Joshua M. Moore: 2013

Sunday, October 6, 2013

5 Things You Didn't Know About Red Lobster

There's no shortage of fans and critics when it comes to Darden Restaurants' (NYSE: DRI ) Red Lobster restaurant. Naysayers will argue that there are far better restaurants out there serving fresh seafood, and regulars will argue that there's a reason Red Lobster is the country's largest chain that specializes in seafood.

Let's go over a few things about Red Lobster -- good and bad -- that you probably didn't know.

1. Red Lobster serves 395 million Cheddar Bay Biscuits a year
The one common thread that links every person dining at Red Lobster isn't seafood. There are plenty of items on the menu for those skirting marine life options on their plate. The one thing everybody gets is a serving of the the chain's signature buttery and slightly cheesy biscuits.

Red Lobster claims to serve 395 million of its Cheddar Bay Biscuits every year. That breaks down to nearly 1.1 million of the flaky treats on any given day.

2. Red Lobster is currently the worst performing Darden concept
Darden runs a lot of chains. Red Lobster and Olive Garden are the biggies, but this is also company behind the rustic LongHorn SteakHouse, the upscale brewpub Yard House, and the tropical casual-dining hub Bahama Breeze.

Many of Darden's smaller chains posted positive same-restaurant sales in its most recent quarter, though Yard House, Olive Garden, and healthy foodie magnet Seasons 52 were all negative. Red Lobster was its biggest loser, with comps declining 5.2% during the period.

Attempts to drum up more hungry patrons didn't pan out during the quarter. The Seaside Mix & Match and Four Course Seafood Feast promotions failed to live up to the operator's expectations. In a bold move, Red Lobster bumped up its Endless Shrimp offering from $14.99 to its historical $15.99 price point in August. We'll see how that plays out in its next quarterly report.

3. There really is a Darden
The very first Red Lobster was opened in Lakeland, Fla., by Bill Darden in 1968.

Florida is no stranger to seafood. It's surrounded by water on three sides. Legend has it that Bill Darden and his partners specifically chose Lakeland because it wasn't coastal. He wanted to see whether the concept would fly in the middle of the state. Even the company's home turf of Orlando is smack dab in the center of the state, well than an hour's drive away from the nearest coast.

The first restaurant proved to be so popular that it didn't offer desserts or take credit cards to keep the tables turning quickly. As of the end of August there were 704 Red Lobster restaurants, and 27 of those were located in Canada.

4. Red Lobster invented popcorn shrimp
Popcorn shrimp is a staple at most seafood restaurant these days. Everyone from Gorton's to SeaPak offers them at supermarkets in the freezer aisle. Even Dairy Queen offers popcorn shrimp on its menu. Red Lobster claims to have invented it.

Red Lobster is also credited with introducing Middle America to snow crabs and calamari, but the practice of stripping tails off shrimp, breading them, and frying them up is a Red Lobster original.

5. Red Lobster used to be owned by a cereal company
Shortly after Red Lobster started to take off, General Mills (NYSE: GIS ) acquired the restaurant operator.

You would never know. It's not as if Red Lobster ever offered Wheaties-breaded popcorn shrimp or would grind up Cheerios to batter its fried fish. The restaurants just provided the food giant with another way to cash in on the consumption of food.

General Mills decided to spin off Darden Restaurants in 1995.

The first few years were rough, but that had nothing to do with General Mills' unloading of the chain. There were plenty of rival casual-dining chains popping up, leading to market saturation.

Red Lobster lives on, but there was a time when it was part of a company making Trix cereal for kids.