g to the fast-casual market with strategic investments in emerging brands.The casual-dining chain recently acquired a minority ownership in PizzaRev, a Los Angeles-based fast-casual pizza chain with eight locations and at least 15 on the way, and plans to invest in more fast-casual concepts.
“We just believe that there’s opportunity in that space,” said Kathy Benning, executive vice-president and chief strategy officer and business development, during the company’s analyst meeting on April 2. “It’s the fastest-growing restaurant industry segment, as consumers continually seek the quick-service-style speed coupled with a desire for higher-quality food and beverages. And this also allows us to build both brand and restaurant segment differentiation within our enterprise.”
With annual sales in the $1.2 million to $1.3 million range, PizzaRev offers a craft-your-own-pie concept that appealed to Buffalo Wild Wings.
“Operationally, they’re focused on better pizza, superior service, enhanced execution, and differentiating their brand,” Ms. Benning said. “The simplicity of operations are high-quality ingredients, and high-quality ingredients really make it appealing to our franchisees and for franchisees in general.”
The investment in PizzRev is part of a long-term growth strategy to build a portfolio of diversified restaurant brands with plans to add one or two more this year.
“So, PizzaRev is exciting and just the beginning of our continual pursuit to identify and build a portfolio of diversified brands contributing to our long-term financial goals,” Ms. Benning said. “Moving ahead, we will continue to evaluate additional concepts, with the goal of investing in three to five concepts, with the vision of growing at least one of them to be the next Buffalo Wild Wings. Our emerging brands business is going to be an important component of achieving our enterprise vision to be a growth enterprise of 3,000 restaurants, creating the ultimate social experience worldwide.”
As Buffalo Wild Wings scans the marketplace for potential investments, the company said it is seeking a fast-casual concept that offers a distinct experience within the market it serves. The brand must be nationally relevant, appealing to tastes and regions throughout the United States, as well as “franchiseable,” Ms. Benning said.
“And next, we assess the brand’s culture and its potential to fit with our enterprise,” she added. “It’s very, very important to us.”
Also driving Buffalo Wild Wings’ strategy is a small-bets approach of low-risk investments.
“This is really small bets on a number of concepts, so that if one or two don’t work — let’s say PizzaRev doesn’t work — it’s not a huge investment,” said Sally Smith, president and chief executive officer. “It doesn’t break the company apart. It’s like opening a couple of restaurants that didn’t make it. But we’ve hopefully done the vetting process and really investigated, got to know the founders; what's the motivation behind it in making that investment?”
