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Changes in Latitudes, Changes in Attitudes
January 3, 2009
Every now and then a musician can score a really successful restaurant on the basis of their popularity. Justin Timberlake has Southern Hospitality in New York City. Toby Keith has I Love This Bar & Grill in Las Vegas. Jennifer Lopez has Madres in Pasadena. Sammy Hagar has Cabo Wabo Cantina in Cabo San Lucas. Gloria Estefan has Lario's in South Miami Beach.
But who is really making the big bucks in our industry? None other than Mr. Jimmy Buffett. His Margaritaville in Las Vegas is the second highest grossing restaurant in the country, clipping in at $43 million last year. I know. You want to know who was number one. It's human nature. It was Tao in Las Vegas at a miserly $67 million last year.
As if having the second highest grossing restaurant wasn't impressive enough, there are 15 other Margaritaville's around the country, and some neighboring countries. And if that isn't enough to grab your attention, Jimmy also licenses the 38-unit Cheeseburger in Paradise chain to OSI Partners (the Outback people). I don't know about you, but if I could have two big chains named after two of my songs I would be writing songs every day.
Jimmy just turned 62 on Christmas Day. He has always made more money from touring than from album sales, but it is unusual for a musician to have as diverse a source of income as he does. Most musicians make their money from music royalties, album sales, concerts, T-shirts, etc. If they are lucky, and have good financial managers, they might even get some investment income.
Jimmy pulls in about $40 million per year. He makes it the way that other musicians do. And he makes it from his restaurant enterprises. He also makes it from selling food and alcohol retail products. There are Margaritaville salsa, tortillas, and dips in Wal-Mart and other stores. He sells Landshark beer and Margaritaville liquor. And there are Margaritaville retail stores selling a full line of tropical clothing, shot glasses, etc.
What's next? As soon as the economy strengthens Harrah's has teamed up with Jimmy to develop a $700 million Margaritaville Casino & Resort in Biloxi, Mississippi. After all, Harrah's is his partner in Las Vegas with the high volume Margaritaville on the Strip.
I can't help but believe that Bahama Breeze tried to cash in on a little of the magic that Jimmy demonstrated was there with a lifestyle restaurant offering a tropical party 365 days a year. That's okay. There is plenty of room in the market for other concepts offering us an opportunity to enjoy the beach lifestyle. Even if it only lasts for the length of a meal.
Every now and then the slackers win. Even if this slacker has worked 40 years to become an overnight success. A $43 million a year restaurant. That buys you respect, even in a town like Las Vegas. And that's more than just a state of mind.
Posted by Lane Cardwell on January 3, 2009 | Comments (9)
Reader Comments
at 1/4/2009 8:45:27 PM, Mark M commented:
Wow, you must be looking for another board seat, Darden must be the target! Come on Lane, most industry professionals understand that Margaretville is a lifestyle aspirashional concept a "third place" a "lifestyle escape" complemented by Mr. Buffett and his ongoing legacy. Bahama Breeze was Darden’s answer to what they (Darden) again wrongly perceived as a trend; Caribbean & Caribbean flavors. When at the time in-depth industry research showed that bold flavors and authentic flavors were in fact a strong long term trend. Caribbean was only a fad, it lasted like most fads 19 months. Bold flavors with natural authentic flavors via spice, plant continue to drive menu development. This continues as the ongoing trend today. Darden has a great PR group; they make Bill O’Riley look like a first grader at spin. I give them credit for experimentation but they have proven repeatedly Orlando is there focus! The US is much larger and has different consumer traffic patterns, preferences and perception of perceived value. They might try starting a new concept in a different state other than Florida, other than a highly dense tourist market. Then they might not write off another $300,000,000, yes 300 million! Yes, over the years 300 million on multiple concept frailer write offs. Credit yes, approval no, success not even close! Survival is assured due to current market size of their two main concepts. However, a word to the wise, don’t get spun by true spinners of spin!
at 1/4/2009 9:16:06 PM, Lane commented:
I agree about starting everything in Orlando. And on International Drive at that. It is a shame about Bahama Breeze, however. Excellent food and a top knotch bar program. However, buildings were too big, live entertainment is tough to manage, and some of the locations didn't make sense for the type of concept. I am open for ideas for other companies that are standing at the plate and taking a swing at the ball. I mostly see a landscape of LTO's coming out of casual dining.
at 1/5/2009 2:45:54 PM, Steve J commented:
Lane, the questions is what do consumers think of casual dinning? There has been a dramatic shift in how people eat, when they eat and what they like to eat. These questions are much more important than utilizing our self-imposed industry labels. It is obvious that all many current C-Level executives are clinging to “their” definition of casual dinning not consumer preferences. If the consumer has moved, might the specific chain leaders need to change their own niche positioning? It appears via traffic counts and the consumer is shifting. Current industry research show the shift in frequency is much greater for boomers than Millennial’s. Which makes since most boomers lost substantial sums of money out of there 401K or IRA accounts while Millennial’s don’t have one or there were very small. If that is the case; then one might conclude boomers shift in spending might not recover as rapidly as in the 80’s or 90’s industry recession set backs. C-level executives that don’t adjust pricing, menu mix and utilize the we can wait it out philosophy might well be waiting it out entirely. This is not the time for mediocrity and or complacency small appearance of action via an LTO to buy time will not be suitable for the next 24 months. Organic makeovers can retain brand legacy while redefining, aliening and positioning the brand with today’s consumer. These organic makeovers must be based on research and viewed with objectivity. This may be to big an undertaking for many current C-level executives. There are consultants like myself who work in this arena everyday are much better accustom to viewing transformation change and facilitating future success. On the very bright side those who do will be big winner for years to come. To paraphrase Jim Collins “built to last means built to change”; in a flat world we are lucky we can as an industry change and change faster than most other industries.
at 1/5/2009 8:17:14 PM, JB McD commented:
Don't over think things - it's nice to see a "theme" or "niche" or "celebrity" restaurant do well. They were smart and followed the proven formula - Build on an A+ location, create a unique (in their case a tropical vacation like) atmosphere, make it fun and most importantly - keep it simple. We in the restaurant business sometimes get caught up in our own hype and out think our guests. I don't think that Jimmy Buffet would ever be accused of that and he brings the same atmosphere to his concept. Just keep it simple, just keep it fun. By the way - the Jerk Salmon is awesome.
at 1/6/2009 3:51:59 PM, Growth wins commented:
In the chain game, you need more than just a one good location. The concept has to speak to consumers.
at 1/6/2009 4:42:02 PM, Steve J commented:
Wow, how exciting of a time is it! Just look at PR from restaurant companies and aggressive customer focused promo's are poping up daily! Those with the most customers will win!
at 1/7/2009 2:13:46 PM, Carol commented:
Wow Lane! You hit a few nerves there! I love your blog and congrats to Jimmy Buffet. I think that the TIME of the consumer is the factor that everyone needs to focus on... Time is our most precious resource and one hour waits and expensive food don't fit (unless we are on vacation at Disneyworld! ) :)
at 1/8/2009 1:06:19 PM, Jeffrey Summers commented:
I just finished an interview with a Dallas Morning News reporter about this very issue. The bottom line, also hit upon here, is that this isn't a recession, it's a recalibration. Operators, especially casual dining, beware.
at 1/18/2009 12:28:17 PM, Sherrie Philip commented:
Is it possible to get permission to print this article in our next news letter?
Sherrie Philip
Las Vegas Parrot Head Club
President (shergirl@cox.net)