On March 25, 2013 I took a taxi out to Hongqiao, a western district in Shanghai, to visit Bubba’s Texas-Style BBQ (now one of three locations). Having grown up in the Lone Star state it is always interesting to meet fellow Texans in East Asia (there are not many of us… we do not have a reputation for being globe-trotters) and as it so happens the founder of Bubba’s is Kenneth Walker, from South Austin.
Kenneth has spent the last 16 years in Asia, 8 in Hong Kong and 8 now in Shanghai. Prior to Asia he also had an 8 year stint in New York City, working as a PR specialist for Weber Shandwick, a large global PR firm. And as he explained it to me, although he enjoyed cooking BBQ as a hobby throughout high school, it was not his intention to create his own barbecue joint in China, rather it was a matter of happenstance.
According to him, “While I was doing PR work in New York and Hong Kong, creating a BBQ restaurant was not something that I had really thought about. It was not until much later, after I had arrived in Shanghai and sampled the local so-called “BBQ” that I realized there was an unmet market opportunity and I began putting together a business plan. One of the initial challenges for me then and one of the challenges that all restaurant start-ups today must face in this city is finding a location. When I finally decided to give this idea a try, I originally tried scouting locations whose tenants were already out of business. The problem for me was two-fold: the first is that I had actually only been in the metro for less than a year, so I did not have a lot of connections throughout the city. The second is that in contrast to other parts of the world, after a business closes shop, the ideal time to lease the real estate is not after it is fully closed down. By then it is too late, as someone else always manages to make arrangements before you do – as I found time and again. So I changed my strategy to look for establishments that were on their way down – that had seen better days. The original Bubba’s here, was just that – a woman’s bar called Dragon Bar that was run by a couple of expat women. A friend noticed the place and informed me about it. So I stopped by one day and spoke to the lady who was thrilled to hear about the buyout idea.”
Kenneth was able to finally check something off the list: found the location. And as I mention in Chapter 3, in busy areas like Raffles City (来福士广场), one of the most popular shopping malls in Shanghai, space may cost more than 15 RMB per square meter per day (a rate, which for the typical sit-down restaurant footprint can amount to several million RMB a year). As a consequence several notable restaurants have closed this past year including Purple Onion, Funky Chicken, Public and The Fat Olive (yes those are real names, visit SmartShanghai for more).
What about supplies and decorations? For anyone that has lived abroad for any long-term period, it can be difficult to find a number of creature comforts from back home. And as is the case of football, to the chagrin of North American fans, sport memorabilia can be hard to find. Yet walking around in Bubba’s, North Americans would feel at home with dozens of sport pennants and authentic jersey’s attached to the wall and even a trophy case with autographed footballs (including one from Tony Dorsett and Mack Brown).
Where did he get these?
“It started with a Michigan State fan a few years ago. He gave me a Spartan pennant that I hung up on the wall. And after other patrons saw this, they became riled up. So I made it an open policy: if you bring it, I’ll hang it. BYOB: bring your own banner. So little by little I began to accrue what you see before you today. Prior to this ambiance, all I had initially brought were a few of things I had with me: a flag of Texas, saddles and a golf club whose Tom Kite autograph was accidentally rubbed off later by a cleaning crew.”
Again, for disclosure purposes I will note that I do not own any equity in his firm. I even paid for my own baby back ribs. But as I later told my friends, these were the most authentic tasting Texas ribs I have eaten in this time zone and this is coming from a guy who growing up, regularly ate at Spring Creek and Dickies. How did he do this?
“As I said, I had sampled the food of other local restaurants and what I found did not meet the standards I was used to back home. And to make good BBQ you need to actually smoke the meat. So I began looking for a smoker to import. I had never done this before and I was unfamiliar with the import laws. I did find a company in the US called Southern Pride who told me they could sell me one for $15,000 and that they had sold them abroad before. After hearing they had exported 15 smokers to Asia back in the ‘90s, I then began trying to track down the one that ended up in Shanghai. Somewhere in this city was a real smoker. And as luck would have it, I found out that Hard Rock Cafe were the owners of the smoker – and that they closed the restaurant a few years earlier. I got a hold of their previous GM and he told me that all of the store equipment was now in storage out by the airport and that it was all about to be removed in the next month. So I drove out to this storage site, climbed around for a couple of hours with a flashlight in my hands and after crawling around old chairs, tables, automobiles and motorcycles, I found the smoker. While it had been used as a rotisserie oven for chicken, it had never been used as a smoker, so fortunately it did not have any of the old smoker smell stained into it. I was able to buy it for $2,000 and with the help of about 10 Chinese mover guys we put it onto a flatbed truck and brought it to the now gutted Dragon Bar.”
While you may not be as fortunate as Kenneth was in acquiring kitchenware for your own restaurant, today would-be entrepreneurs have websites like Craigslist, Shanghai Expat and Delta Bridges to talk with others (both locals and laowai) to find equipment and potential store locations.
So Kenneth has found a location, a smoker and has a team to work with. How did he turn it into the real deal?
