How Consuming a Competitor Fueled Cava’s Rapid Growth | WSJ The Economics Of
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- เผยแพร่เมื่อ 26 พ.ค. 2024
- Cava has quickly grown to about 300 locations through an acquisition of another Mediterranean fast-casual restaurant chain, Zoe’s Kitchen. The chain has turned into a nearly $4 billion business, but can it continue to grow at a rapid pace when it has to start building new locations from scratch?
WSJ examines if Cava can become the Chipotle for Mediterranean food and continue to grow at such an ambitious pace.
Chapters:
0:00 Mediterranean fast-casual food
0:58 Growing through conversions
3:05 Business model
4:35 Growing without Zoe’s Kitchen
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#Cava #Economics #WSJ
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That CEO spit out so many buzzwords that I think my brain melted.
buzwords ?
And that is why I'm not investing
We proactively conducted a meta-analysis which resulted in a synergistic partnership that eliminated all silos
CEO's have a strong need to seem smart. But using tons of buzzwords tends to have the opposite effect.
He should reevaluate his core competencies and pivot to focus on what matters. His impact on the brand and its legacy.
This country needs more chain restaurants because we are sorely lacking in that department.
This place is actually quality though. We need quality chains
@@Anonymous-sw5jxThen they need to be grow every single year, leading to quality cuts over time. It’s how corporations always are.
Restaurants like Cava and Chipotle aren't just chains though. Their build-your-own-bowl setup conveniently suits many different diets.
Agreed. We are too reliant on Taco Bells during road trips.
@Zigestthere are multiple continents, countries, and ethnicities in the Mediterranean. Whatever you’re trying to imply cannot be universal
I love Cava. But it's high prices encouraged to make my own Mediterranean food. And now I spend $2-5 per meal.
exactly what I was thinking. I've spent so much time in Italy and Spain on the Mediterranean and this is a good start, and probably just as healthy, but $12.00 for a meal? Yes, I'll go and eat there, but the menu isn't really Mediterranean, but a cheaper version, not much chicken on a Med diet. That's what the price I'd pay for on the Med for a way better meal, but for now I'm stuck here, so yes, I like it. But I cook healthier meals and for $12.00 I have 4 servings. If I cooked their dishes, it would be $3.00 a serving. This is a move in the right direction.
My local supermarket owner is Lebanese, I can find baklava, 🍢 kebabs, quinoa salad, tamali, pita bread etc a lbs of Mediterranean salad is $7.99 , with chickpeas cucumber, red beans and quinoa, it's enough for 2 servings 😋
Zoes kitchen was amazing. They had a delicious half chicken over rice, and amazing lemon bars. I went there almost daily. Cava doesn't hit the same.
Remember when lunch didn’t cost $20?
no, I don't. It's just changing times.
PEPPERIDGE FARM REMEMBERS
What does that even mean?@@CoopsQuest91
@@benjaminanderson5176 Its a meme referencing a joke in Family Guy.
@@DefBroadcasting Oh silly, the meme is much older than that. It comes from a Pepperidge Farm commercial in the 1980s, which Family Guy referenced in the late 2000s.
Even though it's more expensive, CAVA is so much better. Chipotle is consistently on the decline with multiple price increases and smaller portions (especially mobile orders) over the years. Chipotle values their stock price more than their food quality/portions.
You'll be saying that about Cava in the next 5 years......
Cava’s food is too salty. One bowl is close to the daily recommended amount of sodium intake 😅
Bull. Cava has drastically reduced their portions. I’m so glad we don’t have one and have a local place (exactly like cava, but small business) that offers big portions and is so much cheaper. 12 vs 17usd.
Depends on where you go. The cava next to my old office was bomb and they gave good portion sizes, but the one close to where I live is the opposite. ALSO the like at cava takes forever at every location. I have no idea why.
Cava was OK, chipotle is much better
Cava is so freaking good, healthy and affordable. It's ridiculous how clean it is. Almost nothing has preservatives or garbage of any kind. Im a huge fan of the business.
How is it affordable? It’s like $18 just for 1 bowl not including tips etc. i usually get the lamb
@@antonykuo3809 Not at all! I paid $10 for a chicken wrap and $14 for an avocado bowl. For the volume and quality of food you’re getting, it’s unmatched!!
