The CEO of a Mediterranean fast-casual chain explains how it is upending the industry with a focus on 'value for calories'
- Mediterranean chain Cava has grown to nearly 80 locations and developed a cult following over the last eight years.
- While the "Chipotle of X" era has passed, Cava is still thriving.
- It has plans to open 15 more locations this year and completed a $300 million acquisition of Zoe's Kitchen in 2018.
- "People, more and more, are spending their calories like their dollar - very judiciously," CEO Brett Schulman told Business Insider. "They don't want to waste it on a mediocre meal."
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The era of the "Chipotle of X" is over.
Now, it is time to see which fast-casual chains survive in a new era of the restaurant industry.
For a few years in the early 2010s, it seemed as if every new restaurant concept was required to have an assembly-line construction, trendy minimalist design, and feel-good messaging. From 1999 to 2015, the fast-casual industry grew 550%, more than 10 times the growth of the fast-food industry over the same period.
Chipotle may have paved the way, but it was followed by chains like Sweetgreen, Noodles & Co., and a stampede of fast-casual pizza chains. A new "Chipotle of X" was opening every week, as brands vied for the title of "Chipotle of pizza," "Chipotle of pasta," "Chipotle of Indian food," "Chipotle of Greek food," and more.
Cava certainly seems to fit the mold of the ideal Chipotle-esque fast-casual chain. Launched in 2011, the chain was dubbed the "Chipotle of Mediterranean food" by Business Insider in 2017.
"The boom spoke to the demand that consumers want ... this idea of value proposition and affordability, but quality at the same time," Cava CEO Brett Schulman recently told Business Insider.
However, in recent years, this explosion has slowed. Some of the biggest names in the business, such as Chipotle and Noodles & Co., faced public crises.
Chipotle's sales plummeted in the wake of an E. coli scandal in late 2015 and early 2016, while in 2017 Noodles & Co. announced plans to close more than 10% of its locations due to slow sales.
The lunch-bowl concept seemed to hit its saturation point, and being the "Chipotle of X" didn't sound like such an appetizing proposition after the company's stock tanked.
"You've seen that over time in so many industries where there's obviously this huge growing need, and a lot of people go in to fill that need," Schulman said.
With so many people flooding the zone, only a few brands are likely to survive in the long run.
Thriving in a post-Chipotle 2.0 era
Yet, Cava has managed to thrive. The chain has cultivated a dedicated fan base. Cava has steadily expanded, with almost 80 locations across the US and plans to open another 15 this year.
Following its $300 million purchase of Zoe's Kitchen in 2018, the company now has more than 320 restaurants - almost twice as many locations as Shake Shack has opened around the world.
Cava sets itself apart from the competition with its mix of broad appeal and specific, strong flavors, according to Schulman.
"I think anybody can pick their favorite, even on a curated menu, and then beat it to death and burn out on it," he said. "But I think what bodes well for us is you have so much flavor and satiating variability within our menu."
While some cities may feel oversaturated with trendy fast-casual chains, Schulman said that many suburban areas are still looking for inexpensive and convenient options beyond fast food.
Tech plays a crucial way to ensure convenience, and Cava has been ramping up its mobile ordering. Cava's drive-thru test in Charlotte, North Carolina, is another part of the chain's strategy of attempting to meet these needs, especially among younger diners.
"Gen Z really wants good value for their dollar and their calories. People, more and more, are spending their calories like their dollar - very judiciously," Schulman said. "They don't want to waste it on a mediocre meal."