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View Real Time Cases’ Managing Chaos in Jose Andres Kitchen. While chaos can mean disorder, is this the intent of Jose Andres? Use at least one new sciences systems theory (i.e., chaos theory, complexity theory, or self-organizing systems theory) to analyze the management theories and practices guiding Chef Jose Andres’ management decisions and actions. Case FocusManaging a chaotic creative process and struggling with the operational balance of art vs. science.Case IntroductionJoe Raffa is an Executive Chef at ThinkFoodGroup, the restaurant group inspired by the creative leadership of Chef José Andrés and his Spanish culinary excellence. The development team is composed of very creative individuals who are not always the most organized. Joe wants to know how would you control the chaos of last minute ideas and changes? He shares a vignette from the Las Vegas grand opening of their China Poblano restaurant to illustrate the chaos; José likes to walk into the restaurant with his pink and blue highlighters, slashing menu items that do not work and demanding new ideas be implemented immediately - in this case, just 2 hours before the grand opening. How can the development team sustain this creative tension while still innovating their culinary products and maintaining the operational effectiveness to drive the bottom line? company_background.pdf embrace_complexity.docx embrace_complexity.docx Unformatted Attachment Preview Company Background Packet Copyright © Real Time Cases 11062018 All Rights Reserved. The content of this document and accompanying videos may not be reproduced or distributed without the express written consent of Real Time Cases Inc. 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Proprietary & Confidential 2 COMPANY PROFILE ............................................................... 4 Leadership Team .............................................................................4 Company Overview ..........................................................................5 Fast Facts ........................................................................................5 History and Development .................................................................6 Industry ............................................................................................8 Competitive Environment .................................................................9 Product ............................................................................................9 Sales and Marketing ......................................................................10 Business Update ............................................................................10 Proprietary & Confidential 3 Company Profile Company Name: Location: Founded: Website: Holding Type: Company Size: Estimated Valuation: Industry: ThinkFoodGroup Washington, DC 1993 www.thinkfoodgroup.com Private 25+ restaurants >$100M sales Restaurant & Hospitality Leadership Team José Andrés Kimberly Grant President Chief Executive Officer Gary Evans Michael Doneff Eduardo Sanabia Chief Financial Officer Chief Marketing Officer Chief People Officer Proprietary & Confidential 4 Company Overview ThinkFoodGroup (TFG) is the company behind José Andrés’s restaurants, consumer food products, media, educational initiatives, and philanthropy. Together with his partner, Rob Wilder, Andrés pursues a mission of changing the world through the power of food. TFG restaurants reflect the authentic roots of each concept and showcase Andrés’s passion for telling the stories of a culture through food. ThinkFoodGroup is committed to fostering future generations of innovators and activists, changing the world through the power of food. José Andrés is an internationally recognized culinary innovator, author, educator, television personality, humanitarian, and chef/owner of ThinkFoodGroup. A pioneer of Spanish tapas in the United States, he is also known for his groundbreaking avant-garde cuisine. Andrés’s award-winning group of restaurants includes locations in Washington, D.C., Miami, Puerto Rico, Las Vegas, Los Angeles, and Philadelphia, as well as in Mexico City—his first location outside the United States. TFG’s first Texas restaurant opened in 2018, and Andrés has signaled he will be opening more restaurants in Dallas. He is a committed advocate on food and hunger issues and is known for championing the role of chefs in the national debate on food policy.1 Fast Facts 1 • Celebrity chef José Andrés is ThinkFoodGroup’s charismatic co-founder; in 1993, Andrés, a Spanish immigrant, brought tapas to D.C. with Jaleo • Today the TFG restaurant empire employs 1,000+ • $100M+ revenue; industry profit margins are only 5\%–8\% • 25 total restaurant units • Price points range from $5 to $500+ per person • Beefsteak, TFG’s veggie-themed fast-casual chain, launched in D.C. in March 2015 and now has five locations • 10\% of Americans’ jobs are in the restaurant industry Biography - About José Andrés. For a historical timeline of José’s remarkable career with TFG, visit http://www.Joséandres.com/en_us/bio Proprietary & Confidential 5 History and Development TFG’s business model is designed to capitalize on Andrés’s vision and culinary passion. He is the ultimate judge for deciding which products TFG sells and the creative director behind their restaurant operations. Andrés first experienced success in 1993 when he partnered with Rob Wilder and Roberto Álvarez to bring Tapas to D.C. in their now Michelin-starred restaurant, Jaleo. Andrés’s success with Jaleo ignited TFG’s growth in the following years, leading them to expand their business operations. With TFG’s business growth, Andrés’s name grew, and he has become one of the world’s most renowned chefs. The following timeline highlights the development of TFG and Andrés: • • • • • • • • • • 2001 o Jaleo opens 2nd location in Bethesda, MD 2002 o Zaytinya Turkish, Lebanese and Greek Cuisine opens in Washington, D.C 2003 o o Andrés receives the James Beard Award: Mid-Atlantic Michelin-starred, six-seat bar minibar opens inside Café Atlántico 2004 o o o José recognized as Chef of the Year by Bon Appétit Magazine Oyamel Cocina Mexicana Mexican Cuisine opens in Crystal City, VA Jaleo opens its 3rd location in Crystal City, VA 2006 o The Restaurant Association of Metropolitan Washington names Andrés Chef of the Year 2007 o Andrés inducted in The James Beard Foundations Whos Who in American Food & Wine 2008 o Oyamel Cocina Mexicana moves to D.C. 2009 o The Bazaar by José Andrés & Tres by José Andrés both open at the SLS Hotel Beverly Hills 2010 o o GQ names Andrés Man of the Year SAAM by José Andrés opens at SLS Hotel Beverly Hills 2011 o o o Jaleo’s 3rd location, China Poblano, and é by José open in The Cosmopolitan in Las Vegas Andrés receives Order of the Arts and Letter Award from Spain’s Ministry of Culture and Vilcek Foundation Award Restaurant Hospitality Magazine awards Andrés and Wilder the Richard Milman Award Proprietary & Confidential 6 • • • • • • • 2012 o o o The James Beard Foundation names Andrés Outstanding Chef America Eats Tavern replaces Café Atlántico as a pop-up restaurant The Restaurant Association of Metropolitan Washington presents José with the Duke Zeilbert Capital Achievement Award 2013 o o o o o TIME Mag names Andrés one of the 100 most influential people in the world Jaleo renovated and minibar reinvented in D.C. The Bazaar opens 2nd location in SLS South Beach, FL Mi Casa opens at Dorado Beach, the Ritz-Carlton’s Reserve Pepe food truck launched—Spanish sandwiches to the streets of D.C., MD, & VA 2014 o o Andrés is first chef ever to be awarded the Hispanic Heritage Award barmini by José Andrés opens in Penn Quarter, D.C. 2015 o o o President Barack Obama names Andrés Outstanding American Citizen by Choice Bazaar Meat opens at the SLS Las Vegas Reimagined America Eats Tavern opens at The Ritz Carlton in Tysons Corner, VA 2016 o o o o o o o China Chilcano Chinese and Japanese-influenced Peruvian Cuisine opens in Penn Quarter, D.C. TFG enters fast-casual food scene with Beefsteak opening in Tenleytown, D.C. President Barack Obama awards Andrés the National Humanities Medal minibar awarded two Michelin stars Oyamel, Jaleo, China Chilcano, & Zaytinya awarded Bib Gourmands 4th Bazaar, Bazaar Mar opens in Miami, FL Fish by José Andrés opens at MGM National Harbor, MD 2017 o o o International Association of Culinary Professionals Awards Andrés Lifetime Achievement Award CARACEN awards Andrés the Saul Solórzano Justice Award Historical Society of Washington, D.C. honors Andrés for Distinction in Corporate Achievement 2018 o o o o The James Beard Foundation names Andrés Humanitarian of the Year Zaytinya opens 2nd location in Frisco, TX Somani opens within The Bazaar Beverly Hills TIME names Andrés one of the 100 most influential people Proprietary & Confidential 7 Industry TPG is involved in the restaurant industry as well as the Consumer Packaged Goods (CPG) industry. Restaurants: The National Restaurant Association projected in 2016 $783 billion in restaurant sales across 1 million+ locations and 14.4 million employees. 2 Growth is projected at a national average of 5\%, with a range at the state level from 2.8\% up to 7.3\%. However, the restaurant industry is fragmented and quite competitive, especially for chefs looking to make a name for themselves. Figure 1: Projected Restaurant Sales Growth in 2016 Source: http://www.restaurant.org/News-Research/Research/Forecast-2016 Consumer Packaged Goods (CPGs) The CPG industry is one of the largest in North America, valued at approximately $2 trillion. Although growth has slowed in this industry, CPG companies still benefit from large margins and strong balance sheets. Traditional Food and Beverage (F&B) brands are struggling to connect with consumers in purchasing decisions, as more consumers are seeking nontraditional values (other than price, taste, and convenience) against a backdrop of stagnant industry revenue growth (2.6\% from 2012–2014). Consumers have unprecedented power to access product information and share via social, in many cases signaling a distrust for established food industry3 and an openness to localized, creative, global-influenced cuisines. 