@@antonykuo3809why would you tip at this place? You don’t need to at cafeteria type of eat outs.
Are you serious. It is industrial produced steam tray food of marginal nutritional value using a marketing-lever to take advantage of the perceived benefit of the Med Diet. Industrial fast food is just industrial fast food no matter how you advertise it. Get real.
@@antonykuo3809where are you paying $18?! It’s $12 with tax here and a bowl is enough for 2 usually especially if you do double protein for another $3. The best value eating out hands down!
This CEO is very good at articulating how they tackled and is capturing the market.
Hard disagree. They are going to same Chipotle route where they were amazing in quality & portion sizes but post-covid has been lacking.
How ?? I go to Chipotle all the time and their portions are really big and food is great
🔥FACT🔥
CAVA has ZERO restaurant in Chicago, the host of the biggest Mediterranean communities in the United States 🤦♀️
and its much more expensive
Isn’t this almost the entire country that you’re describing? What hasn’t become a diminished version of its former self?
@duran9964, maybe blame the signature pigheadedness of the Midwest?
Tried cava for the 1st time recently. I actually thought it was pretty good, and prefer it over chipotle as it seems healthier. Is it overpriced? Yeah, but all food at all restaurants is expensive now. I mostly eat at home, and only eat out maybe once or twice a week, so the cost doesn’t bother me as much as those that eat out more frequently.
I will pay a little more to have a healthy option.
@@benjaminsaucedo3569You thought you were the only person who thought it was pretty good? Tf?
Best reason for eating here. Chipotle could easily be trash
@@saskhiker3935 but isn't it ridiculous how we have to spend more money to sustain a reasonable amount of healthiness?
@incogneter agreed. But fresh food spoils which makes it more difficult to have a consistent product at every location. You would think not having to cook the food would be a money saver.
Both Chipotle and Cava portions are not what they were. Chipotle has also gone through price hikes several times but also made changes to portions while at it.
I’m 6’5” 230 lbs and I have never had problems with portions at either location lol
cava is AMAZING. my bowl is 11 dollars- fills me up, fresh, gosh it’s soooooo good
Awesome video. I love knowing why they haven’t expanded more.
My big feedback for them is how dirty some of their stores are. They need to ensure cleanliness of lobbys, bathrooms, and the behind the line area
Loved Cava when I had it! Definitely better than Zoe’s, which was way too bland for me. However, we all know that usually as these small chains start to go mainstream and grow, food quality and customer service tend to decline. Prayerfully that doesn’t happen.
its already bad management in my area
New facilities is the easy part. Running them well after the grand opening is the challenge. Look for them to fail. Classic path for a restaurant chain to go under? Expand faster than you can staff/manage the new units, while keeping the existing operations running at 100%. Most can't do it. Resources get stretched. Some of the new locations aren't as popular as hoped. Money starts drying up, as obligations climb. Quick; raise prices, cut corners, cheapen the product, to improve cash flow/cover ballooning expenses. Pull top management out of successful, older, operations to save the newer faltering operations. Leaving the once solid older operations to now falter, losing customers. Their sales were already under stress, due to recent chain-wide cost cutting measures. And the entire thing goes down. Maybe a handful of the original units survive after the bankruptcy. I hope they prove me wrong.
Aubergine (fast casual mediterranean) restaurant chain has been doing great here in Utah. Would love to try Cava sometime. CEO blowing smoke trying to sound special by saying “we look at customer data” lol. So does every restaurant worth its salt, that doesn’t make you special as a business.
CEO's have a strong need to seem smart. But using tons of buzzwords tends to have the opposite effect.
Aubergine is the bomb!!!!
I was so upset when Cava replaced Zoe's Kitchen here in Dallas, TX. I eat at Cava often enough, but flavor and menu wise...Zoe's was so much better IMO.
The logo of Zoe’s looks better too😒 CAVA reminds me of CRVANA & some other logos of web design services🤢🤢🤮
Same. Really miss Zoe's.
