Zoe’s Kitchen Inc. had a very good year in 2015. Revenue increased almost 32 percent, same-store sales jumped 6.3 percent and 34 new company-owned restaurants opened, giving the Plano, Texas-based chain a total of 170 restaurants in 17 states.
The fast-casual Mediterranean chain is also expecting a good 2016, anticipating a 22-percent increase in revenue, to between $275 million and $280 million, same-store sales growth of between 4 percent and 5 percent, and another 34 to 36 company restaurant openings.
CEO Kevin Miles and chief marketing officer Rachel Phillips-Luther recently discussed the chain’s success with Nation’s Restaurant News.
You had a great fourth quarter. To what do you attribute that?
We have a mission: Delivering goodness from inside out. What does that mean? It’s about the team and it’s about growing the culture of the organization and then partnering it with great food that a team member can actually get behind and get excited about.
The majority of our team is Millennial. They eat differently, they think differently, they want to put their thumbprint and be empowered.
That culture piece is not new, but it’s something we’re really focused on right now as we’re approaching 5,000 employees.
[Our team members] may be there for six months until they graduate high school, or 10 years, whatever it may be. But how do you get them empowered and [able to] make a difference and be happy?
Happy people tend to take care of customers better, and that’s the biggest reason that our numbers are so good.
And we’re on-trend. The menu is right where it needs to be. We’re very differentiated. We’re ethnic in the sense of Mediterranean, but it’s such a license to be broad: We’re not Mexican or Chinese — or sandwiches, where you go, 'I’m tired of it and can’t eat there more than one time a week.'
We can cater 20 people, and 20 people can have very different dietary needs — gluten free, low calorie, allergies. There’s so many things out there, and [at Zoës] you can eat salad or a beef kebab. Everyone can be satisfied and not feel like they’ve compromised. Or you can have a salad for lunch and bring home a kebab family meal for dinner and not even have a flavor profile that’s even similar.
What shifts in the industry do you see going forward?
Rachel Phillips-Luther: Generation Z. Watch out: These kids will change our industry. What they eat: My four-year-old eats hummus with a spoon. They’re eating salmon and choosing grilled [chicken] nuggets [instead of fried ones]. I think the shift in what the consumer demands and how that will change quick service and beyond will be really interesting.
Miles: Kids today want more flavors, bolder flavors. They’re more adventurous. They’re looking to try a lupini bean or a Calabrian pepper or salmon.
When they get older and start to work, they want to work at places they can relate to. They want to work somewhere where they can feel good, it’s a fun environment, it’s upbeat. Those [restaurant] concepts with food that makes people feel good and have a team culture that makes them feel good — nine times out of 10 the customer feedback we get is that the team is so great. The food is secondary.
[The restaurant industry is] always late to adopt things, whether it’s technology or a culture of people. There are very few restaurant lifestyle brands out there. Really the one that jumped out to me was Starbucks. People are viscerally connected to it. They’re proud to walk around with a cup, and that’s what we’re striving to do at Zoe’s, and the only way to do that is through your team.
On team retention, company culture and training:
Phillips-Luther: We actually divide our time equally between our team and the consumer, so as a brand marketing department, when I’m thinking of allocation of resources and investment of dollars I think about those being the two primary places where we’re influencing the brand.
I think so often about traditional marketing teams, where the focus is on the consumer only — driving traffic and trial. We have really taken a hard turn left in a different direction from that. We definitely believe the team has such a huge opportunity to influence the brand in all the right ways. We’ve made hard investments and will continue to make them.
We use the summer, our peak season, to really reinforce and support our mission. So there’s no hard food strategy. We’re not using that peak window to do anything other than really rally people around our purpose and ensure that they’re reminded of why they’re there and what we’re there to do, which is to deliver goodness through our food and through our team.
Miles: You can spend lots of money on billboards and television and radio and all that, but if you spent a little bit of money on the team to get better service, whether it’s salaries or quality of life, and [let them] have a voice for your brand rather than treating them like a commodity, I just believe that in the long term that pays off.
The team is very protective of the organization. I say to a 16-year-old cashier, 'You’re part of the fabric of the organization. It may be a good fabric or a bad fabric, but you’re a thread in it.'
Contact Bret Thorn at [email protected].
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