THE BIG BOWL THEORY : An aging population is making soup and salad bars the restaurant industry’s hottest concept. Two San Diego-based specialty chains are creating a stir with talk of expansion.
Two San Diego-based restaurant chains have shunned traditional main courses--including beef and fish--in favor of meals consisting of home-style soups, unlimited salad bars and health-conscious desserts.
Another flaky fad from Southern California? Maybe. But restaurant industry analysts believe that American diners are ready for meals without main entrees.
“It could be the next generation of fast food,” according to Joan Lang, executive editor of New York-based Restaurant Business magazine. “There’s definitely a market for that kind of thing . . . especially in the Sun Belt and the big cities. It could be a real go-go kind of a situation.”
Slightly more than 60% of consumers dine at least once a month at restaurants with salad and food bars, according to a 1987 survey conducted by the Washington-based National Restaurant Assn. A like number of consumers wish that self-serve salad and food bars were more widespread, according to the NRA survey.
The NRA survey also suggested that 70% of the nation’s consumers believe that salad and food bars will satisfy their hunger for good values. “The popularity of salad and self-serve food bars among consumers is undisputed,” according to the NRA. “Word of a good food bar will bring in new customers.”
Soup Orders Rising
But simply installing a salad or food bar is not enough to attract new customers and retain old ones, according to the NRA. Consumers are looking for a salad or food bar that “stands out from the crowd,” according to a recent article in the NRA’s monthly magazine.
Both San Diego chains--Soup Exchange and Soup Plantation--offer home-style soups, salad bars with more than 30 daily items, as well as a variety of seasonal fresh fruit and fresh baked goods.
Salad bar offerings include the traditional--iceberg lettuce, sliced cucumbers and carrots--and the off-beat, such as chow mein noodles, azuke sprouts, guacamole and chicken marinara. Salad doesn’t only mean greens: Both chains include pasta, rice, chicken and potato offerings.
Restaurant operators also are paying closer attention to the soups on their menus because older consumers--who have the most discretionary spending power--are the group most likely to order soup. Diners 55 or older accounted for just 22% of restaurant visits in 1986, but accounted for 42% of soup orders placed, according to the NRA.
While just 1% of fast-food orders placed in 1986 included soup, soup orders rose by 15% between 1984 and 1986, according to the NRA. Overall fast-food orders increased by just 9% during that period, according to the NRA. Soup is more common at mid-scale and upscale restaurants, where it was ordered on 8% and 13% of occasions, respectively.
“Soup has come of age,” according to Nation’s Restaurant News food editor Ken Frydman. Soup’s return to the front burner has been chronicled in recent trade magazine articles with headlines such as “Soup Getting Hotter” and “The Great Soup Wars.”
Despite its name, Soup Exchange’s revenue stream is driven largely by the salad bar.
Soup will generate just 15% of the chain’s $25.6 million in 1988 revenue. Salads--green, pasta and otherwise--will generate the rest. During one week, a typical Soup Exchange will run through 1,440 heads of iceberg lettuce, 972 pints of cherry tomatoes, 1,300 melons, 2,376 cucumbers and 924 broccoli stalks.
With the exception of a Soup Exchange in Las Vegas, neither chain has ventured out of Southern California, a fact that concerns some industry observers.
“They’ve been talking about (expansion) but they’re not much beyond where they were years ago,” according to Frydman. “The time may indeed be right (for expansion) but I’d suggest that they investigate the market slowly,” Frydman said.
Soup Exchange and Soup Plantation will run into competition wherever they expand, Frydman said. Boston’s 12-year-old Souper Salad chain already has 12 locations in Massachusetts, and chains with similar concepts have been expanding their presence in Dallas, Denver, Washington, and other large cities.
Soup Exchange, which has 17 company and franchise restaurants in Southern California and Nevada, will open new company-owned restaurants in Las Vegas, Denver and Dallas during the next two years. Soup Exchange also has signed a 100-unit franchise agreement with the San Francisco-based owners of Magic Pan International.
Magic Pan, a privately held, San Francisco-based company, has begun construction on a handful of restaurants in Florida, according to Tony Baldino, vice president of operations at Magic Pan. The Soup Exchange franchise agreement is “a natural extension” for the company that owns about 50 Magic Pans, Baldino said.
Soup Plantation, which has 12 company-owned restaurants in San Diego, Orange and Los Angeles counties, plans to open 13 new locations--including Beverly Hills, Marina Del Rey and the San Francisco Bay Area--during the coming year.
Chunks of Capital
Soup Plantation has opted to expand through company-owned locations rather than franchising, said Michael P. Mack, president of Soup Plantation. The company has attracted $15 million from investors such as T. Rowe Price Threshold Fund, Los Angeles-based Brentwood Associates, Canaan Venture Partners, formerly a wholly owned subsidiary of General Electric, and Rockefeller & Co.
Executives at the two companies declined to discuss profitability.
However, a typical soup and salad bar restaurant--about 7,000 square feet in size--serves 1,400 customers daily, according to Restaurant Business magazine. Unit sales have climbed to about $2 million annually, which “yields a healthy pretax profit of 15% to 20%,” according to the magazine.