Luke’s Lobster CEO Luke Holden: With supply chain, short-term pains can lead to long-term gains

The founder and chief executive of the leading seafood fast casual explains how he’s creating value for his system even as supply issues eat into profit margins.


The dominoes of the COVID-19 pandemic seem to keep on falling. Lately, the global supply chain has been severely bottlenecked as staffing shortages and other issues drag distribution networks to a crawl. Those bottlenecks are starting to threaten the restaurant industry’s pandemic recovery.

But Luke Holden is doing his best to create value out of the disruption. The founder and CEO of Luke’s Lobster has faced more unique challenges in the pandemic than other operators; his brick-and-mortars were almost exclusively in urban areas and had to close for a season, and his company is vertically integrated in that it owns its supply chain, purchasing seafood from fishermen and then processing and distributing it.

With lobster prices spiking during the pandemic, Luke’s has been forced to raise prices for its lobster rolls by a couple of bucks. But Holden said the company has a duty to serve the best-quality lobster rolls at a value price point, and so he’s not making any knee-jerk reactions to supply issues. Instead, he’s letting the profit margin take a hit and trusting that the value Luke’s offers today will create customer loyalty for the future.

“As we [make] one tough decision after the next, we're just staying grounded in that and not making any sacrifices that would ultimately move us against … building momentum toward our brand mission, which is to become the world's most respected seafood brand,” he said. “So we’re definitely taking a long-term approach on this, but definitely feeling a lot of short-term pains.”

In this interview from Take-Away with Sam Oches, Holden shares how Luke’s has invested in the success of its supply chain and how investing in CPG and direct-to-consumer channels have also created long-term value for the brand. Plus, Sam shares his five take-aways that listeners should take with them from the interview.

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