With 206 locations and 35 years in business, what has contributed most to Rubio’s Coastal Grill’s success? Cofounder Ralph Rubio says the Original Fish Taco, hands down.
After his first bite of such a taco on a trip to the Baja Peninsula in Mexico, Rubio knew this craveable dish had potential. Ten years later, he was setting up shop to his own taco stand in San Diego with the help of his father, Ray Rubio. The company went public in 1999, but after an investor tried to acquire the company, the father-son team turned to Mill Road Capital to transition the company back to private status in 2011.
At that point, Rubio’s decided to rebrand, focusing on the coastal aspect of the company and building out its healthy offerings to include more grilled, sustainably sourced seafood, salads, and bowls. Ralph discusses his “aha” moment, the company’s journey, and his hopes for the future.
At first bite
As a college freshman, I went down to San Felipe on spring break. I grew up in Southern California and my parents are from Mexico, but I’d never heard of a fish taco. I’d always been more of an adventurous eater, so I didn’t hesitate to try it. I’ll never forget it. We had just driven five hours to get to our little campground on the beach, but we stopped in the town to get supplies and fish tacos.
I took my first bite on a sunny morning in Mexico, and just fell in love with the bright flavors and the textures—the soft-shell corn tortilla, the crunchy cabbage, and crispy fish. The batter used spices like oregano, mustard, and pepper. It was just so fresh, delicious, and clean-tasting for something that was fried. Because it’s a fishing village, they use whatever is fresh, then dust it in flour, put it in the spicy batter, and fry it in a wok.
There’s something craveable about the ingredients and the way they work together. Over the years that I continued to go down there, I recognized that other college students like myself were in love with fish tacos. I thought, this would really work in San Diego. That was my big idea, my epiphany.
Slow start
It took a while for people to catch on. I thought people were familiar with fish tacos like I was, but I was very naive. I didn’t realize what a marketing challenge it would be. Fish tacos sounded strange to the majority of consumers; they said, “Fish in a taco just doesn’t make sense.” I heard that so many times. But once they tried it, they did a 180. I had people tell me, “I never liked seafood. I never eat grilled fish, but, man, I love fish tacos.”
It’s something about the fried fish in a corn tortilla with all the right accompaniments that really works together. The fact that it’s still our No. 1 seller after 35 years speaks volumes. There are very few products that are truly craveable out there in the marketplace, and the fish taco is one of them.
From public to private
We were a public company with about 200 restaurants for 12 years. It was a difficult run; there were lots of highs and lows. Around 2010, we had an unfriendly investor who wanted to take over the company. We hired bankers and successfully took the company private with Mill Road Capital. They’re still with us and have proven to be wonderful partners.
They had invested in Rubio’s two years prior to taking us private, so they knew the company; they knew me and Dan Pittard, who was then the CEO. They were familiar with the brand and had some ideas in terms of where we could take the company strategically.
One of the first things we did was devise a new strategy around “coastal grill,” where we would build on our heritage in seafood, but also transition to healthier products. We introduced wild Alaskan coho salmon and ramped up our shrimp program. We revamped the entire menu and hired a new designer, which was all implemented in 2012 and 2013. We’ve had a wonderful run with the rebranding; sales increased, and profitability improved dramatically.
Reorganizing growth
We’ve grown tremendously since we first opened 35 years ago. There are now more than 200 locations, including recently opened ones throughout Florida. Certainly the coastal context there aligns well with the West Coast in California, where we’ve had the most success. But we haven’t really expanded much since the rebrand.
Eventually, we will put together an expansion strategy; we just haven’t gotten to it yet. That said, I think what we would look for in terms of market is our demographic: those people that have the income to avail themselves to a fast-casual brand. Our price point’s a little higher, so in the Midwest, Northeast, Northwest, you look for those trade areas that have those demographics.
