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Food & Beverage Industry

Cities that Sizzle

Nation's Restaurant News, Jan, 2001

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"We benefit from the strong economy in the high-tech sector," says Tom Kenney, a local Outback Steakhouse joint-venture partner. "Dell, Motorola and Intel fueled a great growth and wealth." As a result of the city's technology buzz, Outback's Austin locations generate very high sales.

According to the Greater Austin Chamber of Commerce, Austin ranks No. 4 among the "most-wired" cities in the country, behind only San Francisco; Washington; and San Jose, Calif.

Dell Computer Corp., Motorola Inc., IBM and 3M are only a few of the major technology companies with a large presence in Austin. Technology-based employment in the region increased by 88 percent since 1990, bringing in 42,250 new high-tech jobs.

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And those high-tech employees are exactly the type of customer restaurant operators want to attract.

"We're opening our restaurants in tech centers," says Lisa Wall, marketing director for Consolidated Restaurant Cos. Inc., operator of the recently opened Cool River Cafe in Austin. Popular for its "high-tech happy hour," the restaurant tries to appeal to young professionals and single people with expense accounts, she says. The company opened Cool River Cafe in northern Austin, right down the road from Dell, Austin's No. 1 employer, to attract the lunch and after-work crowds of workers from the computer company.

Represented by five counties and some 1.2 million people, the Austin/San Marcos metropolitan statistical area is the fastest-growing market in the state for foodservice sales. The local restaurant market is expected to grow by 13 percent in 2001, to $2.3 billion in sales, according to the Austin Restaurant Association.

The growth of Austin's economy in the technology sector brings individuals with large bank accounts to live in the area, says the restaurant association's Kristin Hovanek. The Austin/San Marcos area ranked first in the state for personal income growth, and the median income for residents of single-family homes in Austin reached $133,430. According to the latest statistics, Austinites annually spend an average of $1,940 eating out.

The majority of Austin's fast-growing population and the burgeoning diversity of the city's restaurants reflect the influx of individuals from across the United States, says Saralee Tiede of the Greater Austin Chamber of Commerce. "They wanted different kinds of food," she says. "They wanted a New York deli. They wanted the kinds of restaurants they were used to in New York, L.A. and San Francisco. Restaurants developed to meet their needs."

Kevin Williamson, president of the Austin Restaurant Association and chef-owner of Ranch 616, says high-tech growth brought a diverse array of restaurants to the city. "People moved to Austin from the East and West coasts. Their palates are a little more upscale, and they like all types of cuisine," he says.

Some of the most popular corridors for chain restaurant growth are in the northwestern suburbs, says longtime Sonic franchisee Jerry Conway, who owns about 32 Sonic units in Austin. Urban sprawl generated by the influx of technology companies has caused the suburban population to skyrocket, he says. In addition, many of the big-name computer companies are located in newer northwestern neighborhoods.

Food & Beverage Industry

Cities that Sizzle

Nation's Restaurant News, Jan, 2001

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