"You Cannot Scale Cool Fast Enough," Says Eureka! CEO About the Brand

Photo courtesy of Eureka!

Photo courtesy of Eureka!

Eureka! is one of those brands that comes across as a one-off, independent restaurant concept. The brand even has 22 separate social media accounts on both Instagram and Facebook for each of its locations— the latest opening last month in San Diego, Ca.

“I've done that consciously,” said Justin Nedelman, CEO and co-founder of Eureka!, a multi-unit gastropub that was born soon after the economic recession of 2008 began.

“At that time, in the recession, I think people with money were trading down, but they still wanted service; and folks that had limited income and still wanted a great experience, they were really discerning and weren't going to spend that money on a big chain restaurant.”

This is also the reason why one week before opening the first restaurant, Nedelman and his business partner and co-founder of Eureka!, Paul Frederick, decided to make the switch from fast casual to full service.

Hail Mary Beginnings

Nedelman and Frederick actually met in West Los Angeles at a real estate conference. Nedelman was doing structured finance at the time and Frederick was doing fee development. A few years later, they ended up forming a development company together which led them to eventually develop shopping centers halfway between L.A. and Palm Springs.

As developers, they built many restaurants and the tenants who owned the centers did not own the restaurants. As a result, they saw many restaurants come and go out of business. They actually stopped signing new deals in 2008 because of the recession. One year later, the duo had a vacancy that they could not find a way to lease.

Photo courtesy of Eureka!

Photo courtesy of Eureka!

It was a shopping center in Redlands, off Eureka Street. “It was a middle market and instead of just accepting the fact that no one wanted to be there, we had a bank loan to debt service,” said Nedelman. “We threw the Hail Mary.”

The business partners opened Eureka! two hours away from where they lived to keep their shopping center solvent. They named the concept after the street it resided on thinking the name would be transferable to other markets if the venture was successful and centered their menu around craft beer and artisan burger offerings.  

Surviving the Recession

What helped Eureka survive the recession? It was a combination of many things. For one, they were not afraid to get scrappy when it came to their marketing efforts. Nedelman’s philosophy? Get it for free.

Photo courtesy of Eureka!

Photo courtesy of Eureka!

“The most authentic way to communicate locally in a market that none of us lived in was to get local. I was flyering cars after week one, in my real estate suit, out in 100 degree weather, in the summer of 2009, literally, because sales were... we did like 18 grand the first week, and we needed to do 30, I think, to be really successful there,” confessed Nedelman.

Also they were able to use the same investors they had as real estate developers to invest in their restaurant group. “We had a great reputation with them, so there's definitely a lesson there. If you're treating your investors right, they'll take care of you when money is scarce,” said Nedelman.

Full Service Instead of Fast Casual

Initially, Eureka was going to be an over-the-counter concept. A week before opening, Nedelman and Frederick changed their minds.

Photo courtesy of Eureka!

Photo courtesy of Eureka!

They decided to resist the trend since, as California-based developers, they were hyper aware of the landscape around the fast casual craze at the time. Instead they went for a memorable experience at a reasonable price point.

By the time they opened their second concept, they not only offered craft beer, but they also incorporated an all-American brown bar, featuring whiskey, which helped them become a little more profitable.

“If we talk bar program, which represents almost 38% of our sales, you cannot repeat multiple cocktails or drinks in a fast casual setting like you can in a full-service bar concept,” explained Nedelman. “That was a smart move... there's a lot of burger guys that are out there, but a lot of them are fast casual.”

Photo courtesy of Eureka!

Photo courtesy of Eureka!

Although, Eureka! started out as a burger-centric concept, the menu has evolved to include sharable dishes, salads, tacos, steak and fish entrees, and even brunch at some of their locations.

According to Nedelman, because the food is prepared 100% from scratch and offered at modest prices, Eureka! was able to appeal to a wide range of demographics, pulling in customers from all income ranges. “You would see doctors in scrubs, next to hardcore beer geeks and your local everyday guy next to the guy who pulls up in an expensive car.”

