One year after buyout by Piccadilly Cafeteries Inc., chain is ready to forge ahead

Ralph & Kacoo’s set to test the waters: one year after buyout by Piccadilly Cafeteries Inc., chain is ready to forge ahead

Peter O. Keegan

Ralph & Kacoo’s set to test new waters

BATON ROUGE, La. – Having spent more than a year streamlining operations, Piccadilly Cafeterias Inc. is poised to march its Ralph & Kacoo’s Louisian-style seafood chain into new markets.

Piccadilly bought the 20-year-old chain from founders Ralph and Kacoo Olinde for $38.1 million in December 1988 in a move to diversify outside of cafeterias – a maturing segment in which the company operates 132 units.

“Many analysts were surprised that we didn’t start expanding right away,” says Piccadilly senior executive vice president Malcolm Stein, “but after we bought the company, we took time to learn the ropes and put plans in motion.”

The sale included the entire Ralph & Kacoo’s operation: three units in Baton Rouge; two in New Orleans; one in Bossier City, La.; a Dallas unit; a catering facility in Glynwood; and the Cajun Bayou Management Co.

Cajun Bayou encompasses a purchasing and distribution commissary, a seafood-processing plant, a laundry facility and three refrigeration trucks.

Piccadilly is targeting expansion within a 500-mile radius of its Baton Rouge headquarters. The newest Ralph & Kacoo’s is slated to open in Dallas by summer’s end. The company is also negotiating for two Houston sites and one in Jackson, Miss. – with high hopes for 1991 openings.

Stein, also general manager of Ralph & Kacoo’s, works with vice president and district managers Todd Gerald, Don Gerald and Charles DeLaune, who stayed with the concept after the buyout, and Piccadilly veterans Charles Siddle and Patrick Prudhomme. Siddle has since returned to a management position at Piccadilly.

The team of six managers has spent months evaluating Ralph & Kacoo’s past and future potential, standardizing operations, restructuring and formulating expansion plans.

“The biggest problem we encountered when we were getting our arms around Ralph & Kacoo’s was the management base,” Stein continues, “because it had weakened after the Dallas unit opened.”

Piccadilly has since put together an extensive, six-month management training program. Trainees study operations for three months in the production and kitchen areas and then go on to tackle front-of-the-house duties for three more.

The new program is more structured, allotting certain times of the day for hands-on training and the study of manuals, recipes and company policies. Piccadilly has also developed new Ralph & Kacoo’s training manuals for cashiers, hostesses and bartenders.

Piccadilly standardized the Ralph & Kacoo’s menu after discovering that preparation methods and ingredients varied from restaurant to restaurant. But “we wanted to keep the food good – as it was,” Stein notes. “We’re not trying to make it like a cafeteria, or vice versa.”

Piccadilly standardized each recipe to make sure that the plate of crawfish etoufee served on Toulouse Street in New Orleans is the same as the one served in Dallas.

Now Ralph & Kacoo’s is working on capturing a bigger portion of the under-$10 lunch niche by testing new menu items and reduced portion entrees.

An average check at Ralph & Kacoo’s is $15 to $20 per person, including drinks.

To help boost profits, Piccadilly instituted a 4-percent price increase about six months ago. “Once we got in and analyzed the situation, we found that Ralph & Kacoo’s hadn’t had a price increase in two or three years,” Stein points out. “Prices were going up on goods and wages, and it was eating away at the base.”

Overall food costs run about 28 percent to 32 percent and labor costs, which generally run lower in the Southern states, are about 26 percent of sales.

A major money saver was the February 1989 opening of the fish-processing plant, begun by the Olindes. The plant cost $200,000 to build and saves 10 percent to 15 percent on processing costs. Most of the restaurants’ 10 varieties of fish are flown in from the Gulf of Mexico. From there, plant employees prepare it for shipment to the units via refrigeration trucks.

The process helps ensure the quality of the fish supply and allows unit managers more time to serve customers instead of worrying about purchasing and supplier problems.

To speed up service, Piccadilly has installed a point-of-sale cash register system to streamline the ordering process.

And following in the footsteps of health-conscious restaurants around the country, Ralph & Kacoo’s has adopted a “heart-healthy” menu in a Baton Rouge restaurant.

Chefs worked with a dietitian from Ochsner Clinic to reduce fats, sodium, cholesterol and calorie contents in select menu items. A heart logo pinpoints program-approved appetizers, salads, entrees and desserts. Items include marinated crab claws, oysters on the half shell and salads.

Many restaurants charge higher prices for heart-healthy items, but Ralph & Kacoo’s heart-healthy dishes are cheaper – thanks to reduced portions. For example: Diners receive 6 ounces of fish instead of 8 ounces, or seven shrimp per plate instead of 10.

The cafeteria segment of the company, “is kept as a separate entity all together,” says Stein, “yet the company’s commitment to price and value applies to both concepts.”

Absorbing Ralph & Kacoo’s 1,000 employees into the company’s base of 7,000 workers was another task Piccadilly faced after the buyout.

Piccadilly rewrote and restructured policies to include everyone under the new company umbrella. Ralph & Kacoo’s employees were put under the Piccadilly pension plan, and were included in the company’s vacation policy: One week after one year, two weeks after two years, and three weeks after three years.

PHOTO : A Ralph & Kacoo’s unit in Baton Rouge, La.

COPYRIGHT 1990 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.

COPYRIGHT 2004 Gale Group