Local restaurateurs are hitting the jackpot in the Valley, developing successful home-grown businesses and adding to the food offerings of the region. These aren’t just your run-of-the-mill mom-and-pop cafes, good for a weekday lunch or two.
With names like RA Sushi Bar, Pie in the Sky Bakery, Fairytale Brownies and Wildflower Bread Company, these high-end companies are appealing to gourmet tastes.
“The Valley’s a great place because it’s such a melting pot. People move here from different places in the country and you get a lot of different tastes and ethnicities. That helps in terms of the variety of food,” said Louis Basile, founder of Wildflower Bread Company.
Those evolving tastes also helped RA Sushi Bar grow from one location in Scottsdale to 11 stores across the nation.
“We don’t lose sleep at night anymore,” said Scott Kilpatrick, RA’s vice president.
Kilpatrick and his business partner, Rich Howland, founded RA in 1997 in Old Town Scottsdale with about 20 employees.
“We only had two sushi chefs when we opened, so we used to have to close Sundays so that they’d have a day off,” Kilpatrick said.
In the late ’90s, sushi was starting to expand to a larger audience, but Kilpatrick said he and his partner found that at existing locales, either the sushi was great and the environment not-so-hot or there was a great environment and not-so-hot sushi. “We just tried to fill that niche with good, quality sushi in an upbeat energetic environment,” Kilpatrick said.
Now, the company has 700 employees and an affiliation with Benihana. With four restaurants in the Valley, the company just opened its 11th store in Illinois, with plans for more.
“We probably just got really lucky. Our timing was good because sushi was
just coming into its own,” Kilpatrick said.
WHY THE VALLEY?
The Valley is a hot spot for successful restaurants and food-oriented businesses partly because of its population growth, the skills of local entrepreneurs and the desire for residents to try new things, experts say.
“Phoenix is a great area. I think’s it’s a really good market and obviously, the growth doesn’t hurt,” Kilpatrick said, referring to the Valley’s everblossoming population.
“Food is so popular in the Valley because so many people are moving here. With the amount of new people coming, one of the ways people socialize is by going out to restaurants,” said Wildflower’s Basile.
Founded in 1996 in the Valley, Wildflower is a full-service bakery and restaurant.
With locations also in Prescott and Sedona, there are eight stores in the Valley, with the ninth under construction at 44th Street and Indian School.
“One of the things that’s so special about Phoenix is that there’s so many people from different places here. You’re getting all sorts of taste preferences and likes,” said Eileen Spitalny, co-founder of Fairytale Brownies.
Another East Valley success story, Spitalny and her kindergarten pal, David Kravetz, began the company in a friend’s kitchen in 1992.
Now, the Chandler firm employs between 40 and 100 people year-round and makes more than two million brownies a year, sending them to places far and wide.
The Valley’s location near both Los Angeles and Las Vegas and its cadre of recent culinary school graduates has also helped boost its profile, experts say.
Talent and creativity don’t always translate into economic success, also helping make the Valley attractive.
NOT ALL SUCCESS
But just because it’s in the Valley doesn’t guarantee a restaurant’s success, said Tom Rex, associate director of the Center for Business Research at Arizona State University’s W.P. Carey School of Business.
“A very high percentage of restaurants and food-related businesses fail and fail very quickly,” Rex said.
Steve Chucri, president of the Arizona Restaurant and Hospitality Association, agreed. “P.F. Chang’s and some of these other great concepts you’ve seen take hold — they didn’t always start that great,” Chucri said.
A successful restaurant demands a combination of creativity and good business acumen that can be hard to come by, Rex said.
Someone may be the most talented chef and concoct the tastiest meals, but if the staff’s not there to serve it well and prices aren’t set to cover costs, the business will fail.
“You have a lot of people get into the restaurant business that really aren’t business people,” Rex said.
Similarly, a restaurant can be run by the most efficient, business-minded entrepreneur in the best location, with the hippest environment, but if the food’s not bringing in customers, it’s just an empty building, Rex said.
“And it’s also extremely competitive. It’s just constant competition. Look at the ins and outs of all the restaurants in downtown Tempe. And that’s a highly successful area,” Rex said.
Rex cites the former Marilyn’s Mexican Restaurant in Scottsdale as one example that had him scratching his head.
“I thought it was fabulous. Great food. Any time you went there there were long lines. And it still failed,” Rex said.
According to the U.S. Census Bureau, the Valley has more than 5,000 food and drinking establishments, including 1,870 sit-down restaurants.
More than 200,000 people are employed in the foodservice industry state-wide, helping make it a powerful job producer in Arizona.
Not only are the number of restaurants and its employees expected to grow, receipts are also forecast to increase.
“We’ve been the second fastest-growing state in restaurant sales growth for the past three years behind Nevada,” said the restaurant association’s Chucri.
“And there’s projections that we’re going to be number one next year,” Chucri said.
And even successful restaurants have had bumps in the road. “To get from one to four restaurants was all sorts of trials and tribulations,” Kilpatrick said about his RA Sushi Bar.
“It was bank loans and paperwork and money from investors and so on and so on. That was just a different world for us,” Kilpatrick said.
The food industry is a fickle business, with a clientele that has an ever-changing palate.
While opening a restaurant in the Valley may not guarantee success, there remains numerous restaurateurs who run very successful businesses and have grown them into nationally known brands.
“Whether it’s the food concept itself or the restaurant concept itself, the RA, the Fairytale Brownies, Arizona has proven to be a really good breeding ground,” Chucri said.
“In the restaurant business, you don’t always know what’s going to stick. It’s always nice to see good concepts take hold and continue to do well. That aren’t just a blip on the screen,” Chucri said.