2 3 http://www.restaurant.org/News-Research/Research/Forecast-2016 http://www.gmaonline.org/file-manager/FMI_GMA_Report_rev_008.pdf Proprietary & Confidential 8 Competitive Environment Restaurants: The NV, DC, and FL markets, in which TFG has established a strong presence, have above average growth rates (see graphic below). This means TFG has to be able to maintain its uniqueness in order to differentiate itself from competition. Aside from its sit-down conventional restaurants, TFG’s Beefsteak stands to capitalize on the quickly growing fast-casual dining industry by appealing especially to the vegetarian and vegan consumers—although it offers salmon and chicken sausage—who often lack the variety other consumers enjoy. For TFG, Beefsteak, with the right strategy, has the potential of becoming the Chipotle of vegetables. Consumer Packaged Goods: CPG companies often face stiff competition. Shelf placement, brand recognition, and mass advertising can greatly influence sales of CPGs. Coke, Nestle, PepsiCo, and Kraft are big conglomerate players in the Food and Beverage space, operating many strong brands with barriers to entry for lower-end products in place, such as expensive distribution and habitforming products. While CPG companies that sell those products—such as bread or other basic food—are less affected by market fluctuations, this would likely not hold true for higherend CPG companies.4 According to a PwC Consumer Insights 2016 report, it is a good time to be a small, growing player in the CPG space: “Changing consumer attitudes, behaviors, and preferences— compounded by sweeping changes in technology—have necessitated dramatic change in the CPG industry over the past decade.” New entrants with innovative products and packaging as well as a keener response to varied consumer concerns, such as natural ingredients and social responsibility, are keeping leading manufacturers on the back foot. CPG CEOs are concerned about less predictable shifts in consumer preferences, and scale is not always the advantage it used to be, as barriers to entry are lower than ever. Entrants engage directly with digitally savvy consumers using data analytics to better target shopping segments. 5 Product The TFG portfolio of more than two dozen establishments runs the gamut, from the elite highend to the affordable fast-casual and food truck. The common theme is a business strategy with heavy focus on creating a unique customer experience through delivering unusual and creative foods using high-quality ingredients to consumers across all price points. On the other hand, TFG’s CPGs are premium cooking/food products, which Andrés uses in his restaurants as well as on his TV shows. TFG doesn’t produce these goods. Instead, they represent Andrés’s curated favorites of imported Spanish staples. 4 Investopedia: Consumer Packaged Goods (CPG) Definition. http://www.investopedia.com/terms/c/cpg.asp#ixzz4HhoGr644 PwC Retail & Consumer Insights: 2016 Financial Benchmarking and Industry Trends. http://www.gmaonline.org/filemanager/About/PwC_181108__RCI_Fin_2016_Report_v8_interactive.pdf 5 Proprietary & Confidential 9 Sales and Marketing José Andres is a celebrity chef with a fan base reaching more than 260k followers on Instagram and Facebook, and more than 670k followers on Twitter. This makes Andrés TFG’s strongest marketing tool by far. He is the public face and creative force behind the corporation. To his consumers and fan base, which he is very engaged with, Andrés is not just another highly awarded chef. He is a culinary innovator, a passionate advocate for food and hunger issues, an author, a TV personality, and a symbol of the American Dream for many entrepreneurs and immigrants. Thus, TFG utilizes Andrés’s popularity and charisma to market and sell virtually all of their products. Similarly, hotels and partners realize this also, and they will include his name explicitly in the name of the restaurants in many cases. For their CPGs, TFG’s strategy is to seek out partnership with the chef’s favorite paragon producers/suppliers of niche Spanish-themed packaged food products and enter into cobranding agreements featuring the José Andrés brand alongside the producer’s brand on the label, creating mutually beneficial value. Business Update ThinkFoodGroup and José Andrés plan to open their first New York City all-day dining and market destination in Spring of 20196, located underneath the High Line at 10 Hudson Yard. Named Mercado Little Spain, the new Spanish food hall is a joint venture with Related Companies and Oxford Properties Groups. Andrés will be partnering with Spanish chefs Ferran and Albert Adrià to form the creative team. The space itself measures 35,000 square feet of indoor/outdoor space and will feature three restaurants offering different experiences of Spanish cuisine as well as several bars. New York City’s High Line is a popular public park built on a historic freight rail line elevated above the streets on the West Side of Manhattan. 