As 53-unit Brazilian steakhouse chain Fogo de Chão continues to stabilize its brand performance with its fifth consecutive year of positive traffic, the Dallas, Texas-based restaurant chain looks to keep up with trends in restaurant technology and menu innovation.
About 15 months after the company went private under new owner Rhône Capital, NRN spoke with Fogo de Chão CEO Barry McGowan — who was promoted from president to chief executive five months ago after longtime CEO Larry Johnson announced his retirement — about what’s ahead for the brand, including off-premise delivery, investment in blockchain technology and opportunity around meatless proteins.
Investing in off-premise
While Fogo de Chão has offered catering for corporate and private events for awhile, this year the brand will also test off-premise delivery for the first time. By the end of 2019 the new delivery platform, which will bring customized churrascaria and market table options to homes and offices, will be in beta testing in three markets: Dallas, Chicago and a third as-of-yet unnamed market.
“All of our positive comps this year are due to price and off-premise while traffic in restaurants is declining,” McGowan said. “We know that’s an issue. If you’re convenient, you do well. If you’re experiential, you do well and that’s what we are right now. Pretty soon if you want us in your office or home, we can do that, or if you want us to bring a grill [and start cooking] at your event, we will be able to do that too.”
Still, one risk McGowan is not willing to make is in third-party delivery. McGowan said that he would prefer to have complete control over the quality, including in-house packaging specifically made for delivery.
“We want to control our experience,” he said. “With third party, there’s a big disconnect there.”
After beta testing, a national rollout of their in-house delivery program will likely launch in 2020, McGowan said.
Testing blockchain transparency
Though blockchain has become a restaurant industry buzzword over the past couple of years, many restaurants are still grappling with how to apply this network technology that’s usually associated with cryptocurrency. For its part, Fogo de Chão is gearing up to begin testing the technology’s applications for its supply chain, McGowan said.
McGowan said that Fogo de Chão has partnered with agricultural technology company to become the first restaurant to track and trace their meat sources all the way down the supply chain. HerdX tabs each animal from cattle ranches in their supply chain with a smart tag that allows farmers and ranchers to monitor animal movement, health, and operational issues that will — among other benefits — allow them to more judicially distribute antibiotics only when necessary and to avoid breakouts of foodborne illnesses.
“With blockchain we believe we can connect the dots,” McGowan said. “We can easily see best practices and how to better take care of your animals. We want to take the data they already have and move it into the blockchain sphere so now they can immutably prove it.”
On the customer experience side, the blockchain investment would look like a QR code alongside menu items. Once customers scan the QR code with their phones they will be directed toward a map that shows guests where and how the animal was raised, what its diet was, and the rest of the supply chain that traces back from farm to kitchen.
“When tradition and technology meet, we’re trying to take those two and put it on the plate,” McGowan said.
In the next 12 to 16 months, Fogo will be implementing its first regional test of the blockchain technology with cattle from its partner ranches in New Zealand and will roll out the technology systemwide within three to five years.
Expanding vegan protein options
Although Fogo de Chão is mainly known for its endless parade of meat skewers, the brand is working on adding vegan meats to its menu.
“We’ve been working on plant-based proteins for about two years,” McGowan said. “Our price includes everything, so why wouldn’t we offer that? There’s no risk.”
When asked if he is considering the popular Beyond Meat or Impossible brand plant-based products, McGowan said that they have “several ideas” in the works for introducing plant-based protein options, though there is no timeframe yet on when it would introduce the new vegan options to the regular menu.
Other alternative proteins are in play as well, McGowan said. Though not plant-based, he said the chain is considering adding insects to the menu, especially since insects are already a common part of Brazilian culinary culture.
“We’re not looking at adding crickets yet, but we could consider it,” McGowan said. “We will keep innovating around what’s new and if the guest doesn’t like it, then we will move on.”
Contact Joanna Fantozzi at [email protected]
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Correction: May 30, 2019 This story has been updated to reflect the correct test cities for the chain's delivery test.