Transcript of Food & Restaurant Marketing Podcast – Episode: Casual Dining Moves Upstream
[00:00:06] Adam Pierno: All right, we’re back with another episode of Food and Restaurant Marketing. I’m Adam Pierno, with me today is Mr. Daniel T Santy.
[00:00:15] Daniel T Santy: How is everyone doing out there?
[00:00:17] Adam: No answer, these people are lame. They never respond when we say that. You’re out there somewhere, thank you for listening to another episode, we appreciate it. We are talking about something near and dear to our hearts, casual dining and the Hindenburg that is some of the restaurants in this category that we laugh at/cry over, because we love them and we also love to hate them a little bit as some of the brands that just refused to change.
Dan, do you remember a few weeks ago– Geez, I don’t know how many episodes it was ago but we’ve covered some failed brand extensions by casual-dining. Actually it was by all brands it wasn’t specific to casual-dining or the Red Robin’s burger works was an example we gave of a failed extension. Do you remember why we said it failed?
[00:01:11] Dan: It failed because expectations are already set. I know what the expectation is at Five Guys, I know what the expectation is at Smashburger and I could go down the list for about six more brands–
[00:01:26] Adam: Something more than that?
[00:01:27] Dan: All right. And you’re too late to the game.
[00:01:31] Adam: You’re not innovative.
[00:01:33] Dan: You’re innovative and I already have my probably two to three favorites that I choose from-
[00:01:41] Adam: Perez.
[00:01:41] Dan: -is that space is really, truly the burger space specifically is very saturated at this point, so is pizza for that matter.
[00:01:49] Adam: Many of these spaces are finding themselves kind of saturated and built out and not a lot of room for growth. We were visiting that topic today, because we have another look at it. There was an article that was published in Adweek. Yes, Adweek of all places, that was really good it was written by Robert Klara, well done. Interesting look, although I think his point is really overly focused on millennials, but what else is new? Great look there with some brands that are stepping out of casual dining and we’re moving where we call downstream.
They’re figuring out how do you get into that fast casual space, which is really an interesting move, it’s an interesting gambit for us and in the Red Robin example that we were just talking about, they closed all those burger works location, so they retreated from that. They realized their mistakes, but the examples given in this article are very interesting for conversation purposes. We were talking about it and we just turned the mics on just to capture an episode and capture the conversation.
What did you think of the three that are profiled in this article, Dan? There’s a Denny’s has The Den, Cracker Barrel launched a new concept called Holler & Dash, and lastly Tony Roma’s which is the place for ribs, I don’t know if you knew that?
[00:03:14] Dan: Yes, I did.
[00:03:14] Adam: Tony Roma’s launched theirs which is called TR Fire Grill or TR’s, some people call it TR’s.
[00:03:23] Dan: Okay. That popular it’s already got abbreviated the name.
[00:03:26] Adam: Yes. Of the three which one do you think best avoids the pitfalls we laid out in our earlier episode which we will definitely link to in the show note?
[00:03:34] Dan: I’m going to get Cracker Barrel big kudos for Holler & Dash and here’s why. There’s two reasons, one it does not resemble a Cracker Barrel on any level.
[00:03:47] Adam: That’s a compliment-
[00:03:48] Dan: Compliment.
[00:03:49] Adam: -to both Cracker Barrel and to Holler & Dash.
[00:03:51] Dan: Exactly. They wanted to go and step into fast-casual, they wanted to attract the millennial or younger diner and they’re doing it, but the interesting piece that I find about Holler & Dash, they’re still sticking to their core of the product offering being southern comfort food. I just saw a commercial that they produced, that shows that everything’s made– the sandwiches are made on a biscuit. Classic biscuit, like you get at Cracker Barrel, but they’re putting these interesting sandwiches together and that’s going to be very attractive to that 18 to 34-year-old fast-casual diner who’s upgraded from QSR.
[00:04:39] Adam: It looks smart, it looks fresh. If I saw it without knowing anything about its relationship to Cracker Barrel, I would still go and eat it, I will still go try it. It makes me curious and I think what they did, which is kind of what we warned about in our last talk was they figured out the insight about the audience they wanted to reach and they built the concept around that versus just saying, “Oh, you know what we’ll do? We’ll get rid of that lobby with the tchotchkes and we’ll paint everything a new color and we’ll cut the menu down, we’ll cut down the chicken-fried steak. But everything else will be the same.” Which is what Red Robin tried to do. This is a whole new invention, it’s got menu boards. I mean it feels like a different experience.
