AILSA CHANG, HOST:
So what did you have for lunch today? You may have considered spending your precious 30-minute lunch running to a restaurant that made you stand in line to pick some toppings to pile on top of each other - you know, a grain, a meat, maybe some veggies. Well, the lunch bowl industry - which Chipotle launched to stardom - has exploded over the years. There are salad shops, Mediterranean and Korean options. But now, something that a lot of people once loved for its convenience is facing some economic headwinds and, even worse, online mockery. Bloomberg consumer reporter Redd Brown wrote all about this earlier this month and joins us now. Hi, Redd.
REDD BROWN: Hi there.
CHANG: So I know that you cover earnings reports for these big lunch bowl companies. We're talking about Chipotle and Sweetgreen and Cava. What do the numbers tell us?
BROWN: The numbers are telling us that they are definitely facing probably one of the stiffer economic moments in recent memory. They had, you know, a really explosive period of growth after the pandemic when people were, you know, hungry to get back out there and go back to their favorite chain. Sorry...
CHANG: (Laughter) Hungry, so to speak.
BROWN: Excuse the pun. And they found a situation. They found a consumer who was willing to just take on as much price as they were willing to raise them. So...
CHANG: Yeah.
BROWN: ...That is starting to kind of bite them now, where people are starting to feel the pinch in the wallet when it comes to spending, you know, upwards of 15, $20 for a lunch, and they are a little less willing to do so. And that's really what we're seeing show up in these earnings reports over this past year.
CHANG: And this building of resentment has coined a term online people are using to describe these kinds of meals. Can you tell us what that term is?
BROWN: Yeah, the term is slop.
CHANG: And that's the thing. Like, when I pay almost $20 for a Sweetgreen salad, I don't want to use the word slop for something I just paid that much money for.
BROWN: No, definitely not. I mean, that was the kind of the, like, founding principle of a lot of these companies, that they - we're going to give you fast food, which has a bunch of negative connotations, but we're going to do it in an elevated way. We're going to do it with fresh ingredients. We're going to do it in this nice, you know, minimal, cool restaurant. But now there has been this sort of turn where people are starting to question, you know, like, what am I actually getting for $20?
CHANG: Yeah. Meanwhile, are these bowl businesses doing anything to right the ship?
BROWN: Yeah, it's a good question. We've heard from both Cava and Chipotle this idea of being more of, like, a lifestyle brand. Cava has this idea of, like, introducing the Mediterranean way of life to people. Sweetgreen talked about becoming more of a lifestyle brand on their most recent earnings call. And I think how maybe we can interpret that is, like, how can we add other value to you as a customer? How can we make this more appealing so that, yes, you may be paying for a $15 salad bowl, but you're also getting all of this other sort of, like, prestige or something like that, or you're getting a better in-store experience?
CHANG: I'm just wondering, though. I mean, people are still struggling under inflation. Prices don't seem to be coming down anytime soon. So are these bowl companies just suffering because of these larger forces, or are you seeing something idiosyncratic, something specific to these bowl companies that's happening?
BROWN: I think it's a little bit of both. So one thing that came up on all three earnings calls for these companies was that younger people are pulling back the most. That's where they're seeing the most kind of foot traffic leaving from the restaurants. And those are the same people that are kind of feeling the economic issues most acutely at the moment. They're facing higher unemployment. They're facing the return of debt payments, things like that. So that does make sense. But at the same time, fast food is doing quite well. There's also some of these more formal sit-down chains that are doing quite well. I think of, like, Chili's has had an incredible year. So it's not...
CHANG: Yeah.
BROWN: ...The fact that everyone is pulling back. It does seem to be something specific to the bowl chains - the slop bowl chains, if you will - that is facing sort of, yes, a specific pressure at the moment.
CHANG: Redd Brown, consumer reporter at Bloomberg. Thank you so much.
BROWN: Thanks for having me. Transcript provided by NPR, Copyright NPR.
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