Ever wonder how restaurants survive and thrive in this very competitive industry? It’s no longer that easy to get a restaurant off the ground, especially in the “premium casual” sector.
When scanning the dining scene, it seems like two restaurant groups stand out: The Bistro Group (Italianni’s, TGIFriday’s, Denny’s, etc.) and Bistronomia (Las Flores, Rambla, La Lola, Tomatito,Tapas & Pintxos). The question is, how do they do it? Despite the many challenges, they continue to come out with restaurant concepts that draw the crowds.
The answer may lie in the private equity fund that is behind these restaurant groups’ success. Set up in 2014, the Philippine-focused Navegar Fund has seen the restaurant industry’s potential for growth. “Consumer spending is a big driver of growth of the Philippine economy and food accounts for a large percentage of consumer spending,” acknowledges Navegar partner Honorio “Nori” Poblador IV. “When we started the fund, we knew we needed to be exposed to the food sector.”
Choosing the right partners
With the fast food sector dominant, Poblador understood that the Navegar Fund had to look elsewhere for opportunities, thus deciding to zero in on the premium casual segment. “We noticed the premium casual space was quite fragmented, and very few restaurant groups had scale,” observes Poblador. Scale was something the fund was keen on. “Scale is very important from a marketing perspective, an operations perspective, and for dealing with landlords. With a portfolio of brands, there is more to offer.”
But not just any casual restaurant group would do. Poblador asserts, “We have been very deliberate about investing in new concepts, taking into account fit with the portfolio and also the bandwidth of the management team to absorb new concepts.”
Navegar’s investment involves not just providing capital, corporate structure, and financial data analysis, but establishing a shared services group—involving finance, accounting, training and recruitment, purchasing—that would enable the growth of The Bistro Group.
In 2014, the perfect partnership was born with Navegar’s investment in The Bistro Group, a top operator of both foreign and homegrown casual restaurant concepts. “The Bistro Group impressed us the most because the team really knew how to operate restaurants. It was not just theoretical or academic knowledge, but experience built over twenty years,” Poblador shares.
The Navegar Fund’s next investment was the group of successful Spanish restaurants under Bistronomia. “The founders managed to create brands that have a strong following and have some longevity, which is difficult to achieve,” declares Poblador about the decision to invest.
Navegar’s shared services group was also an important factor in the decision to invest in Bistronomia, since it enabled the restaurante group to streamline its own back office operations.
Spanish recipe for success
To learn about the secret to Bistronomia’s success, I recently popped in the newly-opened BCN by Rambla discreetly tucked away in a quiet portion of Legaspi Village. I found the owners Sergi Rostoll and Uri Singla immersed in a discussion about menu changes, while perusing possible wines to add to their cellar. After they concluded their business, I sat down with the two who expressed their thoughts on the past six years since they first opened Las Flores in 2012 with Dani Aliaga. When I queried them on what factors they think have contributed to their longevity and popularity, the two regaled me with the following observations:
1. Create an experience
“We believe in creating a ‘wow’ experience. From the service, interior design, the food and playlist, the moment you step in a restaurant, everything counts,” Rostoll acknowledges. The restaurants go beyond customer expectations, through the creation of distinct personalities for each restaurant, from Las Flores’ business-like aura, Rambla’s cosmopolitan vibe, to Tomatito’s young and sexy atmosphere reminiscent of Spain in the 1980s. The owners add “soul” to every establishment, which works to capture the fancy of both local and international diners. “Each customer is different,” Rostolli adds. “We try to cater to their different personalities.”
“Specialize, don’t do a lot of things,” reminds Singla. BCN by Rambla focuses on charcoal grilling and roasting, complemented by its extensive wine list. La Lola Churreria specializes in traditional churros—a concept so successful they are now opening a branch in Singapore. They continue this idea with their new Italian pasta bar slated to open in late October.
3. The drinks have it
Las Flores was one of the first to recognize the growing importance of beverages, especially cocktails. “We were very strong with cocktails,” Rostoll recalls. “We collaborated with Giancarlo Mancino, a famous Italian bartender and bar consultant.” Although both Rostoll and Singla humbly deny that they were responsible for the cocktail trend that has since swept Manila, they are quite proud of having 25 bartenders in the group, some of whom have competed in international competitions. “We had the gin and tonic cart even before gin buffets were offered in hotels,” says Rostoll as he pointed to the Las Flores cart just outside BCN’s entrance.
4. Keep reinventing
“Even if you are doing well, you have to reinvent yourself. Keep changing and keep doing new things,” Rostoll notes. “We change our menu three to four times a year, so we always have something new.” One example is the Pulpo a la Gallega which is boiled octopus mildly spiced with paprika and Maldon salt and a side of potato confit on the Las Flores menu. The dish was then tweaked for Rambla to become Pulpo a Feira, Rambla Style with Ajillo, replacing the confit with mashed potatoes.
At BCN, the owners decided to use Spanish octopus in their Pulpo Gallega a la Brasa con sus Patatitas, grilling it and serving it with confit potatoes and paprika sauce.
Another creation resulted from Rostoll’s reluctance to serve a Filipino favorite, pork ribs until they met a Spanish producer who makes pork ribs using Iberico pork. “This is a game changer,” he exclaims about BCN by Rambla’s bestselling BBQ Costillar de Cerdo Iberico or grilled Iberian pork ribs drizzled sparingly with a sweet-smoky BBQ sauce.
With the latest addition to the range of brands in their investment, Poblador is enthusiastic about the potential yield in the future. “The rationale for the investment was to combine a management team that can execute to a manual with one that has the ability to create new concepts.”
With Bistronomia now on board, Poblador is enthusiastic about the potential yield in the future.
The challenge though to continue to come up with concepts that will attract diners. “There is a group of customers looking for unique concepts and artisanal ideas, but the challenge is to sustain their uniqueness. In the premium casual dining space, there is still a sizeable market that will continue to patronize the new brands we are bringing in, who are willing to spend and are looking for something new,” Poblador notes.
Homegrown concepts recently rolled out are Helm and Savage by Chef Josh Boutwood and The Bistro Group, as well as Bistronomia’s BCN by Rambla, and Tapas & Pintxos by Rambla at The Grid in Power Plant, Rockwell.
"Good food will sell,” Poblador affirms. “But it is the bare minimum, and you have to keep it consistent so that customers will come back. Outside of that, there are so many things that can go wrong, and you can only control what you can—good food, attention to service, financial discipline. When you cover all those bases, it increases the chance of success.”