All You Can't Eat: Red Lobster's Last Supper with Lewberger | 74

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People have told me that hands down, the best food in any chain restaurant in the world is the Cheddar Bay Biscuits at Red Lobster.

Now, I cannot confirm or deny this because brace yourself, besties.

I have never been to a Red Lobster.

Tragic, I am part of the problem.

But even the power of a legendary biscuit couldn't save the subject of today's big flop from a world of pain and let's just say their troubles aren't shrimpy they're jumbo

talk about being boiled alive

without warning red lobster has announced it's closing 99 restaurants across the usa when you saw endless shrimp you know what did you think said that's a very expensive product to give away endlessly not a red lobster it has officially filed for bankruptcy y'all not fing your woman good enough to earn that trip to Red Lobster.

That's what happened.

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From Wondery and at Will Media, this is the Big Flop, where we chronicle the greatest flubs, fails, and blunders of all time.

I'm your host, Misha Brown, social media superstar who loves a good bottom list meal deal at Don't Cross a Gay Man.

Now, everybody on our show today, we have the members of the three-man comedy band Lou Burger.

I'm obsessed.

It's Keith Habersberger, Alex Lewis, and Huey Stonefish.

Welcome to the show guys.

Hello Misha.

Hello.

Thank you so much.

So happy to be here.

Before we get into Red Lobster, I guess first question, what's your favorite sit-down chain restaurant?

Whoa, big question.

Well, we used to have a Chili's in my hometown.

They might still be there, my hometown of Syracuse.

And I always had friends that worked there.

And, you know, in terms of favorite, what does it really mean to be favorite?

I guess where you have the best memories.

And I have a lot of memories of going to this chain restaurant as a 17-year-old.

So chilies.

Nice.

My favorite sit-down chain restaurant, and maybe I'm a little biased because I'm from California and also my parents had their first date at one of these, but my favorite is California Pizza Kitchen.

Oh, yes.

I love California Pizza Kitchen.

And I mean, it's where I discovered my love for the barbecue chicken pizza, no onions, no cilantro.

And

I think it's delicious and I love their tortilla soup.

Okay.

This is such a hard question to answer because I've eaten almost all of them and I could say most of them aren't very good.

I've eaten at Applebee's the most because they were open the latest.

When we're on tour, sometimes you don't have a lot of choices.

So Applebee's is often open.

They have the good half-price everything sort of menu.

So I guess Applebee's, although I don't want to say that Applebee's is good, but I guess I will venture to say that it's my favorite, or at least my most visited.

Yeah, Huey, I think I'm actually from a little town called Sodis that's very close to Syracuse.

Get out of here!

So I think we're kindred spirits because mine's also chilies.

I'm a triple dipper queen.

Okay.

Oh my God.

Nisha, I'm wearing my upstate New York shirt right now.

Yes.

Wow.

Well, today we're going to take a crack at Red Lobster's buttery bankruptcy and learn how a few greedy investors sucked Red Lobster dry.

Now,

here's a trivia question.

Can you guess when the very first Red Lobster opened up?

1972.

I'm going to guess it was, yeah,

late 70s or early 80s.

So let's go 81.

I was thinking like 83, 85-ish.

So I'll go, I'm going to go 82 just by Price's right rules to beat Keith if it's up there.

Well, the first Red Lobster Inn, as it was originally known, opened in 1968 in Lakeland, Florida.

Wow.

Yeah, I should know that.

Yeah, we should all know that.

Its founder, a restaurant genius named Bill Darden, has been innovating in the restaurant space for decades.

He opened up his first place, The Green Frog, in 1938

when he was only 19 years old.

Wow.

The Green Frog.

Are all his restaurants children's book titles?

Are they all colors and animals?

I guess.

But the green frog, it was a luncheonette that served your basics, sandwiches, chops, steaks, and items from the briny deep.

From the briny deep.

Yarr.

What would you eat from the briny deep?

I ate sushi, so that's briny deep.

Salted oysters.

Oh, you know, I do it like an oyster.

But you know what I should say before we really get into this?

I've never been to a red lobster.

What?

Ah, the cheddar bay biscuits.

Also, their mashed potatoes used to be so good, and their chicken tenders were exceptional.

I submit the only good thing at a red lobster is the cheddar bay biscuit.

So before red lobster drowned in the briny deep, its beginnings were as hopeful and majestic as the first light of dawn over the distant horizon.

Corporate lore says the green frog was desegregated in Georgia during Jim Crow, which would mean Darden was way ahead of his time and a badass outlaw.

But people who grew up around the Green Frog say it's just a legend.

He hired black workers, but he didn't welcome black customers to dine at the Green Frog at first.

