CREATE 2024 Insider

LESSONS FROM THE HOT CONCEPTS

LEADERSHIP Restaurant Leader of the Year: Jersey Mike’s Peter Cancro

A LOOK INSIDE CREATE

COCA-COLA COLLECTIVE Helping emerging brands innovate and grow

FINANCE How to find growth capital

MENU Value without discounting

MARKETING Branding tips from top CEOs

W hen hundreds of restaurant ex- ecs and trailblazing entrepre- neurs come together in a vibrant city like Nashville, you know it’s going to be a good time. We recently wrapped the 2024 CREATE: The Event for Emerging Restaurateurs in Music City, and the energy was off the charts. For three days, the leaders of the next big restaurant brands came togeth- er to network, learn and tackle their most pressing business challenges — together. They explored different funding paths and honed their pitches at the second annual Investment Summit. They learned critical branding and leadership lessons from top CEOs and iconic brand founders. They examined the latest digital tools in our curated restaurant technology show- case. They got exclusive data and insights

on consumer behavior, labor strategy, marketing trends, the economy, and more. And, most important, they connected with like-minded restaurateurs who are also looking to take their brands to the next level. Our team of veteran editors was there to bring you the best of CREATE — a great- est hits album, if you will. In the following pages, you’ll find the biggest takeaways and insights from CREATE speakers and at- tendees in videos, podcasts and features. Watch main stage sessions, get exclusive consumer data and hear one-on-one con- versations with industry giants and rising entrepreneurs alike. We hope this special issue helps you chart a growth path in the year ahead. We’ll see you back in Nashville for CREATE 2025.

SAM OCHES Editor-in-Chief, Nation’s Restaurant News

COVER PHOTO CREDIT: EDIN STUDIOS

FOUNDERS FORUM Founders of Cooper’s Hawk, Bluestone Lane, and Cameron Mitchell Restaurants recount their growth journeys 12

Contents

OPERATOR SPOTLIGHT Hear from executives at Walk-On’s, IHOP, City Barbecue, and more

BEHIND THE SCENES Exclusive photos from CREATE 2024

LEADERSHIP CEO Conversations: Top branding lessons from leaders at Swig, El Pollo Loco and more INDUSTRY INSIGHTS Coca-Cola Collective: Helping emerging brands innovate and grow BRAND ICON Texas Roadhouse thrives on ‘rowdy enthusiasm’ IDEAS & INNOVATION The economy, Chili’s marketing, and the future of salad explained in Ted- style talks

KEYNOTE From cupcakes to pizza: Sprinkles founder Candace Nelson on her next act HOT CONCEPTS 5 rising brands share the secrets of their success DATA & INSIGHTS How to navigate low consumer confidence without overusing discounts

INVESTMENT SUMMIT How to attract investors to your restaurant concepts

• LEADERSHIP •

CEO CONVERSATIONS: TOP BRANDING LESSONS FROM SWIG, EL POLLO LOCO & MORE

The leaders of El Pollo Loco, Firebirds, L&L Hawaiian Barbecue, and Swig discuss leadership, brand, and growth

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BY JOANNA FANTOZZI

ALEX DUNN SWIG

our different CEOs of hot brands — Alex Dunn of Swig, Elisia Flores of L&L Hawaiian Barbecue, Steve Kislow of Firebirds Wood Fired Grill, and Liz Williams of El Pollo Loco — took the stage at CREATE: the Future of Foodservice during the CEO Conver- sations panel in Nashville, Tenn. to dis- cuss branding, leadership, and more. From Swig learning to lead the way in an entirely new category and Fire- brands figuring out how to navigate the temptation of raising prices, here are some key operations lessons. There are pros and cons to being the inventor of a category Swig is the innovator behind the “dirty soda” craze in Utah that has now spread to other regions throughout the Unit- ed States. But while it is a boon to be the first operator within a wildly popu - lar category, it can also be frustrating when competitors selling similar dairy- and-soda concoctions start popping up. “Swig created a category that is start- ing to come into its own,” Dunn said. “While imitation is the sincerest form of flattery, we’d rather they didn’t copy us, and people just came to Swig.” The challenge for category innova- tors is to make sure that their invention (like the dirty soda) continues to be as- sociated with the Swig brand, and not that consumers just associate Swig as one of many capitalizing on a trend. “Lots of people can have success in this space but we’re the fastest grow- ing,” Dunn said. “We’re working hard to make sure people can have the Swig experience wherever they live.” Stay focused on what you’re good at A lot of operators are paring down menus to simplify operations, but you don’t have to go that route if your menu is already simple. Swig sells a few snacks, desserts, and dirty sodas with 50 different topping options, with drinks starting at just a couple of dol- lars. “What we do is we’re going to stay focused on what we do and do it well,” Dunn said. “We focus on making sure we provide value – once a consumer comes and tries their brand and finds their drink, it becomes an important part of their day.”

ELISIA FLORES L&L HAWAIIAN BARBECUE

STEVE KISLOW FIREBIRDS WOOD FIRED GRILL

LIZ WILLIAMS EL POLLO LOCO

PHOTO CREDIT: EDIN STUDIOS

CONTINUE READING ON PAGE 8

• industry insights •

COCA-COLA COLLECTIVE:

CONNECT WITH THE COCA-COLA COMPANY HERE

How The Coca-Cola Company helps emerging restaurant brands grow Barbara Poremba of The Coca-Cola Company talks with Nation’s Restaurant News’ Sam Oches during the 2024 CREATE: The Event for Emerging Restaurateurs about how The Coca-Cola Company’s complementary insights tools, leadership training and digital expertise can help restaurant leaders take their businesses to the next level.

