At this stage of the pandemic story, what does it mean to offer the best of both worlds in fast casual? It’s a question CAVA CEO Brett Schulman believes he has a clear view of.
Traditionally, the category held two sides of the same token of differentiation—convenience to rival quick service, but with elevated hospitality, and quality to make casual dining rethink their value proposition. Yet shifting dynamics have brought expectations somewhere else.
“It’s not so much a surprise to us, but I think the demise of the in-restaurant dining experience is exaggerated,” he says. “We see full dining rooms in many of our restaurants, but what that’s translated to is more frequent occasions from our guests.”
During COVID, CAVA’s dinner business—already healthy pre-pandemic, Schulman says—grew by 10 percent. It’s further proof the customer has arrived at an inflection the category can latch onto.
Diners have figured out how to use CAVA in different ways for different experiences, at different times of the day. “Whether that’s lunch or dinner, or even grabbing a meal if it’s a shoulder period if they’re on the go during their day,” Schulman says, “running around doing errands.”
In response, CAVA is well ahead of its 2019 baselines. COVID served as an accelerant to many of the trends it previously plotted underneath the surface. Things like building out an engineering team and launching marketplace-aided delivery. Curbside. Also, an in-house digital ecosystem that gives CAVA control over its off-premises efforts.
Before COVID, digital orders represented 20 percent of CAVA’s transactions. It was as high as 50 percent in some urban units. Overall at the depth of lockdowns, it rose to 70 percent and has moderated in recent months, closer to 40 percent. However, it’s only the percentage basis that’s settled. From a dollar point, CAVA’s digital sales have stayed sticky. Couple that with an in-store comeback, and you have the foundation driving sales higher than 2019 marks.
It’s a broader conversation, though, Schulman says, around how this all defines CAVA’s future. And it returns to the “best of both worlds” shift. “You talk about it from a convenience standpoint—you pretty much have a drive-thru menu in your hand with your phone now,” Schulman says. “Or a kiosk in your hand that you can order from. And whether you pick it up from our window or pick it up off a shelf, it’s a pretty convenient experience.”
“You can have that [quick-service restaurant] convenience with the quality of a fast-casual experience,” he continues. “But you can also have the ambiance or the quality of food that you can get in casual dining without the time or price commitment.”
In 2019, CAVA began to open drive-thru digital pickup windows, which it continues to expand today. These have served as an ideal way to meet pandemic needs, Schulman says, while opening access points and enabling new and core customers to interact with CAVA as the moment calls for it. That’s only carried over as guests return to in-store visits. “They’ve gained the increased awareness of being able to get their favorite CAVA meal,” he says. “How they want it, when they want, where they want it.”
When CAVA acquired Zoës Kitchen in 2018 for $300 million, the brand already leaned heavily into its suburban footprint as it targeted growth in America’s Sun Belt. Today, 80 percent of CAVA’s restaurants, even notwithstanding the Zoës deal, are suburban. Zoës footprint is nearly 100 percent so.
“How can we deliver digital hospitality? And have it feel like you are truly engaging with us in the same sense that you do when you’re in our restaurant,” CAVA CEO Brett Schulman says.
As people began working from home more, as well as migrating out of city centers, CAVA’s awareness and frequency picked up. “Whether they return to the office and want a place where digital pickup order and grab lunch off a shelf in one of our urban locations, or whether they want to meet their friends and family and have a meal in one of our dining rooms in the suburbs, or drive around to one of our drive-thru digital pickup windows to grab their meal,” Schulman says, “they’ve realized that there’s a number of ways they can access their favorite CAVA meal. And so that allows us to gain more frequency because we can meet them in such a multitude of ways.”
Simply, CAVA’s ability to flex to a quick-service need or a casual-dining need, has never been higher.
The brand opened another drive-thru, pickup window store in November in Castle Rock, Colorado. There’s a Bryant Park, New York, unit without any seats. Guests order down the line, but everything is packed and sent out the door. CAVA also boasts boxes with upward of 80 seats. In January 2022, a Sandy Springs, Georgia, digital pickup kitchen hit the market—a first for the brand. It’s a storefront for digital-order pickup, delivery, and catering production to support the company’s recent push into the latter.
Schulman calls this landscape a “multichannel world.” CAVA, like fast casuals, quick serves, and even sit-down brands alike these days, isn’t tied to preconceived notions of what a restaurant is supposed to look like. Brands can adjust to the needs of guests in given trade areas, whether that’s a ghost kitchen, pickup window, or a restaurant with more pickup shelves than seats.
Catering is another example of how CAVA is webbing out. The brand launched the program in November in New York City, with plans to go national throughout the next year or so.
