Byline: Theresa Howard

For many, hitting Rock Bottom is typically not associated with the good things in life.

But for employees, customers and now shareholders, hitting Rock Bottom is tuning out to be not only a pleasurable but also profitable experience – especially when it means hitting The Rock Bottom Brewery.

In just five years since the first store opened under the name Walnut Brewery in Boulder, Colo., Rock Bottom has customers cheering home brews and a diverse, tasty menu.

Restaurants are subtle and contemporary, and they feature warm and inviting spaces that are as comfortable for a single diner as for a group of 10. The brew process positions huge, glass-enclosed, gleaming silver tanks in the center of the floor and a second set raised high behind the bar. Coupled with the display kitchens that let patrons watch the back-of-the-house drama unfold firsthand, the two create an entertainment factor and generate an added value for consumers.

"They're popular because consumers have been blown away by service and the level of food quality they receive on every visit," says Allan Hickok, managing director with Piper Jaffray, the securities firm and lead underwriter for the restaurant company's initial public and secondary offerings. "They execute on the food side and deliver on the beer product and atmosphere."

Fresh from its secondary offering, in which it raised $35 million, and facing a slew of repealed legislation that has blown open the market for brewpubs.

Currently, the five-unit brewpub division of parent company Rock Bottom Restaurants Inc., which also operates an 18-unit band of deep-dish pizza breweries, Old Chicago, has stores in Portland, Houston, Denver, Boulder and Minneapolis. A 500-seat store is slated to open in late May in Dallas and another later in the year in Chicago. Other cities targeted include Kansas City, Mo., Cleveland, Cincinnati; and Washington, D.C.

The five stores alone generated a profit of $1.9 million, on revenues of $16.6 million, for the fiscal year ended Dec. 25, 1994. With a lively atmosphere, contemporary, electric menu and service that is as bubbly as the brew that it serves, The Rock Bottom Brewery is delivering the 1990s recipe for success by exceeding customer expectations.

"The first thing our serves learn is to punch in," says president and chief operating officer Tom Moxcey. "The second thing they learn is to comp food."

Moxcey along with chairman and chief executive, Frank Day, have created a culture based on the basic premise that customers won't be happy unless those who serve the customers are happy. The company is a virtual textbook example of organizational design that fosters teamwork and feedback to generate results.

"We have a certain culture in the way we do things," Day says. "And we believe we can be contaminated by people who don't buy into our culture. We have a great deal of trust in our employees. A lot of people don't give their workers enough credit, but if you give them the chance, they rise to the occasion."

Servers are given free rein not only to comp food, but to send it back to the kitchen if they feel the dish is not up to snuff. Modifications to recipes are often worked out in the half-hour sales meeting that occurs daily before a shift.

"If a server wouldn't eat it, it goes back and we remake an entire dish," says Larry McClure, executive chef. McClure recalls his first few weeks on the job.

"Somebody sent something back, and my first reaction was 'What do they know?' But now after 14 months as the top culinarian, McClure sees it differently. "What it does is make the kitchen function at a higher level. It encourages people to do it right the first time. The philosophy is instilled from the beginning, and we do it."

Servers also get to put their mark of approval on new hires. Before new servers are official Rock Bottom employees, they must convince 10 of their peers that they understand the company's philosophy through their actions. For instance it isn't enough that someone know the definition of "laignaippe" – a Cajun term meaning "something extra." They must show they understand the meaning.

"We ask them to take responsibility and to be team players, and when that happens, we win too," Day says. "You have to invest in people." Rock Bottom's dedication to its employees prompted many to invest back in the company; 10 percent of the shares offered in the secondary offering were scooped up by employees and their friends and family.

The investment has also resulted in turnover of less than 70 percent. "The more important statistic is that we haven't lost one general manager in more than 2.5 years," Moxcey says.

Day says there is little concern that employees take advantage of the leverage they are given. "Their conscience becomes their guide. The culture is so strong that it tends to be self-policing and the bad apples feel uncomfortable."

One server agrees. "There is a lot of decision-making by the servers here," says Kelly Foerstner, a 24-year old who just returned to Rock Bottom after a seven-month travel hiatus. "The systems work very smoothly, and there is not a lot of stress."

That is the goal – to have systems and operations in place that make for happier servers. "In the business there is a huge amount of stress, so you've got to have fun," Day says.

Fun is a serious word around Rock Bottom, and it can seen as much in its marketing as the everyday restaurant operations. Two years ago Day's wife Gina, a former shareholder and sometimes gratis consultant to the company, developed a brew in honor of the Papal visit to Denver. The beer, Ale Mary with the tag "Full of Taste," is just one example of the fun these people have.

A similar approach was taken for the name, "Rock Bottom." The chain's second store in Denver opened in what was then known as the Prudential Plaza. Day and Moxcey playfully came up with the name Rock Bottom based on Prudential's long-standing tag, "A piece of the rock."

But Day and Moxcey recognize there is more to a successful operation than fun and creating an atmosphere where employees are inclined to check a 10 on job satisfaction ratings.

"This has to be a restaurant," Day says. "If we were just a beer joint we wouldn't be able to reach our potential."

"First and foremost it's a restaurant," says Hickok. "A lot of brew pubs are primarily brewing operations with food as an afterthought. Just brewing good beer is not enough. You have to execute on the restaurant side to have a viable and sustainable concept."

To that end of the company has developed a flexible menu that features core items and room for regional tastes and preferences. The menu features such items as shrimp fritters with tomato corn tartar sauce ($5.95); mango and black bean wontons lightly fried and served with pico de gallo and guacamole ($5.50); and smoked Rocky Mountain trout with capers, house-made horseradish sauce, red onion and dark rye bread ($7.95).

Entrees include the Brewtus Caesar-style salad ($6.25); alder smoked salmon, cold smoked and grilled served on braised leeks with apple cider sauce ($14.95); brown ale chicken sautéed in Molly Brown Titanic Ale sauce and served with woodland mushrooms ($12.95); baked paplanos stuffed with Southwestern seasoned pork, corn jalapeno jack cheese ($8.25).

"We've got the core menu, and then we can go regional," McClure says. "It's not a rubber stamp." Menu changes and additions are generated primarily through gut instinct. "We all travel so much, so we see what's popular. Everybody does research and development, so we expound that."

McClure oversees the menu and openings and directs back of the house operations, which like the menu and the company's overall philosophy are also flexible. In Denver, and the soon-to-be-opened Dallas store, dual service lines help execute fast service times and optimize line efficiencies for the 500-seat operations.

Often viewed as a hindrance, the broad-based 40-item menu optimizes ingredients through cross-utilization on multiple dishes. Additionally, customers don't perceive the menu's variety with disdain. "There are often pluses and minuses with a very eclectic menu," Day says. "There is a certain mistrust that perhaps we don't do one particular thing good. What we're trying to do is appeal to a broad base. But we're not trying to be all things to all people, we're trying to provide different foods for different moods," he adds. Recognizing that there are a finite number of urban markets that can support a Rock Bottom Brewery, Day and Moxcey are looking at Old Chicago as an additional expansion vehicle that they expect can fly in urban as well as suburban markets.

For greater penetration in urban markets that may already support a Rock Bottom, a new concept still may help the company realize growth opportunities. In march the company opened its first Denver Chop House and Brewery, an estimated $4 million-a-year restaurant that is not likely to cannibalize the flagship store.

"We're thinking about opening more of those," Day says.