“Fast Casual” is one of the fastest growing segments in the food service industry. Combining the convenience and speed of traditional fast food with greater focus on freshness and food quality, this new breed of restaurant is influencing the organizational structures and talent needs of progressive companies. Herbert Mines Associates has served as a partner on executive talent for consumer-facing companies for 38 years. We bring deep insights on how the critically important role of Chief Development Officer is evolving in today’s highly competitive market landscape.
1. Competition for Prime Locations: The restaurant market is more crowded than ever with new Fast Casual concepts, creating intense competition for the most desirable real estate. The situation is exacerbated by landlord “exclusive use” contract clauses. Progressive Chief Development Officers now need an aggressive acquisition strategy that leverages company-owned, franchise locations, as well as evolving formats to capitalize on the acquisition of prime real estate.
2. Rising Costs of Real Estate: In addition to a shortage of prime real estate, restaurants are facing sky-rocketing rents and real estate acquisition prices. Contract-savviness and fierce negotiating skills are now highly desired competencies of Chief Development Officers, as profitable growth hinges on their deal-making abilities at every stage of development from real estate acquisition to contractor negotiations.
3. Enterprise Focus on Customer Experience: Many consumer-facing companies are emphasizing customer experience as a major strategic priority, and Fast Casual restaurants are no exception. This focus impacts the priorities of the development team as they need to balance acquiring and creating environments that are experiential yet maximize the capacity of the space for optimum revenue generation. Today’s top Chief Development Officers orchestrate the extension of brand into the physicality of the store, while leading the selection of locations and leveraging cross-functional partnerships.
4. Tech-Integrated Spaces: Many up-and-coming fast casual concepts are at the forefront of integrating technology into the store experience. This now requires the Chief Development Officer to lead with an omni-channel mindset and effectively partner with his/her IT and digital peers to drive innovative solutions to customers’ demands.
5. Big Data: Real Estate and Development has become an increasingly data-driven function. Decisions about where to open new stores are no longer based on “gut or intuition” but are steeped in analytics about customer behavior, neighborhood demographics, and operational efficiency. Best in class Chief Development Officers now leverage analytic site modeling tools, macro market analysis, segmentation modeling, and competitor scoring among other analysis to efficiently drive the execution of their company’s growth plan.