Restaurant Industry Insights

Japan-Based, Fast-Casual Restaurant Takes the U.S. by Storm

The newest generations are searching for the ultimate restaurant experience, leaving some restauranteurs wondering just how far they need to go in the social entertainment space. Does it require a total transformation, from redefining seating to developing activities and competitions every night? Or is it best left to the “all in” brands like Puttshack and Flight Club, concepts that combine technology, miniature golf, and darts with global food offerings? 

While some brands in search of the “happy medium” have found themselves spread too thin, there appears to be a fast-casual brand that’s found the target—a line between an experience and good food that doesn’t require a major overhaul. It’s Japan-based Pepper Lunch.

Let’s explore what this brand offers and why some industry experts believe it could take the U.S. by storm. 

What Is Pepper Lunch?

Pepper Lunch is a fast-casual Teppanyaki restaurant. Teppanyaki grill is a Japanese cuisine dating back to a time when families gathered together to prepare dinner over small grills. Teppan means iron plate, and yaki means grilled or pan-fried. These long, flat grills can be found at many restaurants, with guests seated around them, watching knife-wielding chefs perform amazing feats while preparing their meals.

It’s not, however, a concept you would expect at a fast-casual venue.

Pepper Lunch has transformed the experience and built a tremendous cult-like following due to their creative take on this culinary style. This brand delivers personal-sized, sizzling hot iron Teppan plates, allowing guests to cook their food, ensuring a fresh hot experience how they like it. Their catchphrase? “The original DIY Teppanyaki.”

It’s experiential, multi-sensory, high-quality, and fresh—the four requirements of today’s restaurant guests.

Where Is Pepper Lunch Located?

Pepper Lunch first appeared in 1994. Their innovative cooking style, fresh ingredients, and bold flavors garnered worldwide attention. They’re currently in 15 countries with over 500 locations. 

They hit the U.S. market in 2018 and now have five locations, including two in Los Angeles County, one in Irvine, CA, another in Houston, and one in Las Vegas. The brand is targeting mid-market suburban communities and, according to Fast Casual, has its eyes on 100 North American locations by the end of 2025.

What Else is Happening in the Fast-Casual Arena?

Other news making the fast-casual segment includes Islands Restaurant’s first virtual concept. The California-based, beach-themed brand recently announced Tortilla Beach by Islands, a take-out and delivery-based concept specializing in Mexican-inspired burritos, tacos, and bowls with an island twist. 

It’s also incorporating the popular alcohol beverages to-go category with Deep Blue Sea and other cocktails developed for the to-go crowd. Tortilla Beach by Islands is offered via Doordash, Uber Eats, and online ordering via their website. 

Which raises the question, what’s happening in the virtual arena

Third-Party Delivery Apps Cracking Down on Virtual Brands

According to Nation’s Restaurant News, Uber Eats has removed about 8,000 delivery-only restaurants from its marketplace, targeting non-compliant and poorly rated virtual restaurant brands. Virtual brands must meet a minimum of three orders per week to remain on the Uber Eats platform. DoorDash has also updated the standards virtual brands must meet. 

Some of these requirements include offering at least eight items with 50% prepared or hot items to deter restaurants from selling packaged fare. Additionally, there must be a 50% differentiation compared to other items on the restaurant’s other menus at the same location.

Brands that play by the rules have noticed an uptick in customers as redundant brands have met their demise. Several prominent virtual brands have also experienced setbacks, including the once-virtual superstar, Nextbite, and MrBeast Burger.

So, one wonders, what does the future hold for virtual brands and ghost kitchens? Many in the industry believe that, like the tide that ebbs and flows, virtual brands are on the decline following a surge during the pandemic.

FAQS

What is the difference between ghost kitchens and virtual restaurants?

These two unique concepts look the same when ordering on a third-party delivery app. From an operational standpoint, the main difference is that virtual brands tend to come out of brick-and-mortar restaurants that create a new concept and delivery-only menu. On the other hand, Ghost kitchens may operate out of any commercial kitchen.   

What is the largest fast-casual chain in the U.S.?

With over 3,250 locations, Chipotle ranks as one of the largest and most popular fast-casual restaurants. Top competitors include Blaze Pizza, Sweetgreen, and Shake Shack. 

Chipotle recently brought back Chipotle IQ, a trivia game that allows loyal customers to compete for prizes and reflects the brand’s digital mastery.

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