The Coca-Cola Company is a total beverage company with products sold in more than 200 countries and territories. Our company’s purpose is to refresh the world and make a difference. We sell multiple billion-dollar brands across sev- eral beverage categories worldwide including sparkling soft drinks, water, sports, coffee, tea, juice, value-added dairy and plant-based beverages. We’re constantly transforming our portfolio, from reducing sugar in our drinks to bringing innovative new products to market. We seek to positively impact people’s lives, communities and the planet through water replenishment, packaging recycling, sustainable sourcing practices and carbon emissions reductions across our value chain. Together with our bottling partners, we employ more than 700,000 people, helping bring economic opportunity to local communities worldwide.

Barbara Poremba Senior Vice-President Industry Leadership, The Coca-Cola Company

coca-colacompany.com

Helping emerging restaurant brands drive growth

Digital natives are redefining the restaurant experience The Coca-Cola Company’s Josh Gurley talks with Nation’s Restaurant News during CREATE: The Event for Emerging Restaurateurs about how The Coca-Cola Company’s Digital Dine initiative aims to empower restaurants to create brand experiences that resonate with the digital-first consumer.

New tools to help emerging restaurants manage labor challenges The Coca-Cola Company’s Eric Blumenthal talks with Nation’s Restaurant News during CREATE: The Event for Emerging Restaurateurs about how the company’s Leader Lab platform helps brands modernize their workforce strategies. Plus, hear how another free tool, Coca-Cola Lens, aims to empower leaders with data and consumer insights.

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• LEADERSHIP •

take price and are now much closer to that fine-dining category,” Kislow said. “Price is part of the value equa- tion, but it’s not the whole thing. We try to offer value through the type and quality of food that we offer and the quality of a polished-casual dining experience.” With that goal in mind, Kislow said that they don’t really lean into dis- counting or LTOs, and instead might offer a three-course meal for a spe - cial price. Create hype when entering a new market One of the most challenging parts of being an emerging or even a mid- sized brand is how to introduce new potential customers to the brand. El Pollo Loco prefers to do that as or- ganically as possible through people who become fans and want to pro- mote the brand naturally on social media channels. “When we go into a new market, it’s about educating consumers and driving awareness,” Williams said. “There are so many ways we can do that, whether it’s social media or dig- ital media-- the fans love hyping up the brand and there’s a huge oppor- tunity to leverage that.” Williams said that it’s not really the same if you hire influencers or out - side marketers to hype up the brand: “When something goes viral, it’s just so much more special than when it’s too produced,” she added.

Franchisee culture is paramount If an operator chooses to franchise, franchisees can make or break a com- pany culture. That’s how Elisia Flores feels about running L&L Hawaiian Bar- becue, which is 100% franchised. “Our edge is the franchisees we bring in,” Flores said, adding that she makes every franchisee—even the ones that live far away on the main- land—visit Hawaii before opening up their store. “When you think about foundational Hawaiian values — you hear aloha and ohana — we live it ev- ery day.” Flores said it’s just as important for potential franchisees to fit in with the family-first, and community-centric culture, as it is to be a financial fit. “I look for the franchisee that’s com- ing in and telling me these stories of wanting to open this up for their kids or bring the brand to their communi- ty,” she said. “That’s what we look for.” Not taking price can be a differentiator As pricing continues to be a hot topic of debate, with some operators choos- ing to raise their prices to combat other high costs, and others opting to delve into deep discounting, it can be a tough decision to remain steadfast in your pricing strategy instead. This is exactly what Firebirds has tried to do in the face of a tough consumer envi- ronment. “I think a lot of others in the pol- ished-casual space have started to

NRN EDITORS REFLECT ON CREATE

Be bold and lead with empathy The CEO Conversations panel closed out with each other four CEOs discussing their leadership strategies, and two words kept coming up. Kislow said it is important to lead with empathy, while Dunn emphasized boldness and confidence: “One of the things I regret looking over my career is that I wish I would have been more bold,” Dunn said. “It took me a while. I would think things in my head and be embarrassed to say them out loud. I’m now bold in es- tablishing what can be.”

UNLOCKING A BRAND’S POTENTIAL While founders are the beating heart of a brand, CEOs bring valuable outside perspective — and they often have to make the tough decisions on how to grow. Hear from the CEOs of some of the most exciting restaurant companies in foodservice today about how they’re steering their respective brands, leveraging their extensive restaurant expertise.

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Introducing Coca-Cola Lens! A free insights platform designed to empower operators to make data-driven decisions.

Click here for free insights.

TOPO CHICO SABORES WINS A 2024 FABI AWARD!

• BRAND ICON •

TEXAS ROADHOUSE THRIVES ON ‘ROWDY ENTHUSIASM’ CEO Jerry Morgan said the secret to the restaurant brand’s recent success is its focus on people and culture

BY ALICIA KELSO

For Texas Roadhouse, the “legacy” piece is clearly driven by late founder Kent Taylor’s vision for the company — “Legendary Food, Legendary Service.” The “innovation” piece is a bit more subtle given the chain’s historically conservative approach to LTOs, mar- keting, and tech investments. “Our innovation is keeping our

one-on-one chat at the recent CREATE event in Nashville, Tenn., before he and a large constituency from Texas Roadhouse accepted NRN’s “Brand Icon” award. The award was recently created to recognize brands that mas- terfully balance the intersection of leg- acy and innovation. Previous winners include White Castle and Taco Bell.