Differentiators

To narrow it down, there are some key differentiators that make Eureka a unique concept, according to Nedelman:

Photo courtesy of Eureka!

Photo courtesy of Eureka!

  • The all-American brown bar component (with the exception of Tequila) allowed them to simplify and stand for something early on. “There are some great products that we just can't carry, because they are not American. Our bitters are American, our cherries are American, everything we do in the bar is American.”
  •  Approachable food at a modest price-point. “You blend those two and you're getting a good alcohol to food ratio mix, it allows families to feel comfortable because the price points are good, but allows single folks, or folks with more influence, the ability to try a Pappy Van Winkle whisky, early on.”
  • How spaced out each location is from the next where each Eureka! seems like an independent restaurant.

Secret Sauce

The Eureka! brand is centered around passion.

“Anybody can teach someone to make a mojito, or a whiskey sour or whatnot, but no one can teach passion,” said Nedelman about why he prefers to hire for personality and not for experience.

Photo courtesy of Eureka!

Photo courtesy of Eureka!

Part of the reason for this approach is because early on in the company’s history every restaurant was picking out their own craft beers. So, it was necessary for those people in charge to be naturally passionate about the craft beer industry and have a lot of drive to find the right answers. Especially, when introducing a new product to a guest.

To identify employees and managers with passion Nedelman and Frederick narrowed it down to three fundamentals:

Photo courtesy of Eureka!

Photo courtesy of Eureka!

  • They have to be givers of Energy

  • They must be into Discovery; and

  • They must be able to create a sense of Community

They call it— EDC.

“That's more critical than ever as we grow. To be more clearly defined with what are the key elements of being a Eureka! manager or employee. It's been distilled down to EDC. I think that's the secret sauce at this point. Slowly rolled this out over the last year, but informally we've talked about these words for eight years," said Nedelman.

Brand Growth

At the ground level, much of Eureka!’s brand growth falls on its location managers. They are hired for their ability to connect at the community level through social media, to connect with the restaurant team, with the restaurant's regular guests, and finally for their willingness to go out into the community and do grassroots marketing.

Photo courtesy of Eureka!

Photo courtesy of Eureka!

“We actually bonus our managers for doing things in their community and telling us about it,” said Nedelman, who reads every single write-up submitted. “There's never a bad idea. If someone wants to give a gift card to everybody that adopts a dog in a city that we have a restaurant and you go to an adoption shelter... we'll do that!”

Even though Nedelman admits this is a little difficult to scale, the leadership team encourages this practice because being involved in the community, like; sponsoring charities, offering percentages back to schools, getting involved in little leagues and doing professional networking events, is what makes each Eureka! location unique and keeps it locally connected without having to spend actual money on media advertisement.

Eureka! is expected to have about 45 restaurants by 2021, give or take five, according to Nedelman, who opts for opening new restaurants inside architecturally distinct buildings in markets around colleges and tech industries where there’s a high labor pool.

20160423_eureka_mountain_view_3231_AuroraHDR_HDR-Edit.jpg

“I don't want to know what is available. I want to know where the best real estate is, and then how do we get in there at a reasonable cost... We have a high discipline on the rate of occupancy cost. From our background in real estate and also our experience in the recession. Our goal is to continue to be really disciplined from an occupancy cost standpoint, so there's not as much risk in our portfolio in another down,” said Nedelman.

Photo courtesy of Eureka!

Photo courtesy of Eureka!

If you were wondering about franchising… Eureka! restaurants are all privately owned and Nedelman and Frederick have turned down many opportunities to open this option up.

“We don't, because the brand, has so many nuances to it. It's so special! No matter how much money is out there to franchise, you cannot scale 'cool' fast enough. You have to be delicate, and you have to be thoughtful on when you open, and where you open, and who's running it... As of now, we've turned down that.”

To learn more about Eureka’s marketing efforts, watch today’s On Foodable Weekly with our host Paul Barron as he interviews Eureka’s Public Relations and Marketing Manager Alexia Penna at the HUB Hospitality Conference 2017!

