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Entries in SmartBrief (2)

Thursday
Mar082012

Part 2: SmartBlog on Food & Beverage Features The Chipotle Effect 

Why fast casual connects so well with the social consumer

The following is an excerpt from Paul Barron’s new book, “The Chipotle Effect,” slated for publication in 2012. Visit the website to get the full copy of “The Chipotle Effect.” Reprinted with permission by the author.

The number of power users who rely almost exclusively on mobile computing for their computing needs is booming. Apple has sold more than 60 million iPhones worldwide, while Google’s free Android OS is experiencing year-on-year growth of more than 800% across 60 devices in over 40 countries. Smart phones have tipped the balance of information in the consumer’s favor, allowing users to use Twitter, GPS data, and review websites to find restaurants with the characteristics and reviews that suit them and to post their own opinions in real time.

More and more, any restaurant chain that does not have both social media and mobile media strategies is working from a severe competitive disadvantage. On the other hand, operators who know how to leverage the platform can use it to power growth. One example is the now-famous Kogi Korean BBQ truck. Beginning in 2009, the operators of the single Korean-Mexican fusion mobile diner got the idea to begin promoting their food via Los Angeles bloggers and then on Twitter. As word got out about the quality of Kogi’s food, they began advertising the location of their truck exclusively by tweet, ensuring extensive retweeting. As a result of this social buzz, hundreds of hungry Angelinos would often show up at the truck’s location even in the wee hours of the morning. Today, Kogi has five L.A.-area trucks and has just opened its first sit-down establishment, but more importantly, they launched the Food Truck phenomenon now booming in cities like Washington, Miami, Chicago, Austin, and New York.

Much as fast casual completely upended the public’s perception of what quickly produced food could be (better than rewarmed fast-food and cheaper than a sit-down café), the Food Truck movement has taken what were once seen as mobile greasy spoons and turned them into “street cuisine” with high levels of authenticity and local flair. More and more cities — from Springfield, Ill. to Alameda, Calif. — are clearing the regulatory paths for mobile dining, providing consumers with yet another means to get fantastic, fresh food on a budget—while mingling with a local crowd.

We have entered the era of the two-way fast-casual relationship. No longer can restaurateurs assume that the one-direction dynamic of “we make the food, you eat the food” is acceptable to consumers. This is an interactive business now. The new era of mobile technology has emerged as the most intimate means for consumers to experience restaurants and retailers of all types. By using the myriad available tools wisely and actively, companies can connect with their customers and develop word-of-mouth relationships in ways that would have taken weeks or even months in the old world.

In this new dynamic, local is everything. Tapping into location-based media is the long-sought Holy Grail of the restaurant industry. Google has taken its shot with Google Places, its local business search engine. Social media plays a major role in this as well. But the real question is this: “With all the noise, how do I break away from the pack in my own market. Read More

Tuesday
Mar062012

SmartBlog on Food & Beverage Features The Chipotle Effect

How Chipotle tapped into a fast-casual goldmine

Paul Barron is founder and CEO of DigitalCoCo as well as founder of FastCasual.com and QSRweb.com. Follow Barron on Twitter @paulbarron.

The following is an excerpt from his new book, “The Chipotle Effect,” slated for publication in 2012. Visit the website to get the full copy of “The Chipotle Effect.” Reprinted with permission by the author.

You may hate the title of this book, especially if you are involved with a fast casual restaurant that is not named Chipotle. It’s not especially politically correct of me to name my book after the booming fresh Mexican food chain, but I’ve always been a person who spoke his mind and pushed the envelope — even while others were getting comfortable and complacent. So this is no different.

The fact is that Chipotle remains shorthand for “remarkable success” in a segment of the restaurant industry that is growing at a dizzying pace, despite the tumultuous economic conditions of the past few years. In 2010, according to a report by Chicago food industry research firm Technomic, the top 100 fast casual chains increased sales 6% in 2010 to $18.9 billion. While that may not seem like a big jump, remember that during the same period most other players in the restaurant world were flat or watching sales crater.

In this book, I will make the case that a large part of that astonishing growth has been due to fast casual’s ability to adapt to the changing lifestyles of Americans, including our embrace of social networking and mobile technology. And whether you love them or hate them, no company embodies the strategic embrace and tactical engagement of the new consumer to fuel growth like Chipotle. Heck, in a July 29, 2011, article, FastCasual.com even ran an article titled, “Who will be the Chipotle of the pizza industry?” So even if you don’t agree that this Denver-based company is the bellwether of change in our industry, you can’t ignore them. So let’s look at what Chipotle has done right and how it’s changed the restaurant business.

Chipotle may not have fired the first shot in the fast casual revolution, but the fresh Mexican chain is certainly the most famous of the founding fathers. Launched by Steve Ells in a space near the University of Denver in 1993, the restaurant grew quickly, opening its second location in 1995 and continuing its expansion — first with a loan from Ells’s father and later with a $1.8 million Small Business Administration loan. Ells, who had no business background, had clearly tapped into an unmet need among diners for healthful, fresh Mexican cuisine, and the Chipotle brand began to take shape: sustainably sourced ingredients, a simple menu, and impeccable quality. Read More