Industry News | February 20, 2013
Captain D's Turns its Ship Around
It’s no secret to those in the quick-service industry that Captain D’s, a 520-unit seafood brand established in 1969, has been struggling for the better part of the last decade.
Something not as well known: how hard the brand has worked to save its sinking ship. And it appears to be paying off.
In 2011, Captain D’s saw its first positive same-store sales increase in more than eight years, but the good news didn’t stop there. Just last year, it hit an all-time high for same-store sales growth—9.2 percent for company stores and 7.5 percent for franchised units—and a record for the highest AUV in brand history.
The seafood chain is still chugging forward, sailing on the success of five quarters and 16 consecutive months of positive sales.
So how did the brand turn itself around, and why the big slump in the first place? Phil Greifeld, CEO and president of Captain D’s, says although the brand is uniquely positioned in the marketplace and unit economics were “solid,” it simply needed a major rejuvenation.
And beginning in 2011, through some new blood; upgraded food quality and menu items; improved marketing and branding; and a physical makeover, it got just what it was looking for—and more.
“[Guests] now clearly see us as a brand that’s taking care of them, whether it be from facility improvements [or] menu innovation,” Greifeld says.
Though he says the brand has always been rooted in a nautical theme, the Captain D’s team felt it was time for a fresh spin. The result: a completely renovated prototype with brighter colors, a more open dining room, and an atmosphere reminiscent of your favorite seaside restaurant.
“We tested that [design] in various markets and we achieved a very strong double-digit sales life, and now we’re rolling it out to different parts of the country,” Greifeld says, noting that the Beach Design model will make an appearance systemwide in 2013 and beyond.
“From an economic perspective, it’s worked very well for us,” he says, “and we’re getting a quick payback, as well.”
The brand also turned its sights on the product. Not only did Captain D’s re-engineer its core batter-dipped fish, but it also introduced a handful of new products and menus. Its most recent product, Hand-Breaded Fish Tenders, launched this month just in time for the Lenten season.
The tenders are sliced from a flaky white fish filet, hand breaded, and served with two sides and hushpuppies as the latest offering on Captain D’s new $4.99 Full Meal Deal platform.
“They’re innovative. You will not find them anywhere else in the industry,” Greifeld says of the fish tenders. “You won’t see people do quite what we’re doing.”
The chain has also rolled out a new broiler program in its kitchens, which allowed for the development of its new fire-grilled menu, which features items like grilled salmon and D’s very first Surf and Turf offering.
The broiler platform is already offered in 200 restaurants, and will roll out systemwide by the end of the year.
Additionally, the brand has placed increasing focus on a new customer segment—moms with children—with its new 3-D kids program, a range of kids’ meal offerings featuring a “fun pack” full of 3-D glasses, reading materials, and other items.
But before any of these changes could take place, Captain D’s knew there was a more pressing matter it had to take care of: its people, whether they be employees or valued guests.
“It starts with people, and it always starts with making sure you have the right people taking care of the guests,” Greifeld says.
Because the brand made it a priority to create a stronger, more exciting, and welcoming culture full of high-quality team members, he says employees and operators are now proud to work for the company.
“They believe in the culture and the values,” he says. “They believe in the direction of the company. … And that translates into how guests experience our brand.”
Speaking of guests, Greifeld says they’re the single-most important aspect of the company post-turnaround.
“We established a guest-centric mentality at D’s,” he says, adding that the brand emphasized a newfound core value of always doing what’s right for the customer.
“With that as a mindset, with that serving as our core value, and with that governing all of our actions and governing all of our strategies, what happens is it becomes part of your business DNA,” Greifeld continues. “Then what happens is the guests notice, and then they begin rewarding you with their increased visitation.”
But while the brand began showing more love for guests, it realized its marketing approach wasn’t quite keeping up.
Jonathan Muhtar, chief marketing officer for Captain D’s, says the brand noticed there was a core group of guests who loved the brand, but that weren’t being given any reason to celebrate it.
“There were a lot of attempts by Captain D’s to attract new consumers, but in many cases it was at the expense of its valued current customers,” he says.
To solve the problem, the chain began catering to these long-time, loyal D’s fans.
“Consumers love D’s food. They actually crave it,” Greifeld says. “But what we had to do what remind them of their love of D’s.”
Cue the “For the Love of D’s” campaign that rolled out last year, showcasing customers demonstrating their over-the-top love for both the Captain D’s food and brand.
“It’s a tongue-in-cheek way to approach it,” Muhtar says. “But what it does is it reinforces this notion that there really are these people out there that crave seafood and for whom D’s is their first choice.”
Muhtar says the platform has helped drive traffic into the stores since it launched last February. “Most of that [traffic] is actually coming from people who knew about our brand, came to our brand in the past, but now are coming back and coming back more frequently,” he adds.
Though TV marketing works especially well for the brand, Muhtar says D’s has also upped its digital and social media presence.
For instance, to promote the Hand-Breaded Fish Tenders for Lent, it launched a Facebook campaign called “Secrets from the Chef,” featuring Captain D’s head chef Jason Henderson.
The campaign not only features a sweepstakes offering fans a chance to win dinner at D’s for a year, but also showcases the product and the brand’s seafood expertise.
“It really reinforces a point of differentiation that we want to reinforce this time of year that we are seafood experts, we do freshly prepare our food, and we serve full meals,” Muhtar says.
The brand’s Facebook page features short vides of Chef Henderson prepping Captain D’s seafood for customers, “and that’s really driving home that message at a time when a lot of the other players out there are just featuring fish sandwiches.”
Though the brand has certainly undergone a dramatic transformation—and reaped the rewards—its revitalization is far from over, Greifeld says.
“We look into the future and see so much additional untapped potential,” he adds. “We’re a unique brand, we’re well positioned, and we’re going to build upon that with a lot of new initiatives.”
Due to the wild success since the brand turnaround began in 2011, Greifeld says the chain feels it’s the right time to begin franchising once again.
“We have a new prototype, a new design with re-engineered equipment lines,” he says, adding that unit profitability has increased, too. “Later on this year, we’ll be establishing a franchise development department, and we’ll be looking for top-quality restaurant operators to come into the D’s system.”
Greifeld hopes to see additional growth this year, with a goal of 5.1 percent same-store sales increases. “A lot of people say, ‘Wow, you already have these lofty numbers in 2012. Can we do it?’” he says.
“Yeah, I think we can. We’ve got the right people, the right team, the right strategy,” he continues, “so I think our future is bright and we can keep on building on top of the successes we had in 2012.”
By Mary Avant
Food & Beverage
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