Why America Is Addicted to Olive Garden

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CEO Clarence Otis is bringing Darden's brands together in a single building for the first time | Photograph by John Loomis

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Kitchen Monitors run Meal Pacing software created by Patti Reilly White and her IT group

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The Darden Menu

But today, overfishing has made the seafood side of the business increasingly complicated -- not just for Red Lobster but for all the Darden brands. "It's a supply-and-demand issue," says Ian Olson, the company's director of sustainability, a newly created position. "There are 6 billion people on the planet today, and it'll be 9 billion by 2050. There's no better way to say it: There are only so many fish in the sea." Even before scientists predicted in 2006 that world fish stocks could collapse by 2048, Darden had begun removing endangered wild fish, such as Chilean sea bass and orange roughy, from its menus and using its clout as one of the world's largest buyers to push the industry toward sustainability. To promote fish farming and to set standards to minimize its environmental impact, Darden cofounded the Global Aquaculture Alliance, a nonprofit trade association that partners with governments and NGOs. Once GAA agreed on shrimp aquaculture rules, Darden required its suppliers to adopt them, much as Wal-Mart has successfully pushed its vendors to reduce packaging. "We recognize our responsibility," says Olson. "We want to make sure we preserve the ecosystem, but it's even better if we enhance it."

The demand for other ingredients is bound to rise as well, particularly as China's and India's growing middle classes consume more. So the company has begun a plan to transform the supply chain, which it expects will save $20 million a year. It is studying Wal-Mart to "understand the components of cost" with its vendors and become a better and more informed negotiator, says senior vice president Barry Moullet, whose group purchases $2.4 billion of goods a year from 1,500 suppliers. It's hedging wheat purchases, much the way airlines purchase fuel. An automated ordering system will eventually replenish a restaurant based on electronic-tagged inventory and guest-traffic forecasts.

"We're developing tools to control risks," Moullet says. "This should give us an advantage for years to come."

At the last stop on the morning tour, the presidents of Olive Garden, Red Lobster, and LongHorn do what you expect restaurant executives to do: chow down. Over steaks and salads at LongHorn, they talk shop at a back table in the dining room, dissecting things customers don't notice. Red Lobster's faux-wood floor tile, which lasts longer than real wood and is less slippery. Olive Garden's stone exterior, which requires less upkeep than painted wood. LongHorn's layout of food-prep and storage spaces, a small improvement that saves valuable time.

"This was the biggest opportunity yet to see what's behind the scenes and how each of us makes it happen," LongHorn's George tells me after lunch. When LongHorn joined Darden, he says, "I thought this bigger company with tens of thousands more employees and more restaurants than Rare would be less connected. But that's untrue."

Many major brand leaders would die for the opportunity to consult with people who run businesses of similar scale and wrestle with the same issues on a daily basis. But the teams at T.G.I. Friday's and Applebee's can't get together any more than those at Coke and Pepsi can. That is one of Darden's unique strengths, having several brands under the same roof -- and in adjacent offices and R&D kitchens at the new Orlando headquarters.

The key is finding the best mix of independence and collaboration. All of Darden's chains may use the same technology to pace their cooking and predict their dinner traffic, and they may serve shrimp from the same Thai fish farm, but each brand needs to remain distinctive. "It's all about balance," says COO Madsen. "There's an art and science to this."

Efficiency and soul. Innovation and continuity. Darden wants it both ways. Think of it this way: Red Lobster may be serving more grilled salmon and less fried flounder. But no one is messing with the cheese biscuits.