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Independents Band Together | featured in The Business Observer | February 2006

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By Isabelle Gan, Contributing Writer | February 3, 2006

The Sarasota-Manatee Originals, all independently owned restaurants, may be competitors, but they're pooling resources to battle the fine-dining chains that are moving in.

As chain restaurants enter the fine dining arena, some local restaurateurs are banding with old competitors.

D' Arcy Arpke, who co-owns Euphemia Haye restaurant with husband Raymond, is one member of the Sarasota-Manatee Originals, a group of 64 locally-owned restaurants.

"Five years ago, I wouldn't have thought of putting up a card that listed 60 other independent restaurants on it," says D'Arcy Arpke. "But if independent restaurants aren't supported, they will go the way of the small hardware store and other mom and pop establishments."

The idea is that by grouping independent restaurants together and pooling resources, owners will be better able to compete with their large chain competitors.

"What we've realized is we're stronger together," says Michael Klauber, the group's president and co-proprietor of Michael's on East restaurant on Tamiami Trail.

The group's first meeting in 2003 included six of the area's most successful and veteran fine dining restaurateurs: Michael Klauber; Tommy Klauber, Klauber's brother and owner of Pattigeorges; Jean-Pierre Knaggs of Bijou Cafe; John Caragiulos of Caragiulos; Lynn Christensen of Harry's Continental Kitchens; and D'Arcy Arpke.

That first year, the Originals attracted 24 fellow restaurant owners who were increasingly alarmed at the new breed of chains coming to town.

Chains, with their behemoth marketing power, are nothing new to the restaurant business. In the past, however, their growth was largely in the fast food and casual dining market. In the 1990s, big cities started seeing the first upper scale chains that looked and acted like independent gourmet restaurants.

It was just a matter of time before they arrived in growing, upscale Sarasota.

"The only way they can keep their investors happy is to keep expanding," explains Michael Klauber. "Now, what they've done is they've moved into the fine dining category."

Locally, those high end chains have come in the form of restaurants such as Stonewood Grill and Tavern, with two locations in Sarasota and one in Bradenton; and Fleming's Prime Steakhouse and Wine Bar, which opened in Sarasota in 2004. With their posh interior decors and sizable wine lists, they've become examples of a new breed of chains vying for a piece of the once off limits fine dining market share.

"I understand their position to a certain respect," says John De Napoli, joint venture partner at Outback Steakhouse Inc., the company that owns Flemings as well as Bonefish Grill, Carrabbas Italian Grill and Outback Steakhouse. Another high-end Outback brand, Roy's restaurant, is scheduled to open next to Fleming's on U.S. 41 in July.

"I think there's plenty of room (for chains and independents)," he says. "If you're great at what you do, you shouldn't be worried about people getting into the market. You should be welcoming them because it gives you an opportunity to distinguish yourself to the guest."

Nationally, though, independent restaurants are bracing themselves. This year, for the first time, independents will account for less than half of national sales, approximately 47% to 48%, according to the Council of Independent Restaurants of America (CIRA), an umbrella organization of independent restaurant groups of which the Originals is a chapter.

"This is all about keeping Sarasota and Manatee unique," says Klauber. "The question is how do we want to see Sarasota ten years from now? Do we want to look like other cities with the same restaurants and stores?"

As a lone independent restaurant with limited resources, he adds, the situation seems impossible.

"It's hard to compete (with the chains). They get the prime real estate deals, the big marketing campaigns," he says. "They've got lots of money . . . So we've gotten together as a group and we're trying to find a way to level the playing field."

Part of the strategy is to harness purchasing strength through economies of scale.

Since its inception, for example, the Originals have initiated negotiations with restaurant suppliers in the hopes of lowering purchasing price for a range of products from insurance policies to groceries.

"When you have an individual mom and pop, it doesn't have as much clout in terms of how much it can buy. But when there's 50 or more mom and pops, suddenly you have buying power," says Knaggs, whose Bijou Cafe restaurant in downtown Sarasota has been in business for 20 years. "We think we can save money by doing this."

So far, there haven't been any concrete purchasing deals, Klauber adds. But talks with suppliers have lead to monetary contributions into what has become the Originals' marketing fund.

One contributor is Sysco, a national restaurant supplier that sells food products to local restaurants. "We like to help the independent restaurateur. I don't want to say that we don't support the multinational companies . . . But we've got to support the independents." says Carl Canova, president of Sysco's Palmetto branch. "A national restaurant (chain), for example, if they are hurting in one area of the country, they can compensate through their other operations."

More negotiations with liquor and wine suppliers will continue this year, Klauber says.

The marketing money, in the meantime, has already saved some dollars for member restaurants.

"We can cut back on our own advertising since the Originals guide we published six months ago was so successful," Knaggs says, referring to glossy brochure-size dining guides the group distributed as part of its marketing campaign last year.

That campaign also has included the "I'm an Original" ad promotion. The idea is a sort of spin on the chain concept applied to the mom and pop establishment, explains Sam Stearn, president of CAP Creative, the branding and public relations firm the Originals hired in 2004.

The focus is "not about the individual restaurant" but rather the restaurant as part of a group of independents, says Stearn.

Take the Originals' full-page ad in SRQ magazine's December, 2005 edition. In it, the focus is on Hillview Grill chef Candice Gough. Underneath her photograph is a brief bio and a small photo of the restaurant's signature dish. Absent is an address or phone number for the restaurant.

The group's ad campaign will be expanding into television and radio in the coming months.

In addition to the ads, member restaurants will be displaying the group's stamp of excellence at their stores. The square logo touts the catchphrase, "fresh, local flavor," another emphasis.

The marketing campaign is the result of a year of research through focus groups, surveys and one-on-one interviews with local residents and tourists, says Stearn. "Really, the community kept telling us the same thing, that it was all about having fresh food that had a regional flair."

CAP Creative's ad campaign has been so successful that it has been adopted by the national restaurants council.

"In a few months, you'll be seeing the phrase, 'I'm an Original,' all over the country in our local chapters," says Don Luria, president of the 18-chapter CIRA and a founder of the Tucson, Ariz., Originals, an independent restaurant group that formed in 1999. "We really see the Sarasota group as one of our strongest chapters and has probably done more in the way of marketing than our other chapters."

The Sarasota-Manatee Originals have been one of the CIRA's more successful chapters in size and funding. And Luria says it is due in part to a rich sense of local flavor in the area.

There are more Zagat top-scoring restaurants within a 20-mile radius of downtown Sarasota than anywhere else in the state, the Originals website announces. All of them are independently owned.

Klauber hopes to keep attracting new members. He points to a number of benefits, including exposure through the group's website, www.freshoriginals.com.

When asked whether organizing with her old-time competitors still bothers her, Arpke shrugs off any concerns: "I think it's created a nice camaraderie among the group."

There's a different perspective. "I would much rather customers go to the Bijou Cafe or Cafe L'Europe (on St. Armand's Circle) than go to a chain establishment," Arpke says. "We own these restaurants. We live here. This is where our kids go to school. The money we make stays here."