El Pollo Loco 2015 Annual Report Download - page 8

Table of Contents
We believe that we are also well-positioned to benefit from a number of culinary and demographic trends in the United States. We expect that
the trend towards healthier eating will attract and increase consumer demand for fresh and hand-prepared dishes, leading to a positive impact on
our sales. Furthermore, as indicated by recent high growth in the Mexican restaurant segment, we expect to benefit from increased acceptance of
Mexican food in the United States in the general market. Finally, we also anticipate benefits from the continued growth of the Hispanic
population in the United States, which, according to the U.S. Census Bureau, has grown from 50.5 million people in 2009 to 53 million people in
2012, and is projected to reach 78.7 million in 2030. The growth of the Hispanic population is expected to outpace overall population growth,
and the Hispanic population as a percentage of the total U.S. population is expected to increase from 16.3% in 2011 to 21.9% by 2030.
Our Competitive Strengths
We believe that the following strengths differentiate us from our competitors and serve as the foundation for our continued growth:
“Loco-ly” Differentiated Restaurant Concept with Broad Appeal . We believe that our food, served in colorful, bright, and contemporary
restaurant environments at reasonable prices, positions us well to satisfy the needs of a large segment of time-pressured mainstream food
enthusiasts who seek real food, real fast, and at reasonable prices. We provide our customers with the opportunity to enjoy citrus-marinated fire-
grilled chicken and Mexican-inspired entrees containing distinctive ingredients such as avocados, mangos, and Serrano peppers at price points
that appeal to a broad consumer base. Our per-person spend of approximately $6.04 in fiscal 2014 is competitive not only within the fast casual
segment, but also within the QSR segment. We prepare our entrees to order in approximately four minutes and allow our customers the option to
create their favorite flavor profiles using our freshly-prepared salsas before they enjoy their meals in our dining rooms or take their meals to go
from the counter or the drive-thru. We also believe that our concept, which integrates the complexity of creating real food in real kitchens with
the speed of our service model and the skill of our trained and certified Grill Masters, provides a layer of competitive insulation around our
restaurant model. Based on an external research report and a customer satisfaction survey, we believe that our positioning appeals to a broad
customer base, and that our brand crosses over traditional age, ethnic, and income demographics, giving consumers the best of both the fast
casual and QSR segments. Our differentiated QSR+ positioning sources traffic from both dining segments and as a result continues to fuel our
organic transaction growth.
Mexican
-Inspired, Fresh-Made “Crazy You Can Taste” Fire-Grilled Chicken and Entrees
. Our signature product is our chicken, marinated with
a proprietary recipe of citrus juice, garlic, and spices, which serves as the foundation of our distinctive menu of flavorful bone-in chicken meals
and Mexican-inspired entrees. With menu items such as our Chicken Avocado Burrito, Chicken Tostada Salad, Pollo Bowl
®
, and Chicken
Avocado Stuffed Quesadilla, we believe that we offer our customers a healthier alternative to traditional food on-the-go. Our entrees are
prepared using fresh ingredients with recipes inspired by Mexican cuisine. The majority of our menu items are made from scratch, including our
bone-in chicken and chicken breasts, rice, salsas, guacamole, and cilantro dressing, meaning that we make them without pre-prepared
ingredients. These items start with our chicken, which is marinated in our restaurants daily. From there, our Grill Masters fire-grill and hand-
chop our chicken, forming the foundation for our entrees. To complement our entrees, our team members slice and chop whole tomatoes,
avocados, serrano peppers, and cilantro to create our salsas, guacamole, and cilantro dressings. In addition, our rice is seasoned, and simmered in
our restaurants daily. Our salsas and dressings complement our recipes and allow our customers to enhance their culinary experience with
customized flavor profiles.
Our strategic approach to menu design has resulted in a balanced menu with broad appeal, as demonstrated by our balanced day-part mix. Our
bone-in chicken meals and Mexican-inspired entrees accounted for 46% and 54% of our company-operated restaurant sales, respectively, in
fiscal 2014. Our individual and family-sized chicken meals appeal to customers looking to dine at the restaurant or take out during dinner time,
while our more-portable Mexican-inspired entrees draw traffic from customers at lunch time or for an afternoon snack, enabling us to generate
sales almost equally between lunch and dinner. We believe that our family-sized chicken meals provide a
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