Holler & Dash Biscuit House is a small, counter-service chain that has made some big promises to diners: Each location of the biscuit-heavy concept will seek out local ingredients for its food and drink, whether naturally raised birds for a fried chicken sandwich topped with goat cheese and sweet pepper jelly, or locally roasted, single-origin beans for drip coffee.
If Holler & Dash sounds like the latest chef-driven fast-casual concept, you’re right. You’re also wrong.
The budding chain is a subsidiary of Cracker Barrel Old Country Store, the publicly traded company with more than 600 restaurants in 44 states. Cracker Barrel – known for its roadside locations, its retail shops based on old-timey general stores and its firing of Brad’s wife – launched its first Holler & Dash last year in Homewood, Alabama, and has since opened four more locations, including one in Atlanta. The fast-casual aggressively promotes its two chefs, whose résumés include far more refined – and pricey – restaurants.
Should you be surprised that Cracker Barrel has entered the fast-casual market? Not really. Even though the chain is faring better than its underperforming peers in the casual-dining sector, Cracker Barrel has its reasons for muscling into the territory dominated by Panera Bread, Jimmy John’s Gourmet Sandwiches and Chipotle Mexican Grill. For starters, Cracker Barrel sees Holler & Dash as its way to crack the urban market without sacrificing its countrified image.
But more to the point, Cracker Barrel is simply doing what almost everyone else is: watching the continued popularity of the fast-casual industry and wondering whether it should adopt its practices or just join the growing number of counter-service restaurants dedicated to speed, customization, quality ingredients and bargain prices.
Make no mistake: Fast-casuals are influencing and attracting chefs, restaurateurs and executives across the hospitality industry. Fast-food companies are improving their ingredients to stay competitive, and chefs are abandoning or supplementing their full-service temples for a chance to hit it big in the fastest-growing segment of American dining.
“As a society, we are speeding up and moving toward speed- oriented food, which was fast food,” says Jonathan Maze, senior financial editor for Nation’s Restaurant News. “Now, we go to fast-casual restaurants.”
America, it appears, is no longer a Fast Food Nation. It’s a Fast-Casual Nation.
The start of a trend
Chipotle, Panera, Shake Shack and the like didn’t create the demand for affordable, freshly prepared and high-quality meals delivered at breakneck speed.
“Dual-income families, people having less time, people eating away from home more than ever” all inspired the movement, says Brett Schulman, chief executive officer of Cava, the fast-casual based in Washington. People were “also demanding higher quality as well as better nutrition profiles.”
But these pioneers have nurtured the trend to the point where sales at fast-casual restaurants are growing far faster than those at fast-food or full-service restaurants. From 2011 to 2016, fast-casual restaurants saw their sales grow between 10 and 11 percent annually, according to market research provider Euromonitor International. By contrast, sales in the fast-food industry rose annually in the 3 to 4 percent range, while full-service restaurants saw growth rates between 1.5 and 2 percent.
You don’t have to be Warren Buffett to understand that, with their daily dining habits, Americans are telling the hospitality industry what they want. And the industry is getting the message, at both extremes of the restaurant spectrum.
Chefs and restaurateurs with fine-dining pedigrees have entered the fast-casual trade to try to give the people what they want. In Washington, José Andrés developed the vegetable-forward concept Beefsteak. In New York, David Chang created Fuku, a small collection of fast-casual shops devoted to chicken. In Chicago, Rick Bayless opened a number of counter-service spots, including Tortas Frontera and Frontera Fresco. Then there’s restaurateur Danny Meyer, who may now be as famous for his Shake Shack empire as for Gramercy Tavern or any of his other fine-dining establishments.
These name brands in American gastronomy have their self-interests in mind, too. The counter-service operations don’t require as much real estate, so rents are cheaper. They don’t need as many experienced hands in the kitchen, a real benefit when talented cooks are hard to find. And fast-casuals don’t require a change of menu every season (although some have adopted a seasonality to mirror the behavior of chef-driven, full-service restaurants).
Many of these chefs enter the fast-casual business hoping to replicate their concept, perhaps building the next great counter-service empire. Fast-casual veterans have their doubts about that.
“Fine dining and chef-driven restaurants are driven by creativity as well as operations,” says David Strasser, managing director of Swan and Legend Venture Partners, a partner in both Beefsteak and Cava. “Chefs’ core competency is really the theater [of dining], and it’s a very different experience you’re providing your customer.”
