[Music] i am guessing that most of us have been to olive garden at this point they're like this hybrid italian american classic restaurant and if by chance you haven't been there i could not recommend those breadsticks more i'm not even much of a breadstick person but they do some amazing things with them over there you may not even have to go far to get there they have about 900 locations all across the us in every single state easily making them the largest chain of italian restaurants but also making them one of the largest of all
casual dining restaurants it is a unique place with a unique story that i'm happy to talk about given that they have been one of the most successful chains of our time i thought it would make sense to try to identify some of the core reasons behind that success starting with the companies that have been behind it the stories that i think most of us like to hear and that i tend to highlight on this channel are about ambitious young individuals who go out and raise some money to start a business from nothing well this is
pretty much the exact opposite of all of that olive garden was started by one of the biggest companies in food general mills i know you may not expect to hear that but aside from the cheerios and the wheaties general mills has been involved in a lot of other things over the years specifically in the 1960s they started diversifying like crazy 37 acquisitions in that decade it got them involved in toys and fashion and most applicable here would be restaurants in 1970 they bought a chain of three family seafood restaurants in florida called red lobster they
had been started by this guy bill darden a couple years earlier and general mills was interested in taking over and growing the chain they likely wanted to start a restaurant chain because their longtime rival in the flower industry pillsbury had just bought burger king in 1967 and they likely wanted to make it a seafood restaurant in part because they had just bought the bran gorton in 1968 you know with the fishermen on the packages that you see at the stores over the next 12 years they quickly grew the chain to well over 300 locations and
that's when they were looking to start a new chain to act as a compliment to red lobster while growing their share in that casual dining market after five years and millions of dollars in research and development they finally opened the first olive garden again in florida as sort of a test location they used that one to learn what the public responded to they did some fine tuning and in the following years strategically opened a few more of them around the area now remember this is general mills so once they had a promising enough concept they
used their resources to start this rapid national expansion where they opened almost 400 new locations over the next eight years it was very similar to what they did with red lobster and i do want to mention that since this strategy was so successful two times already they did attempt it a third time with less impressive results they had done it with seafood and italian food so the new attempt was with chinese food in 1990 general mills opened a restaurant again in florida called china coast over the next three years they opened four more of them
around the area before shifting into high gear and opening almost 50 more of them the following year i guess that the buildings themselves were too large seating up to 240 people making them feel unlike traditional independent chinese restaurants that most people were familiar with and leading to bad service i couldn't tell you the exact reasons behind it but the sales weren't nearly what they were hoping and the whole thing turned out to be a disaster they lost an estimated 20 million dollars in their final year before shutting them down and converting many of them into
one of the other two restaurants i'll speculate that the experience made general mills want to shy away from the restaurant industry altogether because that same year general mills spun off all of their chains into a separate publicly traded company called darden restaurants named after the red lobster founder bill darden they said that they wanted to better focus on their cereals and other consumer food products but keep in mind even though olive garden was now separate from general mills they were still part of a massive company darden restaurants debuted with a 1.8 billion dollar market cap
making them the second most valuable restaurant company on the stock market behind only mcdonald's so i think it's obvious that having the financial backing of general mills for the first 13 years and then darden restaurants ever since has been a huge part of their success i do have three more reasons that i want to get to that focus more on olive garden itself but i have a little bit more to say about darden that's going to add perspective to it early on in their formation they hit a bit of a rough patch even started closing
some locations for both red lobster and olive garden but the real trouble started about a decade later going into 2009 olive garden had over 50 consecutive quarters of comparable store sales growth that ended in the third quarter of that year and red lobster was having even bigger troubles i have a video about them that goes into more specifics but in the early 2010s darden was not doing well there are plenty of reasons behind this but one of the biggest factors was likely the competition coming from fast casual restaurants you know the ones that are a
little bit cheaper and faster i'm talking about chains like chipotle and panera that were growing fast and taking away their business i think it's safe to say that the comeback for olive garden and darden in general started in 2014 just a basic number to reflect that would be their sales per location it started going down in 2010 and in 2014 it started going back up again there were two big things that happened that year for one darden sold red lobster again the other video has more specifics about it but olive garden had become more significant
and that's where they wanted their attention they used that 2.1 billion dollars from the sale to pay off some of their debts and to reinvest in olive garden the other thing that happened that year is one of darden's investors expressed a bunch of complaints about the operations within the restaurants and about the management themselves it led to new leadership including a new ceo that implemented a bunch of changes to hopefully turn things around a bigger emphasis on service and employee training and they actually raised their prices to better separate themselves from those fast casual restaurants