Either way, Darden's racial politics helped him cultivate a loyal fan base with Black Americans.

And by the time Red Lobster opened in 1968, it had black employees and proudly served black diners.

Now, in contrast, other businesses in Lakeland, Florida chose to close rather than comply with the recently passed Civil Rights Act.

Wow, that's so screwed up.

Idiot losers.

Sounds a little bit Florida.

I guess that does sound Florida.

So when it opens, the concept of Red Lobster, according to Darden and his business partner, is to bring fresh-ish seafood to the landlocked masses.

It's marketed as a harbor for seafood lovers.

You might be thinking, Florida's not landlocked.

No, it's not, but Lakeland isn't on the shore either.

Usually, one of the things that I look for when I'm getting like a fresh or even just like a seafood experience is, how close am I to actual seafood?

So, the thought of opening one to answer that question when the answer is very, very far away, you know, innovation.

Well, but we have Italian restaurants and this isn't Italy.

We simply must help these people achieve culture.

Well, however fresh the food was, the masses, they

eat it up.

Lines to get into that OG red lobster start to form an hour before the doors open.

And I would like to remind everybody that this happened long before social media existed, which makes it even more impressive.

Yeah.

Right.

Do you remember lining up for anything exciting pre-Web 2.0?

I'm not a line guy.

It takes a lot to get me into a line.

I just, I hate, I hate to wait in a a line.

I really do.

When I was in like second grade, I lined up to get my Harry Potter book signed by J.K.

Rowling.

Wow.

Wow.

Oh, tough.

That's tough.

That didn't age well, but you know.

It didn't.

If anyone's looking to buy a first edition copy of

a signed Harry Potter book, you can take it on my hands.

Well, to learn more about the early days of Red Lobster, let's play a game.

Ooh.

Okay.

So let's call this game the popcorn shrimp quiz.

Okay, let's do it.

You're welcome.

You're welcome.

So I'm going to give you some multiple choice questions and whoever gets the most correct wins in all you can-eat hush puppies for life prize.

A completely real offer.

I do like that.

Wow.

Me too.

All right.

First question.

An early dish at Red Lobster was called the Neptune platter.

Which of the following dishes was not included?

A.

Frog legs.

B.

Lobster.

C, crab cakes, or D, crab claws.

Crab claws would be rather expensive to achieve.

I imagine they have frog legs in Florida because they a lot of frogs.

Maybe that's an easy thing to get, but that's certainly not an ocean dweller.

So that would be outside of Neptune's realm.

Are we on a team right now?

I'm going to say lobster.

No, we're all against.

It's every man for himself.

I'm saying lobster because why was it included in the possibilities of questions if it isn't the obvious answer?

We're at a red lobster.

lobster, it's not included.

Lobster for Huey.

I was also sort of leaning lobster.

It feels like a trick question to me.

I don't know.

I mean, you're not wrong with the Neptune and frog legs thing.

Yeah, I'm going with frog legs.

And if I'm wrong, actually, they're wrong because

frogs don't live in Neptune's realm.

So they're wrong.

So I'm going with frogbags.

All right.

Well, the answer was...

Oh,

lobster.

Oh,

I'm two for two right now.

What?

He only asked one question.

But I got the other one.

Yeah.

He was closest on the date.

Yeah, that's true.

The funny thing is, lobster wasn't on the menu at all.

Wow.

Right.

It was too expensive.

Darden and his business partner thought red lobster was a cool name, just like the green frog.

And yes, the platter did include frog legs as well as fried shrimp, oysters, flounder, scallops, crab cakes, crab claws, hush puppies, and a side.

Oh my God, order me two.

Bonus question.

Any guesses at how much it cost in 1968?

Five bucks.

$6.50.

$4.25.

$2.50.

Damn it.

For that much food.

Even with inflation, that's about $23 today.

That's a deal.

That's not bad.

That's a deal.

That's a deal.

That's a deal.

All right.

Second question.

As part of the nautical theme of the restaurant, the waitresses had to wear kitschy outfits.

What were their uniforms inspired by?

A.

Pirates, B, sailors, C, sea captains, or D, mermaids?

Mermaids.

I think, I'm thinking sailors

because it's cute C without being too much.

What was C again?

Sea captains.

I'm doing that just because it's...

That feels the funniest to me.

Well, Keith, ding, ding, ding.

It was sailors.

Nice.

We do have a picture of their uniforms.

Oh, my God.

Oh, wow.

Oh my gosh.

Oh, I would love to see this.

Oh, my God.

So, can you describe these?

Oh, that's fun.

