« May 2007 Table of Contents 
In the Kitchen: Life after Landry’s
Joe's returns to crab roots under new ownership
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