Dive Brief:

• Eatertainment is a flourishing segment of the restaurant industry and 70% of consumers prefer to visit eatertainment formats than typical casual dining for group occasions, Technomic managing principal Joe Pawlak said during a National Restaurant Association Show presentation of the top 500 chains.
• "When they get together in groups they want to do something and eatertainment is meeting that need," he said.
• Many concepts below the top 500 on the top 1,000 list are creeping up in sales, such as Punch Bowl Social, and the segment is expanding to incorporate additional activities, such as archery, escape rooms and axe throwing, he said.

Dive Insight:

With the restaurant industry focusing on creating a better guest experience, it's no surprise that eatertainment concepts are growing in popularity and variety. Eatertainment is not just popular for group settings, the segment also appeals to a wide variety of demographics. Younger diners enjoy going to them and they also make great places for social and family occasions.

These concepts, namely Topgolf, Punch Bowl Social and Ace Eat Serve, often have high-end culinary programs to add to the experience — a far cry from early eatertainment concepts like Chuck E’ Cheese and Dave & Buster’s. Even Dave & Buster's has reconceptualized 75% of its menu within the last year, and launched a menu with premium and healthier items in February.

Many of the top eatertainment brands are growing to help meet increasing demand. Dave & Buster's plans to open 15 to 16 new restaurants in mostly new markets, according to Food Newsfeed. Punch Bowl Social, which secured $20 million in funding last year, plans to increase its store count to 22 units by the end of 2019. In 2017 it had nine units.

While the industry has thrived on a lack of penetration since these concepts require so much space, several of the concepts are looking into smaller locations to reach new markets. Punch Bowl Social is rolling out a 12,500-square-foot prototype, which is half the size of its typical locations this year in Texas, according to Restaurant Business.

Topgolf is swinging toward smaller locations that would fit better within midsize cities with populations of 100,000 to 500,000, with size depending on the market site, according to Restaurant Business. Dave & Buster's opened its second 17,000-square-foot format in Texas last year, according to an earnings release. It plans to open 20 to 40 of these locations and sees these stores as a way to improve its growth opportunity 10% to 20%.

These smaller concepts will be interesting to watch to see if they can still strike a balance between offering the right amount of foodservice and entertainment venues. If these concepts lend themselves to smaller footprints, lower real estate costs could pave the way for further and quicker development.