When looking back on 2018, it was apparent that there were a clear group of concepts that were starting to separate from the pack in the restaurant industry. Restaurant closures topped at 50K closed locations in 2018– so the market seemed to have some correction.
While we did see some closings of lower performers in casual dining with Applebee’s alone closing over 250 locations in the past two years, the good news was the emerging brand's sector saw significant growth. This sector showed better performance in 2018 than any other brand groups.
These emerging brands consist of about 250 total brands that have multiple locations and are starting to take control of categories. Make sure to check out our 2018 Emerging Brands Report and to be on the lookout for our 2019 list.
All that said, my 15 brands to watch for 2019 are led by a group of leaders that I think have some unique and interesting aspects that put them in the limelight.
For example, Sweetgreen is setting a new standard of what it means to be a restaurant. The restaurant has morphed into a lifestyle brand or platform that will prove to be a new strategy for several brands that have the following.
Lemonade is one of these as well and what separates the brand from the pack is its quality and the brand connection that is prevailing in a big way with guests. If they continue on a growth strategy this could be a player in the healthy halo sector very quickly.
Mod Pizza is another in this group that has clearly won the fast-casual pizza wars, now with over 400 locations and a management team that is geared toward people and culture this brand could be one to bet on.
My special mention would be Cava, while not on my 15 brands to watch, their acquisition of the Mediterranean fast-casual chain Zoe’s Kitchen creates both opportunities and challenges that I think are worth mentioning. They also have a rockstar group of investors that are a good reason to keep an eye on them.
Don't miss the episode of The Barron Report above where I break down why these brands have that X-factor.