7 Ways You Can Increase Your Brand's Social Responsibility

Giving back to the communities we serve is not a mandated practice, but is rather something extra that restaurants, and businesses alike, can do to improve their local and national communities.

School Supply Drive! Check out our bio for more info!! #tr19

A post shared by Taproom On 19th (@taproomon19th) on

This is also known as— social responsibility.

This practice can not only increase employee engagement, but also:

  • Develop a positive perception of your brand
  • Increase revenue opportunities; and
  • Increase the possibility of local media coverage

What restaurant wouldn’t want that?

According to the National Restaurant Association, over 90% of restaurants in the U.S. make some form of charitable contribution each year.

What more can be done, you ask?

Let’s take a look!

It can be as simple as what the Taproom on 19th does in Philadelphia. The gastropub in partnership with its neighborhood association, gives out free beer to anyone who donates school supplies and winter coats.   

Cup-of-Care-2017-Blog.jpg

It can involve a more hands-on approach, like what Joey Restaurants is doing with their Cup of Care program, where their front of house, back of house, and head office leaders volunteer their time to wash, peel, and chop over vegetables for beef and barley soup "To date, JOEY has served 100,000 hot meals across Canada, Seattle and Los Angeles partnering with local shelters and organizations" chosen by their employees in each of their communities.

Or, it can involve improving and educating your own team, like Chick-fil-A has done since 1973 with their scholarship program. This brand has been helping restaurant team members achieve their dreams of higher education. Since then, nearly 36,000 team members have received scholarships from the company, “bringing the total amount to nearly $36 million applied at more than 3,000 schools nationwide” as stated in a 2016 blog post on Chick-fil-A’s The Chicken Wire.

Below are a few items to consider when either starting or revamping your own social responsibility program to deliver a more memorable impact!

1. Make it Your Mission

Part of your vision, should be improving your community. How will you turn your vision into a promise? Your program should be highlighted in your mission statement, so it can be shared with your team and community. Take it a step further and set up SMART goals for your program to hold a level of accountability. How much time and/or financial resources do you want to work towards and give back each quarter or year?

2. Reflecting On Your Values

Hopefully you’ve taken the time to define your importance, worth and usefulness within your restaurants statements. If you’ve hired and built your team based on both values and experience, your team should have a common goal of wanting to give back. Get them involved in your social program and have them open up about causes they really care about, as well.

plants growing on coins

3. Environmental Impact

Is there a way your restaurant can build on sustainability? What energy efficient measures can you put in place at your venue(s) and how can you source more ethical food and beverage products to reduce your environmental footprint?  You can also help the environment out by donating used equipment to nonprofits when it’s time to upgrade (instead of disposing them at your local landfill). What kind of impact do you want your brand to leave behind?

4. Local Events

Restaurants pose an easy and enormous opportunity to sponsor local events or teams, or by donating a percentage of revenues to a local benefit event or organization. With a large seating area, a restaurant can also host a fundraising day or night at the restaurant itself. Restaurateurs can also look to support local military and first responders with dining discounts or donations to their equally important charity programs.

5. Team Building

Your restaurant could also take the approach to improve the long-term wellbeing of your team, through a scholarship or further-education program. This could be additional culinary, management, or mixology education scholarships for example, that will improve your operations, both now and in the future. Speaking of team building, giving back often leads to a more positive work environment and increase in staff retention, plus an increase in creativity and personal growth while promoting individual philanthropy.

disaster relief

6. Disaster Relief

When disaster strikes, restaurants are often in a position to lend a helping hand, either locally, nationally, or globally. Whether it is a tornado, earthquake, hurricane, or other life altering event, restaurants can become hubs for financial donations in addition to ‘match funding’ programs.

7. Poverty Assistance

This is an unfortunate aspect of nearly every community. Restaurants are given the opportunity to help the less fortunate through a variety of methods, including volunteer participation, hosting a neighborhood cookout, or by hosting food drives benefiting the local food bank, just to name a few.

