Speaker 1: 0:00

Welcome to another edition of Give an Ovation the restaurant guest experience podcast. I'm your host, Zach Oates, and each week I chat with industry experts to uncover their strategies and tactics to help you create a five-star guest experience. This podcast is powered by Ovation, the feedback and operations platform built for multi-unit restaurants. Get the insights you need to improve without an annoying survey for your guests. Learn more at OvationUpcom. And today we have a legend of the industry, Barry McGowan, the CEO of Fogo de Chão for the last 12 years and a 40-year incredible career in restaurants, from the bottom to the top and all around the globe. This guy did not start off as CEO. He started off as working the restaurants. Isn't that right, Barry?

Speaker 2: 0:43

That's correct. That's correct.

Speaker 1: 0:50

Dishroom to the CEO. One of those stories, definitely my whole life. So tell me about this story, man, how do you get from dishes to CEO? And, quite frankly, being the CEO myself now, I kind of feel like it's like going back to the dishes. You know what I mean.

Speaker 2: 1:01

Like it is. It's full circle. That's a great thing. Look, I've been in industry my whole life. There's nothing else I'd rather do To me.

Speaker 2: 1:08

Hospitality and food transcends culture, language. Food brings us together. It's my passion for it. It's also, I would say it's being around people who, I would say all of us in our industry, are different, unique, very diverse, most of us nobody else would hire. So we settled in the restaurant business and we get together.

Speaker 2: 1:27

I mean, we just seem to make it work, this eclectic group of people in hospitality, and it's, again, I would say, universal across the globe. That's why I think hospitality is global in nature. It's not regional or local. You can be global but act very local. But the industry itself is, as we learned during COVID, without it the world is soulless. So I love this interest Never going to retire someday, not be a CEO, but when I leave here I'll just keep investing in great, great restaurants, great hospitality. So, zach, I appreciate your show, sharing people inside of a great industry. That's never going to go away. We are transforming continually and I'd say today you and I are living in a time this industry is going through immense transformation and I would say renaissance in a good way.

Speaker 1: 2:15

I'm really excited about what's going on in the industry. What are some of the movements that you feel like restaurants should really be dialed into?

Speaker 2: 2:20

I think what I love it's going back to what the consumer wants. I mean, I think we went to a style of we became so process driven, that price, process earnings, that we forgot, well, what does the customer want? So I think competition helps reinvigorate that. I think new models have helped disrupt it with fast casual now ellipsing fast food, actually bringing quality back. So all those things are going back to the essence of the consumer.

Speaker 2: 2:45

So I think that whole going around the loop, coming back to what's most important consumer, your demographic, your location and ultimately, how to differentiate and give value for what you're offering so I think that those staples have never gone away. I love that our industry is right back where the consumer wants us. So I tell everybody that's when our industry gets healthier and stronger, not when a few are winning or the customer, the consumer's not winning, they have to settle for things. So now, with so much more choice, so much more convenience, even your show, everything you're talking about is how to drive a five-star experience. I love that Every segment in our industry is thinking about how to make it better.

Speaker 1: 3:29

And I think when the consumer wins again, I mean it creates more opportunity for us. So really excited about the time. So, as you look at, use the word value, which is a pretty hot button topic right now. A lot of people are talking about value. What does that mean? What are consumers looking for? How do you look at value as a brand where you're not like a four day a week type. You don't stop in and spend $5 a few times a week. It's a celebration, it's a business lunch, it's a date night. You don't have a cheap experience there at Fogo de Chão. I'm interested in how you look at the word value in what you do.