The goal will be to support catering needs via multiple formats, including off-and on-premises ghost kitchens and in-restaurant catering operations.
Schuman says customers have requested catering “for the decade we’ve been doing this.” But existing stores don’t have the capacity to support it in addition to current in-store and digital business.
When CAVA brought Zoës into the fold, however, it gave the company an established catering arm that allowed it to explore how the channel could translate to CAVA as well. Additionally, it suddenly had ample real estate to adapt and support it, and not at the expense of its present restaurant and digital experience.
And speaking of the digital experience, CAVA doubled its base over the past two years. That’s not an uncommon turn of late, as restaurants welcomed hordes of guests into digital avenues during a time when they couldn’t dine-in, but CAVA has tried to nurture audience development more than just let it happen.
“We talk a lot about the hospitality, the Mediterranean way, and how we want to deliver that guest experience we do in our restaurant currently,” Schulman says. “And how can we translate that to our digital channels. How can we deliver digital hospitality? And have it feel like you are truly engaging with us in the same sense that you do when you’re in our restaurant.”
CAVA launched a new app in December 2020 and has continued to tweak features. The aim, to Schulman’s point, was to use a tech-forward approach to create a more personalized experience. The new ordering interface features a highly visual UX that mimics CAVA’s in-store walk-the-line format, showing off each menu item, and encouraging discovery of new ingredients and Mediterranean flavors as users follow the same flow as they would in the restaurant. To streamline the discovery process, guests can also opt to select images or text associated with specific ingredients they’d like to add to their bowl. And earlier, CAVA began offering a specific selection of curated bowls and salads.
The chain’s team also designed the UX so each component was added at the right time to reflect an in-person experience and, from a culinary perspective, build upon existing flavors and textures.
In another feature Schulman says was key to bringing that in-store vibe outside, guests can set and edit dietary preferences. “We wanted to take the guesswork out of building a dish online, ensuring we can deliver a consistently personalized experience that takes account of each guest’s varied needs,” he says. Some recent updates include allowing guests to opt into utensil and bags.
This COVID-ignited environment is splitting across experience lines. Schulman says fast casuals need to understand a digital world can’t just be transactional.
“You’re not just tasting our brand through the food you’re eating, but you’re feeling our brand through the digital hospitality you’re getting in your digital experience,” he says.
Part of that aim comes on the front lines. Back in 2016, CAVA took its starting wage to $13 and hour. Schulman says the decision feels “ages ago.” Today, the brand is north of $15, on average, across the system. And that’s wrapped with benefits alongside immediate advancement opportunities for those who want to grow with CAVA.
“All of my co-founders grew up with families in the restaurant industry and saw firsthand the stereotype of the job,” Schulman says. “And we set out to really make CAVA a place where you could have a career in the restaurant industry, because it’s one of the few pathways for a lot of people in this country, and we want to be a realistic and legitimate one. So that’s helped us attract and retain talent.”
Schulman adds, as is often discussed in the “Great Resignation” debate, COVID awakened people to their surroundings. “Who am I working for? Why am I doing this work? What is the greater purpose behind it?” he says. “And so, I think it’s imperative for any brand to be able to clearly communicate that. … People have choice and if you’re not a better choice, you’re going to struggle.” During the pandemic, CAVA offered crisis pay and bonuses and profit-sharing bonuses when stores reopened and employees returned. Schulman says it helped workers recover lost wages from furloughs.
“It’s critical to a modern worker—how do you value me? And what is the purpose that I’m coming into work every day? That certainly helped us withstand some of the headwinds on the labor front,” Schulman says.
CAVA has plenty of growth on deck for 2022 and beyond. In November, the brand was at 51 restaurants opened and converted (Zoës) that year. The brand has about 160 stores. It planned to convert 55 total in 2021 and expects another 60-plus in 2022.
The Zoës deal is fast becoming a vehicle for CAVA to expand without the typical challenges of sourcing real estate. Time-consuming hurdles such as negotiating leases and developing sites from scratch. Acquiring Zoës, which had 261 locations at the time, gave CAVA a crop of locations (especially in the suburbs) that would have taken the fast casual “a number of years” to build out its footprint otherwise, Schulman notes.
For instance, CAVA had zero Atlanta stores in May. Now, it has 14. There were two in Dallas at the beginning of 2021. That jumped to 14 as well. “It allows us to rapidly expand in these cities that we had been touring and trying to line up high-quality sites—it is a challenge to be able to line up that many in a short period of time,” Schulman says “We can rapidly expand into markets we’ve been trying to bring CAVA to for a number of years. And overall, grow our business on a more compressed timeline.”