Interview: CMO Of The Company Behind Melt Shop, Five Guys, The Little Beet And More On The Future Of Fast-Casual Dining
Jason Anello explains how Aurify turned consumer demand into a powerhouse portfolio of niche brands, commenting on the strengths of fast-casual dining and how restaurants can navigate shifting online-offline customer dynamics
The modern dining experience is undergoing a major transformation. In a retail climate favoring accessibility and convenience without sacrificing quality and immersive experience, the elevated fast-casual restaurant is witnessing its heyday, with niche hotspots like The Little Beet and The Melt Shop thriving and continuing to expand.
To find out more about the bustling space, PSFK spoke to Jason Anello, CMO of Aurify Brands, an incubator for the two aforementioned restaurants as well as Five Guys, Fields Good Chicken and Make Sand Wich. In this interview, Anello speaks to PSFK about how Aurify began, identifying changing consumer demands and responding with new concepts that merge efficiency with niche and quality experiences.
PSFK: Could you describe some of the broader trends that you're seeing impact the restaurant industry and the fast-casual space in particular?
Jason: The big trend in restaurants is the digital ordering ecosystem. That has two effects on the restaurant: One is our digital storefront is more important. Online customers aren't necessarily walking into the restaurant at all, so they don't get that hospitality experience—we have to do that through the digital experience.
If in the old days, the storefront was the thing that drew customers in, now that hospitality experience is fragmented across multiple different platforms. The storytelling that we do and the offerings that we have digitally are drastically different.
Related to that, the second trend is that while some restaurants have up to 50% of their revenue coming from digital, a more realistic number is somewhere between 15 and 30%—call it 25%. Does that mean that restaurants need 25% less dining room space or 25% less restaurant space? This affects one of the largest costs of running a restaurant: the physical lease.
As sales from that digital channel grow, we have to pay attention to what those channels look and feel like from a hospitality perspective. Does it mean the physical space needs to grow so that it's more hospitable and provides better experience? Alternatively, does it need to shrink so we can increase the quality of the food or increase some component of the experience itself?
Some retailers are dedicating a portion of the physical footprint to offering related services. Is this something that you're trying to implement?
Because we have a portfolio, it varies depending on the brand. I would like to see a world in which one of our brands has flagship locations that are larger than they probably need to be.
I always use the example of the nose of the Flatiron Building. Take that space and make a two-level Little Beet and make it a phenomenal experience in terms of the beauty of the space and what people can have. Then also have much smaller outposts that are still street-level storefronts, but they're smaller, maybe for pickup, and have commissary kitchens or ghost kitchens that service other parts of the city.
This allows for a big restaurant experience that consumers want have while keeping costs lower in an expansion.
Could you explain how the traditional quick-service restaurant is failing to meet new consumer expectations? How is Aurify elevating that fast casual experience to meet new demands?
While there's a growing number of consumers that are thinking about healthy food, there are still a lot looking just to enjoy food. Places like Shake Shack blends those two elements together: Consumers are eating a better burger, but it still comes with fries and a classic shake. It is better than McDonald's, but they're still choosing to eat there because it makes them happy or they think it's delicious.
On the other side of the healthy trend, there's still a place for the traditional fast-foods and fast-casuals. Another trend, however, is that people are reveling in the food experience like never before. I say often that food is now a celebrity. People still love Taco Bell because it's Taco Bell, but Chipotle positioned itself and told its story in a different way, and they also designed dining rooms and and stores to allow for a different type of experience.
Aurify and fast-casual as a whole has seen this elevation in the dining room space, the menu and the preparation of the food as the three pillars for really what's made the new fast food. It's a lot closer to a full-service dining experience, yet it's still a place where consumers can go multiple times a week as opposed to a full-service restaurant experience.
How does Aurify incubate and scale its portfolio of restaurants?
Aurify Brands is a hospitality company, but we reference it as an incubator a lot. It started with John Rigos and Andy Stern, who are my co-CEOs and founders, owning several franchise brands. They saw how the fast-casual segment was becoming more popular, but the players were older brands that didn't cater to the changing wants of the consumer.
It all started with Melt Shop, which was an artisanal melted sandwich offering. It evolved into having a lot more melted sandwiches and being an innovator and leader in that particular niche of fast-casual. It wasn't just a grilled cheese for grilled cheese's sake. It had really good cheese, and really good bread made fresh daily.