Speaker 2: 4:00

Yeah, it's all relative to the experience, zach and I would say look, I dine at Fogo seven days a week because it's so good, it's so diverse. In reality, we have a $10 picanha burger that's half pound fresh ground to an $18 market table all you can experience, to the highest indulgent, a Wagyu for $165. So, depending on your occasion, we have a price point for everyone at any time and we give the same level of service. Service and we usually offer a lot more value for your money in terms of optionality, the ability to customize in the moment and I would say, price value always comes down to it all together your environment you're in the restaurant service, the quality of ingredient and I would say the differential we have is the idea to accommodate every diet tribe in the moment. So the pure idea of customization in the moment is where consumers want to be. Sometimes you just don't know you're hungry, you sit down and then the idea comes to our menu is really a guide on how to dine. So while you're sitting there you can discover, try new things and it's not going to change your price. Not many restaurants you can go and say I'll try the lamb chops hey, tell you what I love some ribeye, hey, let me have a piece of that. Whatever center cut pork chop. So those things, I think, are what are unique to us. But I'd even say our strength is the gathering, the celebration. So we know.

Speaker 2: 5:18

But what we love over the last 10 years, with innovation, we brought it up to a weekday launch. It's fast, immediate, totally customizable. And I would say the reason why I joined FOGO 12 years ago is our menu is whole food, nutrient dense items. So it's not manufactured. You get to customize in the moment. So all that variability has been in the trends for 15 years.

Speaker 2: 5:44

But the model itself we've just taken, and now we continue to innovate around that to make sure that we create occasions for you regardless of diet, tribe, all the health view on whole food, non-processed. Well, we've been there for 45 years. So good news is the consumer is catching up with our model. The demographics are driving it, which is fantastic. So I would say value is all in the equation of your occasion. And how do I give you more experience, more quality In price? I would say our industry has learned a valuable lesson. We've taken two and a half percent price on average for the last 10 years while maintaining margin very hard to do, but our model gives us the flexibility to do that and the reason we say that is we want to make sure to keep price value strong relative to peers and make sure that we continue to add more value to the guests, to the experience. I'll give an example.

Speaker 1: 6:36

By the way, just to be clear, you've taken price 2.5% a year for the last 18 years.

Speaker 2: 6:41

On average the last 10 years. So we really created a long-term pricing strategy. Now we've had times where we've gone up as high as three, three and a half, but we've rolled off on average per year. We're averaging about two and a half. Last five years probably 2.8.

Speaker 2: 6:55

All we're saying is we're very, very cautious on price. Price is easy if you're doing. Well, by the way, our traffic's positive 10 years. So we didn't say that was an excuse to take more price. Well, by the way, our traffic's positive 10 years. So we didn't say that was an excuse to take more price. We figured out how do we give more value for the experience. Because we took price, we added candy, bacon free, we had a grilled cheese and Molly got the honey in addition to what we do. So those little extra, some sums or we call them extra special indulgent piece that's included start to add further value for no extra cost. And that's the way we see pricing should be always in favor of the guest. Operationally we work harder on inputs, the way we can serve, dine and execute, so the guest gets the value, not us. That makes sense.

Speaker 1: 7:39

I love that. I think always having that guest-first mentality is just so powerful. And speaking of that, what do you think are the most important aspects of guest experience nowadays?

Speaker 2: 7:50

The most important aspect, regardless. I think talk a lot about technology. It's really the human capital, the personal and emotional engagement with your consumer. If you're relying on driving consumer engagement just through your phone and through technology, I don't think our industry goes there. I think we talk too much about it. I think we've got to pull it forward to say why am I doing it? How do I remove friction so that I'm really connecting with my guests? So I think, ultimately, your culture is the tip of the spear with your people. You're not scaling your culture and every day and I love your opening five-star experience. Literally it's been our initiative for the last eight years Five-star service. By the way, we're on our fifth year really programmed five-star and we see our star rating going up every year. So I love that whole intro. It's a pursuit. Excellence is a pursuit. You never arrive right. So I think you've got to have technology no-transcript.

Speaker 2: 9:08

We've had operators you know was this for over 35 years or area director level team had been with us over 22 and a half years, and then our GMs have 10 years of tenure. So that tenure passion and we call it mentorship to scale culture is really what's most important to us. Our talent pipeline is three years ahead of our growth pipeline meaning site pipeline. So we're always focusing on people and then we'll find a great site and transform it, but we want to put great people in there and keep growing our culture. That's, I think, how you deliver on the hospitality and, I would say, your product side. So that's where we continue to say is our competitive advantage. We haven't cheated that and we have great owners that have always supported those efforts. Bain Capital has been tremendous in the support of us and working with us to continue to focus more on how we can do it better, which is great.

