Article
Brands on the bubble: Redefining QSR
Burgerville and El Pollo Loco are two brands that aim for a better QSR experience. Here's a look at how they do it.
February 8, 2010
It used to be easy to differentiate a quick-service brand from a fast casual one. QSRs offered convenience, speed of service, lower priced offerings and a minimalistic dining experience. Fast casual improved on the model, offering convenience but at a higher price point to support the elevated customer experience and the better quality foods.
In recent years, several QSR brands have begun blurring those lines, with chains such as McDonald's moving to an upscale décor to improve the dine-in experience and Carl's Jr. focusing on premium Six Dollar burgers. But even with those improvements, customers still clearly define those brands as fast food.
For some brands, though, fitting into a label is not nearly as important as offering better quality food and striving to improve on the customer experience. These concepts have melded the two service models to the point that it's hard for the companies to name the segment where they fit.
Jeff Harvey, president and CEO of small, Northwest chain Burgerville, said the company shies away from labeling itself in any segment."We don't even think in terms of those structures. Those structures end up where other people place us, not where we're targeting," he said. "When we talk about targeting, we're targeting a guest experience; we're targeting a certain quality of food."
In the process of doing what's best for their brand, Burgerville and several other chains have elevated the standard for QSR. Captain D's Seafood Kitchen added grilled items and improved its décor, Culver's features homemade frozen custard and made-to-order meals, and El Pollo Loco provides a mix of better quality fresh Mexican menu items and marinated, grilled bone-in chicken.
The result is a number of hybrid brands that consumers recognize as offering the convenience of fast food with the focus on quality of fast casual, leading the way for for national brandsto follow.
Here is a look at how two of those brands fit into both the segments.
Burgerville: Aiming toward casual
Burgerville defines itself by its marketing tagline: fresh, local, sustainable. Much of the food is sourced from local farms, orchards and ranches, many of which have received certification for their sustainability practices. The service model and an elevated customer experience also are differentiators, Harvey said.
"If you push us into traditional boxes, the connection with QSR is simply in the convenience model for delivery because most of our restaurants have drive thrus," he said.
For those who do like those 'traditional boxes,' here's a breakdown of the concept:
Customer experience: Burgerville's staff is well versed at sharing the story of the origin of the brand's locally sourced menu items. Crewmembers can tell interested customers which farm provided the Walla Walla onions and which ranch provided the natural beef for its burgers. They also talk about the brand's wind energy and composting programs. Verdict: fast casual.
Service model: The chain has always had a drive-thru, but in-store, customers order at the counter and the food is delivered to them. Speed of service with a goal of 3 ½ minutes is typical of the QSR model and still primary. In stores that feature composting and recycling, the staff buses the tables. The chain also introduced its Nomad food truck in the fall. Verdict: QSR with a fast casual touch.
Menu: The chain elevates the burger category by featuring all natural, antibiotic- and hormone-free beef. Side salads and fries are typical of QSR, but the fish sandwich features sole and halibut, not whitefish. The chain also rotates limited-time offerings made with seasonal ingredients from local farms and orchards. Last year, the chain began offering gourmet quality LTOs, such as the Yukon & White Bean Basil Burger. All food is made fresh to order, but much of the menu centers around fried offerings. Verdict: Leans toward fast casual.
Décor: Most of the 39 stores are older, with the plastic furnishings of QSRs of the past. One unit represents the chain's new direction, with upscale furnishings more akin to its casual dining aspirations. Verdict: QSR
Value menu: None.
Average check: $8.50, due to the higher price point on seasonal items. Verdict: High-end QSR.
Primary demographic: Ages 35-54, well beyond the typical 18-to-34-year-old QSR customer. Interestingly enough, the chain's gourmet offerings have struck a chord with 20-somethings in the last year. "This year, we focused a lot of our attention on raising the level of our gourmet profile for our food, and that has been quite impactful in the market to have more a gourmet profile in a convenience model like QSR," Harvey said.
Harvey said he believes the brand's customer experience and gourmet offerings elevate Burgerville closer to the casual dining segment than even fast casual.
"Our focus with customer experience is really on high service, high quality," he said. "We spend a lot of money on training to really engage those guests. It's not a transaction, it's a relationship we're building."
*To view a slideshow of Burgerville images,click here.
El Pollo Loco: In the sweet spot
Like Burgerville, El Pollo Loco executives don't label the chain as QSR or fast casual, but somewhere in between.
"We're kind of in a sweet spot because we straddle the two segments," said El Pollo Loco president and CEO Steve Carley. "We've got the price points and convenience and the access of QSR, with the food quality of a fast casual."
Customer research supports that positioning, he said, with customers identifying the chain as convenience-focused for its drive-thru but with better quality menu offerings.
Customer experience: Guests watch as a whole chicken is pulled off the grill, cut into pieces and placed on their plate. Meals are assembled to order, with guests customizing their burritos and bowls. Dine-in guests have access to a salsa bar. Verdict: Leans toward fast casual.
Service model: Most of the stores have drive-thrus, which were added in the 1980s. Customers order at the register and give their name, which is called from a separate counter when their food is ready. A number of franchise stores deliver to the table. Service goals are four minutes from order to delivery in-store and one-minute at the drive-thru. Verdict: Fast casual service at QSR speed.
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Menu: Citrus-marinated, flame-grilled chicken has been the mainstay since the brand formed 30 years ago, from bone-in chicken meals to shredded chicken in the burritos. To combat falling sales during the recession, the chain has added flame-grilled steak after extensive customer research. That addition moves the chain more clearly into fresh Mex and out of the chicken category. Half of its menu items are better-for-you, and 85 percent are of better quality. Verdict: Fast casual.
Décor: Older stores are typical of QSR, but some newer models feature upscale furnishings such as bar-height table and chairs, earth tones and ceramic tile. The grill behind the counter is the showpiece. With the addition of steak to the menu, the chain is developing a rebranding program, which will include a new prototype design and subtle change to the log. Verdict: QSR.
Value menu: Eight items for $1 each, including bone-in chicken leg and cheese quesadilla. Verdict: QSR.
Average check: $9.58, with one-third of sales coming from family meals. Verdict: The price point meets the fast casual definition, but if the proportion of family meals is removed, the check average fits in high-end QSR.
Primary demographic: Ages 25-54, skewed slightly female; 50 percent Hispanic customers.
*To view a slideshow of El Pollo Loco images,click here.
El Pollo Loco differentiates itself by being able to provide bone-in chicken fresh off the grill in four minutes or less. The marinated whole chicken takes about an hour to cook, and sophisticated forecasting and production modules inform staff how many raw, half-cooked and fully cooked chicken should be on the grill at any given time. "It's a matter of skill and timing — skill in forecasting and reacting," Carley said.
The chain also has become skilled at operating from a combined QSR-fast casual model, including its marketing.
"Guests don't discriminate between QSR and fast casual," Carley said. "They shop a continuum."
So El Pollo meets them with messaging for its chicken family meals as well as for its fresh Mexican offerings at lunch. The value menu also fits both spectrums, keeping up frequency for price-point-minded guests and providing appetizers or extras for meals.
"So it works both for value-oriented customers who are tight on their cash because we still get their visit, and it's a great add-on to an individual or a family meal," Carley said.
ChickenTrends / StatisticsMexicanSeafoodRestaurant Design / LayoutBurger/Steak/BBQOperationsFood & Beverage
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