Omfggggg, I’m so glad someone said this because YES! I was SO distraught when I went to Zoe’s Kitchen one day and saw that they (all locations) were closed - for good. I was literally devastated, I think I even cried! Their food and prices were unmatched! And it was conveniently located near my house 😩 it was the best lunch break spot! I ate CAVA for the first time a few weeks ago and it was straight; I said to myself “This reminds me of Zoe’s.” Now imagine my utter shock coming across this video and learning that they actually acquired Zoe’s 😳😳😳 It’s so unfortunate that Zoe’s was in the financial shape it was in because they really had a gem on their hands with that restaurant and that’s hard to come by.
Totally agree!!
I’m just finding this out and now I’m depressed I’ll never have Zoe’s again.
It will probably be $15+ for a meal and the quality will decrease, just like Chipotle. Olive U in Florida is still better than Cava in my opinion.
Already has in my area.. It's sad because I really liked it when they first came here
I just don’t know how much room they have when it comes to pricing. The bowls are good, my favorite is harissa avocado with chicken, hummus, lentils, zucchini, plus a few other toppings but at $17-18 . How much can they raise prices? I don’t think they can no one wants to pay over $20 for a meal.
I had Cava when I visited the East Coast and I thought it was great - would love to see more open in the Midwest.
CAVA is currently my favorite chain restaurant, I have been there twice this week alone.
I sure hope so ! I have my entire HSA invested in CAVA.
@@Zigest Keep an eye on CAVA in the future. Here is how my quality of life will be impacted if it underperforms; instead of buying name brand maximum absorbency Depends diapers , I will be buying Saran wrap and recycling until its structural integrity is compromised.
You made a great choice
cava is expensive but imo, the healthiness and flavor you get here is pretty good bang for your buck and i'm lowkey addicted
As someone that has liver disease Cava is a life saver when you are out and about and can’t cook.
I’m obsessed with their pita chips lol
DC is like Palo Alto for fast food invention. SweetGreen / Cava / Chopt / Zoës Kitchen etc etc tc
Yep, the first Cava opened here. I met one of the founders many years ago...when they only had the Rockville location.
I love cava and chipotle!
i love cava personally. flavorful . not bad price when i think of other fast food chains in the market when it comes to quality
Love that they're getting credit!
For fast Mediterranean, we have Naf Naf Grill and Roti here in Minnesota...no Cava yet. I really like Roti though.
I miss Roti after moving out of the midwest
Cava needs to fix what their buildings look like, I had no clue what was inside for months
Totally agree. I had no idea what it was until this video and there's one just a few minutes from my home. I thought it was a knockoff chipotle because these buffet style restaurants have been popping up all over the place. In NJ alone, there's Brick Oven Pizza, Smash Burger, Five Guys, Qdoba, Halal Guys but the difference is I have an idea of what style of food they serve. Cava just sounds Vague and the look of there buildings as super basic
I thought it was a graphic design place for some reason@@tofer2152
Same here! I passed one the other day and was wondering what the heck is a CAVA but didn't care enough to look it up.I wouldn't have known otherwise if it wasn't fo this video popping up on my homepage.
This is one chain I can get behind. Consider Eau Claire, Wisconsin for your next site! 😊
I like Cava and mediterranean food in general.It's good and healthy.Wish there was one closer to my home.
I had cava 6 years ago. Their bowls was huge and it was actually a good deal. I had one this year and it shunk 50% and they charge for everything ..
that's american capitalism for yah.
Hmm. Need to try it.
Many have tried and failed in the Mediterranean chain model in the west coast. Daphne's Greek, Mezli, and Yalli have closed. The only new and last standing one is Nick the Greek, which I am not a fan of. The chain with most potential is Sweetgreen but that is salads but it occupies the healthy diet space.
Use to eat Cava everyday when I work downtown NYC. Good food
Cava is incredibly flavorful and tasty food, very fresh and healthy
I love Cava!!
I will say Cava is the best of the two
Best fast food salad ever 😋😋😋
cava isn't bad but idk if I ever find myself thinking "you know what I'm craving? I think getting some cava would hit the spot!" I think if it was a little more reasonable with pricing it would be a more viable choice.
I really like cava. I would go much more often if it was just a little cheaper like chipotle.
I love this place! I spend 12$ for their Chicken Tahini Caesar in midtown manhattan, love it and the price! Hope it stays like that. Please build more outside of the city. Like Riverdale
Why didn't they mention Mezeh, Sweetgreens, Chopt and Roots? CAVA is unique it is a Meditterean approach to salad but more generally it's just a salad restaurant, and that industry has so much growing competition. I'm not sure why it was presented in the video as a rare business concept.
