How Sweetgreen is Becoming the Next Fast Casual Unicorn

On this episode of the Barron Report Live, host Paul Barron discusses which wing-focused restaurant brand is taking on pizza for the next Super Bowl, the fire sale of Diageo’s liquor brands, and how Sweetgreen becoming the next food unicorn in the fast casual industry.

Wings Take on Pizza in Super Bowl Challenge
At :35 - Paul discusses the growth of the popular takeout brand, Wingstop. The chicken-wing fast casual chain has seen a 15.5 percent increase in annual growth last quarter, with systemwide same-store sales also growing by 6.3 percent, and its net income jumping 33.8 percent.

The increase in store count to 1,215 global locations, is pretty major move compared to growth in the fast casual segment is slowing down overall. Additionally, the company’s strategy and lack of direct competition are leading them to take over the takeout industry over pizza.

Diageo to Sell Off 19 of Its Brands
At 5:00 - Paul discusses Diageo’s, the world’s largest spirits producer, decision to sell 19 of its lower-end spirits brands to Sazerac for $550 million. The strategy appears to allow Diageo to focus on its premium labels.

This decision will allow the company to take on the trending craft spirits market. Paul has seen firsthand when filming the Foodable show “Across the Bar,” just how often mixologists have opted for a more unique craft cocktail brand.

Sweetgreen to Become the Next Fast Casual Unicorn?
At 6:31 - Paul discusses the biggest news of the week — how salad chain Sweetgreen is quickly becoming the next fast casual market leader.

Foodable identified early on that this concept would be a breakout brand in the fast casual market. With Sweetgreen’s HQ move to Los Angeles in 2016 to join other tech-focused restaurants that are raising money in private rounds at valuations of $1 billion or more, they are here to stay. “CNBC” recently reported that Sweetgreen is nearing a $200 million investment with Fidelity Investments.

The key to Sweetgreen’s success like other fast casual stars is to have a unique,  Xactor. For the salad chain, it’s all about lifestyle. Showcased in previous events like the Sweetlife festival, Sweetgreen is able to connect with their consumers celebrating passion and purpose.

Another brand that has been able to achieve this in the past is Chipotle, controlling the burrito business with ambiance, food, and environment compared to Baja Fresh.

In recent news revolving Chipotle, hedge fund Pershing Square Capital Management has sold another large chunk of its Chipotle Mexican Grill investment. The affiliated entities have reportedly sold a total of 118,307 shares of the fast casual chain for a total of $55.8 million.

Watch the live podcast above to learn Paul’s predictions for the fast casual market and what he believes to be next for these two stars, what other factors are playing into Wingstop’s impressive acceleration and its edge in takeout, and to find out which brands are being sold to Sazerac.

 
 

Why Panera's Founder Started an Investment Fund for Emerging Brands

The former founder and CEO of Panera Bread Ron Shaich has started a new venture.

But instead of creating an iconic fast casual brand, he has started an investment firm to help emerging restaurant brands with funding and to grow.

With his partner, Keith Pascal, who was the senior concept advisor at Panera Bread Co., the two restaurant industry veterans have teamed up to assist up and coming brands that need capital but want to focus on strictly growing the business.

“This is the Buffett approach,” said Shaich in an interview. “We’re providing capital and they don’t have to spend time fundraising or dealing with board fights.”

Shaich, who struggled as the CEO of Panera Bread to keep up with the operational business while also pleasing investors, created the firm to keep other entrepreneurs off the "Wall Street treadmill."

The fund is named Act III Holdings and is working with Zoe's Kitchen, a publicly traded company, to go private at $12.75 a share by the end of the year.

The firm "saw a chance to keep Zoe’s out of the hands of activists by investing $140 million in that deal, which involves a takeover by the privately held Mediterranean chain Cava Grill. The goal is to give Zoe’s a chance to reset the brand amid a sales slump and a stock decline since its 2014 debut in public trading,” writes “Bloomberg.”

Shaich said that Zoe’s “would have gotten ripped apart" without the strategic move.

But to nurture emerging restaurant brands isn't Shaich's only incentive. Find out why he also started the firm at "Bloomberg" now.

Back in 2016, we spoke to Shaich about how he founded Panera Bread and his story as a game-changer in the industry who helped to build the fast casual movement. Check out the Fast Casual Nation documentary trailer below or watch the full film at Amazon.

