Luke's Lobster continues rapid expansion
Photo / Courtesy Luke's Lobster
Luke Holden, co-founder of Luke's Lobster, which opened its newest and 24th U.S. location on July 21. Five new locations are planned through the remainder of this year.
Luke Holden's calm demeanor belies his fast-paced life. The co-founder of Luke's Lobster, which started in 2009, opened his 24th U.S. shack in Philadelphia on July 21, and plans to open another in Manhattan in a few weeks. He also has plans to open sites in Boston's Seaport area, Florida, Chicago and Washington, D.C., by year's end. There are six shops in Japan.
Speaking to Mainebiz days after the Philadelphia site opened, Holden, 33, announced “it's wedding week,” as he was preparing to get married the following weekend. That included bringing the company's Nauti Mobile food truck in for the wedding party. Following is an edited transcript of our discussion.
Mainebiz: You're on a roll setting up new shacks. What's your growth been like?
Luke Holden: I have no ambition to slow down. Opening shops enables us to have a bigger microphone to drive business to the Maine lobster industry. We buy and cook 5 million pounds of lobster a year. Half is sold through our shacks and half through supermarkets, commercial caterers, redistributors and wholesalers. The last five years we've had 20% to 25% top line growth each year. Gross sales this year should be north of $30 million, and we'll continue to grow 20% to 25% in 2018. We are profitable.
MB: You said lobster rolls are your biggest seller. What makes a good lobster roll?
LH: Good quality lobster, where you source the meat and how it's handled and cooked. Our process is to work with fishermen and cook it as soon as it is out of the water. We run it through a stunner to be humane. We measure the claw and grade it so different sizes are cooked differently for optimal temperature. Cape Seafood is our processing plant, where all lobsters arrive live. We have about 125 teammates there. Cape Seafood buys 100% of the catch from the Tenants Harbor Fisherman's Coop, which is about 20% of our total catch, and directly from other fisherman. That gives us an extraordinary margin relative to the market to deal with price fluctuations of lobster. About 80% of our lobster comes from Maine and 20% from Canada.
MB: What's the average size of a shack and how many people work at each one?
LH: The average size is 1,200 square feet. Each shack has 20 to 25 teammates who are full- or part-time. It's all about getting the right people. Some of our workers also are working on their master's degree and some are musicians. So the total company with Cape Seafood in Saco has north of 500 full-time and full-time-equivalent workers.
MB: With the new Philadelphia location, will you keep the original shop near Rittenhouse Square?
LH: Yes, it is our highest yielding market. And we had a strong team so we could open the second location.
MB: Philadelphia has a reputation for its cheesesteaks. How does a lobster roll fare in comparison?
LH: Philadelphia is a great eating city where people appreciate something unique. We want to be best in class. But we're not replacing the 'Philly cheesesteak.' We also sell crab, shrimp and salads at our shacks, but lobster has a higher percentage of sales than the other species.
MB: You opened your first Maine location last summer in Tenants Harbor. How is it doing?
LH: The Maine location is a different format than elsewhere as it is a full-service dining experience with a broader menu. People sit down at fancy picnic tables and have food brought out to them.
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