It’s the hottest category in food tech.
The Wall Street Journal reports this week that fast-casual stalwarts Chipotle and Panera are bringing in solid earnings, while their more traditional fast food competitors prepare for a drop in customer traffic and sales.
By focusing on atmosphere, fresh ingredients, and efficient service, Chipotle and Panera have gained an advantage over McDonald’s and the Yum trifecta of Taco Bell, KFC, and Pizza Hut, brands which are suffering from the current global economic environment. Additionally, the fast-casual industry focuses on a customer base who is not quite as tight in the wallet, and are in fact willing to pay twice as much for a meal, relative to the Golden Arches.
To sustain the momentum they have built in spite of waning consumer confidence, Chipotle and Panera are both employing a similar strategy – to increase advertising dollars in 2013, and focus on catering as a lucrative new revenue source. Whatever they are doing, these strategies have been paying off: Chipotle’s fourth quarter profit rose a respectable 6.8%, while Panera’s has leaped by 34%.