Shawn Walchef and his partner Corey Robinson started Cali BBQ in 2008. They started at the height of the economic recession and perhaps having to survive that tough economy led to proverbial ‘financial calluses’ that made the team mentally resilient and marketing-minded that continues to drive business 12 years later.
Walchef has reported that the business is more profitable than before COVID-19 and Bar and Restaurant discussed the strategies Shawn and his team are using to generate more revenue now in this environment than before the global pandemic started.
B&R: Give us the quick backstory of Cali BBQ and your strategy before COVID-19.
Walchef: They tell you location, location, location is everything. We are 13 miles east of downtown San Diego where all the action is and when we first opened in 2008 and we weren’t busy, we struggled to meet payroll. In order to find growth, we started to invest heavily in digital and had to learn the internet, apps, social media, and figure out ways to brand and market ourselves.
The last 12 years we spent growing our brand online has put us in a great position when COVID came because we already had online ordering, we had DoorDash integrated, and had a strong social presence on Instagram, Facebook, Twitter, YouTube, and a podcast. For us, its second nature communicating with our community.
B&R: How have you all adjusted your model since the pandemic started?
Walchef: We let our community know that we laid off half of our staff of 28 employees. We kept our management team and heart of the house along with a couple of hosts. As difficult as that was, we know that had to happen and we felt lucky that we were considered an essential business and allowed to keep serving food.
After seeing the lines at the grocery stores, anything we could do to get food out of our kitchen to our community would be a relief to both the grocery stores and the community and in turn, would allow us to keep key employees employed.
B&R: What have been the results so far? Many operators are struggling to stay open or re-open right now, but you mentioned that your sales and profits are actually better than before.
Walchef: Now in this COVID world, we have been operating a more profitable business than we have in 12 years. It’s remarkable looking back at the last six weeks, our labor cost is one-third of what it normally is, and our profit margins are up across the board. Our food cost is better than it was before despite having issues getting food and supplies. It’s kind of incredible.
Now in this COVID world, we have been operating a more profitable business than we have in 12 years.
B&R: How is Cali BBQ more profitable even with 3rd party fees?
The number one reason we are more profitable is labor. On a normal NFL Sunday, we have 14 front of the house employees plus our heart (back) of the house. In this current model, we don’t have any servers or bartenders and we are still doing the same volume if not more alcohol. The other component is everyone is ordering through the internet which now acts as a server and we see errors are down because the guests are inputting it themselves. Our operational payroll has gone down from 24% to 12%.
B&R: California has allowed alcohol sales to go, how are you taking advantage of this?
Walchef: We’re selling alcohol cocktails in our fishbowl growlers. Normally used for beer, we polled our fans and subscribers of what cocktails they would want to see served and the number one thing they wanted was our fishbowls. The fishbowls are served for two people, mostly Mai Tais and margaritas with a branded duck served in a fishbowl. This is what they wanted the most and we’ve sold more fishbowls in COVID times than we ever have. Even more than a McGregor fight night or a Charges vs. Raiders gameday.
B&R: What has been your most popular selling cocktail?
The most popular fishbowl is a spin-off of Tiger King and it was so popular that we were selling out every day and guests were showing up dressed up as Carol Baskins. It’s a spicy saladito martini. We’re making craft batched cocktails which brings me back to my college days but now they are happening in a much more professional manner. Eric Olafsen, our General Manager, has been tasked with quality control to ensure we are putting out the best-quality cocktails. His first order of business when being hired was going through multiple ice vendors to ensure the right one was on board so his attention to detail is top-notch.
B&R: In terms of technology, what systems are you using to help manage the business right now and what are the opportunities operators should be thinking about?
Walchef: Online ordering is handled through 411 eats because it has low fees and tied to our POS, Aloha. When we open a second location, we plan to switch to Qu Beyond POS because it allows for total and complete integration for omnichannel management from catering, on-premise, and 3rd party apps.
The biggest opportunity for entrepreneurs, bar owners, restaurant owners, is the digital space. It’s the wild, wild west because it might look so grim, but people still need and want hospitality. How it is delivered to them is going to be digital. There will still be a space for events, sports bars, and nightclubs but we don’t know went that will be.
We can talk about opening up America as much as we want but we don’t know what that is going to be or what it is going to look like.
We all know the restaurant economics behind a full-service restaurant were already broken pre-COVID. So post-COVID with all the PPE you have to have, temping people, wearing a mask, it’s not hospitable. We still want to get our food and drinks out to people that love our brand, how do we do that? We do that through digital.
We’re also using Yelp’s reservation platform which used to let people know their table was available. Now it is informing people in the parking lot that their orders are ready for pickup. We’ve also been using UpnGo for the last year and this platform allows us to better manage our limited inventory of the BBQ we cook every day. UpnGo Pay allows contactless payment where the QR code prints on the receipt from our POS and then they can pay with Apple Pay, Venmo, or a credit card. Technology is going to help improve profit margins but only if they are willing to invest.
B&R: Why do you think Cali BBQ is performing so well right now?
Walchef: It takes 14 hours to slow smoke a brisket, that’s not very convenient for a family of four. Or for a mixologist to craft a cocktail so they can relax with a drink at the end of the day. Our head pitmaster is Gene Goycochea is in charge of creating our BBQ and our most popular item is the Tailgater BBQ Feast which includes all of our slow-smoked meats. Most BBQ restaurants exclude the top and most expensive cuts from their family-style, but our idea was let’s give them all of our meats. We figure if they like one more than another, they’ll come back and buy those meats.
B&R: Are you more focused on reopening your restaurant or continuing to improve the new operational model you have now?
Walchef: We’re focused on the now because there is so much uncertainty. Operating at 75% capacity doesn’t make economic sense. Neither does operating at 50% and certainly not 25%. Our servers and bartenders may be making more money on unemployment [than at those levels].
We'll continue to use social media to build community connections. Giving back has been a core philosophy for us since we opened. We typically don’t do cash donations and instead we donate BBQ and our services to pop-warner or first responders and we’ve done that in a very social way by sharing it. When we then asked our community to support us when we laid off half of our staff to buy takeout, gift cards, and pick up food, those 12 years of giving back paid off. Of course having online ordering, great BBQ, and great hospitality helped, and when you have all of those things working together, its bigger than your brand.