Noodles and Company plans to accelerate catering, dinner focus

In the next few months, Noodles and Company will accelerate its catering growth and focus more heavily on its dinner daypart. These two initiatives will help the brand drive sales and further differentiate itself in the rapidly growing fast casual space, CEO Kevin Reddy said during the Baird 2014 Growth Stock Conference.

Although catering is an area where the brand has historically received many requests, Noodles has never taken a systematic approach with the service. Throughout the past few months, that has started to change, as its culinary teams continue to work to create catering offerings that work well in both downtown and suburban markets.

"We've done everything from business dinners to large family events, weddings, Christmas. This gives us the opportunity to hit that group of 20 to several hundred people and offer them the strengths of our brand that make us different," Reddy said. "We're not just a sandwich or taco catering line. You can pair some unique salads, noodle dishes, hot dishes. We're working on cold dishes and a limited line of desserts."

Early tests of these catering efforts have gone really well, he said. The concept of catering also takes pressure off of the kitchen, since the dishes and recipes have been built for larger groups and requires most prep to come before the rush.

"We just have to finish the assembly and prep right before someone picks it up," Reddy said. Catering, he adds, offers the brand an opportunity to create volume, positively impact AUVs and introduce the concept to a much larger group faster.

Also part of that catering service is Noodles' Square Bowls offering – ideal for four to 20 people. These bowls build average check and fulfill consumer demand, Reddy said. Right now the catering platform is available in about 25 restaurants, but the rollout will be accelerated aggressively throughout the next two quarters.

Executives said catering sales in test markets have already reached 1 to 4 percent of sales, despite not having much marketing.

Messaging and merchandising

Messaging and merchandising are two other areas of focus for Noodles as it works to expand further throughout the country. The brand works to maximize its messaging inside the restaurant and then throughout the 3-mile trading area outside of the four walls.

"We don't do a lot of traditional marketing or media, but we try to build loyalty through the customer experience, and get people to understand and connect to the brand," Reddy said.

In doing so, messages about ingredients, such as cage-free eggs, and flavor complexity and customizability are reinforced throughout each restaurant.

"There are a lot of different diets out there – some days you want healthy and some days you want indulgent. You can get all those needs served here, through real ingredients and a real kitchen," Reddy said. "We don't start your dish until you order and we still get it to your table within 5 minutes. We talk about all of this a lot as customers walk through the line."

Dinner daypart

Noodles also plans to beef up its dinner daypart offerings and messaging. Reddy said this is a strength of the brand's and further differentiates it in a crowded space. It also meets consumer needs.

To feed the evening crowd, the company will offer a limited number of appetizers, desserts, coffee, tea, beer and wine. Customers will order through the line, be seated and then served when their dishes are ready. Employees will circulate the dining room to follow up with tables and ask if there is anything else they need while they linger a little longer.

"It's a hybrid offering. It clearly provides some benefits of some casual dining restaurants but at much lower price point and without the need to tip," Reddy said. "We have a really strong positioning in having the ability to meet consumer needs, not just in fast casual, but also casual dining at a more compelling price point."