A Gallup poll taken in August 2018 reported that only 5% of Americans considered themselves vegetarians and only 3% vegans. Yet millennials aged 18-29 are slightly higher with 7% vegetarians.
But Veggie Grill, a chain of veggie-centric and plant-based food, has defied those small numbers and recently opened its 33rd location including two new stores in 2019 in downtown Los Angeles and Chicago.
Their outposts are located mostly in the west in California, Oregon, Washington and Illinois, but in 2019 it’s moving east, expanding to Boston and New York. It’s aiming to open another eight to ten stores in 2019.
While many restaurant chains opt to franchise to expedite expansion, all of its stores are company-owned. None is franchised.
Two Wall Street friends, Kevin Boylan and T.K. Pillan, launched Veggie Grill in 2006 as a fast-casual eatery, specializing in healthy, vegetarian food.
Its three most popular dishes are: the Beyond Burger, a plant-based burger, Sante Fe crispy chickin’, made from non-GMO soybeans, wheat, peas and grains, and the Mediterranean supergreens salad. Everything on the menu is 100% plant-based so it doesn’t sell any poultry or fish.
Its food doesn’t include saturated animal fats and transfats but instead relies on non-saturated fats, rice bran, canola and seed oils.
Here’s what Culver City, California-based CEO Steve Heeley, the former CEO of Earl of Sandwich, said about its growth:
A Gallup poll indicated that only 5% of Americans considered themselves vegetarians and 3% vegans, and yet Veggie Grill just opened its 33rd location. How is that possible?
Heeley: Those statistics have remained stable, with minimal movement over the last few years. A lot of this has to do with how people define their diet. Vegan in particular has different definitions. but what is meaningful for us and why we have so much momentum is about plant-based food. The trend is rising with 40% of the U.S. dining on more plant-based food, particularly millennials and younger people.
Who are you appealing to?
Heeley: We appeal to vegan and vegetarians who are about 20% of our business. The other 80% is what we call people who are veggie-positive. These are people that have made a mindful decision to incorporate more vegetable, fruits, whole grains and whole foods in their diet. That’s our biggest audience.
How can you attract the people who dine on burgers and pizzas?
Heeley: Our mission at Veggie Grill is to make food that is not only innovative but is delicious. If you eat a Beyond Burger at Veggie Grill, it tastes like what people would expect a burger to taste like. Our chicken sandwich, made from a combination of plant proteins, tastes like a chicken sandwich. We make sure food is approachable and cravable, whether it’s Mediterranean or Asian.
Your locations are mostly out West. Are people out West more health-conscious?
Heeley: The founders started the company in Los Angeles. Clearly we’re in larger cities where there is a greater density of veggie-positive consumers. We now have three locations in Chicago, and we’re heading to Boston and New York. It doesn’t mean we wouldn’t over time get to smaller cities.
On what basis do you choose locations?
Heeley: We’ve developed a real estate site selection model, based on identifying where there’s a concentration of these veggie-positive consumers. It’s really a consumer-based model.
All of your 33 locations are company-owned. Why expand that way rather than franchising?
Heeley: Our plan has been to expand consciously and ensure we’re delivering a great customer experience. But we just signed a deal with Sodexo, the food services company, to develop Veggie Grills within universities. Over time we’ll look for strategic partnerships. Our concept is not like fast-food where you pull something out of a freezer and pop it into the oven. There’s a lot of fresh and chef-inspired cooking.
How much private equity money have you obtained? From whom?
Heeley: We have a private equity partner Brentwood Associates who is a major investor in the company. They’re the largest single shareholder, though they don’t own it. They play a strategic role in our growth.
You work with vendors such as Grubhub, Postmates, Uber Eats, Doordash and Seamless so what’s the role of delivery?
Heeley: Delivery plays a huge role. We got into the delivery game early on. We do a considerable amount of delivery. We also have an app so you can pick your food up and go.
Why did the two cofounders bring you in as CEO?
Heeley: I was brought in to grow the company. My previous experience has been building and growing brands and expanding companies on a national footprint. That’s my wheelhouse.
Two years from today, what do you expect to see with Veggie Grill?
Heeley: We’ll have at least 50 restaurants. We have plans to go to Washington, D.C. in 2020, and we’ll have more restaurants opening in universities through our Sodexho partnership.
Anything we left out?
Heeley: The bigger trend we see is that plant-based food is going mainstream. The consumer has figured out they can eat plant-based food and it doesn’t have to be a bunch of greens on a plate with steamed broccoli. Plant food can replicate chicken, beef and shrimp, and you don’t have to sacrifice your palette.
Describe your 3 keys to growth?
Heeley: 1) Culture and people, 2) A laser-focus on the consumer and consumer experience. 3) The consistent excellent execution of our product and food.
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