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Johnny Rockets targets Hispanic markets

Johnny Rockets targets Hispanic markets

Operator eyes growth opportunities in West Texas, Arizona

Johnny Rockets is making a more targeted push into Hispanic markets, company officials said Wednesday.

The Aliso Viejo, Calif.-based operator has signed a franchise agreement with Cruzar Group LLC to open at least three restaurants in El Paso, Texas, as part of an aggressive expansion into West Texas, where there is a large Hispanic population.

Restaurants are also under construction in San Antonio and Laredo, Texas, and Arizona is another target market with a growing Hispanic demographic where the brand sees potential for growth.

Joel Bulger, Johnny Rockets chief marketing officer, said targeting the Hispanic community is not just a location-specific effort, but a broader emphasis for the chain, given changing demographics nationwide, and particularly in core markets like Southern California, where Johnny Rockets already has a strong presence.

“It’s something Johnny Rockets wants to focus on because we recognize how important and powerful the group is,” Bulger said.

Currently, about 18 percent of U.S. consumers are Hispanic, and the demographic group is expected to make up a third of the general population by 2050.

According to market research firm The NPD Group, Hispanics’ per capita visits to quick-service restaurants and other foodservice outlets increased by 4 percent in 2014, compared with a 1.1-percent decline in visits by non-Hispanics. However, Hispanics’ per capita visits to full-service restaurants decreased by 7 percent during that time, compared with a 1-percent increase for non-Hispanics. 

Johnny Rockets will focus on both Hispanic families and Millennials, Bulger said.

By 2020, an estimated 25 percent of Millennials will be Hispanic. Of those, two thirds identify themselves as “foodies,” which fits with Johnny Rockets’ renewed emphasis on food, Bulger said.

“What we’re doing, from a quality standpoint and making sure we’re offering the best-quality products, is right in line with what Hispanic families are looking for,” he said. “We weren’t doing as good a job in communicating our quality ingredients, but that’s very important to Hispanics.”

The strategy is still in beginning stages, but will likely include the use of Spanish on menus, Bulger said. The focus will also be applied to restaurant design.

Hispanic customers tend to dine out in larger parties of four or more, compared with two or more for the general population, Bulger said. So Johnny Rockets is looking to create space in restaurants for larger gatherings.

The chain will also look to incorporate regional flavors that will resonate in markets with larger Hispanic populations, Bulger said.

Marketing will also be more targeted, and will include a focus on social and digital engagement, although Bulger said the plan is still in the works.

It helps that Charles Bruce, who was named Johnny Rockets CEO in March, speaks Spanish fluently and attended school in Mexico, Bulger said.

Aggressive growth overseas

(Continued from page 1)

Johnny Rockets is not the only restaurant brand seeing opportunity in marketing to Hispanics.

According to a report released last month by AHAA: The Voice of Hispanic Marketing, a trade group that represents the Hispanic marketing community, restaurant companies among the Top 500 advertisers increased their aggregate spending on Hispanic advertising by 68 percent over four years, from $33.2 million in 2010 to $55.9 million in 2014.

Restaurant companies leading that effort include McDonald’s, Yum! Brands Inc. and Wendy’s, the report said. Chains like Whataburger, Denny’s and Popeyes Louisiana Kitchen also dedicated more than 20 percent of their advertising spending to Hispanic-dedicated media in 2014, according to the report.

For Johnny Rockets, the move is part of an overall effort to accelerate growth. The more than 330-unit chain has pledged to add 100 units in the U.S. by 2017.

Last year, the traditionally full-service Johnny Rockets chain unveiled new prototype formats, including a drive thru and smaller-footprint express locations, which are designed to compete for time-starved quick-service consumers.

The first drive-thru Route 66 location, which will feature new technologies like self-ordering kiosks, an interactive video wall as cars drive through the line, and speedier kitchen equipment, is expected to open at the end of 2015 or in early 2016 in California, said James Walker, Johnny Rockets president of operations and development, although he said the company is not ready to reveal where.

In El Paso, Cruzar Group is planning a Route 66 drive thru, a Johnny Rockets Express unit and a traditional restaurant by mid 2016, he said.

“This is a three-store agreement, but there is potential to grow beyond that,” Walker said.

Johnny Rockets is also growing aggressively overseas. The company, which currently has locations in 25 countries, recently signed a 100-unit agreement in China and a five-unit agreement in Poland. This week, Johnny Rockets will open a restaurant in Tunisia for the first time, Walker said.

Contact Lisa Jennings at [email protected].
Follow her on Twitter: @livetodineout

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