If you want a lucrative business opportunity, the restaurant industry is a great place to look. U.S. restaurant sales for 2005 were projected to total $475.8 billion, according to the National Restaurant Association. And by 2010 total sales are forecast to reach about $577 billion.

Although pizza is America's favorite ethnic food, the pizza market is surprisingly "wide open": In 2004 the top 25 pizza chains accounted for only half of the pizza segment's $30.9 billion in total sales (the largest, Pizza Hut, had only 17% of the market).

93% of Americans eat at least one pizza per month. In the U.S., pizza is consumed at a rate of about 350 slices per second, or 100 acres of pizza per day!¹

The vast opportunity of the pizza industry is now being enhanced two key trends:

• Home Meal Replacement: Sales of take-out and delivery meals are growing three times faster than on-premise dining, according to Technomic, a leading restaurant-consulting firm.²
• "Fast-Casual" Dining: Sales at these "better-than-fast-food" restaurants should rise 15% to 20% annually for the next few years according to Salomon Smith Barney analyst Mark Kalinowski. Plus, fast-casual has room to grow, as it is now only about 2% (or $8 billion) of total restaurant sales.²

Fast-Casual is Here to Stay. It's Easy to See Why

Although the fast-casual restaurant segment is only a few years old, it's becoming the industry's consistent growth leader, as stated in the NPD Group's 2004 Fast Casual Report:

• Unit expansion: The number of fast-casual locations increased by 13% in both 2003 and 2004, while the total number of restaurants nationally held steady.
• Traffic: For the year ending September 2004 versus the same period a year earlier, traffic in fast-casual restaurants was up 7%.
• Revenues: Consumer spending in fast-casual concepts was up 10% for the year ending September 2004. And from 2001 to 2004, fast-casual sales in the U.S. grew an average of 12.5% per year. ³

By the end of the decade, it's estimated that the U.S. fast-casual sector will generate $35 billion a year in annual sales, and will account for more than half of all food-service growth.⁴

What's driving these trends? Simple: fast-casual concepts are meeting consumers' needs in ways that traditional "quick-serve" outlets have not. The NPD report says, "fast-casual restaurants are perceived by consumers to offer a slightly higher quality of food, service, and atmosphere. They continue to score higher on customer satisfaction attributes."

More specifically, most fast-casual concepts provide a better customer experience by:

• using far more fresh ingredients in their foods
• offering a wider, more sophisticated selection of menu items
• emphasizing customer service in creative new ways
• providing a more inviting in-store ambiance
• preparing food "to order" in view of the customer

"The thing to remember about fast-casual," says longtime Chicago restaurant consultant Rhonda Sanderson, "is that it's not just about the food, but also about the atmosphere and lifestyle. One reason it appeals to consumers, and especially to women, is that the restaurants don't look like fast food restaurants."⁵

1. Source: www.pizzaware.com/facts
2. Source: www.offthegrill.com/story
3. Source: Tragus Holdings October 2005 report, "The Changing U.K. Leisure Dining Sector."
4. Source: Dining Out Review—Volume IV, Fast Casual, U.S., 2004 (on www.just-food.com), p. 4
5. Source: www.pizzatoday.com, October 2005