Managing exclusivity or luxury comes at a price! [the ElBulli example]

ElBulli is probably the most famous 3 star Michelin restaurant in the world. Labeled “the world’s finest restaurant”.

Its founder, superstar chef Ferran Adrià, is a visionary, a dreamer, a creator of the extraordinary.

And a marketer at heart. He talks about his customers with passion, about his food as a way to convey emotions, about ElBulli as his brand (with strategy, vision, mission, future, and all the rest of the good stuff). The products he serves are unique, different from any restaurant menu in the world, created with the experience in mind. The packaging (in this case: how it is being served on the plate) is fun, eye-opening, memorable, part of the experience.

Adria broke all the rules, he changed the game. That is true marketing for a restaurant if you ask me!

The most impressive fact about ElBulli is that they seat only 8000 people a year [ they open 7 months a year only] … but they have more than 2 million (!) reservations/applications! Getting a seat at the table is a privilege, an honor, unique, extraordinary, not for everyone … eh voilà, the definition of exclusivity. Minor side-remark: it’s expensive too (the average tasting menu goes for about 500 dollars a person).

Aiming for exclusivity? Better keep an eye on supply/demand: if Adrià would have build a chain across Spain or the world, and seated everyone, his exclusive stature would have evaporated.

BUT … there might be a high price to be paid for the exclusivity. In the case of Adrià, losing half a million euros a year! So now the restaurant will close. Permanently? Who knows. Adrià announced a 2 year hiatus. But, and that’s another quality of someone aiming for exclusivity: he is persistent in his own right. He’s the Richard Branson of the restaurant world. So maybe, someday, he’ll be back, with a new formula, a new business model, a new exclusive offering (but I suspect, with the same Elbulli brand!). If and when that happens I for one will go and check it out  😉

 

Conclusion

1. To be exclusive, act exclusive. Your product/brand is not accessible for everyone.

2. There is only one standard for everything that you do: the highest possible one. You can’t give in. Or your consumers will detect it and walk away.

3. Exclusive means extraordinary, different, never-seen-before. That gives your product high talk-value. And let’s be honest, that’s what the target audience wants: see and be seen with your product/brand.

4. Don’t forget the business model, and economic viability. Running a business that loses money for years and years is obviously not desirable, and borders stupidity.

 

My recommendation for ElBulli:

* Keep the dream of exclusivity, but do it smarter. Reopen the original Catalonia ElBulli, as the iconic flagship. Double the price to bring the number of dinner requests from 2mm to 200.000, triple the capacity, re-engineer the input cost per dish without losing the exclusive nature of the restaurant.

* Open spin-off restaurants at a 2-star level that offer the same great experiential eating experiences as ElBulli. But don’t serve all dishes. Keep the price high; don’t go too low (e.g. Louis Vuitton does not offer low-end products; even their wallets and keychains are luxurious, high quality, and expensive). Aim for very high margins, i.e. what dish goes on the menu there is crucial. Open restaurants in 10 major cities in the world.

* Invest in the ElBulli brand, and offer smart branded items: cookbooks, cds and dvds. Sample the restaurant with your targetgoup. Buy a Bentley = get a free exclusive meal at ElBulli!

Net: follow the car model. Porsche offers an “affordable” Porsche Boxter with the dream of an expensive/ exclusive 911 carrera4 racing machine. Porsche makes an average 11% profit margin, blowing away virtually every other car maker in the world. Overpriced? Hell yeah, but that comes with exclusivity rights. And if it makes it profitable, that’s just smart business sense. That’s makes the new VW-Porsche merger a dream model: Porsche brings in the profit, VW brings in the volume.

 

 

 

 

 

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Tagged as: 3star, business, business model, Catalonia, chef, different, eating, Elbulli, exclusive, experience, food, marketing, menu, Michelin, novelty, Porsche, premium, restaurant, Spain, star, superpremium, unique