Lunch Break is a series of Q&As with restaurant leaders about how their brands are overcoming industry challenges. 

Steakhouses abound within a one mile radius of the White House. It's the land of power lunches and wheeling-and-dealing dinners. But just down the street is Fogo de Chao, a mainstay on Pennsylvania Avenue since 2005, looking to buck the traditional steakhouse trend. 

The company itself is 40 years old with 56 restaurants globally, including Mexico, the Middle East, the United States and Brazil, where it began​. While long known for its all-you-can-eat churrasco experience, the fine dining segment isn’t immune from the disruptions its QSR and casual dining cousins face, from growing delivery demands to influential, digitally savvy diners. 

Barry McGowan, who is wrapping up his first full year as Fogo de Chao's CEO, spoke to Restaurant Dive about how the steakhouse is trying to use this time of change to experiment with technology and pilot catered delivery in Texas. He also answered questions on the industry's labor challenges and whether there is a place on the table for the likes of Beyond Meat or Impossible Foods at a meat buffet. 

This interview has been edited for clarity and brevity.

RESTAURANT DIVE: In November, I went to an event to unveil a new look for part of the D.C. restaurant. What is your remodeling strategy for Fogo de Chao?

BARRY MCGOWAN: When we came to America [from Brazil], we kind of copied the U.S. model —​ red mahogany, dark colors. When we dug into our demographic, we realized we were nearly 75% millennial and Generation X. We were the complete opposite of an American steakhouse. We're categorized [as] that by consumers, but Fogo has shown it's so much more than steak. It's experiential. It's authentic. We have a highly ethnic demographic, younger demographic — 42% female, 16% family —​ [but] our dining room doesn't behave that way. 

So we created in our new design a lighter feel. Warm. We call it timeless and a little more contemporary than most steakhouses. We still have flex seating. We’re elevating our bar and lounge areas to more of a place to linger. It suits our demographic. People want to hang out and linger. We're starting to see some of the benefit of all that. We're excited about our investment in keeping our brand relevant to our young and inspirational dining clientele. They're always looking for something new. They value experiences. That's really what we're leaning into with our brand.

We hear about the influence of Gen Z and millennials, who are digital natives, on the industry. Do you take that into account when you think about the store?

McGowan: You bet. We've been working on that for six years. I feel like we've leapfrogged our peers in terms of our web base, how we interact socially, how we geotarget them when we’re serving up ads that are relevant to them. We’ve innovated around new occasions like Brazilian Brunch, Bar Fogo and lunch starting at $15 —​ ways to engage that make sense to them. 

Have you made technology changes because they're looking for more tech-first dining experiences?

McGowan: We've worked on handheld technology. We have pay-at-the-table at every restaurant. Now we're moving to order-at-the-table. It's less about their engagement with the technology and more about leveraging technology to get better service, to capture their needs quickly, efficiently and almost seamlessly where they don't see it. We're focusing more on removing friction from the consumer engagement with us digitally and of course our employees`as well. 

How will you fold order-at-the-table into your service?

McGowan: We don’t have a menu where people have an order and they have a bunch of variables. Our order is pretty simple. You know what you want, we just ask what [menu options] you prefer. Select Cut? Market Table? Would you like Full [Churrasco] Experience? Indulgent cuts of wagyu or tomahawk? All those are additions to the experience. Those are really simple to capture right there at the table.

What that technology does is allow us to stay closer to the guest, to read them and ensure they have the experience they desire instead of running back and forth taking tickets, taking orders. Our dining experience is very engaging, very dynamic. There's service always around. Now we're capturing that technology to ensure we can layer that experience on for them more effectively. 

Where are you testing the tech?

McGowan: We currently use pay-at-the-table technology in all of our locations in the U.S. At this time we are testing order-at-the-table technology at the bar in Plano [Texas] only. Based on the results of our testing phase, we will likely want to expand this capability to other locations as well.

How do you balance technology at tables and maintain the experience that is a big part of Fogo?

McGowan: That's why you have to be careful with technology. We want to drive convenience, but we also want to drive experience first. The technology piece is not perfect, but we have great success with capture rates with guests paying at the table. 

First we want to make sure that consumer data is secure. The guests never let go of the credit card. They pay right there. Nobody should interfere with the card and their privacy. The second piece of that is where it's even more important that it becomes invisible to the guest. It's not to save labor, but to focus on the guest experience. We have a lot of people in the dining room supporting, but this technology we're looking at will allow us to communicate effectively and allow the guest experience to move seamlessly so we don’t waste steps. We're more able to be where we should be versus in a normal restaurant [where] you're going from point A to point B. The POS goes to a system and then back and then it’s plated and brought out. All of our experience is done right in front of the guests right in the dining room. If we use this technology the right way, we believe we’ll enhance this experience.  

How do you want to use that data? 

McGowan: We use quite a bit of data already. We’re gathering mobile data just like everybody else. Of course through reservation systems, OpenTable and everything else, we've got data that gives us a lot of insights to ensure how we geotarget using AI to serve up ads. We use Hot Schedules for predictive scheduling. All that ties together. In the restaurant, with this next level of technology we’re focusing on how we capture the data, make notes and start customizing the experience. 

