Why Saving The Pots Is Bad Business

I’m not a fan of The Olive Garden which is our topic this Foodie Friday. I grew up eating (and cooking) Italian food and Olive Garden is pretty far from the cuisine I love. That said, I appreciate that it’s a lot easier for one to find authentic Italian food in New York and other big cities than it might be elsewhere in this great land of ours. The Olive Garden might have to do for those poor souls.

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(Photo credit: Wikipedia)

A hedge fund recently produced a very lengthy report on Olive Garden’s parent company.  You can read the entire report here – it’s a fascinating look at how a company can lose its way.  I want to focus on one very specific aspect of the report: the food at Olive Garden.  The lessons we can take from it are very instructive for any business.

One main criticism the deck makes is this:

Olive Garden has seemingly lost its Italian heritage and  authenticity.  (It) lost ties to suppliers that offered authentic Italian ingredients and Italian wines at compelling price points. Now Olive Garden serves dishes that are astonishingly far from authentic Italian culture, such as burgers & fries, Spanish tapas, heavy cream sauces, more fried foods, stuffed cheeses, soggy pasta, and bland tomato sauce. Olive Garden has moved away from its authentic Italian roots and now offers what appears to be a low-end Italian-American experience.

The deck has photos of dishes as advertised and as they actually show up on the table.  The difference is amazing.  But it was one last complaint – along with the reasoning behind why the situation is the way it is that really got my attention:

According to Darden management, Darden decided to stop salting the water to get an extended warranty on their pots. Pasta is Olive Garden’s core dish and must be prepared properly.

Uh..duh!  Which is the lesson for any brand.  Diluting your brand causes consumer confusion.  Olive Garden for tapas or a burger?  I think not.  Saving the pots to reduce costs at the expense of the customer experience is lunacy.  Damaging the product – especially the signature product – is a big step down the road to brand destruction.

Many companies lose their core identity in the chase for revenues.  That’s bad.  Hurting the products that got you to this point is worse.  It’s not, as the report points out, just one instance. Breadsticks are another signature dish.  “The lower quality refined flour breadsticks served today are filled with more air and have less flavor (similar to hot dog buns).”  Can your brand survive while committing this sort of product suicide?

Without a brand identity, you’re done.  When any home cook knows more about making your product than you do, it’s time to pack it in.  That’s true if it’s pasta or clothing or web sites or anything else.  Agreed?

 

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Filed under Consulting, food, Huh?

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