Once the hottest concept in dining, fast-casual restaurants have turned cold. Although customers fleeing Chipotle Mexican Grill (NYSE:CMG) was largely related to its food-borne illness woes, it heralded the coming declining fortunes of the entire sector as restaurants all across the space have since succumbed to falling customer counts.

Worse, all of the niche segments that popped up in an attempt to ride the trend have fallen hard, too. Mediterranean cuisine leader Zoe's Kitchen has lost more than a third of its value in the last six months; better burger leader Shake Shack has traded in the mid-$30s range for a year after having lost two-thirds of its value following its IPO pop; and sandwich shop Potbelly has done the same thing, but in the mid-teens range and for almost two years now. Another fast-casual sandwich maker, Cosi, filed for bankruptcy last year.

Wood-fired artisanal pizza

Image source: Getty Images.

No matter how you slice it

Arguably, no trendy fast-casual dining concept has risen faster and fallen further than pizza, which was relatively late to the scene, but may already be dead. Where once everyone was angling to be "the next Chipotle of pizza" -- so much so that Chipotle itself got into the game by investing in fast-casual chain Pizzeria Locale -- there may now be a great shakeout coming to the industry.

Analysts had argued made-to-order pizza was ripe for cashing in on the trend because the product lent itself to using fresh, gourmet ingredients that capitalized on the growing popularity of health and wellness concepts.

The menus speak of handcrafted, scratch-made dough with artisanal ingredients like toppings that include ovalini or buffalo milk mozzarella, tuscan marinara, kale pesto, or sriracha. It became a mouthful just to order a cheese pie.

While fast-casual shops intended to carve out a slice of the $46 billion pizza industry, it was always a rather tenuous supposition.

Pizza deliveery man holding thermal bag

Image source: Getty Images.

Pizza is already pretty fresh

Yum! Brands (NYSE:YUM) Pizza Hut chain, for example, offered something of a fast-casual experience, though it was always considered more fast food, and it routinely suffered from lagging sales. But it sought to upgrade the experience further with its "Flavor of Now" menu that offered customers a mind-numbing assortment of customizable options but just this month, YUM's CEO admitted the chain's U.S. division disappointed yet again, and the results "are not acceptable." That's important because the division represents 10% of total operating profits.

Similarly situated Pizzeria Uno declared bankruptcy several years prior. Industry peer Sbarro, although mostly known as a mall-based staple, tried going upscale with Pizza Cucinova, where it served artisanal Neapolitan-style pizzas with flour imported from Italy and ingredients like wild mushrooms, white truffle oil, potatoes, and gorgonzola cheese. It, too, went bankrupt.

More importantly, it was hard to escape the fact that your local pizza parlor already offered pretty fresh ingredients as it was. They might not describe their slice pies as "artisanal," but the made-to-order pies had the added benefit of typically being ready within 10 minutes and delivered to your door.

An inexorable trend

Still, fast-casual pizza shops began popping up all over anyway. Beyond Chipotle's Pizzeria Locale, there was also Blaze Pizza, Papa Murphy's, Rave Restaurant Group's Pie Five, and PizzaRev, a project that got financial backing from Buffalo Wild Wings (NASDAQ:BWLD). Many of these concepts are now stumbling hard.

Pizza being made in an assembly line fashion

Image source: Pieology.

Rave just reported fiscal second-quarter same-store sales tumbled more than 17% from the year-ago period, but it stubbornly continues to open new restaurants even though it admits "restaurant trends around the country continue to be challenging." Last month, Papa Murphy's said its fourth-quarter comps fell 8% and were down 5% for the year, indicating the pace of decline was increasing. And the activist investor targeting Buffalo Wild Wings, which reported another disappointing quarter, wants it to get rid of its fast-casual pizza and taco shops to focus just on its chicken wings and beer joints. Chipotle doesn't even bother mentioning its pizzerias in its quarterly conference calls with analysts.

While there are leaders emerging in the space, such as Blaze Pizza, and perhaps Pieology, among a few others, the larger trend seems to have run its course, and we may see more than a few fall by the wayside. Fast-casual pizza might not be dead, but like cheese stuck to the top of a pizza box, the niche no longer looks very appetizing.