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R&IEditorial Archives2001January 15 — Business

Amphibious Assault
Seafood restaurants launch successful counter-offensive against steakhouses.


Seafood concepts are storming the beaches of consumer popularity and, while steakhouses are not exactly beating a retreat, they should take heed: The tide is turning in fish's favor.

The U.S. Commerce Department reported that seafood consumption by Americans increased 3.6% in 1999 to a whopping 4.2 billion pounds. And restaurants were more than willing to give consumers the dishes they wanted. Research conducted by Chain Account Menu Survey of Wheaton, Ill., indicated that during the last half of 1999, the number of seafood menu mentions at the 200 largest restaurant chains increased more than 10% compared to the same period in 1998. As of last spring, seafood represented 20% of menu entrees at those same chains, according to CAMS.

"Seafood is a win-win alternative for everyone," says Richard Moskovitz, general manager of the Big Fish restaurant in Princeton, N.J. "For the restaurant owner, it's cost effective, particularly with beef prices going through the roof. Plus, there are so many kinds of fish to fill a menu with. And for the consumer, it's a health issue. Fish is just better for you than meat."

Whether the draw is lower fat and higher omega-3 content or changing consumer tastes, new seafood concepts are opening nationwide with startling speed. And, while steakhouses tend to run toward a dark-wood-and-cognac atmosphere, the latest seafood operations are as varied as the kinds of fish they serve.

In the new wave of seafood operations there is an emphasis on regional species and cooking, and Southern-style cuisine, particularly New Orleans-influenced dishes, may have the most proponents.

Eight-unit, Dallas-based Rockfish Seafood Grill, for example, focuses on what Chief Executive Officer Randy DeWitt calls "comfort seafood," that is, simply prepared tri-coastal entrées (fish from the Northwest, Northeast and the Gulf) that leans in the direction of Louisiana. Included on its menu are a selection of po' boy sandwiches, Cajun shrimp pasta and gumbo, despite a décor that is decidedly North Woods.

One restaurant reviewer described a Rockfish unit as "what an Eddie Bauer store would be like if it served crawfish." That translates into a lodge-style interior with timber structural pieces, pinewood tables and a fly-fishing theme (as DeWitt notes, the fish on the walls are North Country salmon and trout rather than the swordfish found at most mid-priced casual seafood dining establishments).

But the next generation of Rockfish restaurants likely will look quite different. DeWitt fears customers will get bored with the design and so, while elements such as the display kitchen will remain, others will change. The new restaurants will also be larger: 4,000 to 4,800 square feet, compared to the current size of 1,800 to 2,600 square feet.

What will remain are the moderate prices--the average check is $14 per person--and growth plans. The company expects to open six stores in 2001 and is exploring franchising opportunities. Arizona and Colorado, the first markets targeted for franchise development, will also be the first states outside of Texas with Rockfish locations. Discussions are underway with several experienced franchising groups. Mom-and-pop operators need not apply. "We want people with systems in place, local market knowledge and capital," DeWitt says.

New Orleans style features even more prominently at Jacksonville, Fla.-based Harry's Seafood, Bar and Grille. Items such as jambalaya and crawfish étouffée are served in "a Mardi Gras atmosphere," according to Harry's marketing director Dina Damon, and for a reasonable price. Average per-person check is about $9 at lunch,$17 at dinner.

"New Orleans conjures up an atmosphere and a type of food that people love to experience. You'd be surprised at how many of our customers who rarely, if ever, eat seafood, come in and order fried catfish."

Based on sales figures, quite a few. Gross sales in 2000 rose 25% over the previous year. Such increases have given Harry's good reason to be optimistic about the future. Two units are expected to open this year and "steady controlled growth will be maintained from here on out, with franchising a distinct possibility," says Damon.

Cajun and Creole dishes are prominently featured on the menu at Blue Marlin as well. But the Charlotte, N.C. concept is equally influenced by the food of the low country, the region of the South that extends from the coastal plains of South Carolina to the Savannah River in Georgia. That cuisine is strongly influenced by seafood, from freshwater and saltwater fish to shellfish. Specialties of the five Blue Marlins include crab cakes and shrimp and grits made from low-country corn.

