Cava Grill's $16M Expansion — Challenges, Scaling, and What to Expect in L.A.

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Co-Founders Ike Grigoropoulos, Dimitri Moshovitis, and Ted Xenohristos were onto something when the three childhood friends decided to extend their full-service restaurant, Cava Mezze, into a health-based fast-casual concept, Cava Mezze Grill, in January 2011. Cava Mezze was founded in 2006, and the trio began distributing their dips and spreads, which they still produce, in 2008.

Now, four years later, D.C.-based Cava Grill, a healthy spin on Mediterranean with locally sourced ingredients in a build-your-own format, is going national with an expansion to the west coast, thanks to a recent $16M in funding, led by VC capital firm SWaN & Legend Venture Partners.

“For the last five years, we have been methodically growing and honing our Cava Grill offering,” Cava CEO Brett Schulman told Foodable. “The reception we have received has been overwhelming and we felt the time was right to bring Cava Grill to a broader audience. The investment will help us do that with wider distribution of our dips and spreads in more regions of Whole Foods Market.”

Like Tender Greens and Sweetgreen, Cava Grill was an early driver in the ever-growing trend of chef-driven concepts in fast casual. This new wave, which began rearing its head a few years ago, is one of the many appealing factors in the rise of healthy, good-for-you fast casuals — not only to consumers, but also to investors.

“We like to say Cava is ‘a culture, not a concept,’ so it’s important for us to maintain our brand ethos,” says Schulman. “Everything from our culinary, sourcing and sustainability commitments to our team working environment. Having a partner viewing decisions through the lens of those long-term commitments as opposed to short-term financials was key.”

In this On Foodable Feature, below, Foodable CEO Paul Barron visits Cava Grill in Washington, D.C., to talk with Schulman about how far the brand has come since the last time we visited

Cava Grill: The Investor Appeal

As Foodable’s Amelia Levin references in “The Fresh Investors: A Look Into the Rising Popularity of Healthy Fast Casual,” sales growth has more than doubled for salad, greens and other health-focused concepts in the past four years — from 10.4 percent in 2010 to 24.1 percent in 2014 (Technomic).

Many factors can be attributed to the rising popularity of healthy eating. More educated consumers, heightened awareness due to a more transparent food system, and Millennials’ demand for simple, seasonal, and locally sourced ingredients are just a few. Pair healthy dishes with said ingredients in a fast-casual format, and you’ve got a match made in Millennial heaven. 

Even more, build-your-own concepts are, according to Technomic’s Darren Tristano, the “sweet spot” of fast casual. As of this year’s Fast Casual Trends & Directions Conference in May, only 22.5 percent of fast-casual restaurants are build-your-own, but the growth for this subsegment was double compared to non-build-your-own concepts. Also making a case for Cava is Technomic’s data on underserved specialty segments that are growing, which puts Mediterranean at the top of the list at 33 percent, with healthy coming in at No. 2 at 30 percent.

From D.C. to L.A., and Overcoming Challenges

Cava Grill currently has 12 locations, in D.C., Maryland, and Virginia, with stores in L.A. opening soon. With a concept so health-focused, it seems only natural Cava would gravitate toward the City of Angels, but the Cava team looked at a number of markets before deciding, says Schulman. Ultimately, the final decision came not from a single factor, but many pieces of the puzzle that came together.

Not only is the L.A. market health-focused, but also is open to new flavors. Additionally, the neighborhood landscape fits the brand’s residential and commercial needs, and it doesn’t hurt that there’s also a large natural grocery scene there, too — perfect for distributing Cava’s aforementioned dips. On a more personal note, the Cava team has family that’s lived in L.A. for many years, says Schulman. 

But it wasn’t such an easy decision, considering the distance from Cava’s home market, but the team found a solution for that.

To ensure operational continuity, Partner and Co-Founder Ted Xenohristos has already moved to Los Angeles. He will be joined on the west coast by two existing managers from the D.C. market. Additionally, the Cava team is creating a production kitchen for their dips and spreads to distribute in local natural and organic markets. 

“This will help maintain top quality and ensure they are locally produced,” Schulman says. “Everything else on our menu is scratch-made at each location, so having experienced members of our team in the market will be critical to ensure quality consistency.”

The new production kitchen will serve as an operational base that Cava will be able to scale from. “We will look to grow methodically, as we did with our home market.”

Biggest Market-to-Market Differences

With different growing seasons, there will obviously be some changes on the west coast menu compared to that of the east coast. Though, they have not encountered any culinary challenges so far. 

“In California, we are right on the doorstep of the ‘salad bowl’ of the country,” Schulman says. “The produce product we have been seeing from suppliers is amazing.”

The Cava team has already begun working with local producers in L.A. “Being a local producer ourselves, we know how helpful it can be to bring a product to a larger audience.”

So, what should consumers expect from Cava’s new L.A. locations?

“We have some fun surprises for our L.A. menu that will integrate vegetables in-season locally,” says Schulman. “We will also continue our program of using our physical spaces to highlight local producers and makers like we do in Washington, D.C.”

And of the design?

“We’re working on new physical store design elements,” he says. “We always want our restaurants to feel indigenous to the neighborhoods they are located in. The weather in L.A. is different than D.C. The landscape is different. We want our stores to reflect the local atmosphere.”

“L.A. has an incredible burgeoning culinary community, and we are excited to be a part of that.”