With economic conditions improving, consumer spend strengthening and finance lenders becoming more bullish again, a raft of new operators with big plans and deep pockets are emerging and they would appear to only have one thing in mind: growth.
With growth comes investment, and as tomorrow’s big brands look to broaden their footprint and capture more of the market the need for the best equipment and a coherent approach to procurement becomes ever more important.
Analysts firm Horizon’s much anticipated list of the fastest-growing ‘Ones to Watch’ offers a fascinating snapshot of the foodservice brands currently opening up locations at a rapid clip. Most significantly, its latest research reveals that specialist operators are blazing a trail when it comes to new sites.
To qualify for inclusion in the list, a restaurant or quick service concept must have between five and 25 outlets and a growth in outlet numbers of at least 20% over the past three years combined.
Fuel Juice Bars takes the top spot in Horizons’ rundown of growing fledgling brands, having rocketed from just eight units in 2011 to 24 in 2014.
Nicola Knight, Horizons’ director of services at Horizons, said the beauty of Fuel’s business model — in shopping malls away from food courts — is that it’s not affected by seasonality because it is located in covered environments with good footfall. “Fuel offers a quick, healthy alternative to coffee, which ticks the boxes for consumers who are increasingly concerned over diet and lifestyle,” she said.
Other top performers to show up on Horizons’ league table include Dunkin’ Donuts, healthy quick service operator Abokado, Tortilla Mexican Grill, Pieminster, Boost Juice Bars and Asian fast food casual operator Chozen Noodle.
Knight said that each of these fledgling brands is displaying “particular qualities” that are helping them to become scaleable concepts.
“They are often simple ideas, sometimes based around a single product, which can be easily replicated to the same quality and which lend themselves to being prepared in a small space,” she explained. “Operators are also taking a novel approach to location — whether it be in small shopping mall kiosks or transport hubs — rather than in traditional high street sites. We are also seeing a lot of expansion through franchising rather than company-owned outlets, which means that the management has a vested interest in success.”
It is interesting to note that the most active sector in terms of outlet expansion during 2014 was healthy quick service outlets (107new outlets), followed by Italian casual dining (91) and then Mexican burrito outlets (78). Artisan bakeries and coffee shops (74) continue to be the top sector by new outlet numbers, along with sandwich bar outlets (74).
Dunkin’ Donuts takes second place in the league table, having expanded from just one outlet in 2013 to 14 last year as it expanded at a rate of one a month. The US group, led by CEO Nigel Travis, is attempting success in the UK for the second time having previously withdrawn in the 1990s under then owner Allied Domecq. The brand’s aim will be helped by the inroads made by Krispy Kreme in the UK, although Dunkin’ Donuts has bigger ambitions than its 50-site rival, with plans for 144 UK sites.
Healthy fast casual specialist Abokado shares joint second place in the list of fastest growing brands, having added 13 sites from 2011-2014, giving it a total of 22. The London-based, lunch specialist has another two sites in the pipeline to open by March 2015 and growth potential of 100 to 200 outlets in London and other European capital cities.
Founder Mark Lilley puts its success down to a greater awareness of health issues among consumers. The brand has seen like-for-like sales grow 19% over the past financial year, with around 80% of its £10m turnover coming from the two-hour lunch period.
Burrito bar chain Tortilla Mexican Grill, backed by Santander and private equity group Quilvest, shares joint third place in the list. The brand now has 20 outlets, making it the largest Mexican fast casual brand with outlets in London, the South West and North East. By the end of 2015 the company will have 21 sites.
Pie outlet Pieminister comes in at joint third, having grown from seven to 20 outlets over the past four years. Pieminister has plans to double its estate over the next four years and is increasing its presence in pubs by launching a full brand licence, essentially a franchise, to pub operators.
Click on thumbnail below to view table of top 20 fastest growing operators.