My recent dining experience at the Olive Garden drove home an observation that may not be popular among “foodies” – that the Olive Garden brand experience is extraordinary. Having grown up in New York where I have dined at some of the most amazing Italian restaurants, I understand that this is not quite the same experience. Still, the Olive Garden has taken American casual dining to a new level.
The Evolution of a Branded Dining Experience
When you eat at Olive Garden, you are immersed in an imaginary time and place – an idealized version of 1050s Italy. Italian American music from the 50s creates an immediate sense of familiar nostalgia, as if you were returning to childhood roots in and Italian American neighborhood.
Olive Garden president David Pickens, 53, says that the restaurant promises “an idealized Italian family meal, whether you’re Italian or not.”
General Mills launched the chain in 1982 as an affordable Italian restaurant with few surprises. While it grew to hundreds of locations by the 1990’s, the menu had grown stale and sales were in decline. John Caron, Olive Garden’s head of marketing says that it lost its culinary and cultural soul.
The company did extensive research and found that the key consumer insight was that people missed the emotional comfort and connectivity that comes with family. Chief operating officer Drew Madsen, former head of marketing notes that:
People come to a restaurant for both physical and emotional nourishment. The physical is the food; and the emotional is how you feel when you leave.
In pursuit of a mythical Italian family experience, the company adopted the tagline, “When you’re here, you’re family,” designing new locations to suggest Italian farmhouses with a large family-style table, modeled on one in a Florentine trattoria.
A partnership was formed with the Culinary Institute of Tuscany (CIT), and eleven times a year, the company sends 14 top employees, many of whom have never set foot in Italy, to spend a week in an 11th-century village in Tuscany to learn from Sergio and Daniela Zingarelli, a husband and wife who operate a restaurant, winery, and inn. Since 1999, some 850 employees have attended CIT, and 80% of them are still with the company. Today, many items on the dinner menu carry a CIT logo, designating that they were inspired by a staffer’s experience in Italy. These experiences and menu items provide a rare authenticity for a chain restaurant Fast Company provides a good example – risotto:
In a pilot program at a small number of restaurants, diners were initially tepid. As attitudes changed, the test kitchens took on the preparation challenge; risotto requires 20 minutes to cook, longer than customers are willing to wait. Chefs eventually found a more expensive variety of rice that could be cooked most of the way through in advance, finished off just before serving, and still retain the desired taste and texture. Risotto is now part of a CIT-inspired entrée designed to entice more adventurous diners who might not have considered Olive Garden: Chianti-braised short ribs (minus the bone — a concession to American tastes) and portobello mushroom risotto.
Promotion That Isn’t Just Hype
Dale Buss‘s article on Brand Channel, Olive Garden Puts Tuscany at Center of Brand Experience reveals some of the thought that goes into perfecting the $3-billion Olive Garden chain’s brand experience. Of a recent promotion, Dale shows that it far exceeds a sweepstakes promotion on the brand’s Facebook page. It focuses on creating a virtual vacation experience at its restaurants:
With everything Olive Garden is doing — from its new TV ads to a restaurant-remodeling campaign — they want you to whisk you to Tuscany.
The new commercials highlight the fact that Olive Garden sends dozens of its chefs to its culinary institute in Tuscany for training with those who create the genuine Italian cuisine that the brand attempts to duplicate in its US restaurants. The chain also recently announced that it is remodeling 400 of its more than 730 locations over the next two years in an effort to reinforce its Tuscan heritage with consumers. The new look, called Via Tuscany, draws its inspiration from a Tuscan farmhouse, Olive Garden says, and features not only a brick arch and newly planted cypress trees, but also – you guessed it – Tuscan stone.
An Innovative Business Model
Darden Restaurants, which owns Olive Garden, Red Lobster, and Longhorn, is the country’s largest full-service restaurant operation, the 29th-largest employer in the United States, and a pioneer of “casual dining,” which constitutes 39% of all sit-down restaurant meals.
The company operates 1,770 restaurants, and generated $6.7 billion in revenue in its last fiscal year. It serves enough meals (more than 400 million) per year to feed the entire U.S. population, with seconds for California, Florida, New York, and Texas.
Although Olive Garden’s 57 consecutive quarter growth streak ended last fall, Darden is faring better than most of its competition in this economy, exceeding analysts’ earnings forecasts. By May, 2012, its stock had tripled from its last November low. And Darden plans to add as many as 55 restaurants in 2o13.