[00:05:25] Dan: It’s 100% different.
[00:05:26] Adam: From the ground up.
[00:05:27] Dan: Yes. From the concrete floors to the brick walls, they serve their beverages in the mason jars. Again, 100% really thought through what was going to be attractive to that customer versus just trying to spin something. As we’ve talked before, consumers are extremely smart today, they’re very savvy, you just can’t trick them anymore, you really can’t. I think on the flip side of that, while TR’s Fire Grill or whatever it’s called is trying to look younger and so forth, it’s still ribs and it’s TR’s and TR stands for Tony Roma.
[00:06:18] Adam: Well, okay. Let’s talk about this, I have some big problems with it from a branding perspective, which is my obsession, obviously. What would happen if Tony Roma’s instead of messing around with, “Let’s keep our Tony Roma’s core and then open this fast casual version”, what would happen if Tony Roma’s just changed all their formats to this and didn’t change the name? The awareness for Tony Roma’s of people that are under 45 has got to be close to zero, right?
[00:06:56] Dan: Yes.
[00:06:57] Adam: Cracker Barrel has enough brand recognition that they need to do this, because they can’t coexist that way. But could Tony Roma’s arguably just close their locations, move into smaller footprints and make this move?
[00:07:14] Dan: Possible. I think plausible, for sure.
[00:07:17] Adam: Would they be better served?
[00:07:18] Dan: When we went out and surveyed our staff and millennials that work for us, we said “Tony Roma’s”, they’d be, “Huh?”
[00:07:27] Adam: Nobody would, I know one guy that would know, but nobody else would know. The foodie who works here would remember something, but nobody else would. It just seems– Maybe that’s what they’re doing, maybe they’re dipping their toe in the water of how to update the brand and this is a way to hedge.
[00:07:43] Dan: I’m sure they’re testing. I can’t remember how many locations they have up so far. Maybe they’re testing, trying to figure this out. It doesn’t, but I’m with you a 100%. If your brand is Tony Roma’s why not use Tony Roma why are you saying TR’s, because it’s irrelevant. It’s like when Treasure Island became TI, it was– Does that make it hip and cool now?
[00:08:08] Adam: I don’t think. I think it did for a minute just because it was novel, but only for a minute. But I don’t think TR’s feels hip and cool, it feels like you’re really trying to pull on me.
[00:08:21] Dan: Right. Well, there’s a classic example though of borrowing from popular media and the way things are being branded and go, “Let’s just call it TR’s, that sounds really cool.” You know what I mean?
[00:08:38] Adam: That’s a boardroom, you won the boardroom.
[00:08:41] Dan: That’s not strategy. That’s not insight to your point earlier.
[00:08:44] Adam: Yes. Guests don’t know what the hell that is. I’m driving by and see the sign, I guess Fire Grill might tell me, but TR’s sure doesn’t mean anything to me.
[00:08:52] Dan: Fire Grill doesn’t tell me anything. Fire and grill, yes, there’s typically a fire and a grill. What are you grilling?
[00:08:58] Adam: True. And see Applebee’s, right? They spent millions on that grill campaign around Applebee’s and that. Okay, I’m not going.
[00:09:06] Dan: Yes. Right.
[00:09:08] Adam: You didn’t tell me. The last one I think I want to talk about here is The Den by Denny’s, which I like, because you can tell whenever we talk about Denny’s in the office or out in the world, the disconnect between– They do such an amazing job with social and with content. But the disconnect between what the store might– Brand understanding of Denny’s and that social media and how clever and quick it is, and then I think about the store and I’m like, “But that’s not–”
[00:09:45] Dan: Major disconnect.
[00:09:46] Adam: Major disconnect. The Den feels like, “Okay, let’s stitch those things together finally.” If you look at the website there’s quirky wallpaper, there’s– you get the idea like, “Oh, okay. They’re going to make that social media make sense here at The Den.”
[00:10:04] Dan: I couldn’t agree with you more.
