From five cents to 500 million for Nathan’s Famous
Nathan’s Famous in New York circa 1950, with big crowds and classic cars to match.
FT: Congratulations on Nathan’s 100th anniversary. Tell me what you’ve planned.
Wayne Norbitz: In New York Nathan’s is an iconic brand. There’s a cultish appeal for people who grew up with the brand. On May 28, on a Saturday, we celebrated the anniversary in Coney Island at the original location that opened up 100 years ago, by selling our hot dogs for the original 1916 price of 5 cents. Every year we do a July 4th hot dog eating contest. We have about 22 male contestants and I would say about 15 to 20 female contestants.
FT: I’ve heard of that but never seen it.
Norbitz: I know it sounds crazy but it’s a yuuuuge event. We have between 20,000 and 40,000 people who are watching the event live on the streets in Coney Island. And ESPN televises the event every year, so there are millions of viewers.
FT: I’m hearing from your accent that you must be a life-long New Yorker.
Norbitz: I grew up in the New York area. I was born in the Bronx, and I grew up about 30 miles north of the city.
FT: Tell me about Nathan himself.
Norbitz: Nathan Handwerker, our founder, came here as a very young man and he worked in a restaurant in Coney Island as a roll slicer. In 1916 hot dogs were being sold in the Coney Island area for 10 cents. He had this idea that he would open up a hot dog stand and sell them for a nickel. He met Ida who became his wife, and she gave him a recipe from her family. And he produced a very high quality, all beef hot dog with these spices. That hot dog has been the same for 100 years. To a very large degree, that product is the reason Nathan’s has survived for 100 years. That product and also the signature french fry product, the crinkle cut french fry.
FT: That single hot dog stand really grew.
Norbitz: By 1945, Nathan’s was a square city block in Coney Island. As he added space he added menu. So it had this huge, eclectic type of menu, and Nathan’s became an institution in New York. That was the whole company from 1916 to 1956, just the one location in Coney Island. It’s really remarkable.
Above, Nathan and Ida Handwerker, the founders of Nathan’s Famous.
FT: And then the growth began?
Norbitz: The company really started to grow significantly 10 or 15 years ago. In 1975 when I joined the company, there were 16 Nathan’s restaurants, all in and around New York. There was one franchise in California and one in New Jersey. Nathan’s started to grow by opening some company-owned stores and some franchises. It was a very, very small effort. The object was to support a family. The object wasn’t to become a large national or even a large regional chain.
FT: But that’s what started to happen.
Norbitz: We developed a points of distribution strategy. The restaurants became one way we distributed products, but we also sought other ways to distribute products. We had Nathan’s packaged hot dogs in supermarkets and groceries, and that became a very big business for us. And then we allowed other people in the foodservice industry to sell Nathan’s hot dogs as a branded product, as Coca-Cola does. We also began to grow by franchising very small Nathan’s outlets in captive outlets, like in airports and highway travel plazas, and small Nathan’s in universities and colleges, and casino hotels. That’s the way the restaurant system grew in these captive markets.
Today Nathan’s has somewhere between 250 and 260 restaurant outlets, and we sell our products altogether in 53,000 locations.
A couple relax at an iconic Nathan’s sign.
FT: What do you think makes a good hot dog? I think it’s the snap when you bite into it.
Norbitz: We consider Nathan’s to be the best tasting and highest quality hot dog you can buy. It’s an all beef hot dog and the beef comes from the best cut of meat that you can get. We have this proprietary spice profile and it gives it a garlicky flavor. Also our hot dogs cost more money to make and we sell them for more money.
FT: And what about you?
Norbitz: I personally eat a hot dog with nothing on it, the hot dog and the roll. That’s the way God intended it to be. But across the country toppings are very regional. In the South a lot of people put coleslaw on it, in Chicago they put a whole salad on top of it. I would tell you that when it comes to toppings for Nathan’s, the most popular topping is chili.
FT: What would Nathan think if he saw Nathan’s today?
Norbitz: I’m very close to the Handwerker family, and I would think Nathan Handwerker would be totally blown away if he understood what happened. Remember, he started out with a little hot dog stand, and last year we sold over 500 million hot dogs.