As much as a restaurant brands should be taking part in social responsibility for the sole betterment of their community, you should want your program to also improve your image, increase media coverage, develop engagement, and attract investors. Make sure your program is visible on your website, within the four walls of your establishment, and throughout your social media channels to maximize its reach and potential.

Make it a win-win for everyone!

By Doug Radkey, Industry Expert

How Arby’s Beefy Branding Comeback was a Success

How Arby’s Beefy Branding Comeback was a Success

By Kerri Adams, Editor-at-Large

In order to survive in today’s ever so competitive market, a brand has to adapt and evolve with its customer-base.

With the emergence of fast casual, farm-to-table, local sourcing, etc– consumers have higher expectations when it comes to their dining experience.

Not to mention, the digital realm has created a loud world for consumers to live in. They are constantly being bombarded with advertising on social media, TV, and on their favorite websites, blogs and apps.

Every restaurant brand is trying to catch the attention of the elusive, distracted consumer and to do so, restaurant marketers have to think outside the box.

But developing a cohesive marketing message is easier said than done. Sometimes a brand doesn’t find the right marketing recipe right away.

A chain that initially struggled with a brand revamp was the quick-serve restaurant, Arby’s. Although the chain had a slow start, it eventually made an impressive comeback.

Let’s take a closer look at how the brand managed to bounce back and rise above its slumping sales.

A Rocky Start

Arby’s sales were consistently slipping starting in 2010. In October 2012, the brand started a rebranding process with a modernized logo, the new tagline “Slicing Up Freshness” and a revamped website. Unfortunately, this brand refresh was not well-received. The logo, in particular, got negative criticisms for being “forced” and looking “incomplete.” In a poll with 3,600 participants by the brand, 93% said they disliked the updated logo.

Read More

Chipotle Continues to Tell its Compelling Brand Story with New Short Film

Chipotle Continues to Tell its Compelling Brand Story with New Short Film

By Kerri Adams, Editor-at-Large

Chipotle Mexican Grill proves it’s still ahead of the content marketing game with its latest release of the short film, “A Love Story.” The animated film tells the story of two young entrepreneurs as they build competing fast food businesses. It demonstrates “how competition among food businesses can cause them to become something that was not initially intended,” according to a press release.

The fast casual dining king has teamed up with Passion Pictures, an award-winning animation production company to create the latest installment of the Chipotle short films.  

Appealing to a millennial audience, the short is set to a cover of the Backstreet Boys’ 1999 hit song “I Want it That Way,” featuring a duet by the GRAMMY Award winner, Alabama Shakes’ lead singer Brittany Howard and My Morning Jacket front man Jim James.

“We are changing the way people think about and eat fast food,” said Mark Shambura, director of brand marketing at Chipotle in a press release. “That starts with using excellent ingredients, and preparing those ingredients using classic cooking techniques. ‘A Love Story’ illustrates how competition propelled these two once-simple concepts to become something neither of their founders envisioned — reliant on limited time offers, vast menus and heavily processed food.”

Chipotle's Previous Native Content

This isn’t the first time the brand has taken to a compelling animated format to tell a unique story. The brand has won numerous awards for its previous short films.

The first short, “Back to the Start” was released in 2011 and it told the story of a farmer who got caught up in large, industrial farming, but decides to return to his roots with small, sustainable farming. This film was set to a Willie Nelson cover of Coldplay’s song “The Scientist.

Then in 2013, the chain released the beloved animated film, “The Scarecrow,” where a worker in a large agricultural plant leaves after being tired of heavily processed food to farm with more sustainable practices. This animation was set to Fiona Apple’s cover of the song “Pure Imagination.”

Read More

The Most Effective Content Marketing Strategies in the Restaurant Space

In this episode of On Foodable Weekly, brought to you by the Foodable Network, host Paul Barron speaks to Cathy McPhillips, Marketing Director at Content Marketing Institute about how content marketing is playing a larger role in the restaurant and hospitality business. Watch the full episode to see the tactics of content marketing that are proving to be the most effective and are helping to transcend restaurants into lifestyle brands.