Since starting school in Hanover, every time I return home for break I am invariably struck by the changes that have taken place in my absence.  The gradual and otherwise imperceptible are made prominent when given a term to develop.

On this most recent trip home for the holidays I was greeted by a handful of new restaurants that had seemingly materialized from the ether.  Recommendation and convenience lured me to one of these fresh entrants: Mendocino Farms.  Offering gourmet sandwiches and salads, I expected a pleasurable if unexceptional dining experience.  The sandwich was above average, but my attention was occupied by the restaurant itself rather than the food.  I had never before seen such a blatantly contrived space in my life.  It seemed as though every aspect of décor and detail of service was carefully engineered to sell an image of high-minded responsibility, integrity and chic.  What was being sold here was a philosophy that the customer could righteously ascribe to themselves with the purchase of a meal.  The centerpiece of the restaurant was not the sandwich, but the customer himself there to be seen with his arsenal of Apple products.  Prominently displayed on a wall of the establishment is Jean Brillat-Savarin’s famous aphorism, “Tell me what you eat, and I will tell you what you are,” seemingly a public acceptance of their shallow pandering to the self-obsessed.

Though founded in 2003, Mendocino Farms is a borderline hyperbolic incarnation of the “fast-casual” category of dining. While boasting high quality and local ingredients, sustainability, and high-integrity labor practices, it seemed that they exemplified the very philosophical heart of the fast-casual industry.

The fast-casual category is somewhat nebulous.  With no hard and fast rules or definitive definition, it is largely an ontological distinction. Even so, the industry has been ravenously accumulating market share, growing 550 percent between 1999 and 2015 (chart included). They tend to be limited service operations providing made-to-order meals at higher price points but with comparable preparation time to that of traditional fast food restaurants. What is uniquely attractive about this sector is its perceived integrity and purpose, as is made abundantly clear in the example of Mendocino Farms.  To have a business model built on a foundation of conscientious business practices is feasible at smaller scales but inherently leads to fragility as the operation is scaled up.

This weakness has been exposed in Chiptole’s recent health debacles.  After successive E. coli breakouts and a norovirus outbreak in December that resulted in a grand jury subpoena, Chipotle’s stock has been reeling (though at the time of this writing rebounded slightly upon news that they would be closing all of their stores to perform food safety instructions).  As of Jan. 6, Chipotle’s stock price stood at losses of 41.93 percent YTD.  This is in contrast to gains seen by various competitors like Panera Bread Company, which is up 6.66 percent over the same period.  In a frenzy to quell public concern about the safety of their food, Chipotle reported that they will begin limiting their use of locally-sourced ingredients as well as centralizing much of their food processing.  This fundamental dilemma between the logistics of scalability and the righteous philosophy that defines the business model is at the core of the fast-casual industry’s DNA. So far, however, Chipotle has been the only such company to have to reckon with this as few other fast-casual establishments have scaled up so much. Despite a spate of fast-casuals losing ground this past year, it would be safe to maintain a bullish view on the industry as a whole.

At the beginning of 2016, the National Restaurant Association surveyed 1,600 professional chefs asking what they felt the top food trends would be in the upcoming year.  The top six were as follows: 1. Locally sourced meats and seafood, 2. Chef-driven fast-casual concepts, 3. Locally grown produce, 4. Hyper-local sourcing , 5. Natural ingredients/minimally processed food, 6. Environmental sustainability.  This is practically an outline of the fast-casual ethos, suggesting the sector has a very bright year ahead of it.

The lack of a concrete definition for inclusion in the sector and the very promising outlook for the industry mean that it is possible for existing restaurants to rebrand themselves in the hopes of cashing in on the cache of the “fast-casual” classification.  What this means is that a lot of the growth we can expect will be attributable to cannibalization in addition to new development.  This rebranding is happening right now as fast-food chains flee from the now pejorative classification of “fast-food” from Dairy Queen’s “fan-food” and Arby’s “fast-crafted” fare to the striving “modern, progressive burger company” otherwise known as McDonald’s.

This center-ward shift is not only happening at the bottom end of the spectrum but also at the very top.  As observed by New York Magazine’s Alan Sytsma, fine dining, at least as we conceive of it now, may be on its way out.  Citing a devastating review of Per Se in this week’s New York Times that downgraded the paragon of fine dining from four to two stars, Sytsma pointed out the increasing aversion to the immense complexity and labor involved in providing the multi-hour tasting menu format generally expected from a fine-dining experience.  Several fixtures of the fine-dining landscape are planning on adopting more casual formats in the near future and innovative, skilled chefs are increasingly abandoning the trials and tribulations of the elite foodscape for the fame and fortune promised them closer to the middle of the road.

