Some restaurant owners thinking inside the box
Waffle Love opened its first shipping container restaurant in February at the new SteelCraft center in Long Beach, California.
Sitting at a railroad crossing waiting for a slow-moving train stacked with shipping containers doesn’t usually make someone hungry for cheeseburgers, pizza and waffles. But that may soon change as re-purposed shipping containers continue to make their way into the restaurant world.
Developers and business owners are putting surplus shipping containers back to work as pop-up shops, restaurants and eclectic retail and dining destinations with tenants ranging from Starbucks to Toyota. There are several drivers fueling that growing niche market. Some are motivated by sustainability and a desire to recycle empty containers. Others are drawn to the novelty of doing something different to create a unique destination and experience. And there are those who also are finding that the generic steel box is an ideal way to create “cookie cutter” modular units quickly and cost-effectively.
Building something unusual, interesting and even charming were all factors that influenced the creation of the Detroit Shipping Co. The firm is preparing to start construction this summer on its first shipping container “food hall” project, the Detroit ShipYard in Midtown Detroit. The project will be constructed from 21 shipping containers including 16 40-footers and five 20-footers. Total square footage will be 8,000 square feet with half of that enclosed space on the interior and half as exterior open-air space, notes Jonathan Hartzell, founding partner at the Detroit Shipping Co.
The Detroit ShipYard is set to open in October and is already fully leased to several tenants that include restaurants and a beer garden along with retail and art gallery space. “There was a lot of buzz and people wanted to be there, because it is a great marketing space for someone launching a brand,” says Hartzell. Some of the food tenants include the Detroit Dog. Co., Monty’s Beef Co. and Coop, a chicken concept from private chef Max Hardy.
Checkers & Rally's unveiled its latest building option late last year, constructed from a recycled shipping container. The price is $280,000 all in.
Weighing the pros and cons
Hartzell admits his project was motivated more by a passion to try something new rather than practicality. Shipping containers can be challenging for developers who are trying to be more creative in design elements, because that footprint is fairly rigid. Adding design features, such as cantilevered points, ends up being more expensive because it involves transforming cheap, structured building materials with a very defined size and non-traditional construction, says Hartzell.
There also are thousands of framing companies that will build out walls in wood or steel studs, but there are maybe 10 that do good container work, says Hartzell. “So, I wouldn’t tell anyone to go into container building if they want cost savings. It is really that you want to build with containers for other reasons,” says Hartzell.
That being said, there also is some upside to container locations. In some cases, those units are literally a “store in a box” that can be picked up and moved to a new location. The world’s first container-based Taco Bell first opened as a pop-up store at the 2015 South by Southwest Conference & Festival in Austin. It was developed by container-based structures developer SG Blocks for Alvarado Restaurant Group, which owns 110 Taco Bells in five states. Alvarado relocated the 1,000-square-foot store to its new permanent location in South Gate, California, earlier this year. The new location also includes a walk-up window, a drive-thru and outdoor seating.
Operators also are finding that containers do work well for applications such as modular designs and pre-fab projects that can be constructed off-site and installed on site very quickly as either a temporary pop-up or a permanent store.
Checkers & Rally’s unveiled its latest build-out option late last year that is constructed from a recycled shipping container. “This innovative new model provides flexibility for our franchisees and operators, streamlining and speeding up buildout, while simultaneously reducing costs,” says Jennifer Durham, chief development officer for Checkers & Rally’s Restaurants Inc. “Our modular design can now be completed for under $280,000, all in, boosting return on investment and making our franchise opportunity among the most attractive and competitive in the QSR space nationwide,” she adds.
The new model is part of the company’s current Model 4.0 growth strategy, which gives franchisees three design plans to choose from: a traditional on-site build, a new modular building built off-site or the new hybrid building that utilizes shipping containers as structural support. “By empowering our franchisees to choose the building format that makes the most sense for each of their sites, we’re creating scalable, yet customized development with more price certainty across our franchise system,” says Durham. The new design will initially roll out in the key markets of South Florida, Los Angeles, Nashville, Columbus, Tampa and Houston.
Testing the waters
There are a growing number of examples of franchise groups that have opened one-off shipping container stores from industry veterans to new start-ups. For example, franchisor Waffle Love opened its first shipping container restaurant in February at the new SteelCraft shipping container retail center in Long Beach, California. Waffle Love joins a variety of other food tenants, such as DeSano Pizza Bakery, Steelhead Coffee and Smog City Brewery. Waffle Love started out as a food truck company in 2012 and has grown to 10 stores and five food trucks in Utah, California and Arizona.
Subway is no stranger to non-traditional locations with hundreds of stores situated in venues such as airports, train stations, sports stadiums and amusement parks. The company operated a shipping container restaurant at the One World Trade Center in New York City that exclusively served building workers while the 94-story tower was under construction in 2010 and 2011. One of advantages was the container restaurant could be moved higher up in the tower as construction progressed, which made it more accessible to workers.
A Subway franchisee also operates a restaurant built out of two 20-foot containers at Eafit University in Medellin, Colombia, that has been open since 2013. There was no other option to open inside the premises of the University, which is home to 26,000 students and staff. “This concept has a high flow of customers, and has proven to be a novelty with ease of adaptation,” says Subway spokesperson Kevin Kane.
It remains to be seen whether shipping containers will gain a bigger foothold in the restaurant and retail industry. However, it is sparking a whole new generation of container developers. SG Blocks, for example, already has a number of projects under its belt. In addition to developing the Taco Bell store, the company built a container-based open-air bar and a hotel room prototype for Marriott’s Moxy Hotels and is fresh off an initial public offering in June that will give the firm more capital to expand.
Shipping containers also are emerging in a wider variety of applications for homes and businesses. Detroit Shipping Co. has yet to even start on-site assembly of its project, and the company is already getting calls from shopping center developers and owners who are interested in bringing the firm’s shipping container food hall concept to their properties.
Hartzell expects the Detroit ShipYard to be a test case for its container food halls that it can then roll out into other cities around the country.