Discovery Zones: Chain Restaurant research-and-development facilities

Investment in research-and-development facilities shows culinary innovation�s importance in differentiating chain restaurant brands.

By Kate Leahy, Associate Editor -- Restaurants & Institutions, 7/15/2007

Nearly 4,000 people will visit Ruby Tuesday’s new culinary center this year to take advantage of hands-on training and state-of-the-art equipment.

Cedar-seared salmon is a hit on T.G.I. Friday’s menu while meatloaf hits comfort spots on Huddle House’s all-day menu.

If Damon Paolozzi burns his hash browns, overcooks chicken or drops a pan on the floor, lack of cooking skills isn’t the problem. As director of product development for Atlanta-based Huddle House, Paolozzi pokes and prods dishes at the family-dining chain’s new research-and-development center to familiarize himself with potential pitfalls of menu preparation.

"We want to make sure that what we’re serving can be executed [in the units] and that the quality will be what we expect," he says.

This focus on testing and product development is a strategic shift for Huddle House, which until recently had neither R&D center nor corporate chef. The chain’s newfound commitment to culinary development is what attracted Paolozzi.

"They’ve shown me that they’re serious about developing new products and enhancing existing ones," says Paolozzi, who spent more than five years as corporate chef for Popeyes Chicken & Biscuits, also based in Atlanta. "Huddle House has opened up the door and let me get creative."

Other chains also are strengthening commitments to research and development. Steak ‘n Shake built a new test kitchen and research facility in its Indianapolis headquarters to increase product-development capacity. Godfather’s Pizza in Omaha, Neb., developed within its 24,000-square-foot company headquarters a research facility that includes a mock convenience store as a result of the chain’s expansion in that segment. To improve its ability to execute the menu, Ruby Tuesday built a culinary training facility at its corporate support center in Maryville, Tenn.

This growing commitment to R&D stems from chains’ need to gain market share in a highly competitive chain environment by creating and executing innovative ideas. "The dining public is exposed to so much more in terms of food knowledge, flavors and trends—it’s not enough to stand on the corner and say that I have a restaurant with good food," explains Phil Costner, vice president of research and development for Carrollton, Texas-based T.G.I. Friday’s. "Our competitors have very savvy teams. We’re all fighting for the same share of stomach."

Central Nervous Systems

An R&D facility melds buttoned-down corporate strategy with anything-goes creativity, making it the center point where operations’ needs, culinary development and marketing initiatives meet.

"The development and pursuit of products that are high-quality and served consistently are more important than ever before," says Karen Eadon, chief marketing officer for Irvine, Calif.-based El Pollo Loco. "R&D is the crucial linchpin."

R&D centers’ primary strategic roles are as varied as chain menus. Einstein Noah Restaurant Group uses a test kitchen and a mock unit within the company’s new headquarters in Golden, Colo. There, Chad Thompson, senior director of research and development, quickly can react to operator and customer demand and also ensure that products are tested in a real-world environment.

T.G.I. Friday’s and Corpus Christi, Texas-based Whataburger also have corporate-headquarters R&D centers with kitchens that replicate those found in their restaurants. "When it comes to menu development, having your own facility offers convenience, accessibility and confidentiality," says Todd Coerver, vice president of brand development for Whataburger. "A designated facility inside our home office allows us to experiment with new ideas without having to interrupt the operations of an actual restaurant or go through the trouble of booking time at a third-party facility."

Jon Miller, director of research and development for El Pollo Loco, prefers his small research-and-development kitchen, which is appended to an actual restaurant. "By using the restaurant, we can utilize actual product," Miller says. "It also is great for organic development. All of your products and ingredients are in real-time use."

Eureka Moments

Although numerous dishes are tested each year, few make it to being limited-time offers and fewer still find permanent core-menu places. Successful new items must have broad appeal, fit with operations and be distinctive enough to add interest to the menu. Most of all, a new menu item must drive sales.

"We liken it to being musicians," says Costner. "And every month you have to write a greatest-hits album and it has to sell like hotcakes."

Developing a dish that tops the charts is not an easy achievement. Quick-service chains average five new items each per year; casual-dining chains add between 15 and 60 items annually. T.G.I. Friday’s develops nearly 60 new menu items a year, of which 25% may make it on the permanent menu. Whataburger keeps core-menu development purposefully conservative, focusing on limited-time offers to leverage taste trends.

Inspiration can come from unexpected sources. Watching El Pollo crew members assemble tacos for themselves yielded a revelation for Miller. "If you have 20 people make tacos, there are a few common items," he says. "Over and over, people squeezed lemon onto their tacos. We thought, wow, that’s a powerful thing. You can integrate that into your development."

Testing, Testing

T.G.I. Friday’s Costner and his team gather ideas from consumer and culinary research and consider leads from the marketing department. "After an idea is germinated from research, we go into our kitchen—we call it ‘the bench,’" he says. "We might do scratch cooking or we might reach out to a vendor for a sauce, a protein or a vegetable that we know has to be in there. If we come out with a product that tastes great, can be executed in our restaurants, and is fun, vibrant and innovative, we test it."

Testing procedures range from Internet market research to focus-group sensory analysis in test kitchens and guest evaluations in test markets. Whatever the approach taken, carefully tracking data is essential. "There are hundreds of steps," Costner says. "You need to have a tight process so that when test results come back, you can do something with them."

Charting performances of limited-time offers, Miller discovered that tortilla soup had more widespread appeal for El Pollo Loco guests than the company had anticipated, and the soup became a core menu item.

Testing also gives franchisees and unit management the opportunity to provide feedback on what works and what doesn’t. "Your first line of defense is the store operator," Thompson says, noting that if an item doesn’t bake as expected at Einstein Noah Restaurant Group’s Einstein Bros. Bagels or Noah’s Bagels locations, operators quickly let him know.

Says Miller, "We use franchisees as a sounding board and as our operational experts."

Trained for Success

Research and development is only as successful as its translation into the field. To ensure that menus were properly executed at the store level, Maryville, Tenn.-based Ruby Tuesday invested more than $4 million in a 6,300-square-foot facility dedicated to training. The facility can handle as many as 60 people at a time with a demonstration area complemented by extensive audio-visual equipment and multiple learning stations that feature equipment typical of a Ruby Tuesday restaurant. The center will train an estimated 4,000 people this year.

"This came out of our commitment to improve the quality of our food," says Jim Domanic, director of training and development. "One thing that we stand by is that we need to show everyone what quality looks like. In a burger class, we went through every single component of a burger."

Although the company conducted training sessions before, it shared a space with the R&D facility and wasn’t able to deliver as much hands-on training. "Now everyone’s able to get that exposure," says Domanic.