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    Fast Casual Vapiano Entrenches in South, Debuts in Chicago

    By Rick Zambrano

    Fast Casual Vapiano Entrenches in South, Debuts in Chicago_Kandessa Media

    Vapiano International, the pasta, salad and sandwich chain with European roots, expands its presence in the South this summer. The 95-unit fast casual chain will open in Charlotte at the end of this month, on the heels of a grand opening in Reston, Va., on June 28.

    The new digs in Reston is an eclectic, urban-like setting just 20 miles outside Washington, DC, and nestled in the busy Dulles Technology Corridor where Web companies like AOL and VeriSign first made their mark.

    The Charlotte, N.C. store will open at 201 South Tryon Street, Suite 101 in the Steele Creek area of Charlotte, which was mostly pastures and farmland a couple of decades back.

    In addition, windy city patrons will see Vapiano debut in the Chicago market in late August, followed by a second store at the Shops at Northbridge on Chicago's Magnificent Mile in 2012. The first store will be located at 2577 North Clark Street in North Chicago. Vapiano International has a total of eight stores currently in construction.

    "As for markets, we are clearly extending out, but want to structurally strengthen our brand in existing markets,” says Bill Bessette, CEO of Vapiano USA. Bessette refers to the strategy as a ‘selective cluster strategy.’

    With a development deal underway for its sixth spot in DC, and its sights set on enlarging its New York and Boston footprints, the cluster strategy may reap big rewards for the European-style eatery. Unlike the bulk of fast casual brands, Vapiano incorporates alcohol sales and modern lounges to its mix. Patios and exterior urban hangouts highlight the ambience and anchor clientele.

    Bessette says the brand averages 18 to 20 percent alcohol sales in Europe, with target expansion markets in the United States tipping the 30 percent mark.

    A recent study by Technomic, a Chicago foodservice research and consulting firm, shows that alcohol sales are expected to be stronger than originally expected, but will grow modestly at restaurants. (Alcohol typically represents only 2 to 3 percent of total sales for fast casual restaurants that serve alcohol.)

    But those opportunities are selective, says David Henkes, vice president at Technomic. "Brands are separating those locations that serve alcohol to appeal to a different type of consumer," says Henkes about Starbucks and Burger King. Both Starbucks and Burger King have launched concepts that serve alcohol, which are typically located in major urban areas with a younger demographic.

    While overall alcohol sales in 2010 grew modestly, up 0.4 percent; fast casual eateries maintained robust alchohol growth, nearly matching the overall 9.3 percent year-over-year total food and sales increase they posted.

    Technomic's Henkes cautions that brands need to assess whether alcohol fits their overall strategies and messaging. Licensing hurdles, training, liability, and the young age of fast casual workers (sometimes in their teens) present major challenges that need to be considered.

    A recent consumer behavior study by Technomic showed that 20 percent of adults refraining from alcohol say it’s because alcohol is too expensive. The same study noted that consumers consider alcohol as an "extra," signaling that operators need to review affordable options for guests. 

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    This story appears in:  Fast Casual | Chain News