[00:10:05] Adam: They don’t hide it. It’s The Den by Denny’s, unlike Holler & Dash by– Holler & Dash does not have any reference to Cracker Barrel. If you didn’t know, you wouldn’t know. The Den is owned by Denny’s here, it’s in the logo. It’s pretty clear and obvious. That’s a brand that just has a sense of humor about itself and has enough self-awareness to know. I’m looking at the locations and seeing they’re all opening around colleges as well, which I think is pretty smart. Did you catch that?
[00:10:38] Dan: Yes. See? They’re staying with– Smart, it’s just smart. This is a brand extension that was clearly well thought out. They probably queried a number of customers that they wanted to attract with The Den. “What can we keep about our existing brand?”
[00:11:00] Adam: Yes.
[00:11:01] Dan: Right? “But what do you want new in the brand experience?”
[00:11:06] Adam: Yes. They built it for the people, the right people and they’re buying the media or the real estate in the right places. I’m actually looking at the locations and saying, “Damn, I’m disappointed there’s not one closer here.”
[00:11:18] Dan: Yes. I don’t mind giving them a try.
[00:11:19] Adam: Yes, but I’m not going to Tucson.
[00:11:22] Dan: You’re not?
[00:11:23] Adam: If I go to Tucson, Dan, as you know-
[00:11:24] Dan: We love Tucson.
[00:11:25] Adam: -I go to Eegee’s if we’re going to Tucson for sure. But this is similar, this play, depending on what their sponsorships are like, this play is very similar to Raising Cane’s. In their new market they sponsor the football team and they get on board with all the college sports. They try to win people that way, which-
[00:11:44] Dan: Makes sense.
[00:11:44] Adam: -doesn’t, so far, has not failed them.
[00:11:47] Dan: I had to laugh in this article, giant change in subjects here but– Not subjects, but brands. It talked about Wienerschnitzel [chuckles] which I have always loved that brand for some– I don’t know. It’s more probably nostalgia than anything.
[00:12:05] Adam: It’s a cute brand.
[00:12:06] Dan: They launched a fast casual Mexican eatery called Two Madres that featured build your own burritos and tacos. Is that not Chipotle?
[00:12:17] Adam: Yes. Doesn’t that already exist?
[00:12:18] Dan: [laughs] Guess what? They opened five locations and by 2015, the sole Two Madres was closed. [laughs]
[00:12:28] Adam: Right. I’m shocked.
[00:12:32] Dan: Right?
[00:12:34] Adam: Let’s see, that goes back to not knowing. That’s like, “Chipotle is selling things. We’re going to also sell things. We’ll sell things just like Chipotle. Okay, let’s do it. Great.”
[00:12:43] Dan: Yes, but you go from being a hot dog stand with the iconic name and–
[00:12:50] Adam: Isn’t that why it works? Because you get, you understand the space?
[00:12:54] Dan: All right. Again, everyone who’s suffering from a traffic standpoint, sales standpoint and they did everything they could for that brand or so they think, for that brand to rejuvenate it. They didn’t so they, “Let’s open fast casual, because fast casual is where [crosstalk]”.
[00:13:10] Adam: That’s where all the money’s going.
[00:13:12] Dan: But if you’re not going to think through that, you can’t just– Like we pointed out, Burgerworks failed. There’s already plenty of burger places. Mexican existence fades in fast casual, especially if you think through the burritos of the world, right? The burritos all over?
[00:13:31] Adam: Yes. It looks like Denny’s is doing something different with The Den too, because as you were talking, I was thinking about each of these value props of each of these places. What I like about Holler & Dash is there’s crowded competition in the breakfast space, but Holler & Dash has a different attack at it and there’s not a lot of breakfast fast casual.
[00:13:57] Dan: Good point.
[00:13:58] Adam: There really isn’t. I’m wracking my brain now to think of one. I think that’s well positioned to succeed if they buy the right real estate, if they get in the right places. The Den, too, figured out a way to take breakfast, which is their core, and also put a twist on it. They’re focusing on breakfast sandwiches and they’re focusing on things that are little more fun and interesting versus the regular. I don’t look at the menu, but I doubt there’s a Grand Slam. Maybe there’s some play on than Grand Slam.
