Toque of the Town: Outside the Box

Qdoba Chef Ed Wilroy sidesteps Tex-Mex cliches and defines fresh, nuevo-Mex fare.

By Monica Rogers, Contributing Editor -- Chain Leader, 3/1/2003

Qdoba’s director of operations services, training, and research and development Ed Wilroy

A menu philosophy that moves outside the box is a big part of what put Denver-based Qdoba Mexican Grill in the box with Jack—new owner Jack in the Box, that is. Ultimately, it’s all about the food, according to management at San Diego-based Jack in the Box, praising Qdoba’s distinctive flavor profile and visual presentations as it listed reasons for purchasing the 85-unit fast-casual chain late January. Those are sweet words for Qdoba’s corporate leaders, who spent the last several years sidestepping Tex-Mex cliches to shape their own definition of “Mexican Grill.”

Chef Ed Wilroy, Qdoba’s director of operations services, training and research and development, explains, “We’re not after trying to reproduce authentic Mexican recipes. We’re trying to shape something new working with classic Latin flavors and ingredients such as our adobo marinade, lime and cilantro in combination with other commonly recognized fresh ingredients.”

Resulting signatures have included the Poblano Pesto Burrito, $5.19, adobo-marinated grilled chicken with a sauce of roasted poblano peppers, cilantro, almonds and pine nuts; and the Grilled Vegetable Burrito, $4.79, an adobo-marinated blend of grilled zucchini, scallions, eggplant and sweet red peppers.

Burritos are spread with cilantro-lime rice, a scratch-made, black bean-studded concoction. Refried beans are conspicuously absent, and the chain’s warm, three-cheese queso sauce includes an atypical mix of Swiss (and even a touch of blue cheese) in the white cheddar and Monterey Jack base.

“What we’ve been trying to achieve is modern, nuevo-Mex food, focusing on unique flavors that you can’t get anywhere else,” says CEO Gary Beisler.

Taste of Competition
That’s a tall order, given the similar objectives of competitors Chipotle Grill and Baja Fresh, but one analysts such as New York-based Mark Kalinowski of Salomon Smith Barney think Qdoba can accomplish.

“The Qdoba chain has much going for it,” says Kalinowski, noting that despite “stiff competition from Chipotle and Baja Fresh, Qdoba’s comparative growth in 2002 was 12.3 percent.” Growth at company stores was 7.1 percent, franchised 4.9 percent.

Qdoba’s same-store sales also increased in each of the last 14 quarters, according to Kalinowski. He says that’s an impressive track record, especially given the upscale menu pricing and sluggish economy over 2001-02.

Maniac Factor
Beisler says Qdoba’s success so far has come through customer appreciation of its many menu customization choices, fresh ingredients and a “maniacal focus” on throughput and speed. Wilroy oversees all of these factors.

Wilroy, who came to Qdoba in 1997 after seven years as a teaching chef and administrator for Johnson & Wales University, says Qdoba’s commitment to fresh-made product is intense, but balanced with several items that are now outsourced to improve product consistency.

“It’s a balancing act,” says Wilroy. “You want to send the image of freshness to the customer without compromising on quality. There are many items that we prepare fresh each day—chips, pico de gallo, roasted corn chili salsa, guacamole, adobo-marinated chicken, ground sirloin and oven-roast shredded beef. But there are others that we outsource and frankly, have had improved quality as a result.” Qdoba worked with one key manufacturer to develop and supply the chain’s remaining salsas, sauces and its tortilla soup.

According to Wilroy, the “nuevo-Mex fresh” message gets communicated to customers as their food is prepared. Guests can alter most dishes on the menu to suit personal tastes by adding or omitting ingredients from a roster including cilantro-lime rice, black or pinto beans, five salsas, five sauces, cheese, sour cream, and adobo-marinated grilled chicken, veggies, steak, ground sirloin or shredded beef.

“We’ve tweaked the order-making process to the point that you get all this customization in 45 seconds per customer,” says Wilroy.

Still New News?
In recent years, Qdoba says the customized approach to its menu, combined with its focus on speedy delivery and switch to a new name had made the chain slow in terms of adding new items.

“The name change from Z-Teca to Qdoba Mexican Grill happened just two years ago,” Wilroy points out. “And given our growth rate [15 new stores in 2002, 60 slated for 2003, and 275 to 300 total by 2005], Qdoba’s menu is still new news to many of our customers.”

