Roy Choi

Case 8By: Dave Kramer, Sri Paladugu, Nick Raycraft

About Roy Choi• A chef who's celebrated for food that isn't fancy.• One of the founders of the food truck movement.• Instead of hot dogs or ice cream, more unusual, gourmet dishes are prepared and sold.• His Kogi trucks specialize in tacos filled

with Korean barbecue.

Background• Born in Seoul, South Korea in 1970 .• He was raised in Los Angeles and Southern California.• When Choi was young, his parents owned a Korean restaurant

in Anaheim, California called “ Silver Garden” for three years.• The family moved 12 times among southern California

neighborhoods that ranged from gritty to posh as their fortunes changed.

• His family once lived near Olympic Boulevard and Vermont Avenue as well as in South Central, the Crenshaw District and West Hollywood.

Education• He attended a gifted-students program, but changed schools in

his early teens• At age 13, he rebelled, running away from home several times.

He began getting C's in school, started dabbling in drugs and hung out with a crowd of burgeoning criminals

• At age 15, Choi's parents sent him to Southern California Military Academy in Signal Hill, California.

• After high school, Choi went to Korea and taught English there• He then attended California State University, Fullerton,

graduating with a bachelor's degree in philosophy• Choi attended Western State University law school for a

semester and soon dropped out.

How he became Chef?• At 24, confused about his life, and in a dark period

around 1994 0r 1995.• Became obsessed with Emeril Lagasse’s “ Essence of

Emeril” show.• Inspired him to enroll in a local culinary school night

class.• In 1996, he transferred to the Culinary Institute of

America in Hyde Park, New York.• Worked as an intern during this period at Le Bernardin

in New York City.• favorite childhood memory is making dumplings at the

age of eight at his family's own restaurant.

Career• Choi gained experience as a journeyman hotel chef since the mid-

1990s• In 2001, Choi started working for Hilton Hotels.• After being promoted within the company, in 2007, Choi became

chef de cuisine at the Beverly Hilton, the chain's flagship• Choi also worked at the following restaurants: Embassy Suites in

Lake Tahoe, California and the Rock Sugar Pan Asian Kitchen in Los Angeles

• Started in late 2008s as one mobile food truck that parked outside nightclubs on Sunset Boulevard late at night, selling Mexican tacos stuffed with Korean-style meat• The company used Twitter to alert customers to trucks' locations.

Choi’s Mission• Change the paradigm of how people eat, how younger

generations, and people that aren’t within our foodie world, view food.

Achievements• one of the top ten "Best New Chefs" of 2010 by Food and

Wine magazine• It is the first food truck operator to win that distinction.• currently runs several Los Angeles-area restaurants:

Chego!, which features rice bowls, Sunny Spot which is Caribbean-inspired, A- Frame which conveys the Hawaiian idea of aloha and is built in a former IHOP and Pot at the Line Hotel in Korea town.

• In November 2013, Choi released his autobiography that is part memoir part cookbook called L.A. Son: My Life, My City, My Food.

Kogi BBQ Trucks• Kogi BBQ grossed $2 Million in first year of its business.• Started with one truck, one hope and one aspiration.• With all the support and small army of fans helped us

grow from one truck to five – but then scaled it back down again to four to keep their service, quality and connection to people at a nice and even keel.

• Each truck has been christened with a name.

Competitor• Started in 2009, Calbi BBQ has been copying the

concept, logo, menu and style of the much-blogged about Kogi BBQ.

• They’re even on Twitter, too.

The “FOUR P’s” of Kogi

Product

• High quality– Gourmet– Healthy

• Convenient– Truck comes to you!

• Unique– Not your standard Food Truck– Mexican meets Korean

Hot Dog Korean Burrito (K-Oki Dog)

Place/Distribution• Food Truck Niche– First on the scene (Innovators)

• Neighborhoods & City Streets– Area’s lacking restaurants– Parks– Lack of gourmet

Place/Distribution

• Strategic Coverage– Four Trucks• Roja• Verde• Naranja• Rosita

– Consistent areas – Request a stop spot online!

Promotion• Press: “In Kogi. They trust”– Time – Los Angeles Times– LA Weekly

“Chased out by club owners and cops, the support and small army of fans helped us grow from one truck to two, from two trucks to three, from three trucks to five...”

Promotion

• Blogs– Customer Comments– New Entrées– Request a stop spot

• Twitter & Facebook– 129K Followers on Twitter– 40,672 likes on Facebook

Price

• Affordable Gourmet• Low Overhead/Production Costs• Food to Neighborhoods that can’t support

restaurants.

Target Market

• Food trucks are the epitome of small, mobile, adaptable businesses going after their target markets.

• Food Neighborhoods that can’t support restaurants.

