If you’ve ever considered opening a restaurant or hospitality business, you’ve most likely been regaled with that famous metric, “90 percent of restaurants fail in their first year.” That’s a frightening statistic that could justifiably scare would-be entrepreneurs from taking the leap. It’s also wrong – only about 17 percent of restaurants fail in their first year.
Scary – albeit inaccurate – statistics aside, the restaurant and hospitality business is a difficult one. But every now and again, a company comes along that has the right ingredients to make it big. And one of those companies has started right here in the Nation’s Capital – CAVA.
If you live in the National Capital region, you’re most likely familiar with this fast casual restaurant chain, which gives its customers the ability to build their own meal – whether a salad, pita or rice bowl – with their choice of delicious Mediterranean-inspired proteins and a number of locally-sourced and fresh toppings. And, if you’ve ever eaten in one of their numerous restaurants across 10 states, then that previous statement most likely made you hungry.
But there’s a lot more to the company’s success than delicious “crazy feta” spread and braised lamb. When addressing the ACG National Capital membership and their guests at the recent Mid-Atlantic Growth Conference, CAVA CEO Brett Schulman shared multiple ingredients that have made CAVA a regional business success story. These ingredients include a winning concept, a focus on being a great place to work, and the adoption of new technologies for a competitive edge.
When it comes to CAVA’s winning concept, much of it has to do with how people’s lives are changing and how dining is changing with them. According to Brett, “Food away from home continues to grow. It actually surpassed food at home last year. You have more dual income families, people can’t afford to eat at a full service experience all of the time, they don’t have the budget, or the time. They’re on-the-go, and they want to eat healthier and eat better.”
This trend led the founders of CAVA to try and evolve their existing full-service business model and create a fast-casual environment where “on-the-go” people could get the healthy and satisfying food that they crave conveniently and affordably. “We were inspired to try and bring this experience to a wide audience in a fast format, and really bring the flavor and healthy profile of the food to people,” Brett explained. “When we talk about our food, we like to say that at CAVA, you won’t need a snack or a nap after you eat our food. You can feel good about what you just ate, without having to make any sacrifices when you come in.”
Although the fast-casual restaurants are the area where the company sees the most potential for growth, they do continue to operate five full service restaurants in the National Capital region. In addition to offering another dining option for the CAVA-obsessed, these restaurants serve as places where the company can experiment culinarily to identify new products to offer in their fast-casual locations.
But good food is just one of the main drivers for the company’s growth. Another is how they treat employees. According to Brett, “I wanted to create an environment where employees would get up and do something they’re passionate about every day. I used to get the Sunday night blues at 6PM every week, and then wanted to hit the snooze button the following morning. I wanted to create an environment where it wasn’t just about the paycheck – where people were passionate about the mission and the environment they were working in every day.”
There are a few ways in which CAVA has accomplished this. First, they offer employees compensation well above minimum wage in their restaurants to ensure that all employees can make a living. They also offer benefits to their hourly restaurant workers that some full-time, salaried employees would be jealous of.
“In early 2016, we went to a $13 hourly wage across all of our restaurants. We also have paid sick leave to the California standard. We have paid parental leave. And this is for hourly employees,” Brett said. “We have something we do called community leave where our hourly employees can submit a request to their supervisor to get one shift off a year and we pay for them to go do a philanthropic effort that they’re passionate about in their communities.”
But technology does more for CAVA than just increase efficiency. It also helps to drive revenue and guide business decisions.
A fast-casual restaurant needs to serve its guests quickly. If perceived wait times are too long, or if people feel that they won’t be served in a timely fashion, they could leave before making a purchase. The point in which customers “balk” at standing in line for a meal has gotten a lot of consideration at CAVA, and technology has played a role in helping to fight against it.
“We’ve deployed sensors in a number of our restaurants and were able to determine the distance from the counter and number of people in line that lead to customers starting to turn away – the line is too intimidating,” Brett said. “That data was used to help us redesign some of our stores and capture more people – making them feel like they’re not too far away from placing an order.”
The analysis of that data also led to the deployment of another technology solution designed to help meet customer expectations – mobile ordering. Utilizing a mobile application, Brett claims that customers can, “…order in advance on their phone, walk in and pick up a meal without having to wait in line.”
Big Data and data analytics are also playing a key role in another area for the company – helping it make smart decisions about where to place its future stores. Using data, CAVA is able to ensure that every new location in which it opens is an optimal one, and that every new restaurant is set up for success.
“A lot of factors go into determining our next market and location. We used to have to do hard surveys. Now, we use massive mobile data, overlaid with Mosaic Lifestyle Segmentation Data, to identify the DNA of our customer base,” Brett explained. “We then heat map that around the country to see where our target customers congregate. This allows us to make an informed decision as we go into a new market – to find the three or four areas we should be targeting immediately.”
CAVA is an incredible local success story in one of the most difficult and competitive industries. Through its focus on its people, its emphasis on embracing new technologies and its ability to give customers what they want – fresh, healthy food in a fast and affordable way – CAVA has revolutionized the fast-casual restaurant marketplace. Thanks in part to its strong leadership and reliance on data for making informed decisions, the company has grown rapidly. CAVA currently operates 48 stores. That number is expected to jump to more than 70 by the end of the year.