T exas Roadhouse chief executive officer Jerry Morgan describes his company as “rowdy,” “enthu- siastic,” and “energetic.” Probably not your ordinary de- scriptors for a steakhouse chain, but Texas Roadhouse has been everything but ordinary as of late. In the past few years, the Louisville, Ky.-based chain has outpaced the casual dining seg- ment by a dizzying pace, leapfrogging Applebee’s along the way to become the No. 2 concept in the category by sales. It’s also been a traffic anomaly in a softening environment, generating gains while much of the industry is losing guests to grocery stores. The company has done all of this without jumping into delivery, discounting, national marketing, or limited-time of- fers. Instead, the secret sauce for Tex- as Roadhouse is the people and the culture. At least, that’s chief execu- tive officer Jerry Morgan’s perspec - tive. That perspective, by the way, has been informed by his 27 years with the company working through several positions including managing partner, market partner, and regional market partner. Morgan joined Nation’s Restaurant News editor-in-chief Sam Oches for a

“ He was our head coach. He put everything on the line, which is what a founder does, and believed in something so strong and gave us a piece of that pie. He taught us how to do it legendary.” — CEO Jerry Morgan, on Texas Roadhouse founder Kent Taylor

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PHOTO CREDIT: EDIN STUDIOS

managing partners at the center of our universe, providing them with the tools to provide a great experience to our employees and our guests,” Mor- gan said. “If we take care of Roadie Na- tion and they take care of the guests, that’s what creates our reputation. You have to create an environment that your employees want to work in. You’re getting me fired up just talking about it.” Morgan is a firm believer in this ap - proach because he lived it — borrow- ing money and writing a check all those years ago to become a partner for a five-year contract. Betting on himself, he said, was risky, but it forged a true partnership. “We freaking love (the model),” he said. “If you’re running a restaurant, you have to believe in what you’re sell- ing and doing. That’s what it comes down to.” Beyond the managing partner pro- gram, Morgan said Texas Roadhouse’s differentiators come from the kitch - en — made-from-scratch offerings, hand-cut steaks, the expectation of two sides, bread with signature honey

cinnamon butter, and peanuts. It also comes from the front of house — mu- sic, line dancing and, that “rowdy en- thusiasm” he often refers to. “We like consistency and hospitality and human interaction and creating an environment where people come to work hard and have a good time. Let’s go!” Morgan said. The “controlled chaos” of operating such an environment helped him step into the CEO and president role after Taylor’s death in 2021. Less than two years later, Morgan transferred his du- ties as president to Gina Tobin, anoth- er 27-year veteran with the company and also a former managing partner and market partner. Together, the two are proof points that the partner mod- el seems to be working. Both leaders learned everything from Taylor, and Morgan said the founder’s influence continues to loom large not just over the leadership team, but the entire company. “He was our head coach. He put everything on the line, which is what a founder does, and believed in some- thing so strong and gave us a piece

of that pie. He taught us how to do it legendary,” Morgan said. “We made a promise to him and with the help of friends, partners, and Roadie Nation, we’ve been able to be strong.” In addition to Texas Roadhouse, the company is growing Bubba’s 33 – a burgers, pizza, and beer concept — and Jagger’s — a quick-service con- cept Taylor once described as “a place that would have better burgers than Five Guys, and serve chicken tenders and sandwiches that could compete with Raising Cane’s and Chick-fil-A.” All three brands are poised for expansion both domestically and internationally, including Jaggers’ recent opening in South Korea. “People love being part of Road- ie Nation everywhere,” Morgan said. “Seeing the brand translating to dif- ferent markets and cultures will have a significant impact on our purpose. Serving communities across the world is why we get out of bed ev- ery day. We are focused on making sure our founder’s legacies remain in place, while evolving and grow- ing as a three-brand company.”

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• FOUNDERS FORUM •

CONCEPT FOUNDERS SHARE WHAT MADE THEM SUCCESSFUL

Tim McEnery of Cooper’s Hawk, Nick Stone of Bluestone Lane coffee, Cameron Mitchell of Ocean Prime offer insights on CREATE panel

P anelists on the CREATE the Event for Emerging Restaurateurs’ Founders Forum tackled issues that made three companies suc- cessful. The panel was moderated by Sam Oches, editorial director for sponsor Nation’s Restaurant News, and fea- tured Tim McEnery, founder and CEO of Cooper’s Hawk Winery and Restau- rant; Cameron Mitchell, founder and CEO of Cameron Mitchell Restaurants; BY RON RUGGLESS

and Nick Stone, founder and CEO of Bluestone Lane. “We have 64 restaurants across the country from Beverly Hills [Calif.] to New York City,” Mitchell said. “Ocean Prime is our national brand. We have 21 brands in total and we’re in 16 states.” Mitchell said he “had an epiphany” while working at a local restaurant as a fry cook, and he pursued education at the Culinary Institute of America. He opened Cameron’s Bistro in October 1993.