The Cava near my home always does not have a particular ingredient for one of their dishes. Portions are very variable.
Will there ever be a fast food Indian restaurant to quickly pick up samosas and khamen?
LOVE CAVA
I really liked it when the first time I went to the restaurant.. The last year and a half or so they portions have been cut in half and the price has gone up A LOT.. Also some of the sides they did away with and they hardly ever get your order right... Also it seems like the same quality isn't there.. Onions, tomatoes and other items seem like they're days old and not freshly cut like before.. They started good but might be growing to quickly and just care about making as much money as possible over quality and customer satisfaction.
Such place often are visited during the lunch break and some think having food restaurant at a work place is good idea, but not if it's a business meeting you wish to have dealing with private investigator who was hired in the You or The Night agent.
Solid commentary from Heather, kudos! Btw, if you are into that sort of thing, "Heather Haddon" is an anagram for "Hoe Hath Dander", or if you prefer, "Rad Hothead Hen". o/
So fire
I love Zoe’s kitchen, they had great food
But what is the source of the growth? If you assume that the typical American has a constant rate at which they’re eating out, then for Cava to grow its revenues, this means that they either need to find a place where Americans are increasing the percentage they spend eating out or they’re taking away from existing fast casual restaurants.
Not zero sum game necessarily. And population still growing in usa.
They are definitely taking away from Chipotle
If you studied business in school, I’d keep that fact to yourself.
Yes!
I’ll eat at cava twice a week. It’s amazing.
It's wonderful food. I go quite often.
I’m from Miami, having seen one over here but yeah I would try it. VS going to a restaurant …
I'm curious to see where 2024 takes them as a company. 15% growth feels ambitious when comparing it to similar fast-casual chains -- especially considering how much their real estate strategy relied on the Zoe's Kitchen acquisition.
FWIW - I thoroughly enjoy their food. It's consistently fresh and provides a hearty meal.
What can they do to avoid disappointing investors❓
The problem is Cava is plagued by poor store management. At several locations there is a lack of supervision, filthy looking prep stations, and often key items are out of stock
Businesses underestimate the need for quality store and multiunit managers for growth. The number of customers is not as important as availability of quality staff.
When I saw the sign in our neighborhood for CAVA, I just assumed it was a wine bar like the Spanish-style Cava wine.
They should look into Toronto. Mediterranean food is quite popular in Toronto.
Love Cava. Only thing we’re disappointed about is the price for the quantity of food you get.
Hopefully Cava restaurants will also open in Europe soon
I love CAVA
by "become the chipotle" do you mean make portions wildly inconsistent to hide that you're shrinking them while increasing prices?
Cava is delicious. I had never heard of it before my friend took me there. But I havent been back by myself. Even though it is delicious
I was skeptical, but after trying it, yes
the first and only time i've been to a cava they didn't prep/trim the arugula at all (most my bowl was giant inedible stems) so i feel like maybe the companies training leaves something to be desired lol
WSJ 😃 ands Merry 🎄mas
There is a Zoe's left, one of the original locations in Birmingham, AL
Big fan of the concept, quality has been pretty poor in all my experiences (~5 locations). Probably won't go back unless there's a drive for quality improvement
Daphne's tried this. Most of the locations closed within a couple of years.
I love cava
I love cava very good food
We still have a Zoe’s Kitchen in Louisville KY
Once they start commercializing their business, it’s not about food quality ingredients anymore. They will focus on profits over anything. They will start to incorporate GMO foods into their menu items. Shop at small local small businesses instead.
"We built a really robust real estate model that includes demographic and psychographic analysis and we use mobile analytics to understand where our guest are coming from, where they're going. And then we kind of create a DNA of our guest base, then heat map that DNA across the country to show us where we have the highesy likelihood of success."
Translation: When we bought Zoe's, we also got their mailing list and app data.
Looks like Cava has restaurants mostly on the east side. Hope they open one in Cali. Love Mediterranean food, but local restaurants are quite pricy.
Well you’re both wrong. They already have locations all over Southern California. They’ve been here since at least 2019.