"By combining flavors of the low country with those of Louisiana and the Mississippi Delta, we've discovered a niche that's never been exploited," says Rob Kendall, president of Blue Marlin's parent, Red Mountain Management Inc. "You can find a steakhouse on every corner. In the near future, you may be able to find a seafood restaurant on every corner. But I guarantee you, there'll never be a restaurant on every corner that blends flavors and food the way we do."

Blue Marlin does not expect to be on every corner. Growth will be slow, with only two units opening per year, although none is currently on the drawing board. The concept's dinner check average, about $32 per person, places it more on a par with upper-end dining establishments than with casual, which is exactly where Red Mountain wants to be.

Southern-style cuisine may be a dominant force in the current crop of seafood dining venues, but by no means is it the only force.

Yankee Pier, a single-shingle restaurant owned by San Francisco-based Lark Creek Restaurant Group, is a recently opened, updated version of "a New England clam shack," says co-founder Michael Dellar. But apparently the down-home atmosphere is not keeping customers away. Only 1,500 square feet in size, the 81-seat (indoor and patio) operation has customers lined up at the door when it opens at 5 p.m. (lunch is served only on weekends).

And atmosphere notwithstanding, the average check for dinner is an impressive $25 per person, "which makes it a wonderful expansion vehicle because it generates large sales volume in a relatively small space," says Dellar.

Filling another seafood niche is Rockin' Baja Lobster, a five-unit San Diego-based chain that was inspired by the food of the small fishing village of Puerto Nuevo, Mexico. Prices for dishes such as fish tacos, fish or shellfish wrapped in flour tortillas and flash-fried lobster range from $5.99 up to $26.99.

Naked Fish, owned by Naked Restaurants Inc., of Woburn, Mass., represents an altogether different style. The five-unit chain specializes in fresh fish cooked over a wood-fired grill in relatively unadorned fashion, with only olive oil, lemon juice and herbs for flavoring. This allows "the fresh riches of the earth and sea to be celebrated, not disguised," according to company president Joey Crugnale.

Big Fish, one of several seafood concepts owned by C.A. Muer Corp. of Southfield, Mich., has taken a bigger-is-better approach. The newest prototype for the five-unit venture features a massive, rotunda-shaped entrance flanked by glass walls configured to look like a ship's bow, 30-foot-high ceilings, a 5,000 square-foot dining space with seating for 300, and a 2,500-square-foot back-of-the-house operation. The raw bar, designed in the shape of a boat's prow, is overhung with metal-frame fish-skeleton arches and adorned with a hanging 12-by-10-feet fish sculpture. Each of the two dining rooms contains a three-dimensional, 36-feet.-long fish mural. "It's like eating inside a big aquarium," says Moskovitz.

The menu selection also is expansive, with the usual selection of grilled, blackened, sautéed, broiled and baked fish, as well as cedar-planked fish, seafood pastas, shellfish, and Asian-, Italian-, French-, and New Orleans-influenced dishes.

Not every aspect of Big Fish is oversized. Its parent company wants to position the chain as the seafood concept that fits the niche between fine and casual dining. The average check is $21 per per-son at dinner, close to $10 at lunch.

"There are companies filling the upscale-casual niche for other types of food but no one has taken the lead yet in seafood," says Moskovitz. "That's the goal of Big Fish: to be the trend-setting place to go for high quality, fresh seafood at a reasonable price point."

The company appears to be making headway toward achieving its goal. This year, the Princeton, N.J., unit is expected to bring in revenues of $5 million, roughly 25% more than in 2000. And long-range plans call for 100 to 150 Big Fish restaurants across the country.

With so many seafood concepts entering the dining scene, is market saturation a real concern in the not-too-distant future? Not likely, according to NPD Foodservice Information Group of Rosemont, Ill. Moderately priced casual seafood restaurants remain sorely underrepresented, with only 7,524 in operation nationwide as of year-end 1999, NPD research indicates. That leaves plenty of room for growth.

"Seafood isn't a trend, it's an overriding dining preference," says Dellar. "People don't cook it at home as much as other foods because they either don't know how, lack the confidence or can't get it fresh. Seafood is often the very reason why people go out to eat."

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