originally posted on CincyInno

Five Lessons Entrepreneurs Can Learn From Cincinnati Chili


By: Tamara Schwarting

Cincinnati chili is an enigma. It’s beefy. It’s kind of spicy. It’s so thin that some say it shouldn’t be called “chili” at all. And its most baffling distinction: It’s served on spaghetti. But, to Cincinnatians both by birth and by choice, this regional delicacy is a proud cultural icon.

In the restaurant industry, fads don’t last long. Yet this peculiar mix of ground beef, tomato sauce, chili powder, and spices has stood the test of time. It was created in Cincinnati around 1920 by Macedonian immigrants, and it has spread into every pocket and neighborhood of the city. 100 years later, Cincinnati residents consume two million pounds of chili per year.

Entrepreneurs can spend years dreaming up their “next big thing” or the must-have product that could finally sustain their career. There is something to learn from Cincinnati’s chili industry and how it has perfected the art of product category development. What makes Cincinnati chili such a successful product category is that it follows solid business practices. These fundamentals can translate easily to other industries.

Create a distinct product with the ability for differentiation.

Cincinnati chili has a recipe that allows for flavor customizations. Across the industry, chili parlors create tastes that are more spicy, sweet or savory than others. Beyond that, customers can customize their own meals by opting for coneys (hot dogs) instead of spaghetti, eating their chili on a baked potato, or eating their chili over or with fries. The chili can also be served on a salad or in a burrito.

The specialized language of Cincinnati chili — “wet,” “dry,” “three-way,” “four-way,” and beyond — creates a distinct nomenclature shared across the industry that makes patrons feel a part of the in-group while also being able to fit in at any of the chili parlors across the region.

Focus on the core product and service.

It’s basic. Cincinnati chili is a no-frills meal without pretense. It’s fast, working from a streamlined menu. The meal can be prepared in minutes. It’s also consistent, so customers know what to expect from their meal. Though the chili recipes may differ slightly by parlor, a coney is a coney no matter where it’s prepared across town.

Understand the Customer

Though customers appreciate the streamlined speed of a chili parlor, most of Cincinnati’s parlors avoid the trap of impersonal efficiency. They are not transactional like the average fast food restaurant. They are open long hours, both early and late. They offer vegetarian (bean chili) and Lenten options for customers (Catholicism is the single largest religious denomination in the region).

Restaurants in San Francisco and New York City host Cincinnati chili events regularly, and demand is high from those who once called Cincinnati home and are longing for a bit of hometown nostalgia.

Embrace Competition to Grow the Category

In a city with strong neighborhood loyalty, local mom-and-pop chili parlors thrive alongside larger corporate restaurants. In the chili industry, competition has grown the product category rather than overwhelm it.

Each distinct business has created their own brand identity in the industry. In Cincinnati, every customer can have their favorite spot around town, and every neighborhood can have their own chili parlor.

Integrate into the Community

Chili is as Cincinnatian as Pete Rose. It was created as a quick, affordable meal that the hard-working town adopted as a hometown favorite. Because its brand identity is so closely aligned with the city’s identity, the community is invested in its success and takes pride in showing it off. The chili industry, likewise, pays it back to the community through various forms of community support, investments, and sponsorships.

Adherence to these business principles has afforded the Cincinnati chili industry the opportunity to build strong product recognition and customer loyalty. This translates into a sustainable revenue stream and many profitable businesses. That’s something that every entrepreneur and business owner can learn from.

Tamara Schwarting is the CEO of 1628 LTD, a curated coworking community of independent professionals and the professionally independent in Cincinnati, Ohio. She is also an executive level consultant in business processes and supply chain purchasing. Read more of Tamara’s articles here.

Special thanks to Jordan Hamons (Tablespoon Cooking Company), Julie Niesen (Wine Me, Dine Me), John Lanni (Thunderdome Restaurant Group), and Tony Ferrari (Ferrari BrothersHillside Supper Club) for offering their professional and personal opinions on the Cincinnati chili industry and its successful longevity.