Wilroy concedes that Qdoba is still “very conservative” with product introductions. Nothing goes on the menu unless it passes all phases of a rigorous evaluation process.

“For something to be viable, it must meet seven criteria. First, the investment impact should be modest; second, it mustn’t muck up operations; and third, it mustn’t slow service. Then we look at how it works at point of sale and evaluate additional equipment investment. The food-cost impact should be minimal. And lastly, because we want to keep our inventory at a minimum, a new item shouldn’t require a lot of new raw materials.”

Qdoba’s food, labor and paper costs for 2002 were 55.2 percent.

Queso and Quesas
The most recent items to pass muster include Qdoba’s quesadillas and the Queso Burrito, both introduced in January and the only new items the company will be rolling out this year.

Wilroy says adding quesadillas as a menu category has been a goal for a while, but production speed was a problem.

Quesadillas are much more time consuming to prepare than burritos, he explains. Nonetheless, development work on the product line—plain, ($4.69), chicken, ($5.69), and steak ($5.99)—began early in 2002.

“We tried all sorts of things,” says Wilroy, but ultimately quesadillas necessitated addition of a new piece of equipment: a two-sided panini grill with flat (instead of the typical grooved) platens.

“It was a real challenge to do this without a costly retrofit,” he says. “But the piece of equipment we selected was very affordable. And its small footprint [about 2 feet deep and 18 inches wide] meant that it could be incorporated into the line with minimal adjustments.”

Grills are set at 500 degrees, allowing staff to cook the top and bottom of each quesadilla at the same time with a resulting crisp exterior and melted cheese interior. Wilroy says input from unit operators during the testing stage third and fourth quarter of last year helped iron out procedural issues.

“What we found was that for the meat quesadilla varieties, the cheese didn’t melt properly unless it was layered above the meat,” he says. In-store sampling and testing with consumers also indicated the need to add more cheese (4 ounces, up from 3 ounces.)

Development of Qdoba’s newest burrito, the Queso Burrito, adobo-marinated grilled chicken ($5.69) or steak ($5.89), topped with choice of ingredients and warm, three-cheese queso sauce, was another direct result of input from unit managers. They serve as one of Wilroy’s best resources for development ideas.

“Managers reported that a lot of customers were requesting that the queso sauce we use for our nachos be ladled onto their burritos,” Wilroy explains. “Based on that, we simply decided to give the product a name and add it to the menu.” The item went into stores in January, without a formal testing period.

Forward and Backward
With Jack in the Box’s purchase of Qdoba now settled, Wilroy says he is excited about potential synergies that may happen with the burger chain’s development staff at its new 70,000-foot R&D center. “We’ll remain autonomous in many regards, but there are some exciting possibilities that come with being linked to Jack in the Box,” he says.

Potential developments include new items produced with the panini grill, plus soups to augment Qdoba’s current tortilla soup, $2.29 per bowl, on the menu from September to April and available vegetarian or with grilled chicken or steak added at no extra charge.

Wilroy talks about the possible addition of various limited-time offers “that would come on and off the menu seasonally.” He is also developing compelling dishes with the potential to bolster dinner traffic (now only 40 percent of business).

Looking back, Wilroy says much has changed since he came to Qdoba in 1997. “I had just relocated to Denver and was so impressed with the Qdoba concept, I took a job as a unit manager, figuring it would be a good way for me to segue out of education back to the daily grind of restaurant operations,” he recalls. “It was a matter of months before they plucked me out of unit management and made me corporate director of operation services.” That job expanded in 1998 to include all menu research and development.

“At that time,” says Wilroy, “we were at something of a crossroads. Strategically, we’d never said, ‘What are we? What defines what we do in terms of image and menu diversity?’”

Defining the answer, “nuevo-Mexican grill,” prompted Wilroy to look for inspiration from creative full-service restaurants and recipes. He added a variety of taco salads, nacho plates and tortilla soup to the menu.

“In 1998 we really began transforming Qdoba from basically being a burrito concept toward becoming a Mexican grill,” Wilroy says. “One thing we knew for sure was that the menu we had appealed more broadly to men. Customer user studies had shown that we didn’t have enough on the menu to appeal to the female demographic. So the salads and soup were shaped to address that. Beyond that, we felt broadening the menu was just a win-win situation for us in becoming a Mexican grill—something we could build on in the future.

“Now that we’re here, it will be interesting to see what the next several years will bring.”