Speaker 1: 10:03

I love that and having investors who believe in that vision is so important because you don't want to get caught behind a group that is just trying to gouge, gouge, gouge and it's dangerous. I mean you look at so many restaurants who were taken over by the wrong PE groups and what happened. I mean you could look at these textbook cases of Red Lobster and Friendly's and these places where they lost the sight of the vision because they were focused more on the profits and in the case, what they were doing is, you know, you can't take price and reduce quality and service and culture and expect it to work. It doesn't work and we could all sit here in the boardroom and on a podcast and talk about that and think about it. But man, it's tough when you got people that are got their red hot pokers and they're prodding you along. It's a challenging environment.

Speaker 2: 10:54

Well, I would say, zach, you said something. Look, I even say it's not private equity, it's management. Somewhere in there. I think private equity is the oil in engine. They do a great job. In fact, our industry wouldn't be this transformative without private equity. That's why I always tell friends so you just got to make sure. The leadership team and this is why I go back to bringing people from within developing leaders, always for the next level I've been developed by some of the best in industry Doug Brooks, just great people at Brinker International. I grew up in a great platform with people that had my best interests in mind, and that's all I'm as a leader today.

Speaker 2: 11:28

Replicating is the idea of people first. How do you prepare people for the next level? How do you scale culture appropriately so that somebody in the boardroom says you can't do that Private equity? Who doesn't know the difference? Learning today is there's so much evidence out there of how to do it the wrong way, the playbook, and this is why I'd say we're going through a renaissance, meaning there is tons of private equity in our space, more coming. You see it at different levels that are breaking out with new brands, new ideas. So I think I would say.

Speaker 2: 12:05

I love your statement. It really has to go down to, ultimately, the management has to own it, the ownership. If you've got a great team in there, it will basically follow the lead of the ownership. I think we just got to keep developing and maturing our next generation of leadership or an industry to make it better. That's what I hope our industry keeps doing and I see a lot of it happening with my peer groups. I see it in the new exciting concepts coming along and to me there's so much fun, so many great things. By the way, not just in the US. It's been a privilege. We have restaurants all around the world. I mean the stuff that's going on in Riyadh and food, the stuff that's going to the East, south America, asia really great stuff happening that. I think our industry is getting more exciting by the moment.

Speaker 1: 12:51

So yeah, that is really exciting. Well, any tactics that you would recommend to restaurants to try to improve the guest experience.

Speaker 2: 13:00

You bet. Well, I think tactically you talk, we talk technology, but I think tactically go back to the beginning of your process of it's going to sound really fundamental, but it is fundamentals. You know you're hiring, defining your culture and what values work best and then hiring people for values, being really clear about their path and really investing heavily there. That's ultimately what you want in experience is going to all determine. There we say it, cliche it, there's no way around it. If you're just hiring to fill a role and you're growing fast and opening restaurants and you haven't done that, then I'm telling you it's not sustainable, it's harder and you can't keep up with it. By the way, it's not easy for any group that tries to do it. Invest is just, it's almost a fixed cost. You just got to keep leaning in on that and you got to really have a view of your talent has to come from within, where you're going to dilute your culture. It's not rocket science, it's just really hard and it's hard and it takes a long time. But we really hard and it's hard and it takes a long time, but we're a 45 year old brand and proves it can happen.

Speaker 2: 14:00

By the way, texas Roadhouse has done it beautifully and shown the way. The roadies, that culture is powerful. Good example Look at Chili's 50 year anniversary. I'm an old Chili head, by the way, ran into Doug Brooks and he said 50 years and around the best year spent some time with Kevin. I'm so proud of that team because that tells me and it proves to everybody the industry is not broken. You just got to choose to do it right. And the consumer, your team, has to win. But Chili's Texas Roadhouse, great culture, and then there's so many independents coming up doing the same thing that are brightening up. We're a small brand. We own 83 restaurants in America, 106 global but we're excited about those bigger brands that have proven the way and shown us the way to do it, and that's what we're excited about.

