‘Inspired’ burritos drive growth for Boloco chain

‘Inspired’ burritos drive growth for Boloco chain

BOSTON —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Now the co-founder and chief executive of Boloco [3], a 13-unit fast-casual chain of so-called “inspired burritos,” Pepper in those days liked to hang out with his friends Adam Liebman, Gregg Harris and Jason Hutchinson to talk about how badly the rest of the country needed burritos. Harris even gave Pepper a book on how to open a restaurant, which he never read. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Pepper headed back east to pursue a master’s degree in business administration at Dartmouth’s Tuck School, but his Bay Area adventures left a lasting influence. He began studying foodservice, writing an early business plan for an entrepreneurship class, and the friends reconnected to form Stellar Restaurant Group in 1996. Harris left in 1999, and Liebman, though still a partner, is no longer an employee. Hutchinson remains executive chef. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Today, the goal of the “little company that has big dreams” remains to introduce burritos to the rest of the world, starting with the Northeast. In the next year and a half, Pepper expects Boloco to nearly double in size. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

“We’ve got a lot in the pipeline right now,” he said. “We expect to open three or four units this year and five, six or seven in 2009. We’ve got really good people on board for our expansion.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

The chain appears to be in the right place at the right time, said Darren Tristano, vice president of Chicago-based Technomic Inc. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Tristano views Boloco as “very well positioned for growth.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

“There are great opportunities for fast-casual Mexican,” he said. “The segment is seeing 20-percent growth, compared to 4 percent for the entire industry in 2007. Boloco differentiates itself by adding an international spin with its Asian and Buffalo burritos.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Dennis Lombardi of Columbus, Ohio-based WD Partners sees a need for Boloco to create a more “distinctive position” as Chipotle [4] and Qdoba have done and to move from its “heritage market” to create “a more unique brand and become a regional player.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

It’s now 11 years since the first unit, previously called Under Wraps, opened in Boston’s Back Bay neighborhood. Despite many changes along the way in both name and expansion strategies, Boloco, which is shorthand for Boston Local Company, is true to the original vision of “inspired people making inspired food” with a simple menu of classic and “inspired” burritos, frozen smoothies, burrito bowls, salads, and snacks made from fresh, high-quality ingredients, which often are organic and naturally raised. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Boloco’s strategies are working, Pepper said, pointing to same-store sales that were up 17 percent in April, representing the 32nd consecutive period of advances. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Although food costs are up this year, Boloco has begun such initiatives as upgrading to naturally raised beef, poultry and pork and starting a recycling program. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Last fall, an intensive search for expansion capital resulted in an investment of $10 million from Chicago-based Winona Capital Management, whose managing director, Laird Koldyke, was named chairman of the board. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Currently, Boloco is reviewing various sites, two of them north and two south of Boston. Most recently, a restaurant opened in Burlington, Vt., joining 12 in Greater Boston plus another in Hanover, N.H. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Plans also call for opening in Boston’s Park Square at 2 Park Plaza, and Pepper is “looking at a second major market outside of Boston,” although he would not elaborate where. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

A former location in Boston’s Financial District was converted for catering. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Units range in size from 1,000 to 3,000 square feet. A nearly year-old restaurant in The Natick Collection, an upscale mall west of Boston with 45 seats in 2,217 square feet, is doing the strongest first-year sales in Boloco’s history, bringing in “almost 20 percent above our average unit volume,” which runs around $1 million. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

2007 was a year of large-scale changes, from the repurchase of franchise rights sold in 2004, to the successful search for expansion capital. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

CHAIN FACTS

NAME: BolocoHEADQUARTERS: BostonMARKET SEGMENT: fast casualMENU: burritos, smoothies, saladsTOTAL NUMBER OF UNITS: 14 restaurants, one catering facilityAVERAGE UNIT VOLUME: about $1 millionAVERAGE CHECK: $7.05LEADERSHIP: John S. Pepper, co-founder and chief executive; Michael Harder, president and chief operating officer; Jason Hutchinson, executive chefYEAR FOUNDED: 1997 —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Recently, a new breakfast menu introduced resized options such as an 8-inch tortilla burrito priced at $2.50, a smaller version of the $3.50 full-sized, 10-inch version. The mini version has about half the filling of the larger size, seeking to appeal to a broader audience. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Other new breakfast items include smoothies with granola and organic yogurt with fresh fruit. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Focusing on its points of difference, Boloco borrows flavors “from people and cultures around the world.” Pepper pointed out: “We’re more than the Mexican niche. We’re simple and fast, and people come in four or five times a week.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

The casual-dining chain recently became certified by the Green Restaurant Association [5], an honor that helps it keep environmental awareness “front and center every day,” Pepper said. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

That affiliation connects Boloco to new vendor contacts, added Michael Harder, who became president and chief operating officer in 2005 and has a background of more than 25 years in the industry. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

A former operations director for Chipotle, Harder was brought in to help facilitate change and growth. Customer lines, Pepper said, accelerated from 150 to 250 an hour. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

“Food became fresher than ever, and safety and customer service practices reached new levels,” he said. “Customers seemed to notice. Lines grew and sales increased.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

This year Boloco switched from Styrofoam to corn-based cups. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

“We don’t claim to be saving the world, but it’s a change that represents small improvements,” said Harder, who expects to start a composting program before year-end. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Another priority is turning jobs traditionally viewed as unrewarding into meaningful career stepping stones, Pepper said. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

“We’ve always paid more than minimum wage,” Pepper said. “I’ve always believed you get what you pay for, and when you spend a little more, you get more.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Employees are treated as a team. Company retreats take place every few years, and a barbecue and soccer event in the summer and a December get-together are part of the corporate culture. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Language lessons were introduced early on, with classes in the office on weekends. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

“We have to stay focused,” Pepper said. “We believe in it and if we all did it, it would be easier [industrywide] to get better people.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Seven years ago, Berlitz was hired to teach both English and Spanish to all employees to improve internal communications and help those for whom English is a second language take on greater responsibility. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

All full-time and most part-time employees get health and dental benefits, a simple IRA plan, and a performance-based bonus plan. Those with 10 years seniority are eligible for sabbaticals, Pepper said. —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.

Pepper wants Boloco to be known for “wicked-good, all-natural, organic, inspired burritos and beverages, and for giving our people great opportunities to learn and grow and help them develop into potential leaders no matter where their careers may take them.” —Just like the guy in that old song, John S. Pepper left his heart in San Francisco back in the mid-1990s, after falling hard for the Mission District taqueria scene.