Lyfe Kitchen to enter restaurant mix with healthful food
If you were looking to build the next great restaurant chain, surely you’d start with a burger. Or some delicious, oily chicken. Or deli sandwiches. No one has ever made it big in America with veggie burgers and vegan brownies.
Then again, Americans have never been fatter, nor have the trumpets of moderation ever been sounded so loudly. Movies and books lecture the country about laying off the fat and salt, and packaged-food companies have been changing their recipes in response to consumer requests and to anticipate new government dietary guidelines that call for more healthful eating.
Bring in two former McDonald’s Corp. executives and an Oprah Winfrey celebrity chef. They are betting that their restaurant concept, Lyfe Kitchen, will unlock the recipe to successfully selling healthful food to the masses. The restaurants will be a step up from fast food, fitting into the fast-casual segment where food is made to order, like at Panera Bread or Chipotle.
Chicago-based Lyfe — an acronym for Love Your Food Everyday — plans to open its first restaurant in Palo Alto late this summer, and a handful of additional Northern California locations are in the works. The company is said to be planning as many as 250 restaurants nationally within five years.
The executives’ expectation is that smart real estate decisions, carefully constructed marketing, philanthropy as a core principle and tasty food will push Lyfe to succeed where others have failed.
“This isn’t easy. If it was, someone would’ve done it already,” Mike Roberts, chief executive of Lyfe Kitchen, acknowledged at a recent tasting for investors.
The restaurant concept is the apparent antithesis of McDonald’s, where Roberts was president and chief operations officer and considered a likely candidate for the top job before leaving in late 2006.
In the Lyfe kitchen, butter, cream and high-fructose corn syrup are banned, and none of the food is fried. Sweet potato fries, for instance, are oven-baked. All of Lyfe’s menu items contain fewer than 600 calories, including signature dishes that include a Niman ranch beef burger with agave ketchup and pickles. The desserts are expected to be dairy-free.
Lyfe faces many hurdles, including the basic challenge of getting the average person in the door on a regular basis, said Larry Miller, an analyst who follows the restaurant industry for RBC Capital Markets. The successful example, Miller said, is Subway, which has fostered a reputation for healthful and tasty offerings.
But even Subway corporate dietitian Lanette Kovachi notes that the chain makes sure there’s something for everyone by balancing healthful sandwiches with indulgences such as the meatball sub.
“Everybody has individual dietary needs, calorie needs; everybody’s looking for something different,” she said. “We try to offer a variety of choices.”
Although 30% to 40% of consumers claim interest in more healthful dining options, only 10% are interested in health food, says Dennis Lombardi, executive vice president of food-service strategies at WD Partners.
Lyfe executives are betting the market is bigger, closer to 50%. Their strategy is to target women age 18 to 49, hoping they’ll like the food enough to bring back friends and families. While a woman is enjoying a grain salad, there’s a beefy burger for her husband. While he’s munching away, he might try a bite of her salad and even like it.
That tactic is plucked from McDonald’s. At one point the hamburger chain was having difficulty luring women to its restaurants because women believed there was little on the menu for them, said Mike Donahue, chief communications officer for Lyfe Kitchen and a McDonald’s alumnus. Mothers, who make many purchasing decisions, were vetoing trips to McDonald’s. So the chain revamped its salads and expanded grilled chicken offerings.
For Lyfe, men are more likely to be the reluctant ones, and that’s where Roberts’ nearly 30 years of pushing burgers comes into play.
Roberts is a stickler for precision. For instance, he explained, the bun and burger have to be perfectly proportioned. If a bun is too big, he said, the patty looks too small, and vice versa.
Roberts and his partners also believed the chain’s name was crucial. They plowed through more than 6,000 names before settling on Lyfe Kitchen. The name captures the importance of loving what you eat, and it creates a potential lifestyle brand.
The Lyfe concept was developed relatively quickly. Stephen Sidwell, an investment banker, approached Roberts with the idea for a healthful restaurant chain about a year ago. Sidwell had been instrumental in launching Gardein, a meat substitute, in the U.S.
“When I spoke to Steve I really felt like we were answering the call of an unmet need in the marketplace,” Roberts said. “Everywhere we go, people are talking about food, they’re talking about taste, what they’re eating tonight, tomorrow, and their health.”
The key, Roberts knew, was to make the food taste good. He reached out to Art Smith, Oprah Winfrey’s former personal chef, who is executive chef and co-owner of Chicago’s Table Fifty-Two.
Smith, who became an early investor in Lyfe, is famous for his restaurant’s fried chicken. He has been approached with numerous proposals, including at least one for a fried-chicken chain. But Smith, who recently cut fat and calories in his own diet after a health scare, believes chefs will be instrumental in changing the way America eats.
To develop vegan options for the menu, Lyfe tapped Tal Ronnen, a celebrity chef perhaps best known for catering Ellen DeGeneres’ wedding to actress Portia de Rossi. Ronnen is executive chef for Gardein Protein.
Roberts and Sidwell hold the largest stakes in Lyfe Kitchen. An angel round of funding has been completed, which covers development