“You have to set your goals,” Mitchell said, “and you have to write them down and you have to then communicate them to everybody else — everybody you can.” Ocean Prime locations can total rev- enue as much as $22 million in a year, he said, citing the Tampa, Fla., location, and average unit volume is $13 million. “It’s just such a great seafood restau- rant and a great steakhouse combined,” Mitchell said, adding that he considers it a successful “triangular relationship” between associates in the company,

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PHOTO CREDIT: EDIN STUDIOS

He said that the Australian ap- proach is “about feeling like a local not a customer — and that was the thing that was so apparent when I moved to the U.S.” Stone said he had worked in Lon- don as well “so I just thought there’s an opportunity here to build some- thing that really doubles down on the quality, especially coffee, but is very much hospitality and service.” Stone opened his first location in 2013, and the company has about 65 locations. “I’d never worked a day in hospital- ity,” he said. “I didn’t have any prec- edent where you have to follow this rule or you can’t do that, so I’ve defi - nitely pushed the envelope.” Bluestone has opened in small and out-of-the-way locations, but close to where Australians worked. Bluestone did some very small rounds of funding with friends and family. The first big round was $1 mil - lion with investment banking friends, he said, and that was followed by one of $25 million. “I think that plan was just to dou- ble the business as fast as we could,” Stone said. “Whether that was the right strategy or not, that was the play that we were running and so we closed in the middle of 2018 and we used all the money to really go from, say, 30 to 51 stores in 18 months or so.” The COVID-19 pandemic then posed a challenge, he said, but the concept was able to adapt. “I think one thing that’s not valued enough in society is the role of hospi- tality establishments in driving com- munity, driving friendship and recog- nition,” Stone added. McHenry, the founder and CEO of Coopers Hawk, said the wine club has been a big differentiator for his con - cept. Oches noted that about 99.7% of Cooper’s Hawk’s 750,000 wine club members visited a restaurant every month or two. “This is a multifaceted business with a wine club and the wine bar that had been missing in the market- place.” McEnery said, “the way that I think of Cooper’s Hawk is that the restau- rants and tasting rooms are where we invite people to join my club, and if you do a good job operating, pro- viding great food, wine, hospitality, they’ll stay there.”

On the CREATE Founders Forum panel were, from left: Sam Oches, Tim McEnery, Nick Stone, and Cameron Mitchell.

Hear how the prolific entrepreneur went from fry cook to leader of a company with 64 restaurants under 21 different concepts. CAMERON MITCHELL FOUNDER AND CEO, CAMERON MITCHELL RESTAURANTS

NICK STONE CO-FOUNDER AND CEO, BLUESTONE LANE

Learn how an investment banker spotted a gap in the coffee market and went on to establish a successful chain of hospitality- focused coffeehouses.

Hear why combining a winery, tasting room, upscale casual dining restaurant, and robust wine club is a recipe for success for this growing brand. TIM MCENERY FOUNDER AND CEO, COOPER’S HAWK WINERY & RESTAURANTS

customers, and the corporate management. Stone, founder and CEO of Bluestone Lane coffee, moved to New York in 2010 from Australia for investment banking. “When I moved to New York,” he said, “the coffee scene was dominated really by two very suc- cessful lives chains that’s quite the opposite of the coffee culture you find in Australia, where Star - bucks actually failed. There’s no Dunkin.”

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• IDEAS & INNOVATION •

THE ECONOMY, CHILI’S MARKETING, AND THE FUTURE OF SALAD EXPLAINED IN TED-STYLE TALKS

Michael Halen of Bloomberg Intelligence, George Felix of Chili’s, and Nicole Portwood of Salad and Go share their perspectives in CREATED Talks C REATE: The Event for Emerging Restaurateurs was designed to pro- vide busy restaurateurs with useful information in quick, easily digest- from 39% in 2021, and 90-day delinquen- cies are 7% higher than before the pan- demic. BY BRET THORN

importantly, “Chili’s had lost its rele- vance,” he said. In the past, Chili’s, which probably in- troduced most American consumers to fajitas, appeared with some frequency in pop culture, including in The Office, the Austin Powers films, and of course, boy band NSync created their own version of the Baby Back Ribs jingle. Felix delved into the brand’s archives to understand its history better and also mapped out its brand purpose. That pur- pose is to make everyone feel special through a fun atmosphere, delicious food and drinks, and “Chilihead hospitality,” Chilihead being the term for employees. “The success we have is really due to the 60,000 Chiliheads,” Felix said. He also had to determine where the brand should sit trend-wise: It’s not sup- posed to be cutting edge, but at “the fore- front of the mainstream,” being cool with- out being off-putting. Hence new items like the Big Smasher, which ties into the ongoing smash burger trend while also resembling a larger version of the Big Mac, an item that has received flack as the Golden Arches has raised prices. In fact, Felix and his team coined the term “McSpensive” as a reminder of how Chili’s should position itself. Chili’s also introduced Nashville Hot sauce as an off-menu condiment for its fried mozzarella, an item that took on a life of its own as TikTokers created vid- eos of themselves pulling the stretchy, stretchy cheese. Chili’s also rationalized its menu to streamline operations and make the lives of its employees easier. It cut 25% of the menu in the past two years to focus on its “core four” categories of fajitas, burgers, Crispers (Chili’s version of chicken ten- ders), and Margaritas.

