fired up

Barbecuing brisket wasn’t anywhere on Rudolph Aue’s agenda in 1929, when heopened his one-pump country store in the tiny community of Leon Springs, TX,just a few miles west of San Antonio. In fact, it wasn’t until 60 years later,when Aue sold the operation, that the pit was first lit.

The buyer was restaurateur Phil Romano, a former Floridian who had adopted Texas as his home and was ready to take up the barbecue gauntlet after establishing a solid restaurant road record as founder of the Fuddruckers and Macaroni Grill casual concepts. And the rustic, laid-back country store in Leon Springs was the perfect setting.

Today there are 16 Rudy’s "Country Store" and Bar-B-Q locations (all but two with convenience stores and gas pumps) in Texas and New Mexico, with more units—and more markets—to come.

Concept pioneer

In 1989, there was no template to follow for combiningrestaurant-style foodservice and a convenience store into a single cohesiveconcept. In fact, according to Rudy’s Vice President of Operations Pete Bassett,Romano may well have been the first entrepreneur to do it.

Rudy’s was already an established pit stop for gasoline and groceries. For the restaurant, Romano brought in a 100% wood-fired "Oyler" pit (a big steel box with a rotisserie inside) to smoke brisket, ribs and other country-style cuts in true Hill Country fashion. He fueled the Oyler with oak rather than mesquite because of its slow burn and lighter flavor.

Although in-and-out service is key to the convenience store concept, Romanotook no shortcuts when it came to cooking. Each 10-lb. to 12-lb. black pepper-and-cayennedry-rubbed brisket spends between 12 hours and 18 hours slowly rotating on therotisserie mechanism, marinating in the juices that continually drip down onthem as they turn.

Hill Country barbecue is served in no-frills slice-and-weigh-to-order meat market style. That’s Rudy’s, right down to the butcher-paper plating. Pickles, onions and sliced white bread are the traditional "go-withs" and Rudy’s signature "Sause" is served on the side.

A la carte accompaniments such as "Rudy-ized" pinto beans, flavored with aproprietary blend of seasonings and spiked with sausage pieces; jumbo smokedpotatoes; coleslaw; and special recipe cream corn are also available. Homespundessert offerings include homemade banana or chocolate pudding and fruit cobbler.

Rudy’s location right off Interstate 10 put the concept in prime position for attention from barbecue-hungry Texans. Natives, as well as cross-country travelers, provided plenty of word-of-mouth advertising early on.

Brisket by the ton
"By the time we opened our first franchised location in Austin in 1994,"says Bassett, "we were amazed by the number of folks who knew about Rudy’s inLeon Springs."

About half of Rudy’s 16 locations are company-owned, five are franchised and three in the San Antonio area (including the original Leon Springs unit) are licensed.

Bassett reports that every month Rudy’s sells more than 100,000 lbs. of brisket, the top-selling single menu item accounting for 20% to 25% of total food sales. The No. 2 best seller is turkey breast, followed by pork loin, chicken, ribs and sausage (both regular and jalapeo).

The company sells more than 5,000 gallons of its signature "Sause" (availablein mildly fiery regular or totally tame "Sissy" varieties) per month, much ofit via the Internet. Bottles of the proprietary Sause and jars of Rudy’s rubsare also available for sale in the company’s convenience stores.

About four years ago, Rudy’s menu expanded to meet the needs of customers yearning for "Rudy-ized" food for another daypart. Not content with smoking the rest of the pit pack at lunch and dinner, Rudy’s introduced a line of breakfast tacos. Aside from the classic bacon and eggs, some of these tacos feature the company’s smoked potatoes, sausages and brisket.

"Breakfast was a natural for us because we have folks in our restaurants early in the morning keeping the pits fired up and getting the meats going," Bassett says.

Ken Schiller, a Rudy’s franchise partner who is about to open his fourth locationin the Austin area, says he sells around 1.5 million of the breakfast tacosper year to the tune of around $2.2 million in revenues. Robert Wolf, who operatesone North Texas franchise unit in Denton (about 36 miles north of Dallas andFort Worth), notes that his breakfast taco sales are "in excess of 500 per day."

About 95% of the Rudy’s menu is consistent across all of the stores. One difference is in New Mexico where a regional rivalry tends to center around who makes the best green chili stew. Never a company to miss an opportunity, Rudy’s got the local lowdown and came up with a category contender that has become a top seller in that market.

Other regional riffs include pulled pork with an eastern-style mustard-based au jus and cookedto-order speckled trout. In the same breath, Bassett emphasizes that Rudy’s isn’t out to become a onemenu-fits-all phenomenon.

‘Three-legged experience’
"We’re not going to start adding green saladsor fries or anything that doesn’t fit our barbecue flavor profile," he says."We’ve stood out by keeping it simple and focusing on being the best at whatwe do."

While barbecue is the big draw at most Rudy’s locations, it’s definitely not the only one. The company learned that lesson when it opened two restaurant units in New Mexico without convenience stores or gas pumps. Although the food in these locations keeps business brisk, the restaurant-alone concept "just seemed to lose something in translation," according to Bassett.