So they're wearing blue dresses that have nice mid-arm length, mid-upper arm length sleeves, classic sleeve-length, I would say.

And then it has a nice red sort of scarf on the big sort of collar that maybe leads to a hood, but probably just goes to one of those long, almost graduation gown-esque like Vs on the back.

They look very demure.

Very Donald Duck-like, if I may.

Ah, yeah.

A little Donald Duck vibes.

Yeah.

So, dorky or chic, who's to decide?

All right.

Third question.

Red lobster is so popular, it only takes them two years to catch the eye of a larger company.

In 1970, which giant food corporation buys red lobster?

Was it A, Hormel Foods, B, Post-Consumer Goods, C, the Campbell Soup Company, or D, General Mills?

Okay, I have not heard of post-consumer goods, but I do know Hormel makes chili, so I'm not going to vote for them.

And then General Mills, I know, makes cereal, so I'm also not going to vote for them.

I'm going post-consumer goods.

PCG, it's got a good feel to it.

So I kind of align with Huey there, but I'm really not sure.

I'm going for the curveball, Campbell's soup.

Let's take Campbell's.

I feel like they make soup there.

They make clam chowder.

It's like, it's right there.

The chowder.

Well, I'm here to tell you, whatever the outcome of this question, I would totally be on any of your trivia teams.

People were very thoughtful in your guesses.

But unfortunately, all of you are wrong, and it was General Mill.

Oh,

that makes sense because they probably also make Captain Crunch.

Right.

Yeah.

All right.

Last question.

How many pounds of seafood has the chain served by 1983?

Is it A, 75 million pounds, B, 150 million, C, 300 million, or D, 600 million?

I'm going C, 350 million.

Yeah, I mean, like, that, that, a Neptune platter sounded like two pounds on its own.

It was two bucks.

So I think Huey's answer is right.

I don't think they did 600 million.

I love when Keith answers with me.

Let's let, you know what?

Let's make it a three-way Lou Burger C.

Oh,

oh, it's Lou Burger's platter, baby.

Lou burgers platter.

That's right.

Well,

no.

It was

600 million pounds

of fresh-ish seafood.

And we did some, we crunched some numbers over here at Big Flop.

That's 2,736 million crab claws, or if you prefer, 13,200,000,000 jumbo shrimp, or that's 27 billion popcorn shrimp.

Wow.

Wow.

Wow.

It still wouldn't be enough to fill us.

Okay.

Come on.

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You destroyed our top.

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We call call things accidents.

There is no accident.

This was 100%

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So Darden, he is pretty proud of his creation.

I'm sure.

But also completely baffled by the rapid expansion.

He just can't believe it's so successful.

What's also great about Red Lobster is that employees, they also really love it.

It's one of those places where a humble dishwasher can climb the ladder over 50 years and become an operations director.

It's a job you keep for life, basically, that grows with you as your family gets larger.

You know, formerly known as the American dream.

Now, here's an excerpt from a 1989 New York Times article titled, Why They Smile at Red Lobster.

It's about a true account of a cheerful training day exchange between Red Lobster new hires and their manager.

So, Alex, if you can please read the narrator.

Huey, if you could read the teacher, and Keith, could you read the trainees?

The scene at a Red Lobster restaurant that opened recently here is a cross between a pep rally and a pop quiz.

What's the first thing we do at the table?

Smile.

Booms the class.

And the second thing?

Say something personal.

And the third thing?

Describe the special features.

Very good.

And what will be our vegetables of the month?

Broccoli and carrots.

Comes the roaring reply.

And so, in a burst of energy, begins a new Red Lobster restaurant.

This is fan fiction.

This is not real.

Well, customers love the food and the pleasant waiters.

So the staff are treated nicely by seafood fanatics, which is a nice change.

Everybody's happy.

Morale is high.

The Cheddar Bay biscuits keep flowing.

What more can you ask for?

So all's well at Red Lobster until 1994 when Bill Darden passes away.

Oh, their fearless leader.

A year later, General Mills diversifies their holdings and adds another restaurant to the mix, the Olive Garden.

Oh my word.

Here it goes.

The downfall.

Come on.

So in honor of Bill Darden, they named their new restaurant umbrella corporation Darden Restaurants.

Now, that would be a touching tribute if General Mills could build on Red Lobster's pristine reputation, but they can't.

So for the next few decades, it seems like they let business flounder.

Oh,

Misha.

Come on.

You're welcome.

Then, around 2010, prices for lobster skyrocket.

Now, this happens for a few reasons.

People start eating more seafood in general because they hear it's super healthy and are, for a moment longer, blissfully unaware of overfishing and how bad it can be for the environment.

