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In the Kitchen: Life after Landry’s

Joe's returns to crab roots under new ownership

 - Photos courtesy of Joe's Crab Shack
By Joan M. Lang
May 01, 2007

Watch out for Joe's Crab Shack. After years of languishing in the wide-ranging Landry's Restaurants portfolio, the 120-unit Joe's is newly single and ready to claim its place as the second-largest seafood chain in the country.

"Under our new ownership, we've got the financial backing, the resources and the business acumen to reach our full potential," says Michael Flanagan, senior VP of concept for Houston-based Joe's Crab Shack Holdings, which was acquired in October 2006 - management team intact - for $192 million by a venture capital group.

Within a year, the chain will double-down on its casual, crab-focused roots and introduce new menu items and marketing strategies as it ramps up for a new five-year growth plan.

"One of the things we will be focusing on is the healthy appeal of seafood in general and crab, in particular," says Flanagan, a 12-year veteran of Joe's Crab Shack, which first opened in 1994.

In the past few years, says Flanagan, Joe's has been slow to adapt to changing customer demand for more variety and healthier seafood preparations. Joe's Gulf Coast crab-shack menu concept has traditionally implied lots of fried food, but the company is adding more non-fried options, including more signature crab items, fresh seafood, salads and other nutritious selections, says Flanagan. And as far as frying goes, the company has also made the commitment to go 100 percent trans fat-free by June.

Despite its crab moniker, Joe's crab sales had actually been dwindling under Landry's, from a one-time high of nearly 25 percent of total sales. Since the break from Landry's, the company has introduced a number of flavor-forward preparation options for its three core crab species (king, snow and Dungeness) and is aggressively on the hunt for other types of crab available on a national basis.

"We will certainly use blue crab and stone crab in the markets where they are available, but part of the challenge of operating in 28 states is finding products that are widely available," notes Flanagan. "There are a lot of different crab species in the world, and we need to become more globally oriented in our sourcing."

Flanagan acknowledges that one of Joe's biggest challenges is sourcing seafood. "That's the nature of any seafood-oriented menu, especially one that relies so heavily on a commodity product like crab," he says. "We definitely need to wait for the catch and see what the market price is, then make our menu decisions based on that." The recent banner year for king crab, for example, 
bodes well for that specie's 
appearance in menu selections and promotions.

"Crab is a very interesting product," adds Flanagan. "We've tried to educate our customer about it in the past, probably more so than any other restaurant chain, but we need to get even more 
serious about that."

Shell-on crab is now available in spicy crab boil, garlic or BBQ ("marinated" in a dry spice rub, then flash-fried) versions, while crabmeat is utilized in crab cakes - including a popular crab cake sandwich - as well as crab-stuffed mushrooms and shrimp. Already, crab is back in the top five of the concept's menu mix.

"We really want to go back to our roots," adds Flanagan, 
noting that in recent years un-der Landry's, Joe's had been trending toward the dinnerhouse segment with the addition of carpeting and tablecloths, bread and complimentary salad, and other accoutrements that the concept's management is eager to dispense with.

"Our curb appeal is the crab shack," says Flanagan, "and we need to fit our menu, marketing and overall direction into that concept. The most important thing is that Joe's is very casual - you can show up in flip flops and shorts and be just as comfortable as the businessman taking off his jacket and tie and relaxing at the end of the day."

Under Landry's, the parent company purchased product for Joe's and stored it, releasing it to the concept's distributors on an as-needed basis.

"Now, we're taking that extra step out of the process," says Flanagan. "We're in the process of putting in place a system where our suppliers fulfill their contracts to our three [Sysco] distribution points directly."

Still, it's a juggling act. "We're working with calamari people in Vietnam, with Global Fishing in Bellevue, Wash., for fish, with Mazzetta in Chicago with all the product for our fish-and-chips," he says. "That's the nature of the business - there are a lot of different players for a lot of different products. You need to know how to manage it."

Certainly, Joe's size is also an advantage. "As the No. 2 seafood chain [after Red Lobster], we've got a lot of purchasing clout," says Flanagan.

Now firmly entrenched in a post-Landry's transition period, the company plans to add three to five more units in established markets this year before launching into an aggressive expansion.

"We've been languishing," says Flanagan. "There's a lot of work to be done, but we have a tremendous opportunity to re-energize and grow the concept, now that we're on our own as a single brand, not one of 25 brands under Landry's.

"We woke up one day and realized that we were a 120-unit start-up concept," jokes Flanagan. "It's an exciting time for us."


Contributing Editor Joan M. Lang lives in Cape Elizabeth, Maine


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