If you don’t have a crystal ball, you need a Danny Klein.
Danny is the editorial director at Food New Media, and he’s got his finger on the pulse of every hospitality category and trend. He sat down with Kickfin to talk about “NextGen Casual” — an emerging industry segment that everyone in the restaurant biz should be watching. Read on to get the lowdown on NGC: what it is, why it is, and how it could impact other more established segments in 2022.
Let’s dive right in: What’s the background on NextGen Casual? Is it coming? Or is it already here?
I actually coined the term “NextGen Casual” somewhat recently, but the segment really started emerging about 4 or 5 years ago. It’s kind of a bucket for restaurants that don’t fit squarely into full service or fast casual. And there are a lot of them.
OK, so it’s a middle ground between FSR and fast casual?
In a way, yes. It’s really a segment of the FSR category.
The thing about full service is that, compared to quick service, it’s very nuanced. You’ve got your local Italian restaurant, and then you’ve got like, Applebee’s. Those are such completely different full-service experiences, and so many restaurants fall somewhere between the two ends of that spectrum.
So we’re talking about this growing segment of full-service dining that’s inspired by, or even borrowing from, fast casual. What made fast casual so popular is that it showed consumers that they can get a convenient but high-quality experience, without spending too much money.
NextGen Casual is similar in that it’s accessible, adaptable, and there’s a heavy emphasis on quality — but again, it’s full service, not counter-service.
What are the hallmarks of a NextGen Casual restaurant?
The criteria are still flexible, but NextGen Casual restaurants are essentially better food and service, with a more authentic experience, at a reasonable price point.
The brands that fall into this category are relatively smaller full-service chains — what you might call micro-chains or emerging chains. They’re generally anywhere from 5-200 locations (although that’s not set in stone by any means).
One of the most important and differentiating elements for NextGen Casual brands is that they’re looking to grow. Casual dining as a whole hasn’t grown much in almost 15 years when it was starting to retract because it was an overleveraged segment. But NextGen Casual restaurants want to expand.
In terms of food, NextGen Casual restaurants tend to be chef-driven. Menus are often seasonal, and they aren’t big. They’re simpler and more focused. There are different price points, too — there might be shareable plates or bar programs like happy hours or wine dinners. It allows you to access these concepts on your own terms.
At the most basic level, NextGen Casual is kind of breaking away from the negative elements of the chain experience that signals to someone that, you know, the food will be out of a freezer or it will all look the same. The overall experience is a step above what people have come to expect in a chain restaurant. One location might be different from the next — much less of a cookie-cutter vibe.
And these brands often stand for something. They’re companies that consumers can align with. They make their mission or values clear when you walk through the door.
What are some brands that fall into the NGC bucket?
We made a list, and it’s in the hundreds. True Food Kitchen is a great example — you’re talking about a brand that lives by a very specific, purpose-driven ethos, which in their case is this anti-inflammatory food pyramid. Your typical casual dining chain was never going to do anything along those lines.
And also the True Food restaurants all look different depending on the city you’re in. There’s a sense that people will go into one and not realize there’s X amount of these across the country.
Another Broken Egg, Eggs Up Grill, Walk On’s, Black Bear Diner, Lazy Dog. First Watch is a little bit of a unicorn given how large they are, but they still live by the principles we’re talking about.
Is this movement having any impact on brands that fall into the traditional categories (FSR, fast casual, etc.)?
We’re definitely seeing the big-box restaurants trying to embrace some of what NextGen Casual stands for. Making their values more front-and-center. Pared down, seasonal menus. Chili’s cut 40% of their menu. They’re not trying to be all things to all people anymore.
It’s happening in fast food, too — like McDonald’s moving away from frozen beef.
Why is it important to put a name on NextGen Casual?
By naming it, we’re giving these restaurants something to attach themselves to — a way that like-minded people and businesses can come together and learn from one another. We’re in the early stages of connecting people, but there is definitely a lot of enthusiasm. We’re getting brands coming to us saying, “Hey, this is us. We’re NextGen Casual.”
NextGen Casual restaurants also want the consumer to know what they’re doing. The work they’re putting in that might not be obvious — like better sourcing, for example — so they want consumers to understand the value there.
Obligatory “new year” question: What are the big industry trends that will gain momentum in 2022 — and does the NextGen Casual segment play into those?
We’re definitely seeing the big-box restaurants trying to embrace some of what NextGen Casual stands for. Making their values more front-and-center. Pared down, seasonal menus. Chili’s cut 40% of their menu. They’re not trying to be all things to all people anymore. It’s happening in fast food, too — like McDonald’s moving away from frozen beef.
So at a high level, we’ll continue to see major chains improve their food quality, mission statements — and also the way they treat employees.
I think restaurants across the board will cater more to what the individual consumer wants. Loyalty programs, for example, have pretty much become table stakes for QSR. But the type of rewards are evolving away from a punch card. We’re seeing tiered rewards, so you can start to choose what you get — the restaurant isn’t just giving you a free cup of coffee.
How can NextGen Casual restaurants officially “join the movement,” so to speak?
In 2022, we’ll be sending out a newsletter, growing our online community, and hosting events. The goal is to provide a forum for this segment, and especially to connect the thought leaders behind it. These are the people who are truly driving innovation across the whole hospitality industry.
Want to learn more about NextGen Casual? Check out Danny’s article here, and sign up for the biweekly newsletter here.