that were giving them trouble and i'll touch on some of the other changes as i finally talk about some of the other reasons behind their success the next one that i have is their unlimited concept i can't imagine that anyone ever leaves this place hungry in fact in my case it's usually too far on the other end of that spectrum and that's because they give you so much food from the very beginning since that first test restaurant in 1982 they have offered their dinan customers unlimited soup or salad and bread sticks believe it or not
early on the salad was their main emphasis their tagline was good times great salad olive garden but obviously the breadsticks have since eclipsed the salad in my mind anyway actually i should put a warning here if it is in fact your first time trying those bread sticks be careful not to go overboard it is a rookie mistake you end up too full for the pasta and your meal is ruined that advice applies to every visit but even more so if you happen to go during their never-ending pasta bowls this is overlapping into my next reason
marketing and promotions the never-ending pasta bowl has given them so much publicity over the years in 1995 they started this promotion where you can eat endless pasta for 6.95 it attracted a bunch of customers and they have continued it every year since the price has been slowly creeping up most recently it's been around 11 but i would say that's still pretty reasonable considering how much food you're getting in 2014 they took it a step further into what i think is a little gimmicky but they introduced the never-ending pasta pass it's this thing where for 100
you can get unlimited pasta for the entire length of the promotion which is usually like two months or so i call it gimmicky because they don't supply enough of them to meet the demand for the first one they offered only 1 000 passes and by 2019 there were 24 000 available but they're still just impossible to get because they sell out within the first minute and to add to the gimmick that year they also offered a lifetime pasta pass the first 50 people to buy the regular pasta pass had an opportunity to pay an additional
400 for the lifetime pasta pass they're probably losing money on it if anything but it does create a lot of buzz around the brand it gets people talking about olive garden each year and by the way i hope this happens if anyone watching this happens to be one of the lucky few individuals that has a genuine lifetime pasta pass that you are living the dream so please comment and tell me everything about it another thing that i have to say about their marketing is their slogan this thing was popular when you're here your family making
you feel welcome in that family dining setting and they adopted it in the late 1990s around the time when they were going through that first rough patch and they kept it all the way through 2012 when they were going through that second rough patch they replaced it with we're all family here which i don't know about that one it's saying the same thing in a simpler way but the other one had a good ring to it and it was pretty well known i guess it was easy enough to change it and mix things up when
they're having trouble it's unclear if it actually helped anything or not but things did improve soon after so it's hard to say though to add a new layer to the marketing here soon after changing it the president of olive garden went on the jimmy fallon show and gave him the rights to use the slogan jimmy kind of frames it like they transferred the ownership of it but it was really more of a licensing deal just giving him the rights to use it as well again more of a gimmick than anything else to get people talking
about olive garden and it went even a step further in 2018 when jimmy transferred those rights to post malone in an episode of his show where they went to olive garden more gimmicks but they are kind of fun and it is effective promotion for the restaurant for my last reason i'm going to call it perceived authenticity because it turns out that americans don't necessarily want to eat authentic italian food as much as they want to perceive that they're eating authentic italian food do you see what i'm saying i have never been to italy but i
am confident in saying that the food that they serve is much different than the food that they serve at olive garden it's like an americanized version of it there's nothing wrong with that but olive garden puts in a lot of effort to make you feel like it's authentic i mean you will see it all over the place if you go into one of the restaurants but there's a few specifics that i want to mention the current design of their buildings was adopted in the late 1990s and modeled after a farmhouse in tuscany some of their
commercials have advertised this culinary institute in tuscany where each winter they send their top chefs for training those trips have been criticized as being more for sightseeing than actual learning but it hardly even matters because again it's more about the perception than anything else in the early 2010s they were even inventing these dishes and putting them on the menu like the pasta chetty it was unfamiliar to people so they perceived it as being less authentic but as part of their turnaround they simplified that menu and eliminated all of that made up stuff in favor of
emphasizing the more traditional pasta dishes let me know in the comments what do you think of olive garden do they hook you in with breadsticks and never-ending pasta bowls in authentic feeling locations or maybe you don't like them you see them as being phony and low-quality maybe the prices are too high i can see those arguments i guess it comes down to personal tastes and what you value more and as always it's not a complete list of everything that makes them successful but i do think it is a good summary of the most important reasons
so let me know if you think anything should be added or taken off the list and any other thoughts you have about olive garden or anything else that i talked about in this video leave them in the comments i'd like to hear what you have to say thank you for watching [Music] you