The largest and most successful fast-casual chains, Strasser says, are process-driven. They know how to manage complex - and massive - tasks without sacrificing the quality of their food or service. They hire, train and manage staff in multiple jurisdictions. They move customers quickly through lines during peak lunch hours. They handle food production and food safety for a vast network of restaurants without, they hope, encountering the kind of contamination outbreaks that have battered Chipotle the past few years.
“I think the key to fast-casual is simplicity,” Strasser adds, “and I think the key to success in fine-dining is complexity.”
For those reasons, among others, some of the fastest-growing fast-casuals are not chef-driven. They’re run by people such as Cava’s Schulman, who has a background in finance. He has raised millions of dollars in venture capital to help Cava grow to 35 locations - and counting. He has also helped create a culture within the company - elevating starting wages to $13 an hour, creating career paths for staff - so that employees see their job as a lifestyle, not a paycheck. It’s a business model that has growth built into it: Experienced employees can help staff and manage new locations.
Fast-casuals are also not a fixed concept. If these operations were the first to recognize that Americans wanted a new style of restaurant, they must now be the ones to acknowledge that customer behaviors constantly evolve. The California-based Sweetgreen chain now operates more than 70 locations, mostly located on the coasts. About four years ago, the company decided to invest heavily in digital technologies, and it has paid off handsomely. About 40 percent of its sales now come from electronic sources such as desktop computers and handheld apps, says Nicolas Jammet, co-founder and co-chief executive of Sweetgreen.
Those electronic interactions also help Sweetgreen collect a ton of information about its customers: which stores they frequent, which dishes they order, which ingredients they substitute. “Having all the data helps us be smarter,” Jammet says.
Competition is strong
Clearly, fast-casuals are not for the hidebound - or the undercapitalized. Which is why fast-food and casual-dining chains are in a unique position to capitalize on fast-casual trends. They often have the financial might and the organizational capacity to make sweeping changes.
Several fast-food chains have already purged their menus of problematic ingredients, a nod to the ways of fast-casuals. Last year, McDonald’s announced it was removing artificial preservatives from numerous items, including Chicken McNuggets. At the same time, the burger chain said it was a year ahead of schedule with its commitment to no longer serve chicken treated with “antibiotics important to human medicine.” Taco Bell has made so many menu changes that one publication suggested that it “has subtly become one of the healthiest fast-food chains.”
McDonald’s and Taco Bell are not alone. Amy Myrdal Miller is a registered dietitian nutritionist with her own company, Farmer’s Daughter Consulting. For seven years, she worked at the Culinary Institute of America, where she directed the Healthy Menus R&D Collaborative, an initiative designed to develop more-healthful menus for large food-service providers and fast-food chains, including McDonald’s, Subway and Sodexo. She continues to work with many of these companies.
By agreement, Miller cannot discuss the specifics of any company, but she says the big guys are all watching the fast-casual industry, even if they can’t immediately implement wholesale changes without the buy-in of franchisees and suppliers. But Miller has already seen chains push for more salads and fresher, higher-quality ingredients.
“They are under pressure to tell a better food story,” she says.
So are the casual-dining chains, such as Ruby Tuesday and Applebee’s, which have been sucking wind in recent years, either losing customers or closing restaurants. Or both. Cracker Barrel’s solution was to tell a whole new story. But Holler & Dash’s tale is not just about a chef-driven menu or locally sourced ingredients. It’s about creating a brand and culture separate from Cracker Barrel’s.
“When you walk into a Holler & Dash, you don’t know that it’s associated with Cracker Barrel,” says Mike Chissler, chief operating officer for the new brand. “It would confuse people. They would look at this and say, ‘What the heck is this?’ “
Buffalo Wild Wings, another casual-dining chain, went the opposite direction with its new B-Dubs Express, a fast-casual concept that recently debuted with two locations in the Minneapolis and St. Paul area. B-Dubs is essentially a pared down version of Buffalo Wild Wings, offering a compact menu, some craft beer and a few TVs in a breezy, counter-service setting.
With its focus on wings, fries and mini corn dogs, B-Dubs is not exactly investing in healthful menus. Instead, says Todd Kronebusch, vice president of market development for Buffalo Wild Wings, B-Dubs is built for speed. The start-up’s goal is to have food on the table eight minutes after you place an order. The early results, he adds, are positive.
The B-Dubs experiment is just another variation - the sports bar fast-casual - in a dining movement that already encompasses chef-driven fare, seasonal salads, greasy burgers and gourmet sandwiches. The fast-casual restaurant, it seems clear, is the venue where all concepts will gradually merge, just as the people wanted.