They’re doing something different that plays the insight about the audience. We want a young consumer, who doesn’t want to come in here and sit down and wait, breakfast sandwiches. Faster, still satisfying, I’m getting something I want. Holler & Dash is saying, “No, biscuits. We’re the only people that can do this. We have the credibility to do it.” That’ll be interesting to see how both of those brands grow and Denny’s, obviously, has a capital behind it to do it. I don’t know what Cracker Barrel’s– Their sales have to be hurting at the core locations.
[00:14:58] Dan: I would imagine. You mentioned Holler & Dash and The Den’s as fast casual breakfast. The minute you said that, I’m like, “You’re right”. The vast majority of breakfast-
[00:15:10] Adam: Can you [unintelligible 00:15:10]?
[00:15:10] Dan: -all I can think of is QSR, predominantly. Now a lot of that’s because there’s so much advertising for it. Then, after that it’s First Watch. Full service, sit down, have breakfast and that’s a great offering, don’t get me wrong, but at the same time there’s– I can’t think of anything.
[00:15:32] Adam: No. Maybe they found a little niche here. First Watch is actually a good brand, I like it. But it is another sit down place. It’s a different spin on it and they did some different things than Denny’s or a lot of their competitors, but it is still– There’s a server and you sit down. It’s not faster and it’s also not premium to a QSR. You get into that business and now you’re going up against McDonald’s and literally, every other restaurant out there. [laughs]
[00:15:58] Dan: I was in that First Watch a couple of weeks ago. Haven’t been in one in a very long time. I was very impressed with the menu.
[00:16:06] Adam: They refurbished everything.
[00:16:07] Dan: Yes. The menu was much healthier, had all the pressed juices and smoothies.
[00:16:16] Adam: That’s recent within the last 18 months. They’ve added all that juice and more natural side of it to get away from all the fried.
[00:16:22] Daniel: See now, that can attract the millennial. If your mate wants to go and get pancakes, they’ve got pancakes. If you want to stay healthy and have the juice and egg white omelet or whatever, it’s covered.
[00:16:38] Adam: The menu, too. They do a good job there. They made the menu rather spare. The new First Watch we’re in, I guess, it’s a 2.0 version here that they’ve been changing over the things that they acquired. We’re seeing probably, that this is probably the newest version of First Watch. Although, I’m sure there’s a prototype somewhere that’s the next one. They cut the menu way down. It’s very simple. There are pancakes, but there’s not a page of pancakes like at IHOP where you’re just flipping pages, syrup covered page after syrup covered page.
It’s just “Here’s our pancakes dish”, maybe there’s two. It’s simple. They figured out a way to make it feel fast, even though it’s casual. That’s pretty interesting, too. I like the decor in there, though. I do think they did a good job with differentiating themselves that way.
[00:17:24] Dan: They did.
[00:17:25] Adam: I’m really curious. Maybe we will go to Tucson and see The Den, because if you look at the website for The Den, the art that they’ve chosen and the way it looks, I’d love to see how much of that plays out in the restaurant or if just feels like a Denny’s with the orange vinyl seats and the negative things I remember. I’m looking at my notes here and I’m skipping back and forth the article. Tony Roma’s actually followed what we said. Tony Roma’s did not just reskin their brand, they did a wholly new brand, TR’s Fire Grill. But I still think they missed. I think the brand is so irrelevant, that a new brand is not going to help them.
[00:18:10] Dan: I agree.
[00:18:11] Adam: There’s no saving that. It’s just a brand that just needs to pack out.
[00:18:16] Dan: To your point earlier, I agree with what you’re saying. To the extent that you could convert your existing Tony Roma’s into TR’s and do a 180.
[00:18:28] Adam: You think that’ll save it? That has the best chance to save it.
[00:18:32] Dan: That seems to have a better chance of saving it. They’re trying to save Tony Roma’s.
[00:18:36] Adam: That’s not a brand that I don’t think is a beloved American brand. What differentiates in these three examples and you can throw Burgerworks back in here, I think one of the other examples we talked about back in the other episode was Jamba Juice did a kiosk model where they ported some of their juices to a kiosk, where I just choose one and it spits it out of a machine. Yikes. It’s imagination. Cracker Barrel really stepped back and redesigned the whole thing around and inside. It looks really impressive where Tony Roma’s was more like– There’s no imagination. It’s just like, “We’ve got to save this brand.”
[00:19:22] Dan: Right.
