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Investors Step Up to the Plate for Foodservice Innovation (Part 1)

In today’s crowded restaurant market, it’s no wonder there seems to be an insatiable hunger for capital investment.  A lean operation may be desirable, but attracting ample funding is just as critical.olu-eletu-38649-unsplash

While popular perception may recoil at bloated high-risk stats (only 17% of restaurants bite the dust in the first year, not 90%, Forbes reported1), savvy investors are likely to spot high reward. Shifting consumer demand has served up a feast of opportunities and whet investors’ taste for growth segments.

The better-for-you foodservice trend is a case in point, propelling the rise of wellness-oriented restaurant concepts and nourishing an environment of healthy competition. “Organic, farm-to-table grab-and-go food is becoming as easy to find as a Whopper,” the wellness lifestyle and news publication Well+Good quipped.2

Wellness Wave Opens Foodservice Floodgates

The feeding frenzy for better-for-you fare sweeping the country has gone from mania to mainstream. As Bonnie Riggs, a restaurant industry analyst for the research firm NPD Group, explained: “We are definitely seeing a health movement, not a fad. Consumers report healthy as the No. 1 characteristic they want to see more of on restaurant menus, and what they mean by that is they’re looking for food that’s real.”2

Big investment opportunities attract big names. Think Wahlburgers, the gourmet burger-driven fast casual phenom started by the famous Wahlburg family. Wahlburgers was one of a small group of fast-casual chains to enjoy triple-digit growth last year.3

Technomic, a market research firm focused on the foodservice industry, predicted that consumer demand would tilt the fast casual segment more toward better-for-you and sustainable options in 2018: “Looking forward, expect to see fast casuals featuring a larger focus on clean eating initiatives and planet-friendly changes to align with growing concerns among consumers.”3

The Oprah Effect: Higher Profile, Higher Profits

Enter Oprah Winfrey as an equity investor in True Food Kitchen, the wellness-driven restaurant chain headquartered in Phoenix, Arizona. Majority-owned by private equity firm Centerbridge, True Food Kitchen was founded in 2008 by Fox Restaurant Concepts CEO Sam Fox and wellness author Dr. Andrew Weil.

Since its inception, the innovative casual dining experience has ridden the well-being wave to grow to 23 locations across 10 states.4 With the backing of its new high-profile media mogul, who joins the company’s board and provides input as a consultant, True Food Kitchen plans to double its number of locations over the next three years.4

“When I first dined at True Food Kitchen, I was so impressed with the team’s passion for healthy eating and, of course, the delicious food, that I knew I wanted to be part of the company’s future,” Winfrey said in statement.5 No stranger to the wellness industry, the celebrity titan helped boost shares of the weight loss franchise Weight Watchers 1,132% with a $43 million investment and the power of her personal brand.5

Named the the top emerging restaurant brand of 2018 by data firm Fishbowl,5 True Food Kitchen features sustainable, local and organic fare as well as vegan and vegetarian options.

Reach out below to learn how our brands can help you elevate your menu and capitalize on the wellness craze. 

In part 2 of this post, we’ll explore how capital investments in technological innovation are transforming the foodservice landscape.

 

1 Ozimek, Adam, “No, Most Restaurants Don't Fail In The First Year,” Forbes, Jan. 29, 2017. 

2 Laurence, Emily, The Plus Factor: Why Healthy Fast-Casual Dining Is the New Fast Food, Well+Good, Nov. 12, 2017.

3 Schouten, Rebekah, “Fast-casual ‘still a bright spot’ in the restaurant industry,” Food Business News, May 11, 2018. 

4 Ruggless, Ron. “Oprah Winfrey invests in True Food Kitchen,” Nation’s Restaurant News, July 11, 2018.

5 Whitten, Sarah, Oprah Winfrey is about to get into the restaurant biz with an investment in True Kitchen, CNBC, July 11, 2018.

 

Topics: Restaurant Operations, Technology, Trends, Millennials

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