How Luke Holden grew a single lobster roll shack into a multimillion-dollar, vertically integrated seafood business.
While many believe emotion hinders sound decision-making, it can very often be the impetus to a successful business. In the case of Luke Holden, homesickness prompted the Maine native to open the first Luke's Lobster in New York's vibrant East Village back in 2009. His concept was simple: approachable prices, a casual setting and good lobster – light on the mayo – on a toasted bun. It was an instant hit, with lines snaking around the block a common sight.
“I was doing investment banking at the same time. I left my business partner Ben Conniff and my father, Jeff [at the outlet], at seven in the morning and went to work. I didn’t hear from them until one in the afternoon because of how busy it would get. We were making people happy and having fun. The first month, we had strong sales and just so many good reactions. I was happy to go to the shack after my day job to close and even work weekends,” shares Holden, 35, who realised very early on that this was his calling. After the second New York location opened in May 2010, he quit his finance job to run the business.
In 11 years, Luke's Lobster grew from a single small shack into a fully vertically integrated operation with a lobster processing plant and 37 outlets around the world, with the latest in Singapore.
Holden attributes his success to a focus on customers and understanding the value proposition of his product. “We treat people the way we would like to be treated and we serve the best lobster roll for the best price.”
These are not empty promises. In over a decade, the price of a Luke’s Lobster roll has gone up by only US$3 (S$4). Within the same time, the price of a Big Mac rose by almost US$2 in America. Holden explains that it's able to do this because the business is completely vertically integrated.
Coming from generations of lobstermen, he recognised the potential of processing lobsters first-hand and built the company's facilities in 2012 in Cape Seafood in Saco, Maine. It now owns docks, buys directly from fishermen, and processes over 18,000kg of live lobsters that are delivered each day.
You have to make the team work and feel like owners – whether they are actual owners or are incentivised as such.
“We use only the flesh from the claws and the knuckles for the rolls. When the price of lobster fluctuates, we apply the difference to the cost of processing the other parts of the lobster as well to keep the price of the rolls fairly stable.”
Employees also play a big part in Luke's Lobster. “You have to make the team work and feel like owners – whether they are actual owners or are incentivised as such. Food and beverage is a 24/7 business. When people go on holiday or are on break, we get busy. You need people who can think on their feet and make decisions as though they are owners.”
Luke's Lobster's processing facility handles 18,000kg of live lobsters every day.
A project born from a lifelong passion that grows into a multimillion-dollar global business is a success story many can only dream of. One imagines some kind of grand ambition and a complex roadmap behind such a transformation, but Holden has been unwaveringly grounded in his approach. “We like to dream a little but don't deviate from our core brand values – our North Star. I typically don't plan any more than three years because there's just too much that's subject to change.”
Case in point, no one could have planned for the pandemic sweeping the planet. Luke's Lobster was also hard hit. In April, it had to furlough 700 team members, and the fishermen were told to stay onshore as the production facilities closed for the time being; only one restaurant remained open. While the other 14 outlets in the US have since reopened, what's really been helping the company keep its head above water is its diversified portfolio.
Overseas, six Japanese outlets are up and running, and its Singapore outpost – in a partnership with local group Caerus Holding – has been pulling queues since its September opening. Just as important, if not more so, is the company’s wholesale side, which supplies other businesses with seafood and runs a “very productive” ready-to-eat line offering meals such as lobster mac and cheese. Yes, Luke’s Lobster is indeed on a roll.