@@TexDex_you’re an embarrassment if you actually think of Chipotle as Mexican food. 🙄🤡
Cava, look at 78748 and 78749. 🙏🏽 South Austin needs more options.
Yes
I like cava and if you had food allergies they are a great place to eat. I dont get full from there portions. I have to order double protein to get full.
what kind of Mediterranean restaurant doesnt allow beef?
Beef is not popular in the Mediterranean.
Mediterranean diet usually exclude a lot of meat…it’s mainly fruits, vegetables, and grains
They used to have beef meatballs.
IMO for years and years the market is open for a mediterranean chipotle. I was in LA and tried a newer spot ZANKOU Chicken that was delicious and affordable. Not sure how far they are expanding.
Zankou has been in the greater LA area for decades but unfortunately given a split amongst different family faction’s, expansion has been relatively slow. Great place though.
Zankou isn't new, it's quite old and an absolute institution in the LA area - but they won't be expanding anytime soon due to a family feud. They haven't even been able to open one in Fresno yet which was a longstanding demand.
People should definitely try it when in the area though, it blows everything else away.
Thank you for that, Yeah Zankou was fire, popping and busy, visibly clean and efficient, good employees, too bad you cannot duplicate this precisely nationwide or even in California jeez its tough.
I love Cava! There are a couple in my area. Much better than Chipotle.
Lol. Describe “better”
Please open one in Fort Lauderdale, Florida!!!
Nice to have more options than burritos, burgers and chicken.
Honestly I feel like they are somehow owned one way or another by the same group of people. In dallas, wherever there is a cava, there is a chipotle within a 1 mile radius. They are literally the same concept but different cultural gastronomy.
That’s why they’re near each other. But no, they’re not run by the same company/owners.
No, they are not owned by the same people. Can't say I have noticed that in DC area....
Never heard of this place
I don't forsee it to be the "next" Chipotle, though it may still become successful at a lesser level. I just can't see young people under 20 ordering salad bowls on a regular basis. Would they switch from a Chipotle burrito for a chicken pita at Cava? Highly unlikely. Without knowing their strategy, I assume Cava is targeting young, white, professionals who are health conscious and have the money to absorb the cost of more expensive ingredients. If that is the case, the market size is just not as large as I would like. I would prefer the food to be more mainstream to appeal to a larger audience. What Cava has going for them is that a Mediterranean diet seems to be one of the most healthy diets available. I don't see why they couldn't offer their own healthy version of a burrito. Perhaps, they can create a chicken sandwich with keto friendly/low-carb buns to lower the blood sugar spike from eating white bread. I don't see any restaurants doing that. I would like to see Cava offer just a little more varieties, so you can go there for other things besides a salad bowl. It's worth keeping your eyes on how well Cava does in 2024 as an investment opportunity.
The many Ive been to in the north of DC/Baltimore region up into Lancaster PA their demo is teens on up ... with 20 to 50 somethings always seen there and always crowded. I'd say half to 60 percent of the crowds seen at Chic Fil A and persistently so. The food is healthy and extremely tasty!
I don’t think so. I’m in the DC area. I never saw CAVA packed like Chipotle. It’s usually empty when I go in.
Me either.
I don't go out of my way to get cava. CEO used too much jargon, just say you used to data to determine regions that you can open a store at.
it already has in the sense that the quality has gone downhill the larger they've scaled
Will have the same problem as Chipotle namely keeping the fresh vegatables free of disease(lysteria?) which is why Chipotle almost failed. Still this is the right way to approach "an option" to McDonald's Restaurants but not Panera Bread or Starbucks are Dunkin Donuts tho #saturation
Hard for me to be excited about paying nearly $15.00 or more for a salad, especially when the 'restaurant' couldn't be any more bare bones, but that could be because they'd only recently opened. I wasn't impressed with the customer services, but again, that might be an issue of training given they were newly opened. Probably won't eat there again, despite the fact that I drive by there regularly. I was disappointed by the quantity; If I'm paying $15.00 or more for a salad, I want a fair bit of greens put in there.
big corporate drone vibes from the CEO and their strategy lol
MEZEH is sooo good as well
Please come to the quality desert of Saint Louis and show everyone how to get things done.
Save us from our fast casual quagmire!
There’s a good Mediterranean restaurant in every town already.