A piece of the pie

A piece of the pie

GOIN’ BACK TO CALI: Los Angeles-based California Pizza Kitchen will open its first Louisiana location later this summer in Perkins Rowe.

Tuesday, July 1, 2008

The chicken barbecue pizza started as an idea that became a concept that blossomed into more than 200 California Pizza Kitchens in 30 states and 10 countries. And, by late summer, the Los Angeles-based company’s first Louisiana store will open in Perkins Rowe.

And like the tasty pizza, the Capital Region has become a tantalizing opportunity for national chains to come into what has been a market dominated by local establishments.

Some restaurateurs consider the extra competition from trendy newcomers like California Pizza Kitchen, P.F. Chang’s China Bistro, Texas de Brazil Churrascaria, Fleming’s Prime Steakhouse and Wine Bar and Kona Grill healthy and desirable. But others say more competition means a smaller slice of the pie.

“Baton Rouge was certainly one of the cities on our radar screen,” says Larry Flax, co-founder and co-owner of California Pizza Kitchen. “We look for growing cities that are upscale with well-educated people, and look for hot areas like Perkins Rowe. I hear Baton Rouge likes good food, too, so I think people will like it.”

Flax wasn’t concerned about the competition when his company decided to locate here, because they prefer to cluster with other proven chains. He cited P.F. Chang’s, which opened in the Towne Center at Cedar Lodge in 2005, and The Cheesecake Factory, which has yet to open a Louisiana location. Flax says don’t be surprised if The Cheesecake Factory shows up in the near future, because one tends to follow the other.

“We think of it as synergy,” he says. “If people have choices, they’ll go out more. We’re really not interested in a city where we’d be the only restaurant.”

Mike Anderson’s Seafood Restaurant has served the Capital Region for 31 years, first from a small location on Highland Road just outside the South Gates of LSU and now from a much larger location on West Lee Drive. [Mike Anderson’s also has a location in the Holiday Inn on La. Highway 30 in Gonzales.]

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“The main thing we see is the pie slice gets smaller, and the chain restaurants don’t have to work as hard as we do,” co-owner Mike Anderson Jr. says. “They buy bulk and have an easier system than an independent. It’s harder for us independent people to compete with that kind of deal.”

Despite having name recognition in the Capital Region, Anderson maintains more chains do make it increasingly difficult for everyone else.

After serving New Orleans for 25 years, he witnessed an increasingly competitive market where the pie continuously got smaller, too. Anderson’s location on Bourbon Street never reopened after Hurricane Katrina. “It was a blessing in disguise,” he says. “Bourbon Street had gotten so out of sight in prices. It needed that because real estate there had just gotten so overpriced, and you couldn’t go on like that.”

Anderson estimates at least 20 new restaurants have opened in Baton Rouge in the past few years. While it’s a good sign the area is growing, he believes it will again signal tougher times for independent restaurateurs.

“It’s a good thing, and it’s a bad thing,” Anderson says. “Somebody’s going to have to back out.”

But Scott McKay, a senior partner with Gulf South Franchise Authority, says taking a comparative look at major markets, where there’s a bar or restaurant on nearly every corner, suggests there’s room for more growth locally.

“I’m not saying we’re Dallas, but that is the extreme … and I don’t think we’re there yet,” McKay says. “As Baton Rouge becomes a more prominent market on the national landscape with Perkins Rowe, downtown developments, etc., this town will get a lot of play from franchise operations and people looking to open up locations in new places across the country.”

For years, McKay says, people have talked about Baton Rouge as the next Charlotte, N.C., or Austin, Texas. “It’s ready to happen unless they screw it up,” he says.

With more than 1,800 locations in the U.S. and abroad, Dallas-based Brinker International has brought three of its four franchises—Romano’s Macaroni Grill, On The Border Mexican Grill and Chili’s Grill and Bar—to the Capital Region. The fourth, Maggiano’s Little Italy, doesn’t have a Louisiana location.

While company spokeswoman Maureen Locus could not specify the demographics that drew them to the area, she could say commercial and residential growth were considerations. Every prospective market is extensively researched for traffic access, visibility, proximity to guests, investment cost and consumer demand, she says, “and clearly Baton Rouge fit all that.”

