A group of North Dakota farmers has entered the restaurant business in 2006 by opening Farmers & Fisher in Georgetown in order to support and promote family farms, emphasizing their commitment to sustainable agricultural practices. Several years after, the Union decided to expand its operations and involved current restaurant managers Dan Simons and Mike Vucurevich into the expansion by signing a profit-sharing agreement.
Already in the first year the new restaurant of Farmers Restaurant Group exceeded sales forecast by more than 20%. The success of this undertaking gained Simons the management position of the first group’s restaurant, which was losing revenues. Menu variety, farm-themed internal design and the freshest products increased customer demand and restaurant revenues. However, the original concept of supporting local farms by making them the only input suppliers and high emphasis on sustainability lost their criticality, giving priority to quality, customer satisfaction and efficiency.
The article demonstrates a perfect example of the synergy between management expertise and an innovative idea, which has created a successful new venture. However, the original concept of the restaurant might be lost as the chain grows and develops. Thus, sustainability has been forgone for the sake of better demand satisfaction. Moreover, sourcing from suppliers other than the local farmers undermines the original idea of the union to support local family farms. Lastly, procuring inputs from more cost-effective sources may make the practice of using only fresh products impossible. Inability to adhere to the original mission and to fulfil own promises is very harmful for company’s reputation, therefore Farmers Restaurant Group should be cautious in pursuing the current strategic orientation and make sure that there is an alignment between their brand promise and their behaviour.
The article considers several economic principles in describing the new Farmers Restaurant Group. Firstly, it shows how diversification of activities by engaging not only in agriculture, but also into the restaurant business, allowed farmers them to derive additional profits. Their unique selling proposition combines high quality standards and sustainable products delivered to the consumers’ tables straight from the local farms. It also incorporates a holistic approach to company’s strategic orientation, emphasizing traditional American cuisine, solid company values and sustainable growth. This complex of factors allowed the company to increase customer demand and to improve profitability. Moreover, moving along the learning curve, business understood key success factors for the restaurant business, therefore their second and consequently third openings were a great success.