Also, as China's economy expands and American chains like Red Lobster open locations there, the local middle class gets a taste for the red stuff, which pushes on the global supply of lobsters.

The red stuff.

So

the red stuff.

Low supply, high demand.

I mean, we know what that generally means.

So as prices go up, satisfaction drops.

And the Red Lobster fanbase, aka the Lobster Heads, which which I'm just guessing is what they're called,

they find other places to gorge.

So something needs to be done to retain and regrow the customer base here.

But instead of reinvesting in the brand, Darden Restaurants looks elsewhere for profits, focusing on newly acquired chains like Longhorn Steakhouse and Capital Grill.

That one didn't have as much of a long-standing reputation

as Olive Garden and Longhorn.

Yeah, I actually went there recently.

Yeah, I maybe want to change my answer from the beginning to there.

Now, by 2013, Red Lobster is still a good place to work, but investors are getting antsy and demand that Darden restaurants make some changes.

Well, they panic.

And instead of fixing the brand, they sell it to a private equity firm called Golden Gate Capital.

Well, at first, it's great.

Golden Gate empties out its pockets and drops $2.1 billion

to buy red lobster.

Oh my God, that's as many popcorn shrimp as they served in the 20-year period.

Still not enough to fill the three of us.

Hey, Alex.

But remember that number, 2.1 billion, because we'll need it for some comparison later in the episode.

Now, on the one hand, Golden Gate invests a ton of money into modernizing the restaurants as part of their Kitchen of the Future project, updating the saute stations and point-of-sale systems.

But to pay for those and to make a little scratch, they do something that might be considered really sketchy.

They sell the land that 500 Red Lobster restaurants sit on for $1.5 billion.

Holy moly.

Hmm.

That is sketchy.

But they retain the Red Lobsters?

They own the buildings.

They do not own the land.

That's strange.

So most people probably think that the famous endless shrimp deal that recently made headlines is the real reason for Red Lobster's big flop, but actually it starts with this real estate deal.

Because from that point on, the Red Lobster company has to pay rent for their restaurants, an expense they did not have before, which means they for sure better be profitable.

Wow.

So what works in Red Lobster's favor is that it cemented its reputation with black consumers early on, thanks to its welcoming policies.

And even even in 2015, the chain boasts a slightly higher percentage of black customers overall than the makeup of the country, which is about 14%.

What would be great is if the brand could figure out how to grow that base with some viral marketing.

But you kind of have to be very online to crack the code, and it doesn't seem like Red Lobster Corporate gets the new environment.

In February of 2016, Red Lobster catches a break.

For the first time in a while, the chain starts trending on social media, and it's all thanks to a song.

Can you guess what song it was?

Is it the Beyoncé song where I'm going to take his ass to Red Lobster?

Yeah.

Yes, yes.

Beyonce releases her now infamous surprise video for the single Formation that breaks the internet or at least puts some cracks in the internet's foundation.

So, Keith, since you guessed it right, can you please read the lyrics of the Immortal Bard?

Of course, I would be honored, and I'm the right person to do it.

Beyonce, home.

I try to give her a setting.

When he fuck me good, I take his ass to red lobster, because I slay.

When he fuck me good, I take his ass to red lobster, cause I slay.

Very good.

Yeah.

How would you use that in a marketing campaign?

That's tough.

I would show two people in love, like sort of like a Valentine's Day type commercial.

They're so in love, they're having such a nice time, and they end their meal at Red Lobster, feeding each other lobster, and then they both look directly into the camera and wink.

Yeah, I gotta side with you, era.

Yeah.

Why not just have Beyonce at Red Lobster or something?

I mean, that would be the ultimate.

Or, like, they're in bed and they pull back the covers to reveal Neptune's platter.

Or that would be good.

Or go with me on this.

Okay, we're going.

It's dirty.

You could have them eating together at the Red Lobster, and the man in this relationship that's representing Beyoncé's lover eats a clam in front of her sensually.

Ah, yes, of course.

Wow.

I mean, all great ideas, but they don't do any of those.

Okay, no, they missed the boat.

Oh, Misha.

Yes.

Red Lobster's account does tweet.

Cheddar Bay Biscuits, B-E-Y, has a nice ring to it, don't you think?

That's pretty good.

That's not bad.

Yeah, not bad.

The problem was it took them eight hours to come up with that,

which makes the lightning speed Twitterverse sort of angry.

Like, how uncool is this company that can't immediately come up with the perfect tweet to capitalize on an unexpected event?

I gotta say, wow, an eight-hour window.

I didn't know you had a time limit on quippy responses on the internet, but I guess you do.

Well, in a world of like, you know, look at the Wendy's Twitter handle.

