Posted: June 01, 2014
No end to fast-casual appetite
Modmarket founders see synergies, not saturationMike Taylor
Denver is arguably the nation’s epicenter of fast-casual restaurant innovation, with a roster that includes Chipotle, Noodles & Company, Garbanzo Mediterranean Grill, Qdoba, Tokyo Joe’s and Smashburger, to name a few.
Anthony Pigliacampo and Rob McColgan sized up the Front Range landscape and didn’t see saturation; they saw a market where consumers were already familiar with — and receptive to — the fast-casual formula of better-quality food at higher price points and a finer dine-in atmosphere than fast food venues offer. So the duo opened the first Modmarket in Boulder in 2009.
Less than five years later, Modmarket, touting a made-from-scratch “farm to table” menu and locally sourced ingredients (when available), has grown to seven Denver-area locations, with additional openings slated for Denver International Airport and Dallas this summer. The two co-founders expect to increase the restaurant total to 12 by the end of this year.
Pigliacampo and McColgan, both 34, have been best friends since high school in Harrisburg, Pa. Both left successful careers to go into the restaurant business. Pigliacampo, a CU grad, previously ran his own mechanical design firm, and McColgan, a Notre Dame graduate, was working in private wealth management for Goldman Sachs in New York City. Neither had ever worked in a restaurant before launching Modmarket, but they made up for it with painstaking research – specifically seeking out owners of failed restaurants, willing to share hard-earned lessons — and then by putting in 15-hour days over a nine-month stretch to get their first Modmarket up and running.
“That initial nine-month education was more valuable than our previous careers, because we learned every aspect of the restaurant, we learned all the pain points,” Pigliacampo says. “I can tell you firsthand why a dishwasher’s job at Modmarket is difficult, because I’ve stood there and done it.”
Pigliacampo has his own ideas on why the Denver area has spawned so many fast-casual success stories, one being a health-conscious, but time-constrained population, willing to pay a little more for healthy food served quick.
“It probably starts with the fact that fast-casual has been here for a while and customers are trained for that type of restaurant experience,” he says. “Customers in Denver seem very comfortable with the idea of a counter-order format, a $8 to $10 price and then getting a higher-quality offering.”
He also credits Denver’s fast-casual pioneers; Chipotle, Qdoba, Noodles & Company and Tokyo Joe’s all debuted in the mid-’90s. Pigliacampo believes these restaurants and subsequent startups have given Denver a valuable intellectual base on which to draw.
“You end up with kind of a brain trust of restaurant people, and that allows companies to have higher quality talent,” he says. “There’s a lot of people working at all those restaurants, and they’re always looking for other opportunities, whether it’s people who work for us that go to work for someone else, or people from someplace else who come to work for us. It creates a nice ecosystem of human capital to leverage as you grow these companies.” Case in point: Noodles & Company CEO Kevin Reddy and Executive Vice President of Operations Phil Petrilli are both former Chipotle executives.
Pigliacampo gives another, more surprising, explanation for Denver’s emergence as an incubator of fast-casual enterprise: real estate.
“It’s strange, but as we look at other markets, I’m always surprised at how perfect the real estate in Colorado is on many levels for restaurants going into strip centers,” he says. “There are a lot of 2,500- to 4,000-square-foot spaces in nice strip centers here for restaurants to go in. Fast casual works great in that environment.”
Mike Taylor is the managing editor of ColoradoBiz. He writes about small-business money issues and how startups are launched. Email him at email@example.com.