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Tuesday
Aug252015

One of our Readers Rants about COSI (Unedited)

Rant of the Day 
 
I admire RJ's enthusiasm and passion and would much like him to succeed in a turnaround for Cosi but whether or not they survive is dependent on creating a simple, streamlined and fantastic menu with amazing food. It's not about the store refreshes. Foodies are attracted to great food. If Cosi has the courage to focus and clip the menu by another 50% as well as the culinary ability to create one or two additional phenomenal, home run selling items, the company turns around.  If not, it doesn't.  AUVs will change only if the menu changes drastically and new customers arrive and repeat.
 
This roll out push for coffee and new Beets Bowls? Seriously, that's the reboot?  Reality check: No one gives a rat's ass about Beets Bowls...the masses certainly don't.  Beets to the average customer are a turnoff.  Beets is a word they'd rather not hear.  
To create amazing food you have to spend the money for the vision. Cosi needs to hire a top tier creative chef from fine dining. Grant them stock to create incredible and addictive food. Chipotle hired Nate Appleman a few years back. It was a great hire.
 
The Cosi message as it is today: "We're a cafeteria!! We sell everything!"  Salads! Soups! Pizza! Bowls! Coffee! Mac and Cheese! Sandwiches! Chili!  Kitchen Sink! Look at our enormous menu!  We magically do everything amazingly well!"  Great except the menu is so huge any one item gets lost in marketing, so the experience is customer potluck and most of it is mediocre and it all takes away from Cosi being able to establish an identity. Now take another step and imagine being a Cosi employee behind the counter trying to navigate that gigantic logistical menu/employee nightmare. Would that be fun to work with everyday?  Paid minimally to prepare and stay on top of 100 different food item combinations? 
 
Cosi has an identity problem with its (stuck in the 80s) all over the place menu. Too much of it either looks or tastes like cafeteria food or both.  And Cosi has a brand appeal issue.  First thing out of the gate, everyday, Cosi sells a breakfast sandwich which they call a "Squagel". It's a Cosi brand name and the name is a joke. Does Cosi believe 'happening' millennials or anyone else alive in New York City or Chicago or paid Cosi employees want to say the word "Squagel", read it, hear it or even have it anywhere near in their brains every morning?  "Squagel" is a moronic, made up word with an imaginably poor Q Score and is a failed cutesy attempt at 1980s faux branding. It serves no purpose in 2015. And ANYTIME you walk into ANY Cosi you see the "Squagel" on the menu.  Shoot me now or Kill the "Squagel" name yesterday, it's incredibly unappealing.  But outside of that... Hey, great breakfast sandwich!
 
Cosi needs five go-to dishes that people customers think about and crave while they're not at Cosi. Focus, market and build around the top 20% of sales and drop the bottom 80%.  Get rid of everything that doesn't have the possibility to be a top five item seller.  
 
Start with the ovens. They are a great and highly underutilized asset. It is a no-brainer for Cosi to utilize their beautiful, focal point COSI OVENS to actually PREPARE the food and bake other things besides that ONE decades old concept bread. Cosi chefs currently look bored and half the time as just standing around. Give them foods to create. Currently, even when a customer asks for a TBM (great but this too could have a better name) sandwich to be heated up, the helper tosses it into a backroom aluminum oven...Really?  Why?  Where is the ceremony in that? Where is the pride? Where is the fun?  Cosi has gorgeous fire ovens. Why let them sit there? USE THEM. Bake other things. Try out different breads.
 
It's about THE FOOD and it's about THE STAFF.  That's coming from someone who travels for work and eats all over the country ...expensive restaurants and amazing hole in the wall dives. A little homework for RJ: Travel and see who's doing it amazingly well: go spend an hour at Chipotle's new Pizzeria Locale in Kansas City, sit at the counter and watch the chefs at Curate in Asheville, sit at the bar and watch the oven magic done at Mozza in Los Angeles.  Eat from those kitchens. Witness the branding at those places. Watch, learn and borrow from the best. Look at the menus. Look at what the employees are wearing, listen to how the customers are being treated. For RJ, time spent doing this would reward him a thousand-fold.
 
Once again, the answer is streamline, deliver hospitality, hire a tier one chef from fine dining and create great food. Give the customers a simple list to choose from, remember, talk about and crave. At the same time, make the employees' job easier and Cosi a better place to work at. That's it.
 
Chipotle gets this.  KISS.  Keep it simple, Stupid.  They are concentrating on what works.  They make it easy for their customers and their employees.  Simple, clean, brilliant. And they have gigantic loyalty. They are doing the same thing with their Asian and pizza concepts they're launching. They're currently opening 200 stores per year. What they are doing is working.
 
Steve Ells, the CEO of Chipotle, said something great on their last quarterly conference call, "Our clients know what we serve, we keep it simple, there is no need to add items to the menu just to add items to the menu. New items are also a hassle for our employees."  
 