Speaker 1: 14:46

And people in hospitality. It's like a lot of people say you can't scale hospitality and we always say there's no other option. Right, there's two.

Speaker 2: 14:55

Darden has done it. I'll give another. Give another example darden multi-platform doing it really well. Gosh brinker, eat brinker cheesecake. So we have plenty of examples of everybody doing it right and scaling it. Well, yeah, when you don't.

Speaker 2: 15:09

What I love is that we just convert those sites into fogo and other new brands. So that's the idea, so that's the beautiful part of industry. We're not going away, we're just getting better. And if you don't show up and you don't do those things, then somebody and I share with our team look, if we don't do it right, somebody is going to convert our boxes. So let's keep long, let's focus on doing it right and thinking long term. Credit, for we always talk about the old class or the next generation. I go boy, look at the stars, look at the big guy. Chili's is something that scream about to say look, when you do it right, what, how, the, where the consumer wants to be. Look at what Texas Roadhouse keeps doing. So those there's a lot of bright line. Again, I'm pointing to Darden. Okay, there's so many great legacy brands that are reinvigorating their brand, reinvesting on the things that matter most and driving great guest experience.

Speaker 2: 16:01

Love that Segmentation of the consumer is what keeps changing, and that's the exciting part.

Speaker 1: 16:05

Now, Barry, obviously you've had an incredible career. You know a lot of people. Who are some people that deserve some shout outs. Who deserves an ovation? Who's someone that we should be following?

Speaker 2: 16:21

Oh gosh, there's too many, but here's three. Because you asked me this question, three come to mind and probably because maybe it's on the private equity investment side, because investing in our industry is crucial to scaling it and transforming it. But who comes to mind is Savory Andrew and Shauna Smith. They're taking new concepts on founder-operated led and helping, I would say, partnering with founders to scale cool ideas. There's really exciting stuff on their platform. Emerging Fund technology meets hospitality. That's next generation. These guys are everything. These guys are investing, are fun hospitality and, I would say, long investing.

Speaker 2: 16:53

And one of my favorite people in the world is Jack Gibbons from F&B Society. So Jack is just an adamant creator, great hospitality and he's unafraid. So you think about those three folks, those three platforms, those three groups. They're just doing great stuff and, by the way, this, as you know, nothing's new. So ovation to them, because everything they're trying and doing with we're all learning from and, by the way, it just makes it better. It's pretty exciting. That's where I go back to Renaissance, that's where the tip of the spear, where all that's happening and all those are scalable ideas if done properly. And those three groups, I think, focus on the scalable piece really well.

Speaker 1: 17:31

Yeah, absolutely, and especially it's been amazing those brands that you mentioned. It's been amazing those brands that you mentioned. It's been amazing working with them and seeing them from side to side and seeing what their guests are saying about them. It's not just on the outside, they're doing cool stuff. I can tell you from looking at their data on the back end, using Ovation. They're doing some amazing things. So love those three shout outs there. Now, barry, where can people go to find and follow you? And Fogo to Chow.

Speaker 2: 17:58

Well, fogocom, pretty simple. Fogocom, Remember, fogo is fire, so our fire campaign you can look up. So Fogo's fire, it's not just you know the fire emoji whenever you see it, that's just remember Fogo, that's it. So that's where we're fire. I'm just on LinkedIn, but Fogocom is how you can reach us.

Speaker 1: 18:15

Awesome. Well, barry, for reminding us how to take a great local experience global. Today's ovation goes to you. Thank you so much for joining us and giving an ovation.

Speaker 2: 18:24

We appreciate all you do for our industry. Thank you.

Speaker 1: 18:27

Thanks for joining us today. If you liked this episode, leave us a review on Apple Podcasts or your favorite place to listen. We're all about feedback here. Again, this episode was sponsored by Ovation, a two-question, sms-based actionable guest feedback platform built for multi-unit restaurants. If you'd like to learn how we can help you measure and create a better guest experience, visit us at OvationUpcom.