I was just gonna say that.

That's true.

Yeah.

So, speaking of the pandemic, let's fast forward four years, our favorite time.

Like many dine-in restaurants, Red Lobster gets hit hard as people hunker down and learn to make their own sourdough.

Even though these fancy quarantinistas are definitely getting food delivered, mid-range chain food isn't isn't their go-to.

Coconut shrimp doesn't travel as well as, say, pizza or a nice curry that you can reheat.

Another problem is that Red Lobster's customers skew older than for other sit-down chains, and older folks take a bit longer to go out in public, unlike their bored and horny children do.

And that eats away at Red Lobster's profits.

Plus, let's not forget all that new rent the company has to pay, which keeps squeezing the ever-living tartar sauce out of Red Lobster Corporate.

At some locations, they're spending 50% of their revenue on rent.

Oh my God.

That's bad.

Gosh.

It gets worse.

At others, rent is being paid on non-existent restaurants.

What?

Because even once a chain fails and has to close, the rent is still due.

Wow.

Oh,

rough.

So by this point, Golden Gate wants its golden parachute and is eager to sell.

So enter Thai Union, one of the biggest frozen and canned seafood companies on planet Earth.

Wow.

Based in Thailand and spanning four continents, it employs 45,000 people worldwide.

Basically, if it is canned or caught in the ocean, they might have a stake in it.

Wow.

They own ubiquitous grocery store brands like Chicken of the Sea and King Oscar, and they sell pet food.

That's unfortunate.

In a blind taste test, maybe you wouldn't know the difference.

That makes sense to me.

That's tough to hear.

So, for all of Thai Union's success in ocean-based snacking, they've never owned a restaurant.

They've just supplied seafood to restaurants like Red Lobster, and they've been a huge stakeholder in Red Lobster since 2016.

Nevertheless, they happily pay about $575 million for a controlling share in Red Lobster, one of their biggest clients.

All right, Huey, pop quiz.

Oh, boy.

Do you know what this is called in Econ 101?

Yes.

Buying companies.

It is called vertical integration.

I'm pretty sure that's the same thing as buying companies.

I also would have accepted conflict of potential interest because the line is very thin.

Now, thankfully, Thai Union promises not to be involved in Red Lobster's daily operations and more importantly, supply chain standards because, again, that's a potential conflict of interest.

It's like if a wheat farm bought Kellogg.

But moral reasons aside, Thai Union keeping a distance is really, really smart because one, again, Thai Union has no experience running restaurants.

Two, the language and culture barriers between American and Thai companies are stark.

And three, Red Lobster already has a great corporate culture with loyal workers and low turnover.

Mind your business.

So how long do you think it takes Thai Union to break that promise?

One year.

Yeah, a year and a half.

I'm going to say immediately.

Yeah, because like there's not much, there's not much time left between when this time you're talking about and now.

Yeah.

You were all in the like the right ballpark.

It was less than two years.

So between 2020 and 2021, Red Lobster seems profitable and TIE Union seems satisfied.

Maybe the pandemic won't hit that hard after all.

Well, Red Lobster, they even rehire 26,000 employees by the end of summer 2021.

That's nice.

And a well-regarded executive, Kelly Velade, is installed as CEO, and she brings on a strong leadership team ready to roll up their sleeves.

Then, in 2022, everything implodes.

Tai Union's CEO, Tira Pong Chunsiri, decides to visit Red Lobster HQ in Orlando and brings his most trusted advisors, including a feng shui consultant.

Just please, can you guess the name of the feng shui consultant?

John Sanderson, Tray Chic, Energy Flow Simpson.

They're named Angel.

That was close to me.

You were all sort of close.

Yeah, yeah.

Yeah, Keith, you get that one.

Yes.

Angel declares that the executive offices are bad feng shui and should be abandoned.

But Angel isn't the worst of it.

That would be Paul Kenney, a new board member and apparently an agent of chaos.

Kenny is Australian and is the former CEO of one of Asia's most successful fast food chains, Minor Food.

He's also part of the investor group that spearheads Red Lobster's acquisition by Thai Union in 2020.

He's very well liked by Thai Union and he's very, very well hated by the Red Lobster top brass.

Oh, wow.

Yeah, because according to former employees, he's a complete asshole.

One account has him making a vice president move to the outermost ring of chairs in a meeting because he didn't like her answer.

He also fat shames a woman during an award ceremony, saying,

We need to institute an exercise program in this company, as this person is accepting her award.

Oh my goodness, so wrong.

I'm so glad you haven't done any of that, Misha, to us.

No.

In March of 2022, just eight months into Vallate's tenure as CEO, Kenny clashes with Vallate and rips into her management team.