The latest Chipotle quarterly conference call is worth a listen for anyone interested in restaurants.  RJ should listen to it as well. It's all delivering great food, hospitality, incredible employee morale and keeping it simple:
 
 
PS - Tossing the customer carrots in a little white plastic baggie with black letters? Sure, it's healthy but everything about that makes the customer feel like they're back in grade school opening mommy's bag lunch.  It's not professional and comes across as amateur.
 
PPS - Michael, take a look at this picture of yours from Twitter- it's the panel wall at the Cosi in Plainview. All those framed photos are a metaphor for Cosi's current clutter problem and it's disservice to  employees.  Look at that wall!  Think about it....Who is going to keep that glass and those frames clean, smudge and dust free everyday?  This is an employee headache. Poor design concept. And name one great restaurant that has photos of their food on their wall. Hate food photos.

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Reader Comments (4)

whoever you are - RJ- should call and meet with you - DEAD ON

Bigger - connect these two

August 25, 2015 | Unregistered CommenterMike Ehlers

Reply from an anonymous reader who sent this to me via email.:

The publisher of the "Cosi Rant" is misdirected in his comparison to Chipotle. A comparison to Panera, a fast casual food service company in the same arena as Cosi, is much more suitable. Cosi and Panera are a completely different concept from Chipotle because of the fact that Cosi and Panera offer much more on the menu. The best comparator is to Panera. Look at the margins on Panera's income statement. Those are similar margins to Hearthstone. If RJ can get the rest of the Cosi to look like Hearthstone/Panera margins, then Cosi is looking much better and finally making money.

As for the menu, it is very easy to have a short menu when you are selling Mexican food. It is all the same ingredients, just in a different wrapper ( a bowl, a burrito, a taco, etc.). Panera is the best comparison because the number of menus offerings are similar.

Also, on the subject of the menu, I do question the addition of a beet salad? Just personal taste, but I don't like beets either. I do think the improvements to the chicken and coffee have been very positive. The new menu boards do look much better. I have noticed customers in line moving much faster because they are able to navigate thru what is now a clearer and somewhat reduced menu.

I always appreciate a different set of eyes, they just need to be looking in the right direction. There is clearly more work for RJ to do, but I think he has tons of experience and tons of skin in the game. With investors like Janus Capital on board, insiders buying, and a market cap of only $50 million, I think this turnaround is just starting to get traction.

Margins are the key. RJ has to get those in line.

August 25, 2015 | Registered CommenterMichael Bigger

The great thing is that the bones are already there for Cosi to work with...and there's good bones there. Opening up and offering a little Al Forno cuisine could be the beginning of giving Cosi a fresh identity.

RJ needs to pivot away from embracing the original Cosi concept -- if that truly resonated with customers the stock wouldn't be at a dollar. RJ needs to recognize that and have the vision and fortitude to change Cosi...stop trying to tweak around what hasn't worked in the past. The opposite of good is great..and even the hearthstone stores are just good.

It's tweaking stuff. Cleaning up the clutter. Making better use and getting creative with those great ovens. Hiring a a tier one chef to create a couple of new major menu additions..

In the meantime, the Cosi TBM is a phenomenal product. Cosi should market the whole company around that product and build out from there. Put out a marketing campaign (a challenge) calling it the "best, freshest sandwich in America". That's how you get people's attention....not with implementing more beet bowls or pumpkin soup. A simple ad campaign: "We have the greatest, freshest sandwich in America". It's PT Barnum marketing. Say that again and again and again. Offer the classic straight up and offer it with prosciutto or gourmet meatballs. And I would say the words: Mozzarella, Basil, Tomato. Because those words make you crave it. And that's your marketing campaign and the ONLY thing Cosi should talk about. That approach with a little confidence and bravado in a cornerstone product will bring in customers.

August 25, 2015 | Unregistered CommenterPT Barnum

More comments from the author of the rant:

Regarding the Cosi remodels: I've had the opportunity to spend time with Carl Behler who is director of Special Projects at Chipotle. He is responsible for the atmosphere and creation of Chipotle's new Shophouse and Pizzeria Locale concepts. As I have seen, Chipotle spends MONTHS and months (obsessively) tinkering with ONE restaurant and getting it RIGHT before rolling out the "Model" everywhere. EVERY day, EVERY detail of ONE initial restaurant is considered and tinkered with: What does the floor look like? What is going on the walls? Which chairs look best? What material looks best on the tables and chairs? What is the atmosphere in the restaurant? How is the lighting at night and during the day? Most importantly, WHAT works within the menu and what doesn't? Change, test, change, test.... How can it be BETTER? Every little detail within the Chipotle Corporation is considered, tested, reconsidered and then tweaked at ONE restaurant before they open Restaurant Number Two. Smart.

That type of attention to detail is much needed at Cosi. RJ is an excellent operator/franchisee but as CEO he needs to adapt the vision of a founder and hire an astute designer, who is dedicated to detail and a creative tier one culinary chef to compliment what he does well. That's the big league ballpark RJ is playing in and he needs to recognize those tools are mandatory if he wants Cosi to survive, compete and excel.

Let's GO!!!

August 26, 2015 | Registered CommenterMichael Bigger

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