So it seems as though this nebulous class of restaurant, “fast-casual” is the midpoint in this convergence theory of food.  As everything trends towards homogeneity, however, we as a society will not be able to repress the taxonomic instinct that birthed “fast-casual” to begin with.  So what do we have to look forward to? More and more similar restaurants distinguished from one another by a soup of hyphens.

A two-year stint in investment banking or consulting has long been considered the first step on the post-graduate career path for many a business-minded graduate from a top university. But the global recession and the contraction of the financial industry have made Wall Street jobs harder to get and even harder to keep, and backlash to the financial turmoil, stoked by the Occupy Movement, has some students rethinking their views on the best place to gain experience before heading back to grad school or entering the business world. More and more recent graduates are choosing to bypass the traditional track and jump into their own entrepreneurial endeavors.

Dave Mainiero ’11, is one such entrepreneur. During his senior year at Dartmouth, Mainiero was contemplating what to do in the year or two before he attended law school. He considered more traditional avenues, but by the summer after graduation, he had decided to start his own business: a fast-casual burger joint in Santa Monica, California. Starting his own restaurant seemed like the ideal way to pursue his talent in and passion for the food business, while providing a source of income to finance his future law degree.

A fourth generation restaurateur, Mainiero drew on his years of exposure to all aspects of the restaurant business, to become his own boss at 22. Although Mainiero considered working for his uncle, a successful restaurateur in California, “I want to make a name for myself in the industry independent of my family. Given the choice between working for someone and owning my own business, it seemed like the logical decision,” he said. Mainiero has “been able to do most of it on [his] own” he said, of carrying out his project, “my family lives on the East Coast, but if I have questions on things, I always verify with my family…I have them advising me.” He also utilized his time at Dartmouth praising the “networking opportunities that naturally present themselves to a Dartmouth student. You’ll have a lot of friends who go on to be very successful, and many who have a lot of money in their first few years after college that they are looking to invest somewhere. That’s a good inroad to some startup money.”

Mainiero recently completed a business deal with his father’s company BurgerFi, a Florida based franchiser with two current burger spots and two more opening up in the near future. Now, Mainiero’s project will become the first west coast outpost of BurgerFi, with certain features unique to the Santa Monica locale. Although Mainiero did not originally plan to open a BurgerFi, he describes the deal as “mutually beneficial” given that he has access to an already established brand network, and BurgerFi will benefit from the prime positioning in Santa Monica, and provide brand visibility to attract potential franchisees on the West Coast. BurgerFi prides itself on sustainable building and products and all natural, locally sourced ingredients and menu offerings like natural, antibiotic and hormone free beef, and sugar cane sodas.

In the summer of 2011, while visiting his uncle in California, Mainiero drove by a deserted KFC in a prime location in Santa Monica. He researched the property, and a week later saw an eviction notice on the door. He called them the next day and acquired the property. He then embarked on the long journey of building the business. Mainiero says he’s “been fortunate not to run into any major obstacles so far” and has mainly been dealing with the back and forth of various approval steps, “going through city zoning and design review and permitting, is necessary for any business. It’s frustrating, you feel like you’re getting started right off the bat but then you run into a lot of bureaucratic red tape.” Government zoning and permitting has been a particular challenge in Laguna, where stringent laws exist to try and prohibit fast food restaurants like the former KFC from setting up shop. The town is resistant to franchisees and chains, which means Mainiero will be creating a unique restaurant, exclusive to the Laguna beach area, but still under the BurgerFi banner. Currently in a holding pattern, waiting for responses and approval on construction, building and electricity plans, Mainiero has been working on crafting the menu, developing interior design ideas, and establishing agreements for local food sourcing. After the official announcement of the BurgerFi partnership, Mainiero will begin a major press push to advertise the deal.

Mainiero anticipated his age might be a challenge in the process of building his own business. Instead, he said “I’ve had a generally positive experience, you have to have no tolerance for people trying to pull wool over your eyes for price gauging and things like that…then they respect you as a business person” His restaurant background has served as a deterrent for people trying to take advantage of him, he says, and “in this economy people are really hungry for work” which makes them less inclined to jeopardize possible job opportunities.