He takes the position that no investment in Red Lobster is needed.

And less than two days later, Vallate resigns.

Wow.

Tai Union then installs Kenny as interim CEO, and the Fox officially starts running the hen house.

One by one, Velate's leadership team, who have decades of experience, abandon ship.

And a few are even jubbed overboard.

More and more Thai union loyalists become involved with Red Lobster under Kenny, and scare culture takes over corporate life.

Now, on their weekly Zoom calls, Kenny and Thai Union berate management on how to cut costs and raise profits faster.

They're emailing executives demanding increases in sales, sometimes as high as 17%.

That's tough.

2% is normal under normal circumstances.

So 17 would literally be a miracle.

I mean, where's Angel when you need them?

So Thai Union insists that wait staff be pared down, forcing the remaining workers to pick up the slack.

We've heard this story before.

They want the few waiters left to upsell like crazy, work themselves to the bone, and stay cheerful at all times.

So how would you terrorize your employees if you were an Evil C?

It sounds great, honestly.

Yeah, make there be few of them and give them more work.

Well, they do it by surprise inspections.

Oh boy, undercover boss style, but not the good ones.

Yeah, yeah, no awards given.

Managers start having nightmares about these unannounced visits.

Employees break down in tears from the stress.

Everyone does their best to try to spruce up their restaurants on shoestring budgets.

Servers are rehearsing company scripts, and chefs need to prepare to be quizzed on recipes.

It's a lot.

Wow.

But no matter how much work they do, no restaurant seems to ever meet the ultra-high standards of the visiting execs.

At a conference, Thai Union CEO, Mr.

Chanzarezi, presents big blown-up pictures of the red lobster dishes he's tried and hated during

ancient.

Wow.

Wow.

So this is...

all what's going on in the boardroom, but like right now the red lobster diners aren't aware of the drama.

So

how do you think Kenny can mess this up on the consumer side?

By like making a social media post of it or something,

or just like telling them to allow for the unlimited shrimp, but then fat chain people who eat too much shrimp.

That's my guess.

Just by those

previous actions.

Well, he starts changing things.

And these are very loyal customers.

Longtime customers start realizing their side salads, which were free before, now cost extra.

Oh, boy.

Now, remember that other promise that Tai Union made not to get involved in the supply chain?

Yeah.

That's not going to happen.

Tai Union was already Red Lobster's major shrimp supplier before the hostile takeover.

And now they decide to cut ties with all other suppliers of shrimp to Red Lobster.

Ty Union wants to sell Red Lobster tons, literally tons of shrimp.

And for that to happen, they need Red Lobster to move that stuff out the door.

So Kenny and Ty Union have a bright idea.

In June of 2023, they announce Ultimate Endless Shrimp.

All you can eat all day, every day for just $20.

So, you remember this, I'm assuming.

Yes, I sure do.

So, before this permanent Ultimate Endless Shrimp promotion, there were Endless Shrimp that was an occasional treat for customers and a temporary pain for restaurants.

But now, cooks and wait staff who are already down in numbers have to run around loading folks up on scampion skewers for practically free.

And if they slow down, customers get antsy.

In Oklahoma City, a woman starts breaking plates when a waiter tells her she can't take endless amounts of shrimp home with her.

She's later arrested.

Good.

Is this, I mean, is that bad or is it relatable?

Like, how much do you like shrimp?

Hold on.

You can't be breaking plates because you can't take home a shrimp.

It's pretty standard that the unlimited stuff stays there.

You can't pack up your plate after a buffet.

I think that's fairly common knowledge.

So

I side against the woman in this scenario.

Yeah, I would say it's bad and relatable.

Of course, we all want to be able to take home the endless spreadsticks in Olive Garden, but we know going in that we're not able to do that.

Yeah.

But, you know, still, maybe.

Things won't be so bad, eh?

Maybe once folks get used to it being on the menu, they won't feel the need to take advantage, right?

Wrong.

Wrong.

Like hungry seabirds, bargain-hunting diners descend on the restaurants and eat everything in sight.

I mean, they gulp this shit down, which causes a strain on some restaurants more than others.

In addition to half a dozen shrimp options like jumbo coconut shrimp and crispy dragon shrimp, diners get a round of coleslaw, french fries, mashed potatoes, and a baked potato, or rice if three types of potatoes is just too crazy.

And of course, they still get those complimentary cheddar bay biscuits.

Oh,

that's a lot for 20 bucks.

That's a good deal.

You should just box up all of that and take that home and only eat the shrimp while you're there.

You know, good idea.

Take all the starches home.

Yeah.

Yep.

