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Sally Smith, CEO of Buffalo Wild Wings, says the chain has stayed true to its original concept despite its rapid growth. |
By Mike Hughlett
Star Tribune
MINNEAPOLIS
--It's Saturday morning at the Buffalo Wild Wings in Minneapolis' Dinkytown neighborhood, just a long punt away from TCF Bank Stadium, and maroon-and-gold-clad fans are gathering. The University of Minnesota Gophers don't take the field for an hour, so there's time for beer and chicken wings, breakfast of champions.The 58 TVs in the bar flicker with everything from college football prognosticators to baseball highlights to global soccer scores--yes, Argentina vanquished Paraguay 3-1. The scene isn't too different from when the wing king started 30 years ago, just more TVs and a bigger beer selection.
"We have really stayed true to our course," Buffalo Wild Wings' longtime CEO Sally Smith said, sitting at a window table and reflecting on the company's unswerving rise.
Sales--expected to cross the $1 billion mark this year--have grown eightfold since the Golden Valley, Minn.-based company went public in 2003. The stock is up tenfold, as profits have steadily climbed. Great Recession? Buffalo Wild Wings blew right past it.
The company is facing record high prices for chicken wings, a major challenge that investors are monitoring closely. Still, as long as Buffalo Wild Wings continues to grow at a robust pace, stock analysts don't seem too worried.
The company, which has almost 850 restaurants in 48 states and one Canadian province, should make good on its long-held goal of 1,000 restaurants by 2013. And Smith sees 1,500 outlets within five to seven years.
Chicken wings are a hot business, and there's lots of competition, from Pizza Hut and Domino's to wing chains like Wingstop, a fast-food concept. "Anybody can do wings--there's nothing to them," said Bob Goldin, executive vice president at restaurant consultant Technomic Inc.
But Buffalo Wild Wings is the clear leader as a wings "pure play," he said. Its growth has regularly topped that of restaurant concepts of all kinds in Technomic's annual rankings. In 2011, Wild Wings was the third fastest-growing full-service chain with revenue over $250 million.
Its success has as much to do with its ambience as its food, Goldin said:
"There's kind of an energy to the place. It's family-friendly, but not a kids' place like Chuck E. Cheese."
And with its TV density and "buddy food," Buffalo Wild Wings is a magnet for the beer-and-sports crowd, he said.
The company started in Columbus, Ohio, near the Ohio State campus, as a simple wing joint. By the early 1990s, Wild Wings' two founders expanded it into a chain of about 30 outlets, mostly in Ohio. But they needed cash to expand further, so they turned to Ken Dahlberg, a Twin Cities electronics entrepreneur.
Dahlberg was the father-in-law of one of Wild Wings' founders, and he had cash after selling his Miracle-Ear hearing aid business in 1993 for $138 million. Dahlberg bankrolled the concept, and Dahlberg Inc.'s chief financial officer--Sally Smith--became Buffalo Wild Wings CFO in 1994.
Smith, who grew up in Grand Forks, N.D., had a numbers background, starting with an accounting degree from the University of North Dakota. By 1996, she had become Buffalo Wild Wings CEO, and was fully immersed in the restaurant business. "I know more about chicken than I thought I ever would," she said.