The New Miami: How KYU is Elevating the Food Scene in Wynwood

KYU (pronounced “cue” like in barbecue) opened its doors in early 2016 in the art district of Miami, Florida known as Wynwood. The wood-fired Asian-American concept, brought to Miami by Chef Michael Lewis and Steven Haigh, has cemented itself as a cornerstone of the Miami’s burgeoning food scene. The culinary explosion is in part because of the development of the city. With more exciting spaces opening up Miami-wide — new ideas, customers, and money are pouring into developing areas and renowned chefs and restaurateurs are seizing the opportunity.

Chef Michael Lewis is the co-founder and executive chef at KYU. Lewis has cooked all over the world; leading teams, opening restaurants, and working with chefs like Jean-Georges. Lewis was Chef de Cuisine at Jean Georges restaurant on Central Park West which earned three Michelin Stars at the time.

In 2016, Lewis teamed up with Steven Haigh a 20-year restaurant and hospitality veteran to open KYU. One year after opening, KYU was nominated for its first James Beard for “Best New Restaurant”.

One of the biggest draws of KYU, outside Chef Lewis’s mouthwatering food, is the environment and the amazing service. When you’re there it just feels good. KYU is the new Miami — upscale and sexy, not overpriced, and just looking to have a good time.

On this episode of Table 42, Paul sits with Chef Michael Lewis and Steven Haigh to talk about how the restaurant connects with the community, the thoughtful design, and KYU’s unique name. Not to mention we get a behind the scenes look at popular menu items like the roasted cauliflower with goat cheese, shishito, and herb vinaigrette and the Wagyu beef brisket with black shichimi pepper.


Zume Pizza Raises $375 Million From SoftBank, Other Firms on the Verge of Investing Too

The automated pizza delivery restaurant Zume has raised an additional $375 million from SoftBank, according to a recent report from "The WallStreet Journal."

“We’ve recently closed a round of funding to support our growth and hiring,” said Alex Garden, Zume CEO and co-founder in a statement.

Zume Pizza is a Silicon Valley-based company that is store-less and has a team of six different robots that assist in making the pizzas.

Zume also has delivery vehicles equipped with pizza ovens, so pizzas are ready for fast delivery.

But delivering fresh pizza isn't the company's only focus, Zume owns a patent for these delivery trucks and is considering licensing this technology to other restaurants looking to use trucks similar to those in Zume's fleet

“Pizza was our prototype,” said Garden to "TechCrunch" in April. “There’s no reason why this technology wouldn’t work for any restaurant or any food category. Any restaurant who wants to adopt our system can now easily do that. They don’t have to be experts in technology or appliance manufacturing. They can just be restaurateurs, who have a more flexible offering for customers.”

Evidently, the company's automation technology is especially attractive to investors because "The WSJ" also said that another firm is looking to invest another $375 million.

Prior to this recent investment, Zume already raised $70 million.

Do you think that this tech-focused pizza brand will take off with this massive investment?

Read more about the funding announcement and what the future holds for Zume at "TechCrunch."

We recently took a closer look at automation in the pizza industry. Watch the video below to see how Zume deploys its team of robots to make its pizzas.

Veggie Grill to Expand to the East Coast With First NYC Store

The fast casual chain known for its veggie-centric bowls, Veggie Grill has announced that it's expanding to the east coast with a new store in New York City's trendy Flatiron District.

The concept has 31 total stores in California, Oregon, Washington, and Illinois, but will be soon feeding the NYC masses bold yet healthy food starting spring of 2019.

The west-coast based chain launched in the Midwest with a Chicago location earlier this year. But the management team felt it was time for the fast casual to set up some roots in The Big Apple.

“The expansion of Veggie Grill to the East Coast could not come at a better time,” said Steve Heeley, Veggie Grill CEO in a press release. “Plant-based food and clean eating continues to be a growing trend, especially in big cities, so New York City is a very exciting opening for us and we look forward to joining the community there.”

The chain's menu, where vegetables take the center stage, is seasonal with plant-based favorites like the Mediterranean Supergreens Salad and Santa Fe Crispy Chickin’, Sonoran Bowl. The brand has also partnered with a company on the rise Beyond Meat and serves the VG Beyond Burger on its menu.

Earlier in the year, Veggie Grill made two new hires to help foster the brand's rapid growth. Tim Welsh, VP of Real Estate and Development, has been leading the efforts to achieve the brand's lofty goal of doubling its stores by 2020. Then the fast casual also hired the vegan food expert Kajsa Alger to be the director of culinary innovation to develop new menu items.

Back in 2015, we visited the veggie-focused brand on the west coast. Watch the video below to learn about how the chain developed its unique menu from the former Chief Energizing Officer.