Consumer Trends | April 2011 | By Jordan Melnick

New Restaurant Trend Really Pops with Diners

Pop-up restaurants are becoming more popular in the fine-dining sector and could spread to the quick-service segment.

In 2007, Ludo Lefebvre did what no businessman should ever do: He made an important business decision out of fear.

Faced with the opportunity to use millions of dollars in investments to open a restaurant, the Los Angeles–based celebrity chef balked at committing himself to 10–15 years sweating in the same kitchen. Instead, he launched LudoBites, a series of temporary eateries that appear in different spaces around Los Angeles for a finite period of time—a few days here, a few weeks there—and then disappear after making Lefebvre heaps of money.

Known as pop-up restaurants, Ludo Bites became a Los Angeles sensation and an outlet for Lefebvre to exercise his considerable creativity in short bursts.

“With the pop-up, I have my freedom,” he says. “I do what I want.”

The success of Ludo Bites also proved to other restaurateurs that the temporary restaurant concept could be a viable business model, suggesting the trend could spread across the restaurant industry.

For Lefebvre, pop-up restaurants provide an outlet through which he can constantly change his menu. He can also take some time off after one of his pop-ups runs its course to reevaluate his business strategy. This is possible because the pop-up model frees Lefebvre of most of the entanglements that he feared in running a restaurant with a fixed address. He only pays rent while he is occupying a space, and his labor force is hired on a temporary basis.

While opening a high-end eatery can cost more than $1 million, Lefebvre says he typically spends only a few thousand dollars launching a pop-up.

High check averages are another benefit of the pop-up. Lefebvre doesn’t get specific about numbers, but he says it is common for diners lucky enough to score a Ludo Bites reservation to take full advantage of the high-end LTO.

“When people come to a pop-up, they spend a lot of money,” Lefebvre says. “It’s a special [temporary] event … so people want to experience everything. They want to eat the whole menu.”

To be sure, these menus are not exactly quick-serve fare. Lefebvre is a culinary rock star, having been a contestant on Top Chef Masters and Iron Chef America. The menu at Ludo Bites 6.0, his latest pop-up, included Oriental mussels veloute, barely cooked squid noodles, and Vietnamese-style hamachi.

In fact, most of the pop-ups that have come and gone around the country over the last few years have served haute cuisine, while precious few have been quick serves.

Pizza Delicious is a rare example of the latter. Unlike Ludo Bites, which pops up and ultimately disappears for good, Pizza Delicious pops up every Sunday in a New Orleans shared kitchen to serve New York–style pizza to customers willing to wait in line for hours.

For all of Pizza Delicious’ success, the dearth of pop-up quick serves around the country suggests the model may be best suited to gourmet eateries. But the pop-up prince of L.A. himself says the model can work across the restaurant industry, including in the

quick-service sector.

“I think the pop-up model can work great for quick service,” Lefebvre says. “It is a really great avenue to test-market a new concept. It can also help give a little energy to a quick-service restaurant that might be stale or boring. Instead of testing or launching a single product, think about a concept within a concept.”

Lefebvre offers a hypothetical. “I could see a restaurant like P.F. Chang’s doing a special noodle bar pop-up for a week or two within its restaurants,” he says. “We can just call it Noodle Pop with Chef X. It drives people to the restaurant to check out Noodle Pop, maybe reminds them they need to come back to P.F. Chang’s because they have not been in a while, and you never know, it could be so successful that Noodle Pop develops into its own [quick-serve] concept.”

“It can give a little energy to a quick-service restaurant that might be stale. Instead of testing or launching a single product, think about a concept within a concept.”

Lefebvre also sees the pop-up as a great way for restaurants, especially those with large spaces, to get the most out of their square-footage; he says they can host pop-ups when they would otherwise be closed.

“[P.F. Chang’s] could easily partner with someone that wants to create a breakfast pop-up,” Lefebvre says. “P.F. Chang’s is typically closed at breakfast, so it is just providing an opportunity for the restaurant to increase the hours in which the restaurant generates revenue. You can’t make money if you are closed, and if someone else is operating, it seems like a win-win.”

Aaron Cohen, one of the partners of Eat Boston, a high-end pop-up that roves around Beantown, says a regional brand could test the waters in a new city by popping up for a few weeks in a mall storefront. If people turn out in droves, maybe expanding to that city is a good idea. If they don’t, the brand will still get “a ton of national press just for trying it out,” Cohen says.

But judging from his own business, Cohen understands why quick serves haven’t jumped on the pop-up bandwagon so far. Eat pop-ups only turnover once per night, so the name of the game is to get each customer to spend as much money as possible. Quick serves tend to operate on the opposite model, trading high ticket averages for high turnover.

“If you have that many people,” Cohen says, “why not just open a fixed location?”

Still, quick serves shouldn’t swear off the pop-up, especially with today’s consumers putting as high a premium on the experience of eating out as on the eating of eating out, says Stephan Paschalides, creative director at Now Plus One, a New York–based trends and consumer insights consulting agency.

“Experiential marketing is really taking off,” Paschalides says, “and consumers are expecting brands to offer them experiences outside of their usual scope.”

Paschalides envisions McDonald’s doing a fancy Madison Avenue pop-up—“a McSwanky”—or a seasonal Starbucks that pops up in the middle of winter serving spiced cider.

And if those ventures fall flat? Well, that’s the beauty of the pop-up: they can close as fast as they opened.