[00:19:22] Adam: Their shareholders need to be getting cashed out here. “What are we going to do? Okay. Let’s just cut out these letters out of the name. Here we go.”
[00:19:29] Dan: Exactly.
[00:19:30] Adam: It says the food is good.
[00:19:32] Dan: [chuckles] Well, it did win an award in Winter Park, Florida, numerous awards. Best new restaurant, best cocktail, best happy hour. Maybe there’s more to it than–
[00:19:44] Adam: What do you think of a chain restaurant running best new restaurant?
[00:19:47] Dan: [laughs] That why I read that.
[00:19:51] Adam: You don’t believe in that?
[00:19:52] Dan: Well, I’d love to know the source. Best new restaurant according to what publication that I paid for a lot of advertising in it.
[00:20:01] Adam: That’s true. We’re working on an article, and this may be a podcast here that we do, but about how really we were looking at Chili’s and we were walking past the Chili’s. We walked up and just looked in and we we’re like, “God, these Chili’s and Applebee’s and all these casual dining places, the legacy places–” That experience is the same, it doesn’t change. You could blindfold me if I go to one, there’s a nuance to it, but there’s nothing different about them.
[00:20:34] Dan: Yes, it’s Fridays. And Chili’s.
[00:20:35] Adam: Well, someone here said that Olive Garden is Chili’s for lovers. The differences is, I don’t want to look like a total jerk, so I’m going to take you to Olive Garden to be a little bit more romantic, there’s olive oil near here.
[00:20:55] Dan: [laughs] We have olive oil?
[00:20:56] Adam: Yes, I don’t know. You can’t blame them for trying to differentiate themselves and get into the fast-casual game. I don’t know if it’s as millennial focus is overblown, especially in college campuses there’s [unintelligible 00:21:10].
[00:21:12] Dan: I know I keep harping on this, it’s what you brought up earlier, you’ve got to do things based on a customer insight. Customer insight, not the boardroom, not the CMO or the CEO with a vision, “Let’s go do this.” You know there’s a Burgerworks i think– You told the Burgerworks story, but there’s another example in here about Texas Roadhouse which quite frankly it does quite well. Open a place called Jagger’s and it serves guess what? Burgers and salads. What are you doing?
[00:21:54] Adam: I get the need to expand, but it’s that saturated, do something else. Then what else should they do, because if they do Wienerschnitzel, they create a burrito place then we spank them for going too far outside their comfort zone.
[00:22:09] Dan: Say that one again, which brand?
[00:22:10] Adam: Wienerschnitzel. Then it’s like, “Well, you were too far gone there.” They have to figure out a way to stay to their core but really re-imagine the whole packaging that way, and still serve the best thing that people will want.
[00:22:24] Dan: The food truck hot dog is in vogue right now, they had an opportunity ready to-
[00:22:33] Adam: That brand should be back, yes.
[00:22:34] Dan: -upgrade it. Maybe it’s just about the menu offering around that hot dog and there’s, what’s that place called, The Leash or something like that, do a great job with the whole–
[00:22:46] Adam: Do you know of any fast-casual dog places?
[00:22:49] Dan: Well, The Leash would be one of them, I don’t know if they have more than one location, but they started off as more little kiosk at the Biltmore, and now they have a free-standing spot in the middle of the park now.
[00:23:04] Adam: I guess Ted’s too. There’s one here and there’s one in Buffalo, but it’s not a chain, I can’t get off a plane in any city and go find it if. I can with Five Guys.
[00:23:16] Dan: You think that would do well to expand.
[00:23:18] Adam: It’s a no-brainer, I can bring kids to it, Five Guys has hot dogs, they’re pretty good.
[00:23:22] Dan: Is that right? I’m not a Five Guys guy.
[00:23:26] Adam: That’s why we can’t be friends.
[00:23:28] Dan: I know.
[00:23:29] Adam: All right, well I think we have covered this conversation about casual dining, moving downstream here. We would love to hear from you, got any more examples of brands that have made a similar move or that you think should, please, you can tweet to us at F&RM or email either one of us, Dan at Food and Restaurant Marketing or Adam at Food and Restaurant Marketing. Please, tell your friends about this show if you like it and if you don’t like it, don’t tell them you don’t like it, just tell them to listen anyway. Thank you very much for listening.
[00:24:01] Dan: Eat well.