For Mainiero, his depth of experience, knowledge, and connection to the restaurant business “was something that I felt I had a lot of talent and advantage in” he said, which gave him the confidence and the skills to dive in head first. Particularly in the restaurant and food business, according to Mainiero, having as much experience as possible is crucial for starting off on your own. His decision to take time off before law school allowed him the freedom to pursue his own venture, saying “taking a year off isn’t a bad idea, even for those that have always thought, like I did, that taking a year off would be a complete waste of time.”

Mainiero encourages potential entrepreneurs “not to feel compelled to jump into a job you’re not passionate about through corporate recruiting or other opportunities that may arise out of convenience.” He cautions, however, that starting your own business early on is dependent on one’s “background, needs, and desires.” He also noted that there are still numerous benefits of the more traditional track for someone interested in starting their own business, saying “the opportunities that present themselves to Dartmouth students in terms of high-paying entry- level jobs are not something to be overlooked” because you can accumulate money to finance your own endeavors and “gain more access to people who might be willing to invest in your business idea at that juncture or later in your life.”

As for what the future holds, Mainiero still plans on attending law school in the next year, and has put a plan into place that will allow him to manage the business from afar. He found potential managing partners through Craigslist postings and relationships with other Laguna Beach food purveyors. He has also partnered with his uncle and his network of restaurants. After the restaurant opens in May, Mainiero plan to spend four or five months training the staff, and hopefully install a good network of people who can run the business while he’s in school. While he “definitely has an eye towards expansion” he’s waiting to see what happens with the opening of his first BurgerFi and says his post- law school career plans are as yet to be determined.

Over the past half-century, fast food giants such as McDonald’s and Yum! Brands Inc. have succeeded in entrenching themselves in American culture and establishing strategic positions within the American market. However, the economic downturn in the United States over the past couple of years, coupled with steep commodity and energy prices, the housing crisis, and increased unemployment, have collectively diminished consumer spending and increased production costs. These factors stunted the growth of the fast food industry and stifled corporate profits. The ensuing stagnation has since been compounded by recent health-related initiatives promoting healthier eating, which draw consumers away from fast food and towards healthier alternatives. In turn, the entire situation prompted fast food chains like McDonald’s and Yum! Brands to change their approach. Fast food chains have refocused their attention on international expansion, particularly in the emerging markets.The term “emerging markets” encompasses rapidly industrializing nations like China, India, and Russia. These economies feature explosive growth and an expanding middle class with greater disposable income. In addition, these nations contain significant urban populations and largely unsaturated markets. Jointly, they present rather promising growth prospects for fast food chains. Eager to take advantage of such favorable economic conditions, companies like McDonald’s and Yum! Brands have consistently remained at the forefront of establishing hundreds of new stores in these locations.

Although McDonald’s, which boasts over 32,000 locations in 117 countries, may be the world’s largest hamburger fast food restaurant chain, it is struggling to keep up with its competitor, Yum! Brands Inc. The rapidly expanding and innovating corporation, which owns KFC, Taco Bell, and Pizza Hut, has created a tremendous presence overseas, arguably more so than McDonald’s. It operates an impressive 38,000 restaurants in 110 countries, earning the title of the world’s largest restaurant company.

The two juggernauts together have sparked an industry-wide search for new markets, which has in turn fostered intense competition among opposing chains. This phenomenon is nowhere more evident than in China. With a middle class of over 300 million people and estimates that the figure could reach 500 million within a decade, China is potentially a very lucrative market.

Even though Yum! Brands has already established itself as the prominent fast food company in China, it is constantly seeking to expand its reach. In order to increase brand recognition of KFC in China, Yum! Brands has been opening the equivalent of a new KFC location almost every day. Of its 1,400 new restaurants in 2009, Yum! Brands opened 509 in China alone. In an effort to keep pace with Yum! Brands, McDonald’s has been forced to constantly innovate and expand.

McDonald’s expects to increase spending in China by 40% in 2011, as well as remodel 80% of its existing locations by 2013 as part of its $1 billion global investment project. This comes in response to Yum! Brands’ current domination of the Chinese sphere with 4,000 outlets in the country and 40% of the market share. As of now, McDonald’s clearly lags behind, possessing only 16% of the market share and having just 1,900 restaurants in China.