On the bright side, real income has increased for 16 straight months, mean- ing that the inflation rate is lower than increases in income. Minimum wages are slated to go up in nine states, including big ones like Florida and New York, which could affect restau - rants’ profitability, but employee turn - over rates are improving, reducing the expenses related to training. To help bring customers back, chains are spending more money on advertising and also discounting. Halen advised against straight dis- counting because it devalues guest per- ception of what an item is worth, but strategic pricing — varying menu prices based on the market, can be a useful strategy. He said Chipotle has “crushed it” thanks in part to its strategic pricing. “They’re pricing down to the individual unit level,” he said. Of all the different segments in so - ciety, Gen Z — those born after around 1995 — is the only one Halen expects to spend more in the next 12 months. He said they don’t remember the Great Recession of 2008-09, so aren’t worried about an economic slowdown. Perhaps more importantly, “most of them aren’t working and they have their parents’ credit cards.” Chipotle is not the only chain that’s doing well at the moment. So is Chili’s Grill & Bar, and its chief marketing offi - cer, George Felix, told attendees how the casual-dining chain is succeeding during this challenging time. When Felix joined Chili’s two years ago, he said the in-restaurant experience at the chain “wasn’t ideal.” Maybe more

ible presentations, sort of like TED talks. In fact, the program included three quick 20-minute presentations called CREATED Talks. They began with Michael Halen, se- nior restaurant analyst for Bloomberg In- telligence, who gave us a rundown of the macroeconomic environment operators face. “Restaurants are the canary in the coal mine,” he said; they’re an early indicator of what direction the economy is going, and for the past several years now, they have indicated that people are pulling back on their spending. That’s particu- larly true of low-income customers, but Halen said a recent survey indicated that 74% of consumers are cutting back on restaurant spending. In fact, 36 out of the past 38 months saw negative traffic at quick-service restaurants, the segment that caters most to low-income consumers. Halen said the pullback was in re- sponse to rising menu prices, and is im- pacting most segments, including most fast-casual restaurants, with the notable exception of Chipotle, which continues to enjoy sales growth. Casual dining chains are also suffering from low traffic, but family dining not so much, he said, maybe because consum- ers are trading down from casual, he said. But fine dining is back as wealthy con - sumers continue to spend: Their equity in real estate continues to accrue, and their retirement plans look to be in good shape thanks to the bullish stock market. Meanwhile, 50% of low-income con- sumers now have credit card debt, up

CONTINUE READING ON PAGE 16

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PHOTO CREDIT: EDIN STUDIOS

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• IDEAS & INNOVATION •

WHAT TO KNOW ABOUT THE ECONOMY

Next, Felix had to determine what drives guests to the brand, which he found was “great food served in gener- ous portions at good value.” Hence, the 3 for Me menu offers guests a starter, beverage, and entrée for as little as $10.99. But half of the guests who buy the 3 for Me deal do so at higher price points of $14.99 or $16.99. Felix said value doesn’t just mean a low price, but “what you get for what you pay,” which was why customers were willing to upgrade for more premium items. As CMO, Felix leaned into some of the chain’s key mar- keting assets, including the popular Baby Back Ribs jingle, which he had Boyz II Men sing again in a recent commer- cial, and also sponsored a NASCAR car. Although he acknowledged that few chains have the resources to do that, they can leverage their social media presence, no matter their size. For example, Felix noticed a customer in Georgia who placed a huge order to cater her wedding and shared it on social media, so Chili’s launched wedding catering and offered it for free to the first three people who proposed in a Chili’s restaurant. The result was more than 700,000 media impressions. But that was nothing compared to the cheese pull vid- eos of their fried mozzarella. “There were like 50 million views in May,” he said, and they got another 50 million once the Nashville Hot option was “leaked.” He said those successes don’t require a lot of money but instead understanding what their customers crave. But people don’t, or at least probably shouldn’t, live on fried mozzarella alone, and the third CREATED talker pre- sented a strategy to make nutritious food convenient and affordable. Nicole Portwood, CMO of drive-thru chain Salad and Go, discussed that company’s vision for bringing nutri- tious food to as many people as they can. “Americans are fed up with food inflation,” she said, adding that the current prices make it hard “for people to eat, let alone eat well.” At least in the past, fast food was cheap, if not the healthiest option, she said. And although there are now plenty of salad concepts, they’re even more expensive than traditional quick-service options. Salad and Go is “everything that the fast-food industry has been missing,” she said. It offers high-quality ingre - dients and better-for-you items, such as ranch dressing made with aquafaba, a chickpea derivative that reduces its calorie count. Prices for a salad with protein start at $6.79. That’s because the Arizona-based chain has large cen- tral kitchens that wash, cut, and prepare everything and then ship them to small-footprint stores of around 750 square feet. The model cuts down on real-estate costs as well as labor, since they can be run by as few as three em- ployees. “We make this accessible to so many people who have been left behind” by our modern food system, she said. Salad and Go has invested hundreds of millions of dol- lars in its infrastructure, and is now up to 150 locations. It’s looking to expand to states with the highest obesity rates, to “ensure that customers have the full spectrum of choice.”

Michael Halen, senior restaurant analyst at Bloomberg Intelligence, discussed recent economic trends and their impact on restaurant sales.

WINNING IN TOUGH TIMES

George Felix, SVP and CMO of Chili’s Bar and Grill discusses how the brand has drawn on its storied history, iconic pop culture references and “Chili Head” culture to revitalize the brand.

‘GREENS FOR EVERYONE’

Nicole Portwood, CMO of Salad and Go, discusses her mission to revolutionize fast food and democratize healthful eating — without the high price tag.

