Adding new revenue streams was pretty much a necessity during the throes of the pandemic, particularly for casual dining concepts that couldn’t rely on drive-thrus to maintain a steady business flow. Many of those concepts have since pulled back on such channels, or removed them all together, as consumer behaviors normalized.
Conversely, 20-year-old Lazy Dog Restaurants is leaning in even harder to its pandemic-inspired channels, and it is reaping significantly higher average unit volumes in the process. According to Datassential, the California-based casual dining chain grew its AUVs by over 6%, to over $8.7 million, from 2021 to 2022. During a recent interview, Founder/CEO Chris Simms estimates that AUVs are now about 25% higher than they were pre-pandemic and attributes this jump to a sustained off-premises business and a wildly successful beer subscription program, which just came out with its 19th quarterly release.
“We had just started the beer program going into Covid, and the timing gave us an opportunity to turbo boost it. People wanted to share the passion of craft membership with us, so we created partnerships with specialty breweries all over the country and our membership has grown exponentially,” Simms said. “It’s been a fantastic program for us.”
There are also Lazy Dog “TV dinners,” which are meals made in-house and frozen in retro-style trays. When dining rooms shut down during the pandemic, they were added as a lifeline and people continue to buy them, “stacks at a time.” Much to Simms’ surprise, the TV dinner channel continues to grow.
So do the company’s virtual brands – Jolene’s Wings & Beer and Roadtrip Bowls. Jolene’s was also added as a lifeline during Covid, while Roadtrip was added just last year. Simms said both brands have helped drive more brand awareness for the core brand.
“We took the time to put some thought into our virtual brands and wanted to make sure from an authenticity perspective, people knew they weren’t separate companies. So it’s Jolene’s Wings & Beer by Lazy Dog and we make that ‘by Lazy Dog’ part clear,” Simms said. “We also found out these brands provide a great entry point for people who maybe never heard of Lazy Dog before, but they’re on their app looking for wings and they find Jolene’s and they enter Lazy Dog through that channel. The brands have also helped us build sales at times where we had additional capacity, like late night.”
Additional capacity requires staffing
Of course, in order to maintain and grow these additional channels, Lazy Dog needed to have the right staffing levels in place – no easy feat these past few years. According to Simms, Lazy Dog has maintained “industry leading” retention levels and has done so because the company’s top priority is maintaining a “people-focused culture.”
“The more we started to grow, the more we realized the importance of documenting every piece of our culture. What we found is when people came in from other companies, they weren’t managing the way we wanted them to. Their culture wasn’t as strong, so we put it on paper to make sure we could communicate our vision consistently,” Simms said. “That culture is built on trust, empowering our teams to make decisions, writing down recipes and making sure the chef cares about following that recipe, and not letting any egos get in the way. We are also constantly listening to guests and teammates to improve.”
This collection of efforts – documented processes, recipes outlined in black and white, listening to employees through an internal email that goes directly to Simms, listening to guests via aggregator platforms – has been the “secret sauce” to Lazy Dog’s consistent growth throughout the past 20 years, he said.
The second priority for Lazy Dog has been innovation, which is the impetus behind the company’s very creation in the first place. In the early 2000s, Simms noticed most casual dining concepts were “a little long in the tooth” and he wanted to create something different.
“I saw a lot of them beginning to make decisions based on the bottom line, cutting things I felt made their concept special,” he said. “At the same time, consumers were becoming more interested in ingredients and quality and cooking preparations. I saw an opportunity to engage in more innovation.”
Simms said he wanted to have items that people love and can’t get enough of, as well as items that some people hate – as long as Lazy Dog was pushing the boundaries on what they might be willing to try and, ideally, accept.
“Sometimes, to be honest, we got a little over our skis,” he said, pointing to a Caparina launch about 15 years ago that fizzled. Sometimes, however, they didn’t. Lazy Dog began selling double IPA beer about 20 years ago, for example, and that market has since grown by double digits almost every year since.
“We always want to be on the forefront of innovation so we can differentiate ourselves,” Simms said.
Culture and innovation will continue to be Lazy Dog’s blueprint as the company continues to grow. That growth plan includes five new restaurants this year and a target of seven next year, which Simms calls a “comfortable rate to make sure we can carry our culture into each new location.”
“We will continue to focus on culture so that our people pipeline is just as full as our real estate pipeline. We will continue to grow and expand all of these additional sales channels that support our core business,” Simms said. “But without the people, you can’t do all these things. They’re why we’re able to do what we’re doing.”
Contact Alicia Kelso at [email protected]