In addition to trying to outpace the local competition, fast food companies like Yum! Brands have begun to buy out these smaller companies. In April of this year, the company made a preliminary offer to acquire a larger share of the Chinese company Little Sheep Group Ltd., a casual-dining chain that specializes in “hot pot” dishes.

It is important to note, however, that the transition to a more global outlook is not solely limited to the two biggest players in the industry, nor is the growth limited just to China. Other chain restaurants, including Starbucks, California Pizza Kitchen, and Domino’s, all have plans to enter and expand their number of stores in China as well. Fast food chains have also sought out various markets in Eastern Europe, especially Russia. In fact, McDonald’s recently announced its plans to increase its store count in Russia by 15%, which amounts to building 40 new restaurants. This would be in addition to its $174 million investment and 30 new restaurants constructed in 2010.

Despite the massive penetration into these developing economies already, the most significant growth has yet to come. In an attempt to gain larger footholds in regions like India, the two fast food mammoths have made ambitious long-term investments that will likely materialize within the next few years. Most notably, Yum! Brands has plans to quadruple the number of its restaurants in India by 2015, which would bring its number of locations in India to a grand total of 1,000. Already a major contributor to the company’s revenues, Yum! Brands expects that Indian operations will bring in $100 million in net income in that same year. What’s more, the fast food company hopes to derive as much as 60% of its earnings from emerging markets by 2015, which would constitute double what these very same markets earned Yum! Brands just five years ago. To accomplish this, Yum! Brands expects to invest over $120 million to fund this additional expansion, on top of the $100 million invested in 2009. In an effort to keep up, McDonald’s expects to open 30 new restaurants in India in 2011 alone as part of its $1 billion global investment project that is currently underway.

With over 245 million people and a large urban youth population, Indonesia is rapidly becoming an attractive market as well. Yum! Brands recently opened its 400th KFC  in Indonesia, just 32 years since the first one opened there in 1979. And the company shows no indications of stopping at 400. According to the Managing Director of the Asia Franchise Business Unit of Yum! Restaurants International, Yum! Brands plans to have over 1,000 KFC and Pizza Hut restaurants in Indonesia by the year 2015.

However, gaining entry into new markets can be difficult, and requires more than merely constructing the physical plant. Rather, it entails tailoring the operations to the specific region, and more specifically, adapting to the needs of the new clientele. In order to stimulate demand for their products, fast food chains have developed unique food options to cater to the differing tastes endemic to that particular nation. Although such menu alterations may be costly, they are integral parts of capturing market share from local restaurants. For example, McDonald’s removed its iconic hamburger from its menus in India because there, the cow is considered a sacred entity. Instead of beef, McDonald’s offers an extensive vegetarian menu, which features 100% vegetarian patties consisting of potatoes, peas, carrots, and Indian spices. McDonald’s has also launched new additions to its McSpicy line, in hopes of attracting a larger number of customers. Beyond India, the company offers shrimp burgers in Japan, a rice and bean dish in Costa Rica, Big Macs wrapped in pitas in Greece, and burgers with rice patties rather than buns in China.

In the case of China, the fast food giants didn’t stop with simply diversifying their menu options.They have also altered operations in order to adapt to the new environment. McDonald’s has employed a strategy to broaden its reach, increase accessibility, and ultimately bolster ales. To do so, the fast food chain plans on renovating existing locations, increasing the number of drive- through outlets in big cities, and expanding the number of restaurants that feature delivery services, 24-hour service, and McCafés. Yum! Brands has similar ideas to stay competitive, hoping to offer breakfast, home delivery, and 24-hour service in its KFC and Pizza Hut chains. Moreover, Yum! Brands has hired Chinese managers to run its operations in China to gain insight into how the Chinese market works. The fast food company has also taken steps to enhance its perception as a more upscale dining experience by offering menu options like wine and escargot at its Pizza Hut locations in China.

While investments in developing economies have the potential to be incredibly profitable, emerging markets like China also pose potential problems for fast food chains. Such high growth environments often bring high levels of inflation, which translates into higher commodity prices, rent, and labor costs. Despite the elevated costs, the move to emerging markets appears to already be paying dividends. Yum! Brands’ recently released a quarterly report indicating a 13% increase in same- store sales, coupled with a 15% rise in transactions in its Chinese restaurants. Furthermore, 54% of its total profits came from China. McDonald’s appears to be trailing a bit, but still posted a 3.2% increase in sales in the Asia Pacific, Middle East, and Africa region. Evidently, with so much room for expansion in these developing markets, the possibilities seem limitless.