STP Chart

Other Food Trucks

Kogi

0

2

4

6

8

10

0 2 4

Pric

ing

Scal

e

Quality Rating

Roy Choi Interview on Price

Marketing Research

Restaurants OpenedMonths Open Food Type

# of Yelp Reviews

Overall Rating Last 5%

Time btw. Now and r-20 (days) Reviews/Month

Reviews/Month (last 20 r)

Kogi Nov-08 71 Korean BBQ 2664 4 3.65 150 37.52 4.00A-Frame Nov-10 47 Asian Fusion/American 1164 3.5 3.68 29 24.77 20.69Sunny Spot Nov-11 35 Carribean 561 3.5 3.44 32 16.03 18.75Alibi Room Sep-07 85 Korean BBQ 1059 4 4.08 34 12.46 17.65POT Mar-14 7 Korean 308 3.5 3.13 18 44.00 33.33Commissary Aug-14 2 New American 147 3.5 3.40 7 73.50 85.71Chego Apr-13 18 Asian Fusion/American/Latin 601 4 3.87 16 33.39 37.503 World's Café Jul-13 15 Coffee/Tea 18 5 5.00 467 1.20 1.28

ConclusionsBest Reviewed (All Time) Best Reviewed (Recent)Restaurants Overall Rating Restaurants Last 5%3 World's Café 5 3 World's Café 5.00Kogi 4 Alibi Room 4.08Alibi Room 4 Chego 3.87Chego 4 A-Frame 3.68A-Frame 3.5 Kogi 3.65Sunny Spot 3.5 Sunny Spot 3.44POT 3.5 Commissary 3.40Commissary 3.5 POT 3.13

Most Frequented (Reviews/Month) Most Popular Now (Recent Reviews/Month)Restaurants Reviews/Month Restaurants Recent Reviews/MonthCommissary 73.5 Commissary 85.71POT 44 Chego 37.5Kogi 37.52 POT 33.33Chego 33.39 A-Frame 20.69A-Frame 24.77 Sunny Spot 18.75Sunny Spot 16.03 Alibi Room 17.65Alibi Room 12.46 Kogi 43 World's Café 1.2 3 World's Café 1.28

BCG Matrix

Market share

POTCommissarySunny Spot

3 Worlds Cafe

ChegoA-Frame

Alibi Room

Mar

ket g

row

th

High Low

High

Low

Question marksStars

Cash cows Dogs

Kogi BBQ Food Trucks

SWOT Analysis

S W

T

StrengthsMany Successful RestaurantsDiversityGood Brand RecognitionPricing

OpportunitiesExpansion into New MarketsCNN ShowNew Restaurant Concepts

ThreatsMaintaining QualityVolatile IndustrySaturation of Food Truck MarketO

WeaknessesGeographic FootprintWeaker Brank Awareness NationallyWide FocusLaw School

Strengths• Many Successful Restaurants– 8 Total (0 Have Failed)

• Diversity– Mobile and Stationary Restaurants– American, Korean, Latin, Carribean

• Good Brand Recognition– Roy Choi name is gaining national attention

• Pricing– Mission: “Prepare healthy, delicious food for people of modest

means”– All restaurants one or two $ on Yelp

Weaknesses

• Geographic Footprint– Roy Choi’s restaurants all in LA area

• Weaker Brank Awareness Nationally– Only find Roy Choi food in LA

• Wide Focus– Dilution of Roy Choi brand with continued

expansion

Opportunities

• Expansion into New Markets– Expand outside LA

• CNN Show– Show should grow Roy Choi name nationally

• New Restaurant Concepts– Enter Healthy Fast Food Market– Enter Rapidly Growing Fast Casual Restaurant

Market

Threats

• Maintaining Quality– Oversight more difficult as number of restaurants

expands• Volatile Industry– Restaurant business very susceptible to economy,

changing consumer tastes• Food Truck Industry Becoming Saturated– As of 2011, food trucks have grown to over 200 in LA– Nationally, food trucks have exploded

Critical Issues

• Maintaining quality• Market Expansion• It’s hard to keep consistently successful in the

restaurant business. Long-term term market share. Volatile market place

Maintain Quality

• Train the Staff• Check lists for each station.• Consistency• Hire a Quality Assurance Manager• Quality inspections.

Market Expansion

• Straight Extension of Kogi BBQ to Fast Casual Market– Fast Casual market growth at 11% in 2013 (3% for

fast food)– Existing fare would translate well

Market Expansion

• Target healthy fast food market– Natural Marketing Institute Study• 17% of consumers willing to pay more for healthy food• 14% of consumers want to eat healthy but are price

sensitive• 21% are fence sitters – would eat healthy if it were easy

– Roy Choi could target all of these groups– Plans to open Loco’l in SF Tenderloin

neighborhood next year

Volatile market place

• “In restaurant industry, high turnover and intense competition”

• Reinvention• Consistent Innovation• Differentiation • Roy Choi’s future brand

Conclusion

• Roy Choi’s Kogi is a great success• Continuing Innovation• Roy Choi’s popularity• New ventures