Several trends are impacting fast-casual restaurants these days. In previous articles, I focused on two of these trends, namely the effectiveness of advertising on new menu item sales and value meal trends. Today I'll address how health influences consumers' dining choices. In particular, I'll highlight three companies that consumers are most willing to fork over a premium to for nutritious offerings.
Putting a premium on premium
The Placed survey "Dining Out in America, Part 2: The Impact of New Menu Items, Value, and Nutrition" studied where consumers who'd pay extra money for healthy menu options were most likely to dine. Nutrition-conscious consumers were 31% more likely to pay a premium to eat healthier at Chipotle Mexican Grill (NYSE:CMG), which topped the list. Also near the top of the list were Panera Bread (NASDAQ:PNRA) and Starbucks (NASDAQ:SBUX), where consumers were 19% and 16%, respectively, more likely to seek out these offerings.
Chipotle differentiates itself from many of its competitors, given its unwavering focus on locally sourced and sustainably raised ingredients. As founder and co-CEO Steve Ells recently summed up, "We are changing the way people think about and eat fast food." The company continues to entice customers while commanding a hefty premium for its high-quality burritos, even after years of fiery growth.
Obviously, Panera and Starbucks haven't performed too shabbily either.
Panera continues to roll out healthy offerings like pastas and its "Hidden Menu" featuring salads and lettuce wraps. First-quarter same-store sales came in at 3.3%, with management stating this might have been closer to 4.5% if not for adverse weather that affected sales. But company growth is accelerating; the bakery-cafe chain expects same-store sales growth of 4% to 5% for next quarter.
By placing more emphasis on its food items, Starbucks has rebranded itself away from being just a coffee haven. For example, earlier this year, the company introduced a number of new sandwiches and salads, including its Turkey and Havarti sandwich and Hearty Veggie and Brown Rice Salad Bowl. To further cater to the health-conscious consumer, Starbucks will post calorie counts on all of its menu boards at the end of this month, as Chipotle and Panera have for some time. For its most recent quarter, Starbucks comp sales grew 7% in the U.S.
Placed also found that consumers who considered healthy options important were more likely to be female, higher-income, and age 35 or older. Information like this gives Chipotle, Panera, and Starbucks even more insight into how to target the promotion and price of their healthy offerings.
Foolish final thoughts
As the trend toward healthy eating continues, these three fast-casual restaurants are well poised to gain even greater wallet share from mouthwateringly profitable demographic groups. That's a tasty morsel for investors to chew on.