The Asian Century
Chains uncover opportunities by satisfying diners' cravings.
By Jamie Popp, Senior Editor -- Restaurants & Institutions, 6/15/2005
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Asian food is customizable, fresh and mobile, three qualities that make it a big draw for time-pressed, health-conscious customers. Add the breadth of flavors found in Asian cuisines and the growing appeal is clear.
Interest in and demand for food from Japan, India, China, Thailand, Korea and Vietnam has created a vigorous market for Asian restaurants. How authentic they should be is a consideration as are broad market acceptance and difficulties in preparation and ingredient procurement.
Mom-and-pop independents still lead the segment. Sharon Zackfia, a research analyst at William Blair & Co., Chicago, Ill., says Asian is the most popular fare not dominated by chains. Of 35,000 Asian restaurants in the United States, Zackfia estimates storefront-style establishments dominate the $12 billion market. That may not hold much longer, though, as chains catch up to the demand.
Established players such as Benihana, Panda Express and P.F. Chang’s China Bistro hold the biggest share of the Asian chain segment. Collectively the three operators’ 900 units rang aggregate sales of almost $1.5 billion in 2004. Their success creates a coattail effect for smaller operators that capitalize on the awareness the chains generate with big marketing budgets. Additionally, drive-thru and takeout help Asian operators further penetrate the market.
“P.F. Chang’s has created brand awareness and brought Asian and Chinese food into the mainstream,” says Stuart Davis, chief executive officer of City Wok, a four-unit operation in Palm Desert, Calif. “It has shown that by eliminating all the things people don’t like about independent Chinese restaurants and by creating an upscale dining experience with a wine program, people will eat Chinese food more frequently. The proliferation of P.F. Chang’s has widened the segment and made it more accessible to the public.”
Paul Fleming, who co-founded P.F. Chang’s with Philip Chang in 1993, also introduced Pei Wei Asian Diner, a fast-casual chain with an $8.50 check average—considerably lower than P.F. Chang’s $18.50—and 53 units. Some analysts predict that in the long run, the sibling Pei Wei will outgrow P.F. Chang’s, because sales volumes are greater than initial store investment.
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In a venture with Tampa, Fla.-based Outback Steakhouse Inc., Fleming also has introduced Paul Lee’s Chinese Kitchen, a Phoenix-based venture that targets the untapped market between P.F. Chang’s and Pei Wei. Two company-owned units are open, with five to six more in the planning stages.
In a similar manner, Panda Restaurant Group operates quick-service Panda Express and full-service Panda Inn. The company also is venturing beyond its traditional Chinese roots with Hibachi-San, a 17-unit mall-based Japanese concept.
On the quick-service side of its business, Panda Restaurant Group is expanding drive-thru. Panda Express currently operates 42 locations that offer the service. “We’ve challenged ourselves to create the same restaurant atmosphere without losing the convenience of drive-thru,” says Tom Davin, president of Panda Restaurant Group, Rosemead, Calif.
In the full-service arena, Panda Inn is taking advantage of strong carryout and catering business. “Asian takeout is now part of people’s dining rotation,” Davin says. “They want meal solutions. Asian food travels well. It offers a lot of protein and it’s still good a half hour later.”
Mainstream Moving In
From the noncommercial sector to fast-food drive-thru lanes, dedicated Asian restaurants continue to use menu offerings to educate customers. Operators draw upon experiences and knowledge of the culture to maintain authenticity and work to share the market with mainstream counterparts with limited Asian offerings.
“Mainstream diners are eating more Asian food and experimenting with new flavors,” says Davin. He believes Chinese is the most approachable of Asian cuisines, and the chain continues to offer reasons for mainstream consumers to visit. The “Panda Chefs Go Garlic” promotion earlier this year featured new menu items such as Chicken Breast in Garlic Black Bean Sauce, Shrimp With Sugar Peas in Garlic Sauce, and Spicy Garlic Beef and Shrimp With Asparagus in Spicy Garlic Sauce.
Mama Fu’s Asian House, a 20-unit Pan-Asian chain owned by Atlanta-based Raving Brands Inc., takes a broader, Americanized approach to Asian dining by offering menu items that encompass everything from Chinese fried rice and Japanese teriyaki to Thai coconut soup. Mama Fu’s enjoys a loyal customer base eager to try new things and takes that into consideration when developing new menu items such as edamame, which were added recently.
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“Consumers want to talk about what they’re eating and drinking,” says Brian Curin, vice president of marketing at Mama Fu’s. “They want to understand the story behind what they’re consuming. Our core demographic looks for bolder tastes and flavors and wants to be educated on where they come from.”
