US restaurants follow the money to the Middle East

Kareem al-Meadawy is the reason American restaurants are rushing into the Middle East. The 30-year-old college administrator in Kuwait eats out twice a week and at least once a month at the Johnny Rockets hamburger chain. He wishes Fuddruckers would open a restaurant near him, and one of his favorite dishes is the steak with fried mushrooms at T.G.I. Friday’s. “It has a nice diner-restaurant feel to it,” he said while eating at the Friday’s in the Avenues shopping center near Kuwait City. The mall also has a Chili’s Grill & Bar, an Applebee’s and a Ruby Tuesday. In the next decade, American restaurant chains plan to open more than 250 locations in the Middle East, where growing populations and increasing wealth offer one of the best chances to expand outside of the saturated US market. “There’s been almost an explosion of interest in the region,” said Shonil Chande, a London-based food and drink analyst at Business Monitor International. American chains are coming to the Middle East because of the growing wealth of the middle class, which has “developed so quickly from energy over the last 10 years,” he said. Friday’s, P.F. Chang’s China Bistro and Applebee’s, owned by DineEquity, are growing in the region by putting new spins on their usual gimmicks, while Smashburger and Darden Restaurants are just getting started, braving the “Arab Spring” political turmoil to open locations in Egypt, Saudi Arabia and the United Arab Emirates. In the UAE, the branded, table-service restaurant segment is worth about $600m a year and may grow 30 percent to $780m by 2015, according to Stefan Breg, founder of strategist Tribe Restaurant Creators in Abu Dhabi. Friday’s, owned by closely held Carlson Co, started doing business in Dubai in 1996 and has grown to 31 restaurants in the region. The company said last year it plans to open an additional 30 locations in the Middle East in the next five years. The chain has honed its bill of fare to tout 100 percent Angus beef instead of pork, and orange-blast slushies as cocktail alternatives. The best seller: Texas-barbecue glazed beef ribs, served instead of Jack Daniel’s baby back pork ribs, chief operating officer Ian Saunders said in a telephone interview. Friday’s has attempted to draw Middle Eastern diners with voiced-over television ads with Arabic wording and a VIP program that allows customers to skip to the front of the seating line. Darden is using radio, print and internet advertising, which are less expensive and more localized than TV, chief marketing officer James Buettgen said in a telephone interview. The Orlando, Florida-based company also is using stock photos for ads to cut marketing costs until more stores open, he said. The chains face challenges beyond political volatility. In some cases it’s hard to translate US food to Middle Eastern tastes - Chili’s learned that with country-fried steak - and each country is different. Advertising should vary across the Middle East because of varied cultures, said Jane Kinninmont, a senior research fellow for the Middle East and North Africa at Chatham House research institute in London. In some countries, such as Lebanon, women must be completely covered and wearing a head scarf in photos, she said.