Conventional wisdom says your restaurant or catering business should appeal to the broadest number of people. So how do those targeting niche markets chase success?
You couldn’t get a more niche business than Ritual restaurant. It’s set well back from the tourist strip in Nelson Bay, tucked in the corner of a suburban shopping centre, yet specialises in molecular cuisine (as championed by international stars Adria or Blumenthal). And it certainly wasn’t a successful business vision that drove Carl Kenzler and his wife Kelie to embrace this style of cooking: “The attitude of most people, when we decided to do this, was ‘you’re mad’,” Carl says.
The decision was actually driven as much by passion and excitement for the food as anything else, but in the process of embracing that, the Kenzler’s have discovered more about successfully targeting a niche than many businesses. And those key lessons involve creating customers rather than finding them, and being proactive about creating word-of-mouth referrals, rather than sitting back and waiting for them to happen.
According to Ed Thomson, owner of Ed Dixon Food Design, a caterer in Melbourne that specialises in a design-focused catering service that appeals to the city’s architecture and design firms; “95 per cent of our work is from word-of-mouth, and that comes from doing a good job. But to ensure those referrals continue, we need to make sure we do everything to guarantee our reputation stays at that high level.”
While the conventional wisdom of having a successful restaurant (or catering business) is to appeal to the broadest number of people possible, businesses like Ritual restaurant and Ed Dixon Food Design have found success and fulfilment targeting a niche that reflects their own passions and interests.
For Carl and Kelie Kenzler, their challenge was finding a focus for their business that got people driving up the highway from Sydney (or Newcastle), through Nelson Bay’s pretty bay-front tourist village, and into the backblocks of town. And one thing was for certain—their previous vision for Ritual wasn’t doing it.
“We opened in October 2005, as an organic café specialising in wholesaling organic, gluten-free food and so on,” says Carl. The location was well-suited in terms of size and rent for wholesaling, but quite poorly suited for walk-in business. “The café and wholesaling was a lot of work for very little money and Carl was losing his passion and interest in cooking,” says Kelie. Carl had years earlier read an article on Heston Blumenthal and what he was doing at The Fat Duck, he had found it interesting but it seemed unrealistic to use in any of his previous positions. “When you’re an apprentice, you want to do this kind of food, but no-one actually does it, so you don’t get an opportunity to learn it,” Carl adds. Kelie’s science degree and experience in research helped with seeking out these new techniques and concepts and “the more I read and found the more excited I became”, says Carl
They decided to change their business concept and developed an innovative menu style where there was no written menu. Instead they took their clients on a ‘flavour journey’—providing taster spoons containing the base flavours of dishes, and asking the diners to choose via their palate. “Our aim is to get our diners thinking about flavours and selecting based on their preferred tastes,” Kelie says. Their menu has evolved since opening: “We quickly discovered customers wanted identifiable entrees, mains and desserts with their meals,” says Kelie. Their tasting menu comprises 12 courses including an entrée, main, and dessert along with unique, fun interim dishes and palate cleansers. “It is degustation style with a twist,” says Carl.
The restaurant seats 16 maximum, and the Kenzlers see this as an advantage: “We have purposely limited our business to maintain and grow the quality of our cuisine including the service. We analysed spend per head and ratios of customers to floor and kitchen staff when compared with profit margins and discovered that if we wanted to maintain our standards we needed to keep our seating to 16. This intimate number of diners also allows for me to walk out to the tables afterwards and gain direct customer feedback. It helps us evolve our dining style and menu,” says Carl.
Today, Ritual is a multi-award-winning destination restaurant that has created a dynamic reputation for itself. The Kenzlers realised intuitively that Carl’s passion for what he was doing was their strongest selling point—and in a sense, defined Ritual. To capitalise on this they have donated their time for community events such as cooking demonstrations and degustation dinners where “we just cover our costs but get excellent publicity” Kelie explains. “It’s about experiencing the food,” says Carl. “We did the Taste of the Bay early on when we opened, and handed out garlic fairy floss on rosemary skewers. Now, three years later, people still talk about it.”
If you’re passionate about something, you can transfer it to anything you like,” says Janet Hollyoak, general manager of Sydney’s Redoak Boutique Beer Café. In Janet’s case, her brother, David, was passionate about beer and food. He has picked up a number of awards for his brewing efforts, including 18 awards at his inaugural Australian International Beer Awards 2004, the Grand Champion trophy at the Australian International Beer Awards 2006, two gold medals at the World Beer Cup 2006, Champion Small Brewery AIBA 2008 and a third gold medal at World Beer Cup 2008. Last month he also picked up another gong at the Australian International Beer Awards.
“We decided to do the Redoak brewery and the restaurant together,” says Janet. “It was about 14 years ago that David decided the brewery was what he wanted to do. He had always believed that beer should be on dining tables rather than just wine, and that Australia didn’t really appreciate the way beer and food went together. And he’s always been up for a challenge. So when he told me he wanted to start a brewery I fell off my chair, but when he told me he wanted to do a restaurant as well, I was floored.” Although the Beer Café looks, at first blush, like a marketing plan for the beer, Janet says the plan was always that the restaurant was intended to stand on its own: “When we started our aim was to create a restaurant people come back to regularly. We can’t grow and develop a business for one-off special occasions. So we’ve tried to be careful with our price point for that reason.”
They have done some local marketing, but like many others rely on word-of-mouth—about David’s passion for the beer. “We’ve been able to transfer it through our love of food, with the love of beer and on a wider scale to people willing to walk into a bottleshop and buy something to drink,” she says. “And I think as we grow we can get more value out of that sort of promotion—particularly as we get the brand out there into the market place we can grow organically.”
That type of growth is what Ed Thompson of Ed Dixon food design has experienced. The catering firm offers a service that is based strongly on design principles for the entire event—from the style of the food to its presentation and the decorative styling of the party premises. Not too surprisingly, Ed Dixon has become a hot favourite for many of Melbourne’s top architecture firms and design businesses.
These people are design savvy, and they expect us to provide an event and food that has a continuity to it,” says Thomson. “But we need to keep doing that time and time again, and I think that is the success of the business.
While Ed Dixon Food Design offers a specialised service, Thomson says she also knows the company must be able to compete with every other caterer in the market. “Staying in business is always hard, but when you are in a niche area, it’s even harder,” she says. “People look at one quote compared to another and wonder about the price difference, but they are usually not comparing apples with apples: “When people see the high standard of event we do, they usually don’t question things any more. They are satisfied they are getting what they pay for.”
Still, there was sufficient demand to fuel growth—growth which Thomson resisted. She made a strategic decision a few years ago to focus on the type of client she is best suited to, and instead turn over extra business to other caterers.
“We have the potential to be a medium business, but our mentality remains that of a small operation, with personal service and that attention to detail,” she explains. “We do all varieties of function—sometimes as many as two or three a day—but we are at a point where we can say no to things that are not suited to us. At the end of the day, I want to enjoy my work and be proud of it.”