Popularity associated with mass appeal appears to be trickling down the generations. Curin says Mama Fu’s consumer is getting younger. Rather than the health-conscious 30-year-olds that initially frequented the restaurant, the chain now attracts a 20-something crowd, Curin says.
Mama Fu’s menu-development team travels throughout Asia to learn about trends and techniques that can be incorporated into the concept’s menu mix. In addition to Japanese inspiration, the company is following trends in Thai food and curry that Curin says comes from three distinct regions.
Under the Influence
Noncommercial operators also have discovered the appeal of Asian cuisine. At Williams College, Williamstown, Mass., Cornell University, Ithaca, N.Y., and the University of Northern Colorado, Greeley, Chinese, Thai and Japanese food tops students’ requests. From wok stations to sushi-rolling events, universities are adapting to new dining demands.
Educational efforts of noncommercial establishments and large Asian food chains have paid off for operators in non-Asian segments. Noodles & Co. recently added Bangkok Curry Bowl, Shrimp Curry Sauté and pot stickers served with spicy soy-ginger dipping sauce in response to recent trends toward more ginger and curry. “There is very strong demand for Asian food today and a lot of new restaurants that serve Asian—much more so than Italian or American,” says Aaron Kennedy, founder and chief executive officer of Noodles & Co.
Going forward the company plans to refresh its core Asian offerings such as Japanese Pan Noodles. During the past five years all vegetable oil was removed from the dish’s recipe, which didn’t allow for much caramelization of the noodles, according to Kennedy. The vegetables used in the dish also are going to be revisited to make the dish fresher.
Like any developing industry, growth depends on smart planning and, for chains not specializing in Asian fare, understanding the preparation process and ingredients. However, it’s not every Asian chain that has entered the segment and discovered success similar to that of P.F. Chang’s.
Concepts such as Leeann Chin and Big Bowl—the latter’s development rights were sold last year by Dallas-based Brinker International back to Chicago’s Lettuce Entertain You Enterprises, which created the concept—are taking a reserved approach to growth. Memories of failed Asian-themed chains such as Dallas-based Yum! Brands’ Yan Can and Orlando-based Darden’s China Coast, which never established long-term viability, are still fresh in their minds.
Says Panda’s Davin: “It’s not that people aren’t trying to figure this market out, it’s just complicated. That’s why we spend our money on the people and food.”
Making Moves
Some growing chains that emphasize pan-Asian accents:
- Asian Concepts, based in Columbus, Ohio, has a half dozen variations on a Chinese theme, including Mark Pi’s Express, Feast of the Dragon and China Gate; 30-plus locations are split among the various brands, all serving familiar Chinese fare. Founder Mark Pi for several years held the Guinness Book of World Records title for fastest noodle maker.
- Chin’s Asia Fresh has six Midwest units, each melding pan-Asian with other influences. “Wok’d Fresh” is its marketing message; spring’s seasonal offering were three Asian tacos.
- Fast-casual Gimme Sum opened its first unit outside Las Vegas with rapid expansion in mind. Its four units prepare everything from scratch in-house. Upscale contemporary menu selections include teriyaki rice bowls, Cantonese scallops and sesame-ginger shrimp salad.
- Mein Bowl is one of the offerings of Allentown, Pa.-based Retail Brand Group LLC, a new subsidiary of Sodexho USA that will franchise proprietary brands developed for its clients. Mein Bowl already is in college and corporate settings.
- Samurai Sam’s Teriyaki Grill, based in Scottsdale, Ariz., has more than 50 units in a franchise-based system. The Kahala Corp.-owned concept’s menus emphasize healthful options.
- Denver-based Tokyo Joe’s has eight units, each kicking out $1 million per unit on sales of a healthful, Japanese-themed fast-casual menu that is deep into rice and noodle bowls. Nothing is fried but instead grilled or steamed. Signature sushi roll is made with shrimp, cream cheese and avocado.
Asian Additions
Many non-Asian chains borrow from the Far East for ingredients and preparation styles. Here are some mainstream menu additions:
- Stir Fry Salad: Lettuce topped with grilled chicken breast and stir-fried vegetables sautéed in teriyaki sauce, with crunchy noodles and sesame dressing
Bakers Square, Denver - Asian Bamboo Chicken & Shrimp: Three chicken skewers and three jumbo prawn skewers, grilled and served with warm lo mein noodles and spicy Thai peanut sauce
Bennigan’s Grill & Tavern, Plano, Texas - Peking Duck Pizza: Roast duck breast, mozzarella cheese, soy-glazed shiitake mushrooms, crispy wontons, slivered green onions and ginger-hoisin sauce
California Pizza Kitchen, Los Angeles - Crispy Asian Sampler: Shrimp spring rolls, wontons and beggar’s purses
Phillips Famous Seafood, Baltimore
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