When we spoke in May, you mentioned that you were exploring plant-based meats. Is that still on the table? 

McGowan: Yes, we're looking at it. We've tried several. We're still figuring out how we do it. We just rolled out some vegan entrees [like] cauliflower steak. By the middle of next year, we'll have our whole vegan menu as an option. 

We’ve always had plant-based proteins on the Market Table. Some of this stuff that's out, we’re going to bring it in and just offer it in circulation. I don’t have the exact time we’re going to roll it out. By [next year] sometime we’ll have it. We’ve looked at it for several years. There’s a lot of hype to it. Good news is that there’s a lot of media behind it so it won’t hurt us to bring it in. The culinary team is working on how we’ll do it within our experience. 

From Beyond to Impossible, are there any you are eyeing specifically? 

McGowan: We're looking at it all. There's also a lot of great recipes on making your own out there too. We have a lot of ingredients in-house already. We've started playing and sampling. It's an exciting time in food innovation. 

I just want to do it in a way that it's part of the experience so you don't feel like you have to do it separately, just if you prefer it or someone at the table prefers it, it's just one of the options. 

You started catered delivery in Dallas. How is the test going?

McGowan: We have it in seven restaurants now. We've been working on it for about three years. We’ve had it on our innovation map for six years. We wanted to get all of our other occasions and platforms in place. 

This year will be our sixth year of positive traffic, so we felt like this was the year that we should begin the test. We don’t want to see this as an offset to traffic that is eroding in restaurants. Our drive is experiential dining, and we're focused on traffic first in the restaurant. 

We deliver ourselves. We control the experience. We want to own hospitality on the backend. We tell everybody, look if we’re in an urban city for instance, we’ll get an Uber and deliver it to you, but we’re not going to let the Uber driver deliver it to you. We can Uber ourselves and have one of our customer service agents deliver. That way we make sure it's set up too and [we can] make that personal connection with the guest. It's meeting our expectations in this early ramp. It's exceeding our expectations in terms of average check. More than twice what we thought it would be.

We're looking to expand further in 2020. We know that's a growing category. We know that's where the consumer wants to be. We know our guests ask frequently. We know it's the right time for us. We're doing it in a way that meets our model. 

But remember we're focusing on a large group [with] $200 minimum orders. We also have off-premise, big event orders that are now picking up steam. And we also have pickup at the restaurant. If you want large group dining to take home, we can do that. That's the last leg of what I would say of where the consumer wants us to be. We’re moving very cautiously because we don’t want to drive an experience away. We want to be incremental, but so far it's panning out. 

How do you anticipate delivered catering to expand in 2020? 

McGowan: It's too early to tell. We're going to move methodically through it. We're in seven restaurants. We’ll probably see it grow to another seven to 10 restaurants. If it continues to do well, we'll expand it. We'll do it restaurant by restaurant, market by market, to make sure we see the results. 

How else would you like to see Fogo de Chao grow? What is your path forward in the upcoming few years?

McGowan: [A] Long Island [restaurant] opens up before the end of the year. We have six restaurants in the pipeline next year, and we’ve got international expansion that’s about to take off. In the new year, we’ll be announcing two to three international partners in Asia and we're pretty thrilled about that.

Organically, it's all traffic. We focus on capturing traffic at each restaurant, each market, expanding dayparts and innovating in ways such as Bar Fogo and Next Level Lounge. Creating new occasions and reasons to come to enjoy and indulge and experience.

You've said that labor laws were one of the largest disruptors in your industry. What are your concerns? 

McGowan: We're going to be more efficient [than other restaurants] because our model's different. We have an advantage in that our chefs have three roles. They butcher, they prepare and they serve. That’s a huge advantage in labor. 

What we focus on is using technology to better forecast, plan and really focus on productivity versus labor. Labor laws are there. Our wage rates are higher than a lot of our peers. So the minimum wage is impactful, but we believe we're constantly paying where the market is or above. It's always going to be a challenge, but the bigger challenge is just the lack of supply. We focus globally on our labor talent pool because we are an international company. We don't just think about American labor. We think about labor in Brazil, from Puerto Rico to the U.S. to where we are in international markets. That helps, but like everybody else, we have to hire great people and do what we can to engage and keep them engaged.

Are there other disruptions you think about that impact your business? 

McGowan: The disruption really still is around consumer behavior with digital platforms. Patterns have changed. I think the good news for industries that have high hospitality experience, those will still be the gravity points. Everything else will become more specifically about convenience. This is where ghost kitchens, delivery, all these other things will continue to transform brick-and-mortar restaurants and retail period. 

I still think there's a side to the industry that will still be needed. People still enjoy going out to boutique, great shopping. It’s just got to be different. It’s got to be done a different way. Restaurants are no different. 

Owners of restaurants can't just replicate. You have to be thoughtful on replicating and innovating all at the same time. You can't think prototypical anymore. I think that's exciting from the brick-and-mortar side. It gives you permission to be more dynamic, more experiential and drive to where the consumer wants you to be.