee or beans are increasing at an annual rate of 14 percent, in a segment growing overall by only 2.5 percent, Benzinga observed.
That sideline apparently isn’t cannibalizing the coffee giant’s core restaurant business. Same-store sales for the most recent quarter rose 7 percent.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.