General Mills: nearing China Coast rollout?

Nation's Restaurant News, Oct 26, 1992 by Peter O. Keegan

ORLANDO, Fla. - General Mills has installed a top company executive to head its China Coast restaurants and is apparently gearing up to "work and roll" with the Chinese dinner-house concept.

General Mills veteran Jon L. Finley, formerly president of the Yoplait Yogurt division, has been named president designate of China Coast, a position he will officially take over in January. At he same time the Red Lobster executive vice president of operations has been shifted to the same post at China Coast.

Their work nearly completed, General Mills' "dynamic duo" development team, Blaine Sweatt III, currently China Coast president, and Roger K. Thompson, General Mills vice president of business planning and information, will return to the company's headquarters to explore once again future General Mills concepts. Before China Coast, the two were largely responsible for developing Olive Garden and nurturing the concept through its test stage before stepping aside for the full-scale rollout of the Italian dinner-house chain.

Finley currently is under the tutelage of Olive Garden president Ron Magruder learning the ins and outs of the restaurant business and the dinner-house segment. Once Finley takes the reins at China Coast, Magruder will continue to oversee his progress.

"Blaine will go back to the drawing board," confirmed Olive Garden president Magruder. "That's his expertise. He brought China Coast through two and one-half years of development, and Finley will take the next step.

"Finley is out on Olive Garden openings while working on menu planning, purchasing, marketing and employee relations."

Finley, a 10-year General Mills veteran who has a strong marketing background, will team up with 20-year Red Lobster veteran Phillip Pritchard.

"When you get ready to roll one of these out, you don't want a big learning curve," Magruder explained. "We have a lot of experience with Finley in marketing and Pritchard in operations, and hopefully I can throw something into the pot."

China Coast, which opened its first unit on International Drive in Orlando in early 1990, features Mandarin, Szechuan and Cantonese dishes, wok specialties and traditional Chinese fare. Prices for entrees vary, from $4.95 to $12.95, with appetizers and desserts less than $4.25.

After two and one-half years, General Mills opened a second China Coast unit in Orlando complete with a new open kitchen, and will be opening a third unit in suburban Orlando next month. The company plans soon to break ground for two new units in Indianapolis, scheduled to open next April or May.

"If Indianapolis goes well, then confidence will be very high," Magruder said of the market, which tested Olive Garden's mettle in the mid-1980s. "We're not committed to a full blast out, but I imagine if these come out of the shoot doing a pretty good business, we'll get aggressive in the next [fiscal] year."

Magruder said that if China Coast does become a viable expansion vehicle, then management may try to beat the expansion rate that Olive Garden achieved. "We went from eight units to 50 and then started opening up 50 a year," said Magruder, adding that General Mills tested Olive Garden for four years before he got the go-ahead. "Maybe we'd get to that point a year or so faster."

The official green light has not been given to roll the concept, as General Mills is closely studying the progress of the next unit openings.

General Mills public-relations director R. Craig Shulstad said the company would continue to evaluate the concept and that there was "no decision at all" whether to roll, but it was "looking encouraging."

Analysts also agree that it's too early to tell. "Whether it will be expanded and become a big chain for them is a 50-50 chance at this time," said William Maguire, an analyst with Merrill Lynch Global Securities in New York. "But they are seeing very efficient returns at this point."

"There's no question that they'd like to see another Olive Garden emerge from it," said Ronald B. Morrow, an analyst with Smith Barney Harris Upham, who added that labor costs are high, and the company has thrown a lot of money into decor for authenticity.

Morrow said yearly sales figures were hovering around the $2.5 million per-unit mark, and management additions signal that they are becoming more serious.

"We've done a lot of menu changes, recipe changes and changes in decor," Magruder pointed out. "General Mills as a lot of patience. They want to get it right and then move forward."

A new open kitchen has peaked interest in the concept at the newest 260-seat China Coast in Orlando. "Research shows that people love Chinese food, yet many are not too sure about what goes on in the kitchen," Magruder said. "So we opened it up; it's good theatrics."