Red lobster hates to see Keith coming.

Yeah, I'm smart.

I know exactly what to do.

Make sure those red lobster fries travel real nice.

And you hide the shrimp in the baked potato potato and seal it back up.

So a trend catches on social media where folks try to see how much they can eat on camera in one sitting.

Alex was part of that trend.

Part of the problem.

Part of the down.

Alex.

You right next to Angel and that lady who got arrested for breaking plates.

I know.

I sat there eating all that shrimp and it still wasn't enough to fill me up.

So this is a complete failure as a loss leader, since not even the occasional Mai Thai order can offset the costs.

In high-priced locations, restaurants lose an average of $3 a head on the promotion.

So despite the flood of new diners, average profits go down.

And because of the new diners, wait time to get into Red Lobsters balloons and service becomes painfully slow.

It's hell.

on workers.

The kitchen staff is backed up, waiters keep leaving in droves, and managers can't hire new workers fast enough.

Here's an account from a former service manager in Utah about the chaos he endured.

Alex, could you please read Malcolm Clark's quote from the New York Times article, Greed, Gluttony, and the crackup of Red Robster?

I'd do 16 interviews over the weekend and hire them all.

Three would show up.

If we were lucky, They'd last a week or two.

A bunch quit the same night they started.

And I totally understood.

We were hiring these kids and treating them like animals.

Wow.

My very first job when I moved to New York City was promoting comedy club tickets.

Oh, wow.

And I lasted 45 minutes.

Yeah,

it's tough.

That's a tough job.

It's a tough job to walk by the person doing that job because I don't want to see the show.

So for Red Lobster Corporate, this promotion is a money pit.

They lose $11 million

on this promotion and $76 million in total for the year of 2023.

Oh, no.

And that was just last year.

This story is wrapping up to a close.

What is going to happen next?

I am on the edge of my seat here, Misha.

Well, remember, Thai Union, they're still making money.

They want people to keep shoveling shrimp down their gullets.

Because of that vertical integration, the more shrimp Red Lobster needs to order, the more shrimp Thai Union can sell.

Meanwhile, the quality they send to the restaurants keeps getting worse and worse.

Managers notice it's frostbitten like it's been sitting in storage for months.

It's almost like Thai Union is trying to clear out their inventory, or at least that's what the Red Lobster managers start to whisper to each other.

According to a prominent conspiracy theory, employees think it's possible that Thai Union CEO Tira Pong Chansiri and Paul Kenny decided months earlier that Red Lobster was beyond savings.

Wow.

So perhaps they'd be using their supply chain monopoly as a way to sell off as much shrimp as possible before Red Lobster fails entirely.

Whatever the case.

By September of 2023, just three months into the bottomless shrimp promotion, they find out the hard way that there is, in fact, a bottom.

Red Lobster's newest CEO stops paying bills, hoping the company can make some money in December to cover them then.

But the money doesn't come in.

So managers, unable to pay for repairs, are helpless in emergencies.

At that Utah location where the service manager can't find enough staff, he also has to deal with a backed up grease drain,

but he can't afford to fix it because plumbers are more expensive on weekends.

So the kitchen workers have to wade through an inch of gross oily water for three days

that's gnarly oh my if you're only listening to this podcast our mouths were agape that's a fire hazard like that's a kitchen well no because they got water in there yeah oh yeah that grease and water they're your best friends

but i mean still would you still be happy to get unlimited shrimp if you knew the kitchen was a disaster zone yes no I mean, no.

How do you feel, Alex?

Unlimited shrimp.

It's still a pretty good deal.

Yeah.

I feel fine after.

Well, in December, Red Lobster defaults on its debts.

In January of 2024, Tai Union divests from the company and refuses to invest another penny to cover its debts.

Tai Union takes a $530 million

loss.

At this point, Red Lobster is officially seen as a zombie brand.

Spooky.

Do you know what a zombie brand is?

It's a brand that when you go there, it turns you into one of them.

And in some lore, they're really smart and can move fast.

In some lore, they're really dumb.

But either way, they're going to try to eat you and turn you into them.

No, it's basically half dead, but maybe someone can revive it.

Ah.

Just needs the right person to come in those doors.

And that person, in late March, another CEO is a turnaround specialist named Jonathan Tibbis, who takes the reins of Red Lobster and begins trying to salvage whatever's left.

Bankruptcy seems like the only option.

In May, Red Lobster files for Chapter 11 protections, and at that point, they owe about $1.1 billion in outstanding obligations.

The filing also reveals that even though sales increased a little bit between 2020 and 2021, overall, Red Lobster's annual guest count dropped by 30% since 2019.

Wow.

Yeah.