6 REW: Think Food Group to open Spanish dining concept at 10 Hudson Yards. June 21, 2018. http://rew-online.com/2018/06/21/think-food-group-open-spanish-dining-concept-10-hudson-yards/ Proprietary & Confidential 10 [Embrace Complexity] So, I am Michael Doneff. I’m the Chief Marketing Officer at ThinkFoodGroup. I oversee everything at ThinkFoodGroup that is marketing, branding, public relations, digital, offline, I also get into basically every touch point that is not the food and the service. We’re intent on being a non-corporate, very open-minded, nimble organization, but to do that and to be successful you also have to have some sort of process. I mean, Jose’s motto is “Embrace Complexity.” My version of that is, “Plan for Complexity.” You know, I think theres a way, there’s 90\% of the craziness and spontaneity that goes on here that we can plan for. Because there’s certain types of spontaneity that happen. So that’s our job to sort of manage around it. Not to stifle it, or limit it, but just really plan for it and embrace it. And create structures and processes that are often invisible to creative people like Jose, but they are what keep him going. And keep the business as a plan for him to create more of this stuff. So I think he’s appreciating it now, because in the past few years I’ve joined, Kimberly joined, and we’ve created this level platform that he’s then, he can just dance on top of it. And he doesn’t have to worry about, “Is this being done? Is this being done?” Operationally we are sound, service-wise, you know, the food when he does a tasting, or comes up with a recipe, he knows that is going to be carried through to fruition. When he comes up with a design or a logo, he knows I’ll take it from there. And I think he enjoys that, almost freedom, to be able to - that he can just come up with ideas and - and we got the rest. [Embrace Complexity] So, I am Michael Doneff. I’m the Chief Marketing Officer at ThinkFoodGroup. I oversee everything at ThinkFoodGroup that is marketing, branding, public relations, digital, offline, I also get into basically every touch point that is not the food and the service. We’re intent on being a non-corporate, very open-minded, nimble organization, but to do that and to be successful you also have to have some sort of process. I mean, Jose’s motto is “Embrace Complexity.” My version of that is, “Plan for Complexity.” You know, I think theres a way, there’s 90\% of the craziness and spontaneity that goes on here that we can plan for. Because there’s certain types of spontaneity that happen. So that’s our job to sort of manage around it. Not to stifle it, or limit it, but just really plan for it and embrace it. And create structures and processes that are often invisible to creative people like Jose, but they are what keep him going. And keep the business as a plan for him to create more of this stuff. So I think he’s appreciating it now, because in the past few years I’ve joined, Kimberly joined, and we’ve created this level platform that he’s then, he can just dance on top of it. And he doesn’t have to worry about, “Is this being done? Is this being done?” Operationally we are sound, service-wise, you know, the food when he does a tasting, or comes up with a recipe, he knows that is going to be carried through to fruition. When he comes up with a design or a logo, he knows I’ll take it from there. And I think he enjoys that, almost freedom, to be able to - that he can just come up with ideas and - and we got the rest. My name is Eduardo Sanabia I am the chief people officer for ThinkFoodGroup. we are a company that has over 23 years in the making. However for a lot of aspect, we have operated like a startup because of the constant evolution of the company. We like to evolve and reinvent ourselves over and over and over. That puts you in a situation where you always kind of like starting something. A couple of years ago, 5 years ago when I started, we were a support system here at the home office we call ourselves home office not corporate office or anything like that because that’s not part of our DNA. But the idea is that the people that work in this office supports the operations, because they operations is where everything happens is the revenue generating of the whole company. We were 15-17 people, today we have close to 60. So there has been a huge increase since we started. The food industry is booming. It seems like every big city has a food scene in their downtown or everywhere. There’s a lot of competition. We have more restaurants in our markets, yet it’s the same applicant pool. That’s one of the things we strive to work harder on. And the fact is, how are we going to get people coming from the outside into our restaurants, but also how are we going to develop our own people so we can have our own pipeline to fill those jobs that starts opening. So we work with very closely with restaurants with recruitment also on development initiatives such as we just created a leadership model where we have planned out a plan for employees on how to move up the ladder so to speak in our company. So anywhere from you know a runner or a dishwasher or line cook could sit down with him and say hey you know what I want to be a general manager one day or I want to be a head chef of the re ... Purchase answer to see full attachment