The convenience store segment of Rudy’s locations brings in anywhere from 2% of sales to a high of 10% of sales. But even in the stores where convenience sales are lower, it’s still "an integral part of the three-legged experience" that distinguishes Rudy’s from other barbecue spots, according to Bassett. How much a part varies from location to location.

In Denton, a heavy commuter area, for example, Wolf says that food is far andaway the driving force that brings in customers seven days a week. The onlydifference between weekdays and weekends is the customer mix, which is mostlyoffice workers and corporate catering Monday through Friday. (Prior to opening,Wolf’s crew did some heavy-duty direct marketing to businesses in the area.)Catering jobs for family outings and private parties kick in to maintain salesvolume on Saturdays and Sundays.

Weekday lunch is about 80% dine-in. This gives customers plenty of opportunity to browse the convenience store stock, which ranges from cigarettes, chips and gum to ice cream and six-packs. Another 15% of the lunch trade goes through the drive-thru window. (A good 20% to 25% of those drive-thru customers are regulars, Wolf notes.)

On the other hand, the focus at Schiller’s Austin locations is more on gas and the convenience store. His newest store will also have a touchless car wash. "We pick our sites based on the criteria for those two segments and we know that we’ll automatically have a good barbecue location," Schiller explains.

Both Schiller and Wolf agree that it’s the combination of the three concepts that immediately communicates to interstate travelers that Rudy’s is anything but a cookie-cutter road stop. A definite distinguishing feature is the rustic country store look of the units. Whenever possible, interior details and textures, including wall treatments in the dining area and "porch roof" canopies over cashier stations, are crafted from wood and tin salvaged from old local barns and houses. Also recycled are the vintage pictures, posters and neon signs that complete the down-home theme.

< p>All cylinders
Each Rudy’s unit measures at least 6,000 square feet. Schiller’slocations range between 7,500 square feet and 10,000 square feet, while Wolf’stops out at 6,500 square feet. Between the red-and-white vinyl clothed banquettables inside and picnic table-style seating outside, most Rudy’s locationshave the capacity to accommodate at least 200 diners.

And with its "three-legged" strategy intact, Rudy’s seems to have the legs to take its concept far beyond the bounds of its current markets. Wolf plans to open a store in the Dallas-Fort Worth Metroplex area every one-and-a-half to two years. Rudy’s corporate is exploring expansion opportunities in the Houston market and, outside of Texas, into Colorado, Oklahoma and other selected markets nationwide.

"To continue to build our base of company stores," says Bassett, "we’ll probably be opening between two and four new locations each year for the next several years."

In Houston, which Bassett calls "a huge market by itself," Rudy’s plans tobuild as many as three locations within the next 18 months. If Houston is anyindication, Rudy’s could become even more of a household name in markets throughoutthe Southwest in the not-too-distant future.

NO ordinary JOE

PartJimmy Buffett, part Rainforest Caf and part Wegmans, Trader Joe’shas built an almost cult-like following for its grocery stores. Yet thesesmall (some would say cramped) but unbelievably successful stores—thechain’s 2003 sales tipped the scales at an estimated $2.1 billion, ormore than $1,130 per square foot; that’s more than twice that of a traditionalsupermarket, according to a BusinessWeek report—have strongties to the convenience channel. Started in Los Angeles as conveniencestore chain Pronto Markets in the late 1950s, Trader Joe’s grew out ofthen-owner Joe Coulombe’s desire to differentiate his stores from rivalc-store chains. In 1967, he doubled his stores’ floor space and broughtin imported wines, gourmet foods and other items not found in most conveniencestores at the time. He also outfitted the stores with cedar plank walls,faux palm trees and nautical dcor. This marked, essentially, thebirth of Trader Joe’s. German billionaires Karl and Theo Albrecht, whoown the ALDI grocery store chain, purchased the Monrovia, CA-based retailerin 1979.

With more than 200 stores nationwide—most are in states huggingthe coasts— Trader Joe’s sells upscale fare such as health foods,organic produce and nutritional supplements. Its stores have no servicedepartments and average just 10,000 square feet, according to Hoovers.Trader Joe’s bread and butter: a roster of more than 2,000 private-labelitems, from soup and snacks to shampoo and vitamins to wine and packagedbeverages, with plenty of inventory in between.

With only about 10% of the SKUs stocked in a typical supermarket, TraderJoe’s doesn’t aim to be everything to everyone; dominant brands have littlespace on TJ’s tropical-inspired shelves. Instead, the chain offers proprietaryitems in unique sizes it can sell at "value" prices, while still nettinga decent margin. What’s more, these items are merchandised in a comfortablyfun atmosphere that’s replicated nowhere else.

Customers have a passion for TJ’s. In Seattle, for example, a group ofsingle TJ’s shoppers started a virtual community (which morphed into anin-person mixer) called "Trader Joe’s Love!" as a way for people to meetpotential, like-minded mates. Clearly, the chain’s strength lies not onlyin the quality of its products but in the community it creates and theuniqueness of its brand. And, unlike most conventional grocers, camera-shyTrader Joe’s has grown with little to no promotion. Instead, word of mouthhas been the primary driver fueling the company’s expansion.


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