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OPERATOR SPOTLIGHT

Gabe Alonso, VP of Integrated Marketing at El Pollo Loco, talks with Nation’s Restaurant News executive editor Alicia Kelso about the role of influencer marketing in the restaurant industry and strategies for businesses of all sizes to leverage it effectively. See how influencer marketing, particularly micro- and nano-influencers, can benefit brands of any size. EL POLLO LOCO Chris Porcelli, CEO of Walk-On’s Sports Bistreaux talks with Nation’s Restaurant News senior editor Ron Ruggless about the brand’s growth strategies, including off-premise dining. Porcelli, shares his vision for Walk-On’s as a family-friendly sports bar and explains the goal of creating a lively, stadium-like atmosphere in their venues. WALK-ON’S SPORTS BISTREAUX

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IHOP

Candice Jacobson, executive director of integrated marketing and brand communication for IHOP, talked with Nation’s Restaurant News managing editor Leigh Anne Zinsmeister about the brand’s approach to influencer marketing, a channel that has become an essential part of the brand’s promotional strategy.

Mike Muldoon, CEO of City Barbecue, talks with Nation’s Restaurant News senior editor Joanna Fantozzi about the brand’s customer engagement and loyalty strategies with a focus on personalized, data-driven messaging. Hear how City Barbecue avoids heavy discounting and instead targets customers with relevant product recommendations based on past purchases. CITY BARBECUE Mike Turner, president and COO of Cajun Steamer, talks with Nation’s Restaurant News senior food and beverage editor Bret Thorn about how the brand captures Louisiana’s culture to evoke nostalgic, memorable experiences for guests. Hear about the concept’s growth plans and commitment to quality and authenticity. CAJUN STEAMER

BEHIND THE SCENES

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RESTAURANT TECH SHOWCASE

CREATE teamed up with 858 Partners this year to curate an interactive showcase of ‘must- have’ tech for up-and-coming restaurant brands. Attendees got the chance to explore the 858 x CREATE Tech Showcase through guided tours and get personalized advice on the best technology solutions for their brands.

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• KEYNOTE •

SPRINKLES FOUNDER CANDACE NELSON TRACES HER CAREER PATH FROM CORPORATE AMERICA TO ‘QUEEN OF CUPCAKES’

The entrepreneur found success by following her joy

C andace Nelson is a serial entre- preneur, TV personality, author, and investor who shared her path to “Sweet Success” with attend- ees of CREATE: The Event for Emerging Restaurateurs. The founder of Sprinkles, and thus arguably the catalyst for the ongoing cupcake trend, and owner of an ar- tisanal pizza concept called Pizzana, Nelson has been her own brand am- bassador as well as entrepreneur. She was dubbed the Queen of Cupcakes on the Food Network show Cupcake Wars, where she was a judge, has appeared as a guest “shark” on the reality TV show Shark Tank, and is in the Netflix series “Sugar Rush.” “Sweet Success: A Simple Recipe to Turn your Passion into Profit” is her best-selling book, which she gave to conference attendees while discussing her journey with Nation’s Restaurant News editor-in-chief Sam Oches. She said she got the baking bug as a kid, but the entrepreneurial bug came later because, apart from Mrs. Fields, she didn’t have any role models growing up. Her father was a corporate attorney, so he was all about risk mit- igation, which is essentially the oppo- site of entrepreneurship, and Nelson herself started her professional life do- ing financial analysis for an investment bank in San Francisco, thinking, “Oh my god, there’s got to be more to life than this.” She went on to work in tech during the dot-com boom of the 1990s, which BY BRET THORN

as we all know eventually went bust. Without a job or prospects for a new one, she said it felt like she’d been “sold a bill of goods,” having followed the rules for success in corporate America that ultimately didn’t get her anywhere. So she went to pastry school and rekindled her love for baking, not nec- essarily knowing what she was going to do with a pastry degree. “I was just following my joy,” she said, and quickly realized that was a whole lot better than crunching num- bers. Nelson developed a reputation for making great cakes for her friends, and started making custom-decorated spe- cial occasion cakes out of her home, which she said was very artful, “ and a

huge pain in the butt.” But “that business brain of mine hadn’t shut off,” Nelson said, and she had an epiphany in the bakery section of a grocery store staring at cupcakes in plastic clamshells. “I just thought, these cupcakes look kind of sad,” she said, and the inspira- tion for Sprinkles was born. It took a couple of years to “reinvent the cupcake,” which at that point were mostly mass-produced and uninspir- ing. “They were kind of the ‘fast fashion’ of the baking world, and I wanted to make mine ‘haute-couture.’” She used premium ingredients for her cupcakes, and also reimagined the look, starting with the frosting. Rath-

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• KEYNOTE •

er than piping on thick gobs of it, she hand-frosted them, which made them look more artisanal and also resulted in a better frosting-to-cake ratio. She added a double dot made of sugar that became her product’s sig- nature look (and which is also trade- marked), and the Sprinkles cupcake was born. She debuted her one-item business at the height of the low-carb craze at what was possibly its epicenter, Bever- ly Hills, Calif. “Nobody thought this idea would work,” she said, but driving around Los Angeles she realized that there were a lot of doughnut shops and burger plac- es, and she realized that despite the low-carb talk, there was a place in peo- ple’s hearts and stomachs for starch. She figured that if she made the cupcakes worth the calories, “people would make the splurge.” And she was right. “We had a line out the door since day one,” she said. In fact they sold out of cupcakes be- fore noon. She and her husband Charles had no restaurant experience; Nelson hadn’t even interned during pastry school. “We had to build the plane as we were flying it,” she said. And they had to do it as business was booming. The Beverly Hills location was near many talent agencies, and ac- tress Katie Holmes became a fan and was talking about it just as Tom Cruise was pursuing her romantically, causing a media frenzy of people wanting to talk to her. To curry favor, the media would

