Olive Garden got a scathing lecture from shareholder Starboard Value last year on the restaurant chain’s failings, including its bloated menu and a lack of salt in pasta water.
Now it’s time for Starboard to prove it was right.
Olive Garden is introducing a back-to-basics menu on June 1 under new management: Starboard’s. After taking over the board of Olive Garden’s parent company, Darden Restaurants Inc., the investment firm is putting its stamp on the casual-dining eatery. And the main message is returning to its Italian roots.
Olive Garden is adding sausage-stuffed giant rigatoni, grilled chicken marinated with Italian spices and vanilla panna cotta. It’s also doubling down on its famous breadsticks by turning them into sandwiches, in chicken parmesan and meatball varieties. That marks a shift away from a menu with everything from hummus to hamburgers -- a lineup that was meant to please everyone but instead alienated Olive Garden’s biggest fans.
The chain is “turning our focus on the core guest, to the guest who loves the Olive Garden,” Jose Duenas, executive vice president of marketing, said in an interview. That means paying more attention to Italian comfort food, while also putting fun twists on its most iconic fare, including the breadsticks.
Starboard led a nine-month battle against Darden management last year, culminating in a dramatic victory at the restaurant company’s annual meeting in October. Starboard persuaded shareholders to replace the entire board, a rare outcome for an activist investor. The investment firm’s CEO, Jeffrey Smith, then became chairman at Darden, which also owns the LongHorn Steakhouse and Bahama Breeze chains.
Before the showdown, Olive Garden had struggled to get its menu right. Sitdown restaurants also have seen an exodus of diners to fast-casual chains such as Chipotle Mexican Grill Inc. After declining 3.4 percent in the last fiscal year, Olive Garden’s same-store sales showed signs of a rebound in the most recent quarter, ticking up 2.2 percent.
The new breadstick sandwiches were created quickly, over just three or four months, said Jim Nuetzi, Olive Garden’s executive chef. They use a modified breadstick for the bun that’s shorter and wider. The idea came from restaurant employees, who said that diners were already making sandwiches out of the chain’s garlic-butter breadsticks.
Sausage-stuffed giant rigatoni, topped with meat sauce and mozzarella, also fit Olive Garden’s renewed focus on Italian comfort food. After trying cannelloni- and shell-shaped pastas, Nuetzi decided giant rigatoni were unique.
“It’s not something that you see at other Italian restaurants,” he said.
At the height of its campaign last year, Starboard released a nearly 300-page presentation filled with proposals for fixing Darden. It knocked Olive Garden for having a 96-item menu, more than Italian competitors such as Maggiano’s Little Italy and Romano’s Macaroni Grill. But the presentation wasn’t just about food selection. Starboard said Olive Garden wait staff should visit tables more often and push more wine. And it complained that waiters doled out too many breadsticks at once, allowing them to get cold and stale.
The investment firm also criticized how Olive Garden no longer salted the water it uses to boil pasta, “merely to get a longer warranty on its pots.” Darden didn’t say if it was currently salting the water.
In recent years, Olive Garden had tried luring millennials with non-Italian fare such as garlic hummus and chicken skewer small plates, as well as a burger topped with arugula and aioli. The idea was to address the so-called veto vote -- the person in a group that would nix the idea of going to Olive Garden if there weren’t non-Italian options.
The chain, which has 845 locations, has since axed those items. Still, Olive Garden’s test kitchens continue to explore new dishes. Nuetzi has been trying out different ragu sauces and a deconstructed lasagna, but the experiments aren’t as far afield.
“It’s just not the primary focus that it was,” Nuetzi said.