Published July 13, 2022
The COVID-19 global pandemic changed the face of the fast-casual restaurant industry and propelled businesses into uncharted waters. Due to ongoing restrictions and regulations surrounding in-person capacity and social distancing, many fast-casual restaurants were forced to pivot to takeout, delivery, and curbside collection.
Yet almost 40% of fast-casual business owners say it will be until at least 2023 before businesses return to normal. But what does normalcy mean in a post-pandemic world? How has the global pandemic changed the fast-casual industry, and how will technology play a role in shaping the “new normal”?
The future looks bright for the fast-casual sector, which was valued at $125.6 billion in 2019, and is expected to reach $209.1 billion in 2027—a growth increase of 66%.
Whether you’re a small business just starting out or an established fast-casual veteran, we predict that increased reliance on new technologies will help you scale and reach these growth levels over the coming years.
Who would have predicted that QR codes would make the comeback of the decade? The Japanese invention allows users to scan the barcode and open a URL straight from the built-in QR scanner on their camera and mobile device, making the format ideal for creating low-touch menu browsing.
Other benefits of QR codes include gathering first-party information about your diners, managing waitlists, and gaining feedback from customers.
Having the ability to browse a menu on your phone is a gateway to the Next Big Thing: using technology to fulfill orders and pay bills. While this might sound like a futuristic idea, 52% of Gen-Z adults aged 18-25 prefer this method of ordering and billing, combined with 45% of Millennial adults aged 26-41.
In addition, more than half (52%) of all adults say they would like to see even more tech implemented to make ordering and paying easier, ensuring that QR codes have a place at the table for years to come.
The drive-thru isn’t just for fast food locations. More and more fast-casual restaurants are introducing drive-thrus as consumers become more reluctant to dine in and businesses struggle to adhere to additional cleaning measures and safety protocols. Additionally, drive-thru ordering ensures that humans limit face-to-face contact and potential exposure to the coronavirus as customers use digital boards to order food.
One fast-casual restaurant that’s adopted drive-thru and contactless pick up as part of a growth and expansion plan is Chipotle. The Tex-Mexican restaurant opened its first digital-only restaurant during the pandemic and saw a 133.9% growth in digital sales during Q1 2021, accounting for over 50% of the company’s sales.
Given Chipotle’s success, it’s unsurprising that other fast-casual restaurants have followed suit, including Pizza Hut and Shake Shack, and added technology-driven drive-thrus to their location roster.
The global food automation market is expected to reach $29.4 billion by 2027, signaling that businesses will turn to technology companies to automate different stages of the fast-casual food cycle.
The benefits of food automation include improved quality control, accurate portion sizes, more job creation and opportunities, increased efficiency, and a reduction in food waste.
One company quick to hop on the automation wagon is DoorDash. While it recently closed its salad-making robot startup Chowbotics, it continues to make investments in robot delivery technology. The move will help DoorDash merchants expand their current offering and help DoorDash achieve higher-revenue streams with add-ons.
And it’s not just food delivery companies turning to technological advances in automation.
Ghost kitchens help businesses reduce capital expenditures and support the growth of the fast-casual economy. If you think ghost kitchens are a fad, think again—ghost kitchens are predicted to become a $1 trillion industry by 2030.
A ghost kitchen provides fast-casual restaurants with an opportunity to launch a digital-only food business out of a local commissary or shared kitchen. Food is prepared, boxed up, and distributed using local delivery apps.
The benefits of a ghost kitchen include lower start-up costs and lower overheads. They give operators an opportunity to introduce and test food automation, trial new ideas and menus, and test new concepts before launching to a wider audience.
Ghost kitchens rely on technology—specifically food delivery systems and apps to help merchants get food from point A to point B.
Everyone knows that food delivery apps did very well during the pandemic as consumers turned to technology to get their fill of local grub. And the trend doesn’t show any signs of slowing down.
In Q1 2022, DoorDash reported revenue of $1.4 billion, an increase of 35% compared to Q1 2021, and UberEats is on a similar page, with bookings on the platform increasing by 12% YOY to $13.9 billion in Q1 2022.
This reliance on technology to order food has allowed UberEats to broaden its appeal by creating product bundles and introducing family meals. Steps like these will only solidify delivery apps as a main channel consumers use to order fast-casual food and groceries.
Technology has clearly played a role in the stability and growth of the fast-casual food industry. Here are a few other trends that we predict will shape the industry in a post-pandemic world.
The future of the fast-casual restaurant industry is technology-driven and technology forward. Delivery apps, automation, QR codes… they’re all here to stay, and fast-casual restaurants need to onboard these technologies to scale and stay ahead of the curve.