bring Sprinkles to her to try to score an interview. Soon other celebrities became fans, and the concept grew. The cupcakes became favorite gifts among Angele- nos, assisted by Nelson designing gift boxes that resembled those in which roses were delivered and making pre- mium cupcakes that were gift-worthy. A second Sprinkles opened in New- port Beach, Calif., and then she opened her third location in Dallas, which Nel- son said was “very strategic,” convinc- ing people that it wasn’t just a Southern California phenomenon but could work anywhere. Her role in Cupcake Wars, and the fact that people love cupcakes, meant word-of-mouth preceded their open- ings in new markets; the demand was there before they opened. As the company grew, she said she was concerned that she didn’t have ac- tual industry experience and thought maybe she should hire industry veter- ans to help. “I think it took me awhile to grow into the idea of being a leader and grow into my own power,” she said. “The irony is once we had the mon- ey to hire someone with that pedigree, they came into Sprinkles and they stuck out like a sore thumb,” she said. They didn’t fit Sprinkles’ entrepreneurial style, and she realized she had devel- oped an “awesome, unique, corporate culture.” Eight or nine years in, she sold Sprinkles to private equity firm KarpRe - illy, and then didn’t know what to do with herself. “You actually thrive on getting up

every day and solving problems,” she said. “That hustler part of you never goes away.” “That next opportunity actually found me,” she said. She was at a neighbor’s party and took a bite of pizza that had the best aspects of Neapolitan pies, but without being soggy in the middle. She met the chef, Daniele Udit. “I could just see the brand that I could build around him,” and the first Pizzana opened in Brentwood, Calif. It has since grown to seven loca- tions, five in Los Angeles, one in Dallas, and one in Houston. “We are elevating a simple food at Sprinkles and Pizzana, but that’s where the similarities end,” she said. Sprinkles is a 5-minute transaction (or less at the chain’s revolutionary cupcake ATMs), and Pizzana is a full-service restaurant. “But the biggest difference is we have some experience, so realtors ar- en’t hanging up on us when we call,” she said. She also now has good sup- plier relationships and veteran staff: Three of her original Sprinkles employ- ees now work for Pizzana. She’s launching an app and loyal- ty program for Pizzana, called “Cacio Club,” and looking to expand while also looking for new investments. CN2 Ventures is her investment company, and she’s looking for compa- nies for which she has a personal affin - ity, and she said she also has to like the founders. Also, “they have to be really good at selling, because there’s no time in business when you’re not selling,” she said.

SWEET SUCCESS Candace Nelson — co-founder of Sprinkles and Pizzana, entrepreneur, author, TV host, and guest shark on “Shark Tank” — shares how she turned a humble cupcake shop into a mainstream sensation, and why she’s aiming to do it all over again in the pizza business.

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• HOT CONCEPTS •

On the CREATE Hot Concepts panel were, from left: Sam Oches, Brianna Keefe, Rich Reyes, Logan Powell, Rodney Strong, Dario Wolos, and Peter Tremblay.

5 RISING BRANDS SHARE SECRETS OF THEIR SUCCESS

From tacos and toast to hot chicken and tech-enabled mini-golf, these growing concepts offer what distinguishes their brands

BY RON RUGGLESS

of Puttshack; Rich Reyes, co-found- er and CEO of Mecha Noodle Bar; Rodney Scott, co-founder of Rodney Scott’s Whole Hog BBQ; Peter Trem- blay, chief operating officer of Angry Chickz; and Dario Wolos, founder and CEO of Tacombi. The panel was mod- erated by Sam Oches, editorial direc- tor for Informa Connect, parent com- pany to Nation’s Restaurant News. Keefe of Toastique said she sought franchise partners who shared her passion for the good-for-you brand. “We’re solely looking for owner-op-

erators,” she said. “It’s going to make your life easier getting up and going to sell this every day. And you know they have their own time and money and reputation involved. … That’s how we are choosing our partners.” Toastique can teach the skills, pro- vide the recipes, and offer architec - tural renderings, she added, “but if you don’t enjoy being around people and can’t manage a team and can’t get people to rally behind you and have that same passion, then it’s going to be very hard for you to be successful.”

E xecutives from the half-doz- en 2024 Hot Concepts winners shared what makes their con- cepts, from toast to hot chicken, successful in a competitive environ- ment during the recent CREATE con- ference in Nashville, Tenn. The CREATE: The Event for Emerg- ing Restaurateurs’ Hot Concepts panel included: Brianna Keefe, founder and CEO of Toastique; Logan Powell, CEO