“The next hurdle is finding some type of wood to smoke with. Any fruit wood would work just fine, and I knew that apple wood was available as some of the Beijing duck restaurants were using it to smoke their ducks. I found a local duck restaurant that used Applewood to smoke their ducks, and while they gave me a few sample pieces of wood, they would not divulge the supplier name or contact. Later however, a friend I had placed in charge of logistics tracked down a company in Beijing that sells Applewood by the ton. I was not very sure what a ton of wood looked like and was told they would deliver it in a 6-ton truck. Thus I had a dilemma because I did not want to waste the storage capacity either. At the same time I did not want to scare the neighbors or the authorities, if they saw a new business opening with piles of wood, what would they think? So while I initially ordered a full 6 tons, at the last moment I cancelled half of the order. When the truck finally arrived and we unloaded the wood, all 3 tons that were delivered ended up taking up half of the restaurant. I got lucky because if I had ordered all 6, there would be no room in the restaurant. Afterwards we manually moved each cord out behind the restaurant wall and this supply lasted for two-and-a-half years.”
Is the rest history? Not quite, after all, even with everything in place you still need to cook a produce customers are willing to buy.
“Even though I knew how to cook BBQ, the first 3 months were hard. I was here from 5am to midnight each day. I eventually taught some local hires how to properly smoke meat and our initial menu included chicken, ribs and potato salad. Sometimes, for recipes like a breakfast sausage that tastes like Jimmy Dean sausage for instance, I would do a lot of trial and error before finding the right combination of flavors that the customer was used to and wanted. The restaurant also features my own secret barbecue cause and dry rub. Later we expanded the menu to include burgers, pizza, seafood and Cajun style fish& chips. We did have some Mexican food at one point but felt the menu was getting too cluttered so we culled it. We might expand the menu again though, due to changing customer demand.”
What are some expansion possibilities and opportunities?
“I opened up the first Texas BBQ in all of China. Because of my professional background I have done a lot of branding for merchandise like t-shirts and now social media. I also organize an annual chili cookoff and an annual BBQ cookoff with multiple teams made up of local cooks around the metro. Because the chili cookoff is an officially sanctioned event by CASI, the top 3 finishers earn automatic bids to the world championship held in Terlingua, Texas. In addition, we have live bands at these events and more than 1,000 people attend, with about an 80% – 20% demographic split (80% foreigners, 20% local), which is about the same demographic customer base at Bubba’s locations. We even work with Crown Relocations services to help manage the logistics of the chili teams, by picking up the kitchen equipment the day before and setting it up at the event grounds.”
CASI is the Chili Appreciation Society International and all Texans born north of the Guadalupe River are legally required to belong to it. Crown Relocations services is 45 years old and according to its official FAQ, generates $766 million in annual revenue.
What are some of the challenges that business owners face?
“This can still be a challenging business culture because of the need to maintain guanxi, to maintain relationships with suppliers and various governmental bodies. But larger cities like Shanghai, Beijing and Guangzhou have become increasingly business friendly. There is a formal structure with forms and permits that have been streamlined over the years. Potential business owners should also make sure to set-up a WFOE because it can be very risky creating a JV with a local partner like a friend or wife. Too many risks associated with that.”
For more about guanxi Chapter 1 and WFOE (Wholly Foreign Owned Enterprise) see Chapter 10.
And other opportunities?
“While it will vary from location to location, but the team that gutted and renovated our first restaurant did so brick by brick. They used the wood paneling from the bar to construct a ladder and reused the bricks to create a new wall in a different location. This kind of resourcefulness occurs throughout many other construction sites all throughout the country. And because of time saving methods like this, we were able to gut and then reopen the restaurant in about 3 months – a process which probably would have taken longer in other cities in the US. Other opportunities that I see are a “dive” steak restaurant. It is hard to find a really good steak for a decent price in this city. When I was working in New York there were a couple of very inelegant restaurants that had nothing but graffiti on the walls, no frills or ambiance whatsoever. The money you paid for the meat was used to buy the best meat for the money, so you got a great product, a delicious steak. I think there is room for several of these “dive” restaurants throughout China, especially in bigger cities. In addition, there are these pop-up trailers that are popular in certain cities of the US. They are mobile units that cook ethnic food like from Vietnam and I have yet to see them here on the mainland, but could see them being very popular late at night and early in the morning near bars and clubs.”
For a review of these pop-up mobile food trailers in Austin see: Scrumptious Chef
With varnished bar stools hovering around wooden tables, a flat-screen TV with sports on in the background, sport pennants and white walls (as opposed to the pink and black décor of Dragon Bar), Bubba’s illustrates how a simple idea and bit of tenacity and luck can create a successful business in China.
For more info about Kenneth and Bubba’s BBQ see: Shanghai’s First Annual BBQ Cookoff: What’s Bubba got to say about it? from ShanghaiExpat and Austinite who introduced Shanghai to Texas barbecue to compete in Terlingua from Austin360