Web Exclusive | December 2010 | By Barney Wolf

Innovation 90 Years in the Making

White Castle launches three new fast casuals, hoping at least one will stick with customers.

White Castle is testing a trio of fast-casual restaurant concepts that could help the nation’s oldest quick-service burger chain decide whether to branch off in new directions.

The Columbus, Ohio–based icon, known for its little hamburgers affectionately dubbed sliders, housed the three new restaurants in rebuilt, redesigned White Castle units.

“We created entirely new dining areas and entirely new kitchen areas,” says Jamie Richardson, vice president of corporate relations for family-owned White Castle Systems Inc. “In a very real sense, we wanted to build this from the ground up.”

The new concepts are:

Deckers, a sandwich shop headlined by triple-decker grilled sandwiches, soups, and salads, located in Lebanon, Tennessee, near Nashville.

Blaze Modern BBQ, a contemporary barbecue joint that offers slow-cooked meats, updated traditional sides, and imaginative sauces. It is in Lafayette, Indiana, an hour north of Indianapolis.

Laughing Noodle, featuring various noodle dishes, soups, and upscale salads, in Springfield, Ohio, a community outside Dayton.

“All three are off to a great start,” Richardson says. “Customers are happy they can come into White Castle and have these other menus available, too.”

The company’s decision to dip its toe in the fast-casual pool is a surprise to some. After all, White Castle, with 422 units, has been a quick-service business since its first restaurant opened nearly 90 years ago.

But fast casual has been the one area of restaurant growth in this economy. Customer visits to fast-casual restaurants rose 5 percent for the 12 months ending in August over the same period a year earlier, according to market research firm NPD Group.

“Diners have been trading down from full service and trading up from quick service,” says Bonnie Riggs, restaurant industry analyst at NPD. Not surprisingly, fast feeders and white tablecloth chefs alike are looking at entering this growth sector, she says.

The three new White Castle concepts opened within a two-month period this summer, a move that intrigued restaurant industry observer Dennis Lombardi, executive vice president of foodservice strategies at WD Partners, a retail consulting firm in Dublin, Ohio.

“It took a lot more resources to get three going compared to just one,” he says.

Still, Lombardi applauded White Castle for taking such a bold step. “I am a huge fan of testing, of trying new things," he says. “The real challenge now is to give [the test] the resources and the time necessary to find out if it will work.”

White Castle certainly can do that.

“The good thing is that [the company] is family owned so we can take a long view,” Richardson says, adding that two years of research went into developing the new concepts. “The highest hope is continuing to see progress for all our plans.”

The redeveloped restaurants look like modern White Castle stores outside, but the interiors have bright colors, bold signage, and sleek furniture. All three offer chocolate desserts.

“We created entirely new dining areas and entirely new kitchen areas.”

Deckers’ sandwiches feature three layers of bread and two tiers of meat, cheese, vegetables, and condiments. The 10 sandwiches range from $3.99 for peanut butter and jelly on white bread to $6.49 for turkey, mozzarella, tomato, and pesto on wheatberry.

“You can go into the restaurant and get a sandwich from Deckers and french fries from White Castle if you’d like,” Richardson says.

Distinctive tastes drive Blaze Modern BBQ, with pulled chicken, carnitas, smoked turkey, Chinese char siu pork, beef brisket, and andouille sausage headlining the menu. There are also five sauces with varying degrees of heat.

Platters—with meat, sauce, two sides, and traditional or jalapeno cornbread—range from $6.99 to $7.49, while sandwiches with sauce and one side are $5.79–$6.79.

Laughing Noodle’s eight noodle bowls range from $5.25 to $6.99 (half bowls are $3.99). They include Taco Mac and Cheese and Spicy Thai-Style Chicken with noodles, chicken, Asian vegetables, phad tai sauce, and peanuts.

Orders are delivered to tables and arrive with a fortune cookie that contains a joke, supporting the Laughing Noodle name.

White Castle has no specific timeline for the concepts going forward, Richardson says. “We are doing this organically, learning as we go along.”

If just one of the concepts works, the experiment will still be a success, Lombardi says.

“It’s a way to improve unit economics and put the square footage to better use—to have two different operations where there had been only one. That's obviously a plus.”