Watch out for specialist operators, says Horizons

By Melodie Michel contact

- Last updated on GMT

Dunkin' Donuts came second on the Horizons Ones To Watch survey
Dunkin' Donuts came second on the Horizons Ones To Watch survey

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Foodservice companies operating in niche markets are the fastest-growing ones, according to Horizons’ latest Ones To Watch survey.

Fuel Juice bars topped the list of fastest-growing emerging brands, having expanded from eight venues in 2011 to 24 this year. It operates in small kiosks in shopping malls and transport hubs, but away from food courts.

It was followed by Dunkin’ Donuts and healthy fast food operator Abokado in joint second place, Tortilla Mexican Grill, Pieminster, Boost Juice and Asian fast-casual brand Chozen Noodle.

Simple ideas

“We are seeing particular qualities in all these fledgling Ones To Watch brands, which are helping them become scalable concepts,” said Nicola Knight, Horizons’ director of services.

“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. 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.”

Niche concepts

London-based lunch operator Abokado for example added 13 sites from 2011 to 2014, reaching a total of 22, and has has another two in the pipeline to open by March 2015. The company has seen like-for-like sales grow by 19 per cent in the past financial year, with around 80 per cent of turnover coming from the two-hour lunch period.

Tortilla has grown from seven UK sites in 2011 to 20 today and is opening another one in Liverpool by the end of 2014.

In joint third place, Pieminster has grown from seven to 20 outlets over the past four years, and plans to double that number over the next four years, partly by launching a full brand licence for pub operators.

The sectors that have seen the most expansion in 2014 are healthy quick service outlets (107 new outlets), Italian casual dining (91), and Mexican burrito outlets (78), as well as artisan bakeries and coffee shops (74) and sandwich bar outlets (74).

New investment

The Horizons survey also pointed to an innovative approach to investment, namely through crowdfunding.

For example, the report ranked Chilango​ 82nd​ in the Ones To Watch list, and River Cottage Canteen​ number 15 in the list of Bubbling Under brands.

To be included in the Ones To Watch list, operators must have between five and 25 outlets, and expanded venue numbers by at least 20 per cent over the past three years. Brands with fewer than five sites but the potential to expand rapidly are listed as Bubbling Under brands.

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