Taste Test: National Restaurant Chains Discover D.C. is a Pretty Good Guinea Pig

ShopHouse Southeast Asian Kitchen tried to sneak quietly into D.C. When it opened in Dupont Circle in September 2011, there were no press releases or grand opening parties. The top priority for the Chipotle spin-off was to have a place to learn and experiment, not necessarily to make a big splash. And Washington’s demographics made it the perfect test market.

Affluent? Check. Highly educated? Check. Strong 18-to-35 year old demographic? Densely populated? Burgeoning foodie scene? Check, check, check.

It was also an easy commute for Chipotle’s culinary development team in New York, but cheaper and a little bit farther out of the restaurant-world spotlight. (You have to be ready to scale quickly if you launch in New York.) The international population was a major draw, too, since the restaurant wanted diners who were already receptive to food influences from around the world.

“D.C. was the top of the list for sure,” says Chipotle spokesman Chris Arnold. “There is such a high concentration of people who really fall within our core demographic.”

These days, the District and its surrounding area are at the top of the list for many national restaurant chains looking to test out new services, products, and concepts before rolling them out across the country. Pinkberry introduced its non-frozen Greek yogurt here about a year ago before making it available nationwide in April. Burger King tried out a delivery service at five Washington-area restaurants in 2011 and has since expanded to 65 locations in eight states. And TGI Fridays is kicking off a reimaging campaign with modern design renovations at 29 D.C. and Baltimore locations before taking the new look to its 950 sites worldwide. Meanwhile, international restaurant groups like PAUL Bakery, Nando’s Peri-Peri, Ping Pong Dim Sum, and Yo! Sushi have made D.C. the first city in their American expansions.

D.C. isn’t just following national food trends; it’s becoming the place where they start.

“We have the demographics that the rest of the U.S. is going to have in 2050,” says D.C. Office of Planning Director Harriet Tregoning. “I like to tell people we’re like stepping into the future. Everything that we have and that we do, other cities will eventually have it and do it, just not yet.”

The demographics she cites come from urban planning expert and Reshaping Metropolitan America author Arthur C. Nelson and explain factors like smaller households (45 percent of D.C.’s households are single-person), more walking and biking, and diversity (no race or ethnic group makes up a majority of D.C. residents).

It’s not just restaurants that are eager to try ideas first in the D.C. market. Tregoning points to Wal-Mart, which is trying out a new urban, pedestrian-friendly design in three of its six planned D.C. locations. She also notes that Germany-based car sharing service Car2Go and Atlanta-based mobile parking platform Park Mobile had some of their fastest launches here.

Tregoning says D.C. has only started to become a hub for new innovations over the past dozen years (beginning with the end of the federal financial control board) as the city has gained a lot more private-sector employment, start-ups, and small businesses. “We’ve become no longer afraid to be the first place in the country doing something, and it’s generally worked out pretty well for us,” she says.

Tregoning rattles off a number of qualities that she’s found make the city attractive to retailers: an educated population with disposable income that skews young, which appeals to companies going after millennials. Bonus: “We’re growing at a fairly heavy clip,” Tregoning says.

National restaurant chains recite the same qualities when describing why they chose D.C. as a test market. Many of them already have strong markets here and are planning to expand their presence. For franchises like Burger King and Pinkberry, there was also interest from local franchisees to try something new.

“D.C. is a good representation of our national store footprint,” says Pinkberry Senior VP of Marketing and Design Laura Jakobsen. Georgetown gives Pinkberry access to college kids, foot-traffic-friendly Dupont taps into the professional crowd, and other shops in Tysons Corner and Fairfax reflect more suburban audiences. “We’re able to learn about our national roll-out just based on real estate alone,” Jakobsen says.

Pinkberry most often uses Los Angeles as a test market because that’s the home of its headquarters. But Jakobsen says the company also looks for places where consumer behavior trends overlap with what they’re trying to do. In the case of its new line of Greek yogurt, Pinkberry looked at reports from global market research firm Mintel to see which cities already had high Greek yogurt consumption.

Chipotle likewise wanted to test ShopHouse in a place where it knew people already liked its product. The idea was not to appeal to the everyone, but to the existing customer base. “I guess in some ways it’s the HBO programming model as opposed to the traditional network television,” says Chipotle’s Arnold. Instead of producing content with mass appeal, premium cable networks go after a niche audience; ShopHouse apparently aims to be the Game of Thrones of fast-casual dining.

And while ShopHouse executives didn’t want to be overwhelmed with attention when the concept launched, others seek out Washington because of its visibility. Last year, D.C. saw almost 19 million visitors, according the city’s tourism bureau, Destination D.C. “You might come across something here in Washington and be able to tell others about it and just get a lot of exposure for your flagship product or your new innovation,” Tregoning says.

That’s what TGI Fridays had in mind. Before debuting its new look in the Washington area in November 2012, the restaurant group spent several years testing decor, lighting, menu, music, and other elements at different restaurants in cities like Denver, Minneapolis, and Buffalo. When it was time to bring everything together, the chain wanted a “very high profile, very visible market that we’ve had a lot of success in,” says Director of Operations Ross Spence.

An international population and strong tourism presence is especially attractive to restaurant groups with a global reach. “Everything we launch will eventually go global,” says Pinkberry’s Jakobsen. “So we can have early global learning in D.C. faster than some other markets.”

D.C. is also known to restaurant groups as a social media–savvy city, which translates to more people spreading the word about their new product or service through their networks. Jakobsen says Pinkberry’s Greek yogurt launch benefitted from the active food-blogging scene because they were able to target “key influencers” and get their feedback.

But ultimately, the point of a test market is just that: to test. That means the prototypes we see first might be a little rough around the edges before they’re prodded, packaged, and proliferated.

In some cases, ideas are axed altogether. In 2009, Chipotle tested a vegan soy and wheat-based protein called Garden Blend in San Francisco, Denver, New York, and D.C. but pulled the plug on it after about a year.

Pinkberry used its test run in D.C. to change the packaging from a transparent container back to the standard “iconic” Pinkberry cup. And realizing that people needed more of an introduction to Greek yogurt, Pinkberry added smoothies as a “gateway.”

ShopHouse has also made several changes. Nearly a year in, the restaurant decided to nix the banh mi on its menu. Arnold explains that the chain couldn’t find a bread that it liked, and the sandwich didn’t fit the build-as-you go concept because it involved fewer choices for customers to make. Slices of steak were swapped for chunks of beef larb, a more traditional northern Thai recipe that allowed the restaurant to use more cuts of meats.

Now, ShopHouse is getting ready to open a second location in Georgetown this summer and another in Chinatown. Two more locations are in the works in Hollywood and Santa Monica.

You’re welcome, California.