May/June 2009
By Pam Sawyer
Mike Blum, owner of The Real Chow Baby, likes being first. His New American stir-fry concept was a first for the Southeast, and he notes, “Being first in Atlanta is a good thing.”
Before opening the restaurant, Mike traveled the nation seeking ideas for creative trends in the fast-casual concept. The Mongolian-style restaurants with flattop grills he saw in the Midwest struck a chord. He quickly began adapting the idea for the Atlanta urban market with full-service and beverage options.
The Real Chow Baby at Howell Mill in west Midtown opened in April 2005 with approximately 3,500 square feet. The second location opened in August 2008 with almost 10,000 square feet, catering abilities and 80 dedicated parking spots at Cobb Galleria.
Although his operating and revenue model did not factor in the convention business for the Cobb Galleria, he’s found that as an added boost to the bottom line and welcomes those patrons as much as the locals.
Mike learned that size matters when searching for the second location and recommends that other restaurateurs looking to open a second operation remember the level of detail and attention paid during the opening of the first. Most important, he says, is “value engineering” the kitchens.
One of Blum’s strengths in growing his customer base has been the creation and use of innovative marketing strategies. Blum admits that he loves “doing out-of-the-box thinking on marketing.” He focused on reaching customers in other noncompeting lifestyle centers such as clubs, hair salons and clothing boutiques, and then created marketing opportunities within these segments.
Mike, a former operations director at Fratelli di Napoli, finds the biggest difference between fine dining and The Real Chow Baby is the customer interaction. With The Real Chow Baby, he is able to increase the number of table visits in a day and get firsthand and immediate feedback from customers.
In fact, customers’ input contributed to the design for the Cobb Galleria store. Customers at the original location noted they wanted less wait time and more options for beverages. The Cobb Galleria store reflects these two desires with an expanded full-service bar and a second stir-fry line. The Cobb Galleria location will also become the flagship store for the chain as it expands.
Because of its size, expanded stir-fry lines and full-service bars, the launch of Cobb Galleria location was naturally more expensive than Howell Mill. Howell Mill cost approximately $600,000 to build out, whereas the Cobb Galleria location cost about $2.2 million. While the menus are identical, Mike add catering options to Cobb Galleria. And as of December 2008, Cobb Galleria was on track to generate the same revenue as Howell Mill – approximately $2.8 million – although Mike adjusted his original forecasts down for 2008 from $4 million+. Weekly revenue for 2008 averaged basically $42,000-$45,000 a week.
While Mike’s vision for both restaurants was to create an appealing concept for people in Cobb, Smyrna and Marietta, Mike has learned that a great restaurant will attract customers from more than 30 miles away.
One of Mike’s strengths in growing his customer base has been the creation and use of innovative marketing strategies. Mike admits that he loves “doing out of- the-box thinking on marketing.” He focused on reaching customers in other noncompeting lifestyle centers such as clubs, hair salons and clothing boutiques, then created marketing opportunities within these segments.
For example, he put “chow boxes” in the bathrooms of clubs like Halo and provided club coupons for those wanting late-night dining. Another marketing idea included providing cobranded water spray bottles to hair salons.
At our price point of $10 for lunch and $15 for dinner, we are a nice spot and niche that will probably get better in 2009 with the economy as it is. The food quality and the service standards are in place, and we’ll maintain growth, although dialed back. For example, Howell Mill was up 7% in 2007, and 2% in 2008.
One of the more traditional marketing approaches that The Real Chow Baby employed to great success is building a database of engaged and loyal customers. He offered financial incentives to his team members for collecting patron e-mails, and one staff member collected 500 e-mails in one week. As a result of such efforts, The Real Chow Baby has collected a list of 30,000 e-mails through which The Real Chow Baby studies and interacts with its customers.
“We did a lot of work with our 30,000 e-mail profiles, and surprisingly found that our top demographic was start-up families’ first and urban professionals second. That was a big surprise for us. We also realized that we are a destination restaurant, too. We have people driving from Gwinnett and the Mall of America area for our Howell Mill store.”
Mike’s predictions for the fast-casual segment are cautiously optimistic. “At our price point of $10 for lunch and $15 for dinner, we are a nice spot and niche that will probably get better in 2009 with the economy as it is. The food quality and the service standards are in place, and we’ll maintain growth, although dialed back. For example, Howell Mill was up 7% in 2007, and 2% in 2008.”
Growth and expansion plans include Chow Baby Express for airports, strip malls and centers. Mike is also looking at the old downtown Macy’s currently being redeveloped for the first location with a early 2010 opening target date. He and his leadership team are also working through a first franchise opportunity targeted for the new Emory Village scheduled to open in summer 2009.
Through a unique concept coupled with a sound business model, The Real Chow Baby has found the magic formula for the quick casual segment in Atlanta.
