Piada: One to watchPiada: One to watch

Steve
Rockwell

What is the hottest new concept in America? While ShopHouse Southeast Asian Kitchen, the new fast-casual concept from Chipotle Mexican Grill, may have been anointed as such by the press and many industry observers, a recent trip to Columbus, Ohio, revealed another burgeoning chain that warrants serious consideration: Piada Italian Street Food.


Piada Italian Street Food is a fast-casual restaurant chain developed by a man with a proven track record, Chris Doody, one of the founders of Bravo Brio Restaurant Group, and his partners. Piada operates, as the name implies, in the highly popular Italian segment. And it has a wide-open market opportunity, as there is no significant competition from other fast-casual Italian chains.


The concept features the piada, a rolled flatbread sandwich that can include, at the guest’s discretion, pasta, protein, vegetables and a sauce. The simplest description of Piada is that it is an Italian version of Chipotle; it has a similar basic product — a piada can be thought of as an Italian burrito — and the same line-service system. The concept works, in my opinion, because it has many of the elements that are critical to a successful concept. Among them:


It has soul. Soul is a combination of the food and the look and feel of the restaurant. Service, in this case employee-guest interaction, and the look of the employees also contribute to the restaurant’s soul. It is more than “atmosphere,” as it creates an emotional response to the dining experience. 


Piada’s look is modern and upscale, featuring substantial 
tables with thick wooden tops that are attached to the floor. The chairs are also made of heavy wood and give the feeling of substance. Even the bathrooms are surprisingly well-appointed, with marble vanities. 


The food is fresh and visually appealing as customers move down the line and create their own piada, salad or pasta bowl. Complementing the food are standard fountain drinks and a welcome twist — Italian fountain sodas and teas that provide a distinctive point of differentiation. All the elements of the concept work together to create an atmosphere that is modern, sleek, vibrant — especially given the number of customers in the restaurant — and chic.


The price/value ratio is excellent. An entrée and drink cost approximately $10, comparable to Chipotle, Five Guys and other fast-casual chains. Given the quality of the food and the soulful environment, this price point represents excellent value.


It’s different but familiar. I believe consumers like to be adventurous, but not too much so. When trying new things, they want a different twist on the familiar. To this extent, Piada is a hit. The food ingredients, while different than Chipotle’s, are well known to the average consumer. For example, pasta is offered in a piada, taking the place of rice in a burrito, and Italian sauces replace salsas. Consequently, the end product is familiar in look, but has a different flavor profile.


The concept is a success based on observations of the first three units and consumer reviews on Google, Yelp and Urbanspoon. It is not unusual for the wait line to be nearly out the door during peak meal times. There are currently four units open in the Columbus area, with two more slated to open soon. Also, it is understood that the company is looking for additional locations in Cleveland.


The key financial ingredient to a successful restaurant is the return on capital. Since Piada is a private company, no financial information is available. Logic dictates, however, that returns must be strong. Without adequate returns, the company would not have opened four units and have at least three more under development, all in the past year or so.


Piada’s ultimate fate is difficult to predict. Doody’s past accomplishment with Bravo Brio suggests that the company will produce strong returns for its investors. Bravo Brio was sold to two private-equity firms, Bruckmann, Rosser, Sherrill and Castle Harlan, and then taken public last fall. It was the first successful restaurant IPO in several years. Today, the company boasts multiple restaurant concepts in 29 states, including two Italian casual-dining chains — 47 Bravo! Cucina Italiana restaurants and 40 Brio Tuscan Grille units — and one Bon Vie Bistro. More important to investors, both the stock and the company have performed well after the IPO. The stock is up approximately 30 percent from the IPO price of $14 a share, and total same-store sales have increased in each of the subsequent four quarters.


With so few restaurants in operation, much has to happen before outside investors commit significant funds to the company, either from private or public sources. The concept’s foundation is solid, however, with a strong price-value relationship, good operations and management that has the experience of having already created significant value. Keep an eye on Piada — it is likely to become very well known among interested restaurant investors. 

Steve Rockwell has 30 years of experience in the restaurant industry, including as a restaurant analyst, finance executive, investor and consultant. He can be reached at [email protected].