Somewhere between the price point of quick-service players like Captain D’s and upscale McCormick & Schmick’s, restaurant operators see an ocean of opportunity to sell affordable seafood.
Among those looking to cast a more affordable net is Maryville, Tenn.-based Ruby Tuesday, which is scheduled to debut this spring a yet-to-be-named casual-dining seafood concept. Costa Mesa, Calif.-based King’s Seafood Co. plans to multiply its new fast-casual Fish Camp concept in Southern California. And a private-equity firm recently made a $4 million investment to grow the three-unit Pacific Catch casual-dining chain.
The Lobsta Truck, a food truck offering East Coast-style lobster roll and crab roll sandwiches for $9 to $11, launched in Los Angeles in December. And McCormick & Schmick’s Seafood Restaurant recently announced it is looking to add a less-expensive casual-dining seafood chain to its portfolio.
Still, said Darren Tristano, executive vice president of research firm Technomic Inc., no one has captured the affordable seafood market. “Most people don’t see seafood as affordable, and that alone may be why we don’t see more such concepts,” he said.
Removing the price barrier for seafood isn’t easy. Seafood is often unpredictable in price, and it is subject to seasonal fluctuations and sourcing challenges. Fish and shellfish are also delicate proteins that — unlike steaks — don’t improve with age. Still, seafood that is not fried is seen as a more healthful protein.
Seafood consumption in restaurants has declined in recent years, according to research firm The NPD Group, but the recession may be to blame. NPD found that servings of seafood ordered by consumers in restaurants declined by 2 percent for the year ended November 2010. About 5.5 percent of all restaurant orders included seafood for that period.
That decline, however, was an improvement over the 6-percent drop in seafood servings ordered during the year ended in November 2009, when recessionary pressures were greater. In its fall restaurant census, NPD also found that the number of seafood restaurants declined by 5 percent, a loss of about 161 units.
Bonnie Riggs, NPD industry analyst, said price was largely to blame. Typical seafood entrée prices of $18 to $20 are considered “pretty steep,” she said.
Even Red Lobster, the 700-unit casual-dining concept owned by Orlando, Fla.-based Darden Restaurants Inc., has struggled lately with its average check of $19.25. Darden reported in December that same-stores sales fell 1.6 percent in its second quarter. In recent months company officials have unveiled more value- positioned dishes, such as a seafood dinner for two with two salads, two entrées, and an appetizer or dessert for $29.99.
Still, the 152-unit Bonefish Grill, a casual-dining chain owned by Tampa, Fla.-based OSI Restaurant Partners LLC, reported same-store sales up 7.6 percent in its third quarter ended in September — higher than Outback Steakhouse or other sister brands.
Taking the plunge
Some operators say guests are ordering more seafood. Sandy Beall, chief executive of Ruby Tuesday, said his company decided to develop a casual-dining seafood concept in part because almost one in four guests order seafood at the company’s Ruby Tuesday brand. The new seafood concept will have a check average between $12 and $15. The first location will open near Knoxville, Tenn., in a converted Ruby Tuesday location.
Sam King also wants to make seafood affordable. The chief executive of Costa Mesa, Calif.-based King’s Seafood Co. oversees multiple high-end seafood concepts, from the fine-dining Water Grill in Los Angeles to the 12-unit, upscale-casual King’s Fish House concept.
Last June, the company launched Fish Camp, a fast-casual version of King’s Fish House with a limited menu and lower prices. While the average check at Fish House is about $18 to $19 at lunch and $26 at dinner, at Fish Camp, the average check is $12.50 at lunch and $18 at dinner.
The fact that King’s Seafood Co. has a distribution arm means food is fresh, not frozen, King said. Fish Camp also has a smaller footprint of about 3,000 square feet and lower startup costs. An order-at-the-counter format keeps labor costs lower.
Aaron Noveshen, co-founder of Pacific Catch, said his San Francisco-based concept was designed to make seafood an everyday occasion.
Pacific Catch has a pan-Pacific-influenced menu with daily fresh fish specials, a lively bar with artisanal cocktails and an average check of about $20.
“We were trying to find a sweet spot, which for us is about $15 [for entrées],” said Noveshen.
The concept was initially fast casual, but shifted to full service within six months because it helped manage flow, he said.
Popular dishes include customizable rice bowls for $14.50, including one with seared ahi tuna, wakame salad, avocado, daikon sprouts, cucumber, ginger, sesame seeds, shredded nori and a soy-wasabi sauce.
Menu engineering is key, said Noveshen. Daily specials and regional promotions allow price flexibility. The restaurants use fresh and frozen products, sourcing sustainable seafood wherever possible.
A fourth Pacific Catch is scheduled to open in April. The company plans to open two to three more by the end of 2012. Aiding growth is a $4 million infusion made by San Francisco-based private-equity firm Pacific Community Ventures.
For Justin Mi, operator of the weeks-old Lobsta Truck, selling affordable lobster and crab is all about volume and operating on very tight margins.
Mi, who worked previously in the seafood import industry, said his fixed costs are lower selling his product off of a truck than at a brick-and-mortar location. Top-selling lobster roll sandwiches are $11.
“We’re probably the most expensive truck out there right now, but if you went to a restaurant and got a lobster roll, it would probably be double that price,” he said.
Mi is already thinking about launching a second Lobsta Truck later this year.
Hooking customers
Michael Dellar, co-founder, president and chief executive of the San Francisco-based Lark Creek Restaurant Group, knows how hard it is to keep seafood prices low. Lark Creek founded in 2000 a casual New England-style cafe called Yankee Pier with an average check in the mid-teens at lunch and low $20s at dinner. The menu was heavy on fried clams and shrimp.
Over the years, however, Yankee Pier evolved as diners asked for more healthful preparations. Menu items are more chef driven and sustainable, so prices have climbed up. Now the average check at lunch is $18 to $20 and dinner is $25 to $35.
Given the higher check, Yankee Pier will be remodeled in coming months. “It’ll be less kitchy,” said Dellar. “No buoys and fishing nets.”
Sales at Yankee Pier were up 5 percent in 2010. “Our goal is to keep raising our average check to pay for this pristine seafood,” Dellar said.
With four Yankee Pier locations open, Lark Creek most recently opened a seafood restaurant called Fish Story on the Napa, Calif., riverfront. Fish Story is more high-end, with an average check in the low $20s at lunch and low $40s at dinner.
Contact Lisa Jennings at [email protected] .
