Restaurant trends emphasize fast casual, but seafood playing catch-up
Trends indicate that Americans are spending more and more of their money on eating out, and an increasing proportion of the ever-larger restaurant spend is being done at fast-casual establishments.
Starting in 2010, Americans' total spending on food away-from-home started to pull away from spending on food prepared and eaten at home, to the point that Americans spent USD 100 billion (EUR 88 billion) more on eating out in 2017 than on food at home.
“Food away from home started taking up [more of peoples'] food budgets,” Richard Barry, program manager for the National Fisheries Institute, at last week's Global Seafood Market Conference in Coronado, California.
Among that dining-out experience, one restaurant segment saw the most explosive growth: Chain quick-service restaurants, also known as “fast casual” restaurants. Even during the 2007 to 2009 recession, the segment added thousands of new locations, and in 2015 the segment had more than 200,000 restaurants across the country, up from just over 150,000 in 2005.
“The big driver behind the foodservice segment is these chain quick-service restaurants,” Barry said.
Despite the explosive growth of quick-service restaurants, seafood-branded spots represent a relatively small part of the trend. Of the top 75 brands for fast casual dining, only two are seafood-based restaurants: Slapfish and Brown Bag Seafood Co.
One big obstacle to expanding the fast-casual seafood market is the continuing knowledge gap consumers have between familiar animal proteins like beef and seafood.
“They say, ‘We don’t know who to trust, we don’t know what to trust, so we stick to chicken [and] burgers’” Slapfish Restaurant Group founder and CEO Andrew Gruel said at the GSMC panel. Consumers get lost in the designations between wild-caught versus farmed fish, as many don’t know the difference or have been affected by ongoing stigmas against aquaculture, Gruel said.
“As a business, we’re up against that with consumers,” Gruel said.
Another challenge facing seafood-focused fast-casual restaurants is food sourcing, Gruel said. With most broadline distributors, there are simple options for other animal proteins. With seafood, the wide range of options and the relatively small number of businesses using those options can make receiving a steady supply of certain species difficult.
“It’s the supply-chain piece that we’re up against as a franchiser with our franchisees,” Gruel said. “We spend 90 percent of the time dispelling the myths.”
Despite those challenges, the market may be ripe for more seafood options in the fast-casual scene, as Gruel’s franchise has seen significant success and sales growth.
“Our same-store sales growth are double-digit,” Gruel said. Slapfish has 15 locations coming this year and the company plans on doubling that figure by the end of 2019.
As fast-casual booms, another category is also seeing intense growth: Delivery. Delivery made up 1.75 billion “visits” in 2018, one of the fastest growing segments in the foodservice sector. However, while take-out seafood items represent 17 percent of the total market, delivery makes up only two percent.
If seafood can capitalize on the fast-casual and delivery boom, it could have a positive effect on the market as a whole, Josanna Busby, seafood category manager at Food Lion, said.
“The ultimate goal is, we all want to sell seafood. So if there’s other outlets that are selling seafood, getting people into the category, the more the better,” Busby said. “If they aren’t introduced to seafood, and [fast casual restaurants] get them introduced to try it, then they’ll have more of an opportunity to say ‘Well, I might try that salmon, I might try that cod’ at the grocery store.”