Article

Sushi rolls (slowly) into fast casual

What might seem an odd fit for fast casual’s price point and service style, finds some solid ground.

August 1, 2010 by

By Lisa Bertagnoli

In 2009, David Rutkauskas persuaded the founders of In The Raw Sushi, a casual-dining concept based in Tulsa, Okla., to open a fast-casual outlet in Tulsa’s new BOK Center, a performing arts and sports arena with 19,900 seats.

The results were so good that Rutkauskas is now working on a plan to franchise additional fast casual versions of In The Raw.

“I think there’s a lot of potential for us to get into the space and compete, and compete extremely well,” said Rutkauskas, founder of Beautiful Brands International, a Tulsa-based company that owns and operates Camille’s Sidewalk Cafe, Rex’s Chicken and FreshBerry.

“Sushi is becoming more accepted everywhere,” Rutkauskas said. “If it’s become mainstream in Tulsa, it can become mainstream in Kansas.”

Indeed, Rutkauskas is considering Kansas for the first franchised In The Raw location, which should open in the next six months or so. Missouri and Texas are also possible markets, he added.

Sushi might seem an odd fit for fast casual’s price point and service style, but the show of sushi chefs’ flashing knives and the ceremony of hand-washing before the meal could appeal to fast casual audiences. However, there’s still some question on whether sushi will really work as a fast casual segment.

Lunch accounts for 60% of sales at How Do You Roll. Eighty percent of customers dine in.

“It’s a tough one,” said Eric Giandelone, director of foodservice research at Chicago-based Mintel. “Sushi has been more closely associated with higher-end and casual price points in neighborhood restaurants.”

But, he said, there’s plenty to like about fast casual sushi. The fresh, light cuisine “fits in with this healthier-living trend consumers want to follow,” Giandelone said.

Indeed, grocery stores that sell freshly made, packaged sushi are already capitalizing on customers’ need for quick, low-cost sushi.

“It seems sushi went from fine dining, skipped the rest of the restaurant segments, and went straight to retail,” Giandelone said.

Another reason fast casual and sushi might be a good fit: Quality perception. “Fast casual has always been focused on quality and it does have that higher price point than quick service,” Giandelone said.

Yet another reason: It’s a wide-open market. While fast casual sushi has a number of small regional players, among them Tokyo Joe’s, a 20-unit Japanese concept based in Littleton, Colo., and Sushi Maki, a Miami-based concept with both fullservice and fast casual locations, there is no dominant national brand.

Only rolls

For operators who would fill that niche, the challenge is offering sushi in a customer-friendly, operationally feasible manner. That’s one reason rolls are the only sushi product available at How Do You Roll, a fast casual concept with two locations in Austin, Texas.

How Do You Roll stresses the fresh aspect of sushi by making it to order. Customers choose either a soy or seaweed wrap, and then pick three vegetables and a protein for the roll. CEO Yuen Yung said that while 37 million varieties are possible, the most popular rolls are California, salmon and tuna.

Since opening the first How Do You Roll 18 months ago, Yung has made several operational changes, most involving changes to the line to make service quicker — sauces are now next to the roll cutter, and sinks are built under the line, not behind staffers, saving a step or two.

He’s also learned that social media was the fastest way to get customers past whatever reservations they might have about fast casual sushi.

“People started talking about us and building the brand,” he said, adding that reviews on Yelp.com, the popular customer-review site, are overwhelmingly favorable.

How Do You Roll ensures sushi freshness by making rolls, and only rolls, to order.

Yung plans to end the year with a total of 10 Texas locations. Long-term plans call for 50 units open within three years, and 100 within five years. The locations, each with 45 seats inside and 25 on patios, sport a $12.50 check average and a weekly sales volume of $13,000, Yung said. Eighty percent of business is dine-in, and lunch accounts for 60 percent of business.

Strong at supper

Rutkauskas’ idea for In The Raw is to make dinner the dominant daypart.

“Sushi sells at lunch and dinner,” he said. While many fast casual concepts do better at lunch, he said he’s had success building dinner business, particularly at Rex’s Chicken, which does 60 percent of its business in the evening. “We think we can do that with sushi,” he said.

He allowed that the concept will need some adjusting - for instance, a smaller footprint that offers franchisees a $300,000 or so startup cost. He also wants to devise a takeout program and trim the menu to focus more on entrees rather than appetizers and sides.

He is confident that when the tweaking is finished, In The Raw can be a fast casual concept with an average unit volume of $1.2 million or higher. “This is a time-tested concept,” he said. “We look at this as an opportunity to grow this brand and expand it across wide demographic profiles.”