So 140, aka 20% of the restaurants immediately close.

And those employees who lose their jobs, they find out when they show up to work and the doors are shuttered.

Oh!

That's how it always is, though.

I know.

Goodness.

I had a roommate who worked at Bennigan's when all of them closed at the same time.

And he was in college.

And it was bad because he's like,

how am I even going to get my last paycheck?

Suddenly, he, you know, we have rent.

People have rent.

They have lives to lead.

So I saw firsthand somebody deal with that exact circumstance.

One time I tried to, I showed up to Alex's house for rehearsal and his doors were closed.

And I thought they were telling me Lou Burger was over, but I was just there on the wrong day.

Well, after decades of serving families affordable seafood and treating its workers well, Red Lobster becomes just another brand crushed by corporate mismanagement and stripped of its succulent meat.

I mean, reputation.

So let's do a little, where are they now?

Let's do it.

Red Lobster was recently acquired by a Manhattan-based investment firm, Fortress Investment Group, for an insulting $375 million.

Wow.

Golden Gate had paid almost six times that amount a decade earlier.

But Fortress, they had no competition for the bid.

Tira Pong Chanciri is still the CEO of TIE Union, and whenever he's asked about his biggest career failure, he just changes the subject, which must be nice to move past something like that so easily.

Whatever happens next, employees can breathe a sigh of relief that Paul Kenny will never be back.

And the new boss, a chill 35-year-old CEO named Damola Atomalakin, promises to not bring back endless shrimp either.

Because, quote, I know how to do math.

I've seen that quote going around, and you know, respect.

Good job.

Respect.

I mean, at least he clarifies, not anytime soon.

If Red Lobster does bring back Endless Shrimp, he doesn't want to seem like he lied.

Now, without the famous promotion, Adamalakin still needs to get people in the door somehow.

And his plan is to implement what he unofficially calls the affordability section, where diners can find $15 and $20 entrees.

Yeah, that's pretty good.

He's also bringing back hush puppies and working on a better tartar sauce.

And

he promises to never charge for those Cheddar Bay biscuits.

All right.

These are hilarious updates.

We're working on a better tartar sauce.

Yeah.

I'm like, okay, great.

Yes, that was my biggest concern.

So here on the big flop, we try to be positive people and end on a high.

So are there any silver linings that you can think of that came from Red Lobster and

all that?

Well, I mean, I think it's always good to see an example of why you don't let vertical integrations happen or monopolies happen because they typically end up being bad for both.

If they are successful, you'll typically get sued at some point by a government.

And if they, you know, don't work, then you lose $500 million.

So I think it's good every so often for us to see a big giant make mistakes and fall so that other people don't do it, because otherwise it would lead to bigger issues.

Sure.

Another good thing, though this happened early on in Red Lobster's career and it seems like this was in its heyday and a lot of bad things happened, you know, the fact that they tried to be racially inclusive and culturally inclusive and that that was a boon for them, that that really worked out.

It's that that's a great lesson to us all.

Open your eyes.

And maybe the most important silver lining after hearing the ones that you guys just did.

I think, you know, there are red lobsters open, and knowing that those cheddar bay biscuits are always going to be free,

that's something to keep you going at the end of the day.

And you think there just might be enough of them to fill the three of us.

Thank you.

We're Lou Burger.

Good night, everyone.

Well, now that you all know about what broke Red Lobster, would you consider this a baby flop, a big flop, or a mega flop?

This is a mega flop of mega proportions.

That's a big flop.

I'm going to say big flop because it's not quite a mega flop because it does still...

There are still operating Red Lobsters.

I mean, they don't even own the land.

They still got to deal with that, unless that was part of it.

And to go from a Beyoncé lyric to a bankruptcy, that's bad.

Wow.

Come on, people.

Well, thank you so much to our shrimply fantastic guests.

Oh, come on.

Keith Habersberger, Alex Lewis, and Huey Stonefish for joining us here on The Big Flop.

And of course, thanks to all of you for listening.

If you're enjoying the show, please leave us a rating and review.

We'll be back next week with another flop.

When it came to being a businesswoman, she wanted to be on top.

We're talking the business flops of supermodel Tyra Banks.

Oh,

Bye.

Bye.

Bye.

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The Big Flop is a production of Wondery and At Will Media, hosted by Misha Brown, produced by Sequoia Thomas, Harry Huggins, and Tina Turner.

Written by Anna Rubinova and Luke Burns.

Engineered by Zach Rapone with support from Andrew Holtzberger.

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Theme song is Sinking Ship by Cake.

Executive producers are Lizzie Bassett, Dave Easton, and Marshall Louie for Wondery.