Emerging Concepts | August 2016 | By Judy Kneiszel

Why Mendocino Farms is One to Watch

After a decade perfecting its operation, this California fast casual 2.0 brand is ready to shake up the better-sandwich scene.
Emerging QSR sandwich chain reinvents fast casual restaurant business with high quality offering.
Mendocino Farms' “Not So Fried” Chicken. Mendocino Farms

Shortly after Ellen Chen and Mario Del Pero met, Chen said something that led to a successful business partnership—and eventually marriage, too.

“I said, ‘I’d love to help you create infrastructure,’” Chen says.

Back in the early 2000s, Chen had experience with technology startups, while Del Pero had grown up in the restaurant business and started a fast-casual teriyaki brand called Skews. When the partners realized it was not the right concept to grow, they sold it and turned their attention instead to Mendocino Farms.

The Fast Casual 2.0 concept—often referred to as “Mendo”—has since established a strong foothold in Southern California selling sandwiches and salads filled with locally sourced ingredients.

Chen says there were three main reasons she and Del Pero thought Mendocino Farms was a promising concept. First was that, at the time, no one else in Southern California was tackling the better-sandwich category. She says there was a gap between the sandwich brands selling $5–$8 subs and the upscale cafés with $14–$15 gourmet sandwiches. Mendocino Farms has a check average of $10–$12.

The second was what Chen calls the “the Whole Foods Market effect,” meaning a growing segment of the population care where their food comes from and how farmers are treating animals and the environment. They wanted to work with partners who shared those values.

Mendocino Farms

FOUNDERS: Ellen Chen & Mario Del Pero

HQ: Los Angeles

YEAR STARTED: 2005

ANNUAL SALES: Undisclosed

TOTAL UNITS: 13

FRANCHISE UNITS: 0

mendocinofarms.com

The third reason they believed Mendocino Farms would be successful was the “better-coffee” movement. “Better-coffee places were being called ‘third places,’ or gathering places,” Chen says. “We wanted to be next to those places. We thought we could be the town-square sandwich place with an elevated better-sandwich concept.”

Those better sandwiches on the menu include the “Not So Fried” Chicken made with shaved, roasted, free-range chicken rolled in a crispy coating. The chicken is topped with herb aioli, mustard-pickle slaw, tomatoes, and pickled red onions and served on toasted ciabatta.

Another consistent favorite is the Steak BLT on a pretzel bun featuring carved balsamic-glazed steak, Applewood-smoked bacon, romaine lettuce, roasted tomatoes, herb aioli, and red wine onions.

Mendocino Farms’ sandwich and salad descriptions often include the name of the farm where the ingredients originated. The Save Drake Farm’s Salad features roasted free-range chicken breast, marinated Drake Family Farms’ goat cheese, pink lady beets, green apples, dried cranberries, honey-roasted almonds, Scarborough Farms’ greens, butter lettuce, and romaine with citrus vinaigrette.

Drake Family Farms, which provides goat cheese to Mendocino Farms, has had a namesake salad on the menu ever since the brand helped save the farm during a financial crisis. “The farms are the stars of our menu,” Chen says.

The first Mendocino Farms shop was in a 900-square-foot former Starbucks in downtown Los Angeles. While small compared to stores that followed, it was a great place to test the waters, since Chen and Del Pero were familiar with the area from the Skews days.

“It took us almost four years before we opened a second location,” she says. “We knew we wanted to scale the concept, so we had to perfect the menu and supply chain.”

The second location was also in downtown L.A., and suburban locations followed. Chen says that, 11 years in, the brand is on track to open three or four new locations per year, and eventually aims for four to six per year. She and Del Pero also want to invest in larger locations—about 2,800–3,000 square feet—with a patio. “We want to blur the line between casual dining and fast casual, with many points of contact incorporated,” Chen says.

Mendocino Farms has had slow, steady growth, but nearly doubled in the past two years. By the end of 2016, two more will open. Chen says the company is also considering areas beyond the Golden State, which will mean finding more supply partners.

In 2015, Mendocino Farms’ commitment to quality, locally sourced ingredients caught the eye of Whole Foods executives. The natural foods grocer has gone from a brand inspiration to a minority stakeholder. That investment is helping the brand expand into San Francisco and San Diego, while also setting the stage for Mendocino Farms to open within some Whole Foods locations.

“Whole Foods is providing some great mentorship,” Chen says. “We can tap into their supply chain, their sustainability practices, and the partners they work with, and learn from them.”

The first Mendocino Farms inside a Whole Foods is set to open this winter in Tustin, California. Chen says that doesn’t mean the brand will eventually be in all Whole Foods stores. “We’ll see how this one goes and be very careful in choosing which locations we go into,” she says. “It will be special.”

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