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PHOTO CREDIT: EDIN STUDIOS

Reyes of Mecha Noodle Bar said, “We’re both sons of immigrant par- ents, so both of our parents took a tre- mendous risk and kind of reimagined what the future for them could look like. Because of that, we live in a grati- tude and for us it’s important to find a way to build a company that’s not just transactional but transformational.” Powell of Puttshack noted the tech- nology-forward mini-golf concept, will open its 20th location in November. “It was started by the founders of Top Golf,” he said. “The golf balls have proprietary technology and track ev- ery shot that you make, so you can’t cheat.” The high-end casual-dining expe- rience adds to the concept’s impact, Powell said. “We have local things in the menu,” he said. “In Nashville, we have tail- pipes, but think of it like a larger ver- sion of a spring roll.” Scott, co-founder of Rodney Scott’s Whole Hog BBQ, said he has picked up a lot of Southern respect for barbecue after living in the South for 12 years. “For me, it’s just trying to make sure the next one is better than the previous one,” Scott said, adding that the tradi- tion is much like that of casual-dining chain Texas Roadhouse, which is the “need to push forward into the future and modernize and take it to different communities.” Wolos of Tacombi said his concept started selling tacos out of a Volkswa- gen on the Yucatan Peninsula. “At its core,” he said, “the experi- ence that we’ve created is very much rooted in the heritage.” Now based in New York City, Ta-

tomer primarily comes to your restau- rant because the food tastes good,” he said. “We only have seven items on the menu, so these better be the best darn items that we can possibly serve our customers.” With 28 restaurants in California, he said, the company has neither changed portion sizes over the past four years nor raised prices, to main- tain its value proposition. The third principle, he added, is the guest experience. “We spend no money on advertis- ing,” Tremblay said. “All of our busi- ness is word of mouth. We just focus on those three items, and it seems to be paying off.”

combi reinvests in the experience, Wolos said. “We’ve been meticulous about all the little details that make up the cus- tomer experience,” he said. “When we opened up the first taco stand in Mexico” he recalled. “We wrote in our company constitution that we had a responsibility to give back to Mexico, to give back better.” Tremblay of Angry Chickz said he knew the chicken category was very competitive. “We, as a brand, focus on three very simple principles: the first principle is the quality we really are passionate or fanatical about the quality of our prod- uct and at the end of the day the cus-

MEET THE HOT CONCEPTS

This year’s Hot Concepts awards, powered by The Coca-Cola Company, recognize emerging chains with the potential to become household names. Get to know each brand’s unique story.

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• DATA & INSIGHTS •

HOW OPERATORS CAN NAVIGATE LOW CONSUMER CONFIDENCE WITHOUT OVERUSING DISCOUNTS Technomic spoke about leaning into LTOs and menu innovation to keep customers coming back at the CREATE conference in Nashville

I t’s no secret that consumer confi - dence is low, with 62% of people living paycheck to paycheck, ac- cording to data from Technomic. Inflationary challenges are present on restaurant menus too, with menu prices now 28% higher, on average, than in 2020, Technomic senior prin- cipal David Henkes shared during CREATE: the Event for Emerging Restaurateurs in Nashville, Tenn. This dynamic of skyrocketing menu prices juxtaposed against stag- nant household budgets has really resulted in concerning traffic num - bers. “As non-prime costs continue to proliferate,” Henkes said, full-service dining is faring even worse than lim- ited-service operators when it comes to maintaining traffic numbers. With this dynamic expected to continue (36% of consumers expect their restaurant visits to decrease in Q3), many operators are taking the discounting route, though it’s not the only option. “When you’ve got higher prices and declining traffic, you see deals,” Henkes said, during the session ti- tled “Restaurants 2030.” “The value wars have really erupted, not only in the QSR, where a number of chains BY JOANNA FANTOZZI

“ There’s a lot of trial and error going on, and it’s typically all happening on the LTO side. I increasingly believe that beverage is one of the battlefields for restaurant innovation right now.”

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PHOTO CREDIT: EDIN STUDIOS

are doing different promotions, but even on the full-service side … So what do you do if you’re a restau- rant? How do you then excite your consumers? Restaurants are trying to appeal to customers by bringing out the LTOs.” According to Technomic, limit- ed-time offers are up 46%, which is where most of the menu innovation is happening since the core menu at many restaurants has not changed much. Beverages are a particularly hot category for innovation, partic- ularly in the wake of non-alcoholic beverage chains growing in popular- ity, in categories like boba and dirty soda. “There’s a lot of trial and error go- ing on, and it’s typically all happen- ing on the LTO side,” Henkes said. “I increasingly believe that beverage is one of the battlefields for restaurant innovation right now. If you look at what McDonald’s did with CosMc’s, and H-Tea-O, Swig, 7Brew, creative beverage concepts and drive-thru beverages are having [a moment].” During Technomic’s second ses- sion at CREATE, Henkes and his col- league, Robert Byrne, director of consumer and industry insights at Technomic, noted that more than half of consumers say that the avail- ability of LTOs is important when de- ciding to eat at a restaurant. Non-al- coholic beverages and cocktails unsurprisingly make the list of the most popular LTOs of 2023, though that list also includes popular com- fort foods like ice cream and pizza. When it comes to successful LTOs, two factors seem to be import- ant for consumers: craveability and uniqueness: “That slight twist is the way to go,” Byrne said. For example, the top craveable LTOs of 2023 were variations on classic categories like steak and cake, and many included cheese as a primary ingredient. Many operators are leaning into menu innovation as a way to lure customers back without needing to discount — more than 85% of op- erators have changed their menus over the last year — with winning flavors including the sweet and sa - vory flavor combination and sauces and condiments as traffic-drivers, especially when they’re spicy, chile- based sauces or ones that derive from global flavors, like gochujang and hot honey.

RESTAURANTS 2030 Technomic’s David Henkes examines the state of the restaurant industry and provides insights into the issues keeping operators up at night.

TOP TRENDS SHAPING FOODSERVICE

Powered by Technomic’s menu and consumer data, this session delves into important top-of-mind macro trends impacting menus and consumers to help you plan for the future.

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