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CMO Perspectives: Noodles & Company’s Dan Fogarty

CMO Perspectives: Noodles & Company’s Dan Fogarty

Fogarty, who has led marketing for Chipotle Mexican Grill, Potbelly Sandwich Shop and The Pump Energy Food, discusses competing in the fast-casual segment.

After beginning his career as an advertising executive with several agencies and his own consulting firm, Dan Fogarty began a run as a marketer in the fast-casual segment and never left, eventually rising to his current position as executive vice president of marketing for Noodles & Company.

Under Fogarty’s leadership, the Broomfield, Colo.-based chain undertook a brand repositioning and large integrated campaign called “Your World Kitchen” before going public this year. The brand of about 370 fast-casual restaurants in 27 states serves noodle dishes, pastas, soup, salads and sandwiches that encompass flavors of cuisines from around the world, which presents the challenge and the fun opportunity of being more than just one kind of restaurant in the minds of consumers, Fogarty said.

“We’re a fast-casual restaurant with a twist,” he said in an email conversation with Clay Dover, chief marketing officer of Raising Cane’s Chicken Fingers and board member of the National Restaurant Association’s Marketing Executives Group.

In his more than 25 years in the restaurant industry, Fogarty has led marketing for Chipotle Mexican Grill, Potbelly Sandwich Shop and The Pump Energy Food. He spoke with Dover about how Noodles plans to rise above other fast-casual players by competing with itself to get better.

What is the biggest challenge — and the greatest advantage — of guests understanding the brand positioning?

At first blush, our name, Noodles & Company, can help us or hinder us in new markets. It certainly says something about what we do, but some people think about Asian food, some people think we make pasta. But we’re a restaurant with global variety — our Asian dishes are actually the smallest category we serve — so that’s why we recently developed our new “Your World Kitchen” positioning.

It has been a great way to explain how our guests can get a different taste every day, in lots of different ways. We used to hear our guests tell us they were confused on their first visit, but now we don’t get that anymore. It sets the stage for a bigger conversation and allows our “Noodle Ambassadors” in the restaurants feel comfortable walking guests through the menu.

Noodles has been around nearly 20 years. Why has it recently increased its unit growth and marketing around a new campaign?

We were founded in 1995 and had a quick spurt of growth, mainly through franchising, with varying degrees of success. When Kevin Reddy took over as our CEO in 2005, the first thing he did was help us make sure our business model was right, making several strategic changes. The majority of our growth since then has primarily been company-owned restaurants, and we’ve been following a pattern of steady unit growth ever since.

How do you combat new and increasing competition in your segment?

It used to be just a handful of national fast-casual restaurants building the category, but now new local and regional fast-casual chains are popping up all the time, often in the same ethnic niche. Look at how many sandwich or “better burger” restaurants there are now. And you see casual-dining or quick-service concepts changing up their formats a bit, either trading down or trading up. The pie isn’t getting bigger, so now it’s all a knife fight over market share.

The best way we’ve found to compete is to compete against ourselves and get better at what we do every day. We know our secret is going the extra mile to get that guest to come back more often. We like to say, “Everything’s a little nicer here,” from the décor to cooking to order to speeding our throughput to having really nice people. If we strive to do those things better, we get better, our guests come back and our sales go up.

With your increased emphasis on brand development, what has changed for you and your marketing team?

With our new Your World Kitchen positioning, it really helps us focus on bringing our brand to life. It used to take us forever to describe what we do or don’t do. Now we have a very consistent message we deliver everywhere. It has worked magically. Our guests get it, our teams get it and we get it. We’ve found a great foundation that makes sense and is infinitely extendable.

The other thing that’s changed is hiring a group of people way smarter than me. Seriously, this is the best team I’ve worked with in over 25 years in restaurant marketing. They work their tails off and just plain care; that makes everything better. The amount and quality of work they’ve been able to do over the last year has been astounding.

Growth and marketing

(Continued from page 1)

How has the company grown during a time where the financial crisis seems to still affect other brands?

That’s the power of fast casual and our brand. When I used to be an account executive in advertising, we used to tell clients: “Good, fast or cheap: You can only pick two.” Well, fast casual turns that whole notion on its head and that’s what’s led to our success. It’s the combination of all three that allows us to plow right through economic waves. As long as we over-deliver on value, quality, speed and “nice,” we’ll continue to do well and have fans that stick with us. Everybody wins.

In which area of marketing are you allocating additional resources in 2014, and why?

We’re still a small company with lots of growth demands from the whole organization, so there really isn’t a lot of “additional resources” going around. All of our marketing strategy is about building fans, often through grassroots marketing. Social media has certainly been vital to that, but we’re still doing a lot of old-school blocking and tackling at the restaurant level, with our GMs leading the charge.

Social media has certainly been the focus of our attention, but there wasn’t any social media a couple years ago, so it’s not like I can just walk in and say, “I need five more people to do this.” The reality is that we figure out how to do that in addition to our day jobs. There are so many new tools that pop up every day, you just can’t chase them all. You’ve got to pick which horse you think is going to win and put a saddle on it. Spurs help.

Where is the fast-casual segment going, and what will separate competitors?

I think we’re all going to win. Speed, quality, experience: In the end, that’s what everybody wants. That’s why I’m bullish on the category continuing to steal market share from other categories. As for competitors, I think the good are going to get better, the weak will gradually fall off, the new will always pick off a couple of people, and the smart will take home the prize.

What restaurant chain do you think is doing a great job, and why?

I think there are a bunch of cool new players that are doing an exceptional job. My favorite is Mendocino Farms out of Los Angeles — I love their food. Piada out of Columbus, Ohio — I love their design. Spin Pizza out of Kansas City, Mo., has the best branding of any restaurant chain. I also love what Dig Inn in New York has done to make healthy foods approachable and crave-able. I used to work there before coming to Noodles, but I like how the really smart Adam Eskin has continued to evolve the concept. He’s killing it.

What marketing trends do you see outside of the restaurant industry that you feel could be incorporated into our industry?

Frictionless transactions. When I look at how Amazon Prime has totally, 100-percent changed all my buying habits for nearly everything, I look at how we can do that in the future for restaurants. It is so dependable, so functionally easy, for everything and saves me so much time. I bet I buy 70 percent of my goods from Amazon in one click. If we could do that in the restaurant business, nobody will need to cook anymore.

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