After Melt Shop came Little Beet, the vegetable-inspired concept, and Fields Good Chicken, a clean chicken restaurant. With those three in a portfolio, the platform that would become Aurify began.
As we look at creating new concepts and scaling our current ideas, the platform almost works in a secondary manner: It's about finding pain points that our portfolio of brands has and restaurants as a whole have, and then fixing those from a holistic viewpoint so that all of our brands can benefit.
What are some of the pain points that you've uncovered, and how have you attempted to remedy them?
One of the big ones is unlocking the point of sale [POS]: the register. Unlocking the data that's in there, particularly the customer data to understand and correlate their likes and build customer profiles, is very difficult. There are some new POSs out there, like Toast and Square, software companies that just built a piece of hardware so their software could run on it. That's the fundamental shift in the POS realm that's critical.
Having that POS and connecting it to all of the other digital pieces that establishments can collect information on around the customer to give them a better experience and serve them the food they want is key. It's still a paint point, but it's improving as time goes on.
One of the other pain points is back-house kitchen operations, as food cost is a major challenge for most restaurants. We're developing technology that allows us to better have a handle on the actual food cost, the usage, how to store all our ingredients and automate some of the purchasing process.
Could you explain how you're using the data that you're collecting to further refine and automate your operations?
As head of marketing, I look at the customer experience and the customer more than I look at elements like the kitchen. The data that I look at and the way that I pull data together is all about making a better picture of my customers.
I always think of my customers in small groups. Rather than just women, I think of women who are moms who live in Lower Manhattan—that's a much better customer profile. Then I can communicate with them in a way that is centered around what they care about. That's the best way to start and continue a customer relationship.
Nobody likes to get ads or be communicated to about something that's completely out of left field. I focus a lot on tying as many of these data points together as possible so that I can really understand the different customers and their motivations.
Also, so that I can help our in store team understand the customers that we have so that they can better understand who is in their restaurant every single day, and to make that experience better.
The team in our restaurant is a very critical part to our success. Going back to that theater reference I made earlier, if you think about the restaurant as a stage, then our team is the characters in the play. The food is the props. Finally, the customers are involved in the show.
It's about so much more than food—today, the restaurant is almost like a content studio, especially with people taking pictures of their food and sharing them. Humans forever have been sharing. We're just doing it through a new medium now.
If you think about the restaurant space as the stage in a theatrical play, and you think about the customers and how they're literally involved in the play, you wind up with a prop in front of you that you then take a picture of it and share.
I call it micro hospitality. It's the little moments that you can capitalize on. The power is that a micro idea doesn't have to appeal to everybody, but can appeal to a niche group, as I mentioned earlier.
How do you convey the same experience across all touchpoints, be it digital or physical?
I'm a big fan of telling the story and co-creating it with customers. I want the experience and the story to be linear because humans like linear stories. The challenge is, today's consumers are interacting with that linear story through a “choose your own adventure” track.
They might see something on Snapchat that makes them go to the restaurant and take a picture for their Instagram that their friend might then see. The space in which consumers encounter the story is fragmented, yet we want to maintain a consistent story, which can be challenging.
How do you see Aurify expanding and growing over the next three to five years?
We'll continue to scale our portfolios. Most likely, we'll add a few more concepts as we see the opportunity to meet different consumer needs.
Marketing is shifting. Touchpoints drive sales sometimes and they build brands some other times. They're digital sometimes. They're physical other times. We're going to see the spaces continue to change in terms of how consumers interact with them. The digital will start to not only promote but augment physical spaces.
In terms of continuing to improve the restaurant space, we've also looked into some of the technology that uses eye tracking to identify who people are and what they're doing. It helps in a lot of ways—to know who your customers are or know what your customers are doing, right down to that very specific customer.
If they're having, let's say, a kiosk experience and they're not at the cashier, that camera is going to be used to identify who they are and log them into their loyalty program and bring up their last order. That's adding tons of value. That camera technology also can let us know that we put the ketchup in the wrong spot or the napkins are not in the right spot because everybody keeps crossing over the line to get the napkins.
Over the next few years, as tech that's currently a bit rudimentary continues to progress and as consumers continue to accept certain tracking and data collection, we're going to see the physical and digital combined in new ways that will totally transform the in-store experience.