Seafood giant Red Lobster recently launched a $3 million Spanish-language media campaign, the company’s first foray into Spanish-language marketing. After a disappointing sales quarter, the moves are part of a long-term campaign to reinvent the restaurant with an expanded menu, a new slogan –”Sea Food Differently” in English, “Disfruta un Mar de Sabores” in Spanish (“Enjoy a Sea of Flavors”) – and renovated interiors.
Red Lobster, which runs over 700 stores in North America, will also make its first move into Puerto Rico in the next five years. The seafood chain’s parent company Darden Restaurants announced they plan to open three new Red Lobster locations there before 2017.
The announcement followed the launch of an extensive Spanish-language media campaign that included a new commercial spot.
Red Lobster’s new spot, which will air on several Spanish-language outlets, including NBCUniversal-owned Telemundo, features a Hispanic server named Ariana Paz entertaining a Spanish-speaking family. The ad emphasizes the restaurant as a family-friendly destination and one that values personal service, says marketing director Stewart Marquina.
“The most important thing is to show that Hispanic guests are welcome,” he says. “We want not only to advertise in Spanish but also to be culturally relevant.”
Hispanics make up about 10 percent of Red Lobster’s clientele, a number that matches the industry standard, according to Marquina. Hispanic consumers are projected to account for 25 percent of the increase in consumer spending on food away from home between 2010-2015, according to IHS Global Insight. These numbers are increasingly leading restaurants to invest in their Hispanic customer base, a population that accounts for about 9.8 billion restaurant visits every year.
“This is a growing market,” says Ingrid Smart-Otero, president of the Hispanic advertising agency Casanova Pendrill. “It’s a missed opportunity if you’re not speaking to a significant part of the country that likes to eat out as a large family.”
Restaurants like Denny’s, Wendy’s, McDonald’s and Pizza Patron — which offers chorizo pizza and takes payment in pesos — have been targeting Spanish-speaking Hispanics for years. Red Lobster’s campaign comes at a time when the restaurant is scrambling to find customers after waning sales.
Last quarter, the company suffered a 2.7 percent downturn in its profits, a drop its parent company attributed to negative press. Darden Restaurants experienced a media backlash after they tried to replace some full-time worker openings with part-time workers at a few locations, in response to the Obama administration’s new health care law. Those tests are over, says company spokesman Rich Jeffers.
“We were looking at the impact of health care on our business and any number of scenarios we might consider to help mitigate those costs,” says Jeffers. “We were exploring then and now we know that’s not what will happen.”
Darden Restaurants, which also owns Olive Garden and LongHorn Steakhouse, engineered the expansion into Puerto Rico, with three new Red Lobster locations because, Jeffers says, it is a “very strong market” for casual dining.
The new initiatives may help turn around a brand experiencing slow growth and two quarters of lost profits. With Hispanics outspending other consumers in the food and beverage sector, Red Lobster hopes this move will help drive sales.