A Visionary CEO
CEO Clarence Otis, a 53-year-old janitor’s son from Watts, Los Angeles, works in a troubled sector of the economy and has faced criticisms for the kinds of labor issues that plague it. Still, his vision for Olive Garden has been visionary. He told FastCompany that, despite the focus on the sensory side of the dining experience, his leadership of Olive Garden relies on a carefully thought out and executed strategy:
On the continuum of intuitive restaurants versus systematized, analytic restaurants, we’re very analytic. The direction of our business is based on understanding customers.”
Growing up, Otis would escape the racial strife and isolation of Watts through reading. By ninth grade, he had finished nearly every novel and biography there. He earned a scholarship to Williams College, went to law school at Stanford, and at 31, became a vice president at First Boston. In 1995, a headhunter recommended him to Darden, just spun off from General Mills, where he moved up, from treasurer to chief financial officer, and then president of its Smokey Bones Barbeque & Grill chain. In 2004, he became one of the few African-American CEOs in the Fortune 500. He plotted a new course for major growth, and began making changes.
Formula For Suceess In A Challenging Environment
Today, the average American has 16% fewer sit-down restaurant meals per year,than 15 years ago, according to analyst Harry Balzer of market-research firm NPD Group, while the number of casual-dining restaurants has grown at roughly twice the rate of population.
Knowing this, Otis integrated complimentary strategies for success that is at heart a market share drive. The elements include:
- Leading-edge technology with efficient purchasing practices out of the Wal-Mart playbook.
- Decentralized brand-management honed over the 15 years that the company was owned by General Mills.
- Sharing of information between brands.
Consumer Focus: Over the past year, Darden’s 22-member customer-insight team invited 16 million customers across its six chains to answer guest-satisfaction questionnaires, which Darden says predicts shifts in traffic at individual locations.
Synergies: Competitive pressures make it vital for the company’s 180,000 employees and three major brands to to work collaboratively. The three brands operate as “test labs”, sharing best practice ideas and personnel, while still maintaining distinctive identities. At the headquarters in Orlando, 1,400 executives and restaurant support staff who formerly worked in 12 buildings spread out over 2 miles are coming together with test kitchens that will operate side by side.
Quality: Introducing predictability to a volatile business is a major undertaking. Fast Company points out that Darden is actually running 1,770 just-in-time manufacturing plants, creating in minutes “a wide range of products selected, consumed, and judged by customers who show up unannounced, ” something that requires innovation, creativity, and strict quality standards, with anyone using an outdated item fired on the spot.
Technological Innovation: According to an industry analyst cited by Fast Company:
In every area where technology can be applied, Darden has a considerable lead on other businesses. Darden was computerizing its guest surveys in the 1990s, when other restaurants were relying on comment boxes.
In the 1970s, Darden had worked with Burger King to build the first restaurant point-of-sale system, which tracked sales in real time, eliminating the need for managers to call in the previous day’s results. Today, this has developed into a program called “Guest Forecasting.” Guest Forecasting successfully projects the appropriate staffing and food preparation required each day, including how many orders of each menu item to expect, and how much sauce to make in the morning.
The result: Over the past two years, Darden has reduced unplanned hours by more than 40% and trimmed excess food costs by 10%. The goal isn’t “zero waste” because the restaurant doesn’t want to run out of anything on the menu, but no more than 9% waste.
A recently introduced program called “Meal Pacing” displays the optimal work flow for each party on eight screens in the kitchen and monitors each station’s progress, with color-coded warnings when one falls behind. It ensures that the staff meets Darden’s one-minute rule: Food should arrive at the table within one minute of being ready.
The result: The program takes much of the guesswork out of juggling simultaneous orders, allowing the restaurant to turn tables faster at peak times, increasing revenue and driving guest-satisfaction scores up.
“Not everybody’s a gourmet, but everybody can tell time” ~ Bill Darden
The next technological frontier is to address wait times. While the restaurants don’t accept reservations, it’s not ideal for business to allow guests to wait an hour or more. One pilot program is using handheld devices to speed things up, enabling waiters submit orders and payments at the table, eliminating lag time.
Another project shares wait times across restaurants to allow hostesses to direct customers to nearby Darden establishments that aren’t as busy. Ultimately, customers could be given online access to that information.