The steakhouse business once seemed simple: either you operated a high-class two-Martini lunch spot where 24-ounce porterhouses arrived with creamed spinach and shoestring potatoes, or you ran a cafeteria-style, one size fits all, 10-ounce steak and baked potato house where value and volume ruled the roost.
But there’s been a proliferation nationwide of concepts that have refined and redefined the steak arena, and if you talk to Phil Hickey, Jr., president and chief executive of RARE Hospitality International, the Atlanta-based restaurant corporation with three distinct steak-based concepts, you’ll find that running those businesses today takes a more evolved attitude.
Rare Hospitality’s Bugaboo Creek Steakhouses (top, middle) offer a rustic lodge setting, while Capital Grilles
(bottom) emphasize urban sophistication.
Hickey, who’s the keynoter at this month’s Cheers® Beverage Conference in Chicago, has overall responsibility for three main concepts—LongHorn Steakhouse, Bugaboo Creek Steakhouse and the Capital Grille—that have maintained a stately, steady growth pace.
The company now owns, operates and franchises 139 restaurants, including 109 LongHorn Steakhouses, 17 Bugaboo Creeks and 11 Capital Grilles.
Hickey, like many life-long restaurant execs, has done it all front-and back-of-house; waiting tables in college, tending bar, cooking. “I was very lucky early on to have some great mentors, who taught me how important service was,” he says. His early start introduced him to fine dining at an impressionable age, an experience he laments is missing in many servers today. Most importantly, he says, was the opportunity to learn about foods, products and service quickly and to transmit that education to
customers, an experience that paid off handsomely. It’s a philosophy that has stuck with him.
Hickey started his career in college, working for the Houlihan’s Old Place in the original Kansas City location. He eventually became an area director for Houlihan’s operator Gilbert/Robinson for seven years. In 1984, he branched out on his own and co-founded the Cooker Bar & Grille concept and was president and COO through the company’s initial public offering in 1989.
By 1990, he had become president of H&M Restaurants, which was acquired by Rio Bravo in 1992. At Rio Bravo International, a subsidiary of Applebee’s International which includes Rio Bravo Cantina, Green Hills Grille and Ray’s on the River, he rose to president until he left in 1997. That year, he made the leap to RARE, becoming CEO within the year.
Hickey believes that operators have a golden opportunity when it comes to current alcohol trends–lower per customer consumption and fewer sales but more attention to premium beverages sold at higher price points. But taking advantage of this beverage revolution demands greater server training in everything from product education to salesmanship. The aging baby boomers have matured and prospered, and they want restaurants to provide quality experiences.
He also believes the restaurant industry as a whole must make a better case to the government to forestall further intrusion into the legitimate adult beverage on-premise business. “We’ve been playing defense for so long with the government. We must develop strong strategies to make our case in terms of liquor.”
As RARE grows, so does pressure to break out nationally, but Hickey says they’ll grow all three slowly, Longhorn slightly more aggressively. But observers can expect two or three Bugaboos and one or two Capital Grilles in the coming year.
RARE’s primary growth vehicle, the LongHorn Steakhouse units are modeled on the traditional Texas-style ranch steakhouse, offering casual, full-service dining with items ranging in price from $4.29 to $17.99. Mainly located in the southeastern and midwestern states, LongHorn’s atmosphere is decidedly steaks and longneck beers, says Hickey.
Bugaboo Creek Steak Houses are casual, family-oriented steakhouses built to resemble mountain lodges and decorated with animated displays such as a talking tree, talking moose and buffalo. The northeastern chain places an emphasis on kid’s menus as well, with the same price range as LongHorn.
LongHorn Steakhouses (above) are the engines that drive Rare Hospitality, says Cheers® Beverage Conference keynoter Phil Hickey.
The Capital Grille units, on the other hand, are upscale urban steakhouses located in 11 major metropolitan areas specializing in dry-aged meat served in a fine-dining setting, complete with mahogany bar and personalized wine lockers. Unlike the more casual concepts, Capital Grilles offer an extensive wine list with more than 300 selections, and its wine profile is high enough to have been named by Boston Magazine readers as presenting the best wine list in the area. Capital Grille sells three times the amount of wine the other concepts do, with 30 to 35% of beverage sales wine. “But we’re trying to get the wine profile up at all our operations,” he says.
But specialty beverages also play a role as do the increasingly important house beverage menus. At Bugaboo, for instance, such branded creations as Moose Juice and the Pineapple Martini are big, while at LongHorn, it’s longneck brews. “There’s a bit of a concept difference in the approach,” he says.
In response to the suggestion that wine lists at many chains seem to be identical, Hickey notes the power of the larger wine companies. “There are some pretty savvy wine marketers out there, and they put a lot of energy into getting their wines into a restaurant and promoting them there.” With advertising and in-house marketing efforts tied to menus and promotions, he says, these wines are hard for chain operators to resist.
And a wine’s wide availability is crucial as well, he says, especially for chains that demand a consistent list store to store. “We’re in 22 states, for instance. We can’t put on a wine that is only available in 16 states.” The two main operations now serve about 12 wines, while Capital Grille offers about the same number by the glass.
For now, Hickey plans to offer a broader range of wines to move customers up the price and quality ladder