Toque of the Town: Panda Vision

Andy Kao leads Panda Express to the fresh, healthful side of fast food.

By Monica Rogers, Contributing Editor -- Chain Leader, 1/1/2004

“Set yourself as the standard,” the Chinese proverb goes. “Example is better than precept.” Not a bad credo for Rosemead, Calif.-based Panda Express, the largest Chinese fast-food chain in the country. Growing at nearly 30 percent a year, you might think company energies would be consumed with getting new units up and running. But Panda doesn’t just want to be the biggest bear on the mountain, it wants to be the best. For that, “Food quality is extremely important,” says Andy Kao, director of food and beverage. “Something good can always be better.”

For the near term, making good better means fulfilling customer demands for fresh, healthful, adventuresome food. Panda is featuring more nonfried items, as well as introducing spicy dishes with Szechwan and Hunan flavors.

Panda’s menu expansion comes at a time when other Chinese fast-food chains, such as Minneapolis-based Leeann Chin, have widely diverged from their Chinese core to offer Thai, Indonesian, Japanese and Mongolian dishes. “Most of our growth is coming from women in the 25-to-45 age range who want lighter, fresher, healthier, more adventurous and sophisticated cuisine,” says Steve Finn, chairman and CEO of Leeann Chin. “They want more variety—not just Chinese—which is something we haven’t seen Panda doing.”

Kao admits that 95 percent of Panda’s menu is Chinese. “That’s not to say that we don’t include other Asian flavors and ingredients—Thai, Japanese, Korean—as accents,” Kao explains. “We do include other Asian influences in our food, but our brand is Chinese. We want to be Chinese.”

Changing and Growing
“It’s all part of Panda’s vision to be a dynamic brand while we’re growing,” explains Vice President of Marketing Vicki Gelberg. “We want to have the fluidity to respond to consumer needs while growing at an exponential pace. We look at where the gaps are and fill them.”

According to Gelberg, Panda’s food scores very high in customer satisfaction, “and it’s very hard for a satisfied customer to articulate what’s missing.” That task falls to Kao and the product-development team, which includes personnel from quality assurance, quality control, marketing, purchasing, finance and operations. The team figures out how to fill menu gaps with a combination of extensive customer research (two to four times a year) and basic market testing.

Panda’s core menu is a mix of 24 dishes, divided among appetizers, soups and entrees. Each unit is required to carry 15 mandatory items on its steam table. The rest of the pans are used for limited-time offers and manager’s specials.

Less Fried, More Healthy
“Each year, we review our core dish list and decide which dishes to retire and which ones to add,” says Kao. New items for 2004 include several chicken-breast offerings, plus a more balanced array of proteins. “In the past, our limited-time offerings may have skewed more heavily toward one protein,” Kao says. “But our customers have shown they like to be able to choose from a variety.”

Kung Pao Cashew Chicken Breast, chicken-breast chunks with toasted cashews, diced string beans, red bell peppers and button mushrooms in ginger-garlic-chile sauce, $5.99, was part of a 2003 limited-time lineup that featured more than a dozen nonfried dishes. It was the best seller in Panda’s fall Kung Pao Kick promotion. The menu offered four varieties (shrimp, chicken, beef and cashew chicken) of the spicy Szechwan specialty in celebration of the chain’s 20th anniversary.

“Limited-time offers do several things for us,” says Kao. “They add interest to the menu for our heavy users, bring in new users, and they allow us to feature dishes with special ingredients such as sugar snap peas and asparagus that are of a seasonal nature or are only available in limited supply.”

New for New Year
This year’s promotions will include a Chinese New Year menu that will test new pot stickers with thinner skin, more filling and enhanced aroma. “I’m very picky about pot stickers,” says Kao, who has been working on an upgrade for years. The result is Northern Chinese-Style Pot Stickers, 69 cents each, stuffed with minced chicken, napa cabbage, scallions, ginger and toasted sesame oil.

The Chinese New Year menu will also include a rib dish with specially cut rib pieces that can be prepared in a wok. Kao’s $6.59 Pork Ribs with Black-Bean Sauce, red and green bell peppers and button mushrooms has also been in development for several years. “We ran a similar dish about two years ago,” says Kao. Working with a rib supplier to upgrade the dish, Kao requested cross-cut St. Louis-style ribs in 1-inch pieces, chunks suitable for stir-frying.

The focus on fresh and healthful will also continue this year with the “Panda Chefs Celebrate the Flavors of Garlic” promotion this summer and more chicken-breast and fresh vegetable dishes.

Old Traditions, New Tastes
Kao, director of food and beverage at Panda since 1995, first learned to cook in China in his mother’s kitchen. “I was the oldest child in the family, and it was my duty to help out with daily responsibilities in the household,” he says. “Eventually, I got so comfortable in the kitchen that my mother would have me cook dinner for her and her guests.” Formalizing his training, Kao apprenticed in leading hotels in Taiwan, moving on to chef positions in several restaurants in China and then America.

Kao misses the availability of some of the fresh Chinese vegetables and seafood items such as turtle and shark fin he grew up with. “But I’ve adjusted,” he says. “You cannot say, ‘Oh, my dishes cannot change.’ You must adapt to cook what’s available and what your customer wants.”

What hasn’t changed is that Kao, who has been cooking for 26 years, continues to draw inspiration from different regions of China. He avidly reads Asian magazines and newspapers to keep track of current Chinese culinary developments, as well as following trends in the States.

Playing the Field
Kao is also a team player, bouncing ideas off his development team partners and encouraging input from the field.

“We strongly encourage our chefs to create new recipes and submit them,” he says. If approved, the recipe is featured at the unit level as a manager’s special. Those that sell exceptionally well may be moved into eight- to 12-store operation tests with marketing support. Recipes that test well have the potential to move onto core menus and earn their creators cash prizes.

Six or more employee-generated ideas for dishes are working their way through testing. For example, Kao is evaluating Mongolian Barbecue Ribs, spareribs dry-rubbed with salt and pepper and then stir-fried with a sweet and salty ginger-garlic-soy sauce, for systemwide expansion. Three soups—one lemon-grass based, another curry-based and a third with tofu and vegetables—and a chicken breast with hoisin sauce are also in test.

Another example, Cousin Thai’s Spicy Chicken Breast, $6.59, stir-fried with a trio of bell peppers, cilantro and peanuts in spicy red-pepper sauce, was developed at the unit level and distributed systemwide. It was featured in Panda’s 2003 Chef’s Celebration of Flavors promotion last summer. “An employee had the idea and submitted the recipe,” Kao explains. “We tested it, approved it for use as a manager’s special and it took off from there.”

Working with his co-workers to develop their ideas for Panda’s audience is a task Kao enjoys. “There are so many possibilities for what we can do. When someone has a good idea, I try to catch it and make it work for our market,” Kao says. “It’s so important not to limit ourselves.”

Beyond the Wok
With customer counts increasing and interest in more healthful items burgeoning, Panda Express’ 60 percent wok-prepared menu is about to cross into new territory. After extensive testing, the company will soon introduce several entree salads.

Also on the drawing board: equipment that will allow for grilling, baking, steaming and the preparation of larger cuts of meat, poultry and fish. Kao says expanding cooking stations to include grills, ovens and steamers will take some of the pressure off the wok cooks and add variety to the menu.

“Traditionally, Chinese restaurants use woks because the high heat allows the food to be prepared quickly with a very fresh taste,” says Kao. “But we don’t want to limit ourselves to just the wok.”