Lexington, KY - It has been more than ten years since Brian McCarty and Bruce Drake, general partners and co-founders of Bluegrass Hospitality Group, launched the first location of the company's founding restaurant brand, Malone's, in Lexington's Lansdowne Shopping Center. Since then, the pair has introduced multiple new restaurant concepts to the market, including their newest endeavor, Drake's, and they have spent the last decade tweaking, revamping, reinventing, and sometimes scrapping them altogether.
McCarty recently sat down with Business Lexington restaurateur columnist Mark Sievers to offer his perspective on trends in the local food service industry.
There's a past that usually contributes to the present, and I'd like to hear about how you and your partner, Bruce Drake, got started.
BM: My business partner, Bruce Drake, grew up in the L&N Seafood. Morrison's Group had three or four different brands, and one of them was their upscale seafood concept called L&N. Bruce graduated with a culinary degree from Western Kentucky and went on to work for L&N in D.C., Pittsburgh, Maryland and Louisville, and then eventually ended up here in Lexington. You learn so much in those early days about locations, about team members, about how to manage, about cost structures, menu selection, food quality.
Twelve or 13 years ago, my business partner Brad Scott and I bought AP Suggins Bar & Grill on Romany Road from Don Wathen, and I didn't have any plans, didn't have a culinary background like Bruce did. But (I) was an entrepreneur at heart and had been in business for myself since I was 12 or 13 and had many life experiences that carry on with me today, through my sports memorabilia baseball card distribution business and AP Suggins. ...You're always cutting your teeth. You're always learning new things: how to operate at different sales volumes, how to operate with different numbers of team members, how to operate in different locations. And as each year goes by and with each brand we build, we just continually take those lessons and incorporate them in our new ventures.
Give us some general observations about what is going on in the restaurant industry right now. Certainly the economy is affecting the industry, but it's affecting different segments of the industry in different ways. But everybody is adapting to some degree, it seems.
BM: If you don't adapt, you're not going to be around long. This is a different world we live in today, and in my mind, it's all about value. I think we're well positioned when it comes to value. Ö And our core brand, Malone's, the brand that got us to where we are today - quite frankly, I'll put it up against anybody when you measure it on the value equation. And quite frankly, you know, prime beef steakhouses around the country are not known for providing a lot of selection or value, and I think we do a great job of doing both.
We run a real high food cost. A lot of my competitors and a lot of consultants will tell me my food cost is too high, but I would rather let the customer see the value on the plate and take a little haircut on this visit so they can come back sooner than later. And (in terms of) selection, you're not going to find many prime beef steakhouses that offer grilled chicken Caesar salads or hamburgers on their dinner menu at upscale $60-, $70- and $80-per-plate prime beef steakhouses, and we don't operate in that arena. We don't want to operate in that arena. We want to put the same steak on the plate for about half of what they charge, and we want to offer our guests a lot of selections so that everybody feels comfortable, whether they're getting an $8 or $9 entrÈe salad or the best steak in town.
I think anybody who's been to business school, read a marketing book or taken a marketing class can remember the classic four Ps: product, price, placement and promotion. I've always been a believer that there is the fifth P: people - and it's not talked about enough. So how do you approach training and culture?
BM: We've been able to centralize that function in the last five or six years, and it's really added a nice feather in our cap in terms of being able to put a consistent training program in place, so that we know that the right folks are coming on board and that they're learning what they need to learn - from a food perspective, from a wine perspective, from a beer perspective, a spirits perspective and a hospitality perspective. Our motto is "100 percent guest satisfaction, 100 percent of the time," and that's what we strive for. And we've been very blessed to have 650 great team members that believe in that motto.
A lot has been written and said about the young generation. I'm sure that generation is an important part of your employee base. Are they really any different as employees than other generations?
BM: I don't see it. A lot of folks come to us very young at 17 or 18, and I see them grow through what we have to offer and leave very mature adults at 24 or 25.
What's your perspective on social media as it relates to the restaurant business?
BM: You know our new concept, Drake's? Bruce and I didn't even know when we were going to open Drake's, in terms of whether it was going to be on a Thursday or a Tuesday or a Sunday. It was right down to the wire in terms of us finishing up the project. So we really couldn't get any information out there in terms of, "Hey, this is our drop-dead date, and we're going to open at 5:00 on this date." We opened the doors with really no fanfare. Well, folks started rolling in, and ... hitting the Facebook pages and twittering and tweeting, and I mean, I've never seen a restaurant fill up so fast as Drake's did on its first night or two. And it was all through social media.
Any surprises, failures, mistakes that you've learned from that you'd care to share?
BM: Oh, absolutely. We make them every day. Our Aqua Sushi brand is a phenomenal brand. I think it's the best sushi in Lexington, but I'm a little prejudiced. Five years ago when we got into that business, we spent literally a small fortune out at Hamburg, building a special, 1,200-square-foot satellite restaurant beside Malone's-Hamburg called Aqua Sushi. And it was, quite frankly, too contemporary and too blue and too whatever; the naysayers told me plain what was wrong with it, and eventually I agreed with them that it needed to go. While that room went, we certainly didn't get rid of the brand. In fact, when Bruce and I converted that sushi bar into the Harry's Patio Bar at Hamburg, the sushi sales actually went up. So we turned the negative into a positive out there, but that was certainly one that Bruce and I stubbed our toe on.
How do you identify the niches you want to go after? My guess is you probably travel some and study best practices.
BM: One of the things that Bruce and I do is travel around the country and look at different trends and find out what's working in places like Atlanta, Boston, Chicago, LA and New York. And we've been very blessed to be able to pull things out of places like D.C., Miami, San Francisco and Seattle and incorporate them into the way we do business every day. We believe that trends start in markets that are much larger than Lexington. It's great to be able to see concepts in action and decide for ourselves whether we think Lexington would embrace certain things that are working in these bigger markets. It's a way to look at a concept and kick the tires without taking all the risks.
In some ways, Lexington is a "tweener" town. It's not a small town, but it's not a big metropolis either; it's somewhere in between, and it has attributes of both. It is and it's a very unique town, you know, (with) the university and the equine community. Ö And I can guarantee you that I'll be here for a long, long time. I don't plan on leaving any time soon. It's a wonderful town. ... How can you beat Lexington?