SEE FOOD: Mike Anderson Jr., co-owner of Mike Anderson’s Seafood Restaurant, says the addition of numerous national chains to the Capital Region dining scene could signal tougher times for independent restaurateurs.

Photo by Marie Constantin

SEE FOOD: Mike Anderson Jr., co-owner of Mike Anderson’s Seafood Restaurant, says the addition of numerous national chains to the Capital Region dining scene could signal tougher times for independent restaurateurs.

In the 15 years since Bruce Attinger brought the Outback Steakhouse chain to the Capital Region with locations on South Acadian Thruway, Jones Creek Road and off La. 30 in Gonzales, the Baton Rouge resident agrees the market is more competitive while also keeping pace with the city’s growth, especially in the wake of the 2005 hurricanes.

Attinger also cites the upper-scale developments that have lured casual dining restaurant chains. P.F. Chang’s, Fleming’s, Carrabba’s Italian Grill, Bonefish Grill, Champps Americana, Qdoba Mexican Grill, Zea Rotisserie and Grill and Zoe’s Kitchen located in the Towne Center; California Pizza Kitchen, Texas de Brazil Churrascaria, Kona Grill, Fish City Grill, The Grillroom and La Madeleine located in Perkins Rowe; and Saki Café, BJ’s Restaurant and Brewhouse and Bravo! Cucina Italiana located in The Boulevard lifestyle center at the Mall of Louisiana.

Attinger agrees that restaurants clustering in a location or center provide a welcome and profitable synergy. More choices and variety entice people to eat out more, so everyone ultimately profits. He says strong sales at his two Baton Rouge locations support his premise.

“Good operators will survive and flourish even with the advent of competition, and those who have been in business awhile feel the same,” Attinger says. “But with commodity prices escalating and fuel prices rising, it’s a challenging time in the industry.”

As a partner and chef with Zea Rotisserie and Grill and Semolina Group under New Orleans-based parent company Taste Buds, Greg Reggio says they opened new locations in Baton Rouge and Lafayette to take advantage of name recognition in two nearby metropolitan markets.

Reggio says his company saw how well other restaurants were doing here and “we can compete pretty well with these other big companies.”

“There’s enough people in Baton Rouge,” Reggio says. “Competition is a good thing, and the idea of being in the area with four to five major restaurants just pulls people to that area. People can’t eat Zea every day.

“We went there because it’s a strong restaurant market. We were busy from day one. We could definitely open up another Zea. We just have to figure out where to avoid hurting the original locations. Things are looking great in Baton Rouge.”

Raising Cane’s founder Todd Graves says his dream was to have his first chicken fingers restaurant—“the mothership”—at the gates of LSU. The Highland Road location at the North Gates would have been just fine for him, but it was so successful after opening in 1996, the chain has since expanded to 11 stores in Baton Rouge and 70 stores in 13 states. Plans are to open another 14 locations in Louisiana, Mississippi, Minnesota, Nevada and Ohio this year.

In addition to the recent success of LSU athletic programs, the company relies on market indicators for good expansion opportunities. Since 1990, East Baton Rouge Parish’s population has grown 17% to 448,000 people with a projected 6% jump before 2012. The average household income, $65,539, grew more than 80% from 1990-2007.

“East Baton Rouge Parish is one of our most successful markets,” Graves says. “Being a Baton Rouge-based company … we take great pride in the role we have played in the exciting growth Baton Rouge has experienced over the last 10-plus years, and we look forward to being a part of the future growth.”


Comments

Posted by fourx5 on July 2, 2008 at 1:59 p.m. (Suggest removal)

I don't see why people eat at the lower-tier national chains anyway. The same 5-7 ingredients served in different ways. But I guess there's no accounting for taste in a culture that thinks Wal-Mart is "good for the community".

Posted by pmccarron on July 3, 2008 at 10:33 a.m. (Suggest removal)

Hey, I like Wal-Mart - lowered the cost of living for everybody. Try living in a communist country where you got empty shelves everywhere. Franchise or No Franchise - let the market decide who stays in business and who doesn't. As a small landlord I don't like having to compete with these REITs from New York and Atlanta for tenants - but hey - that's the way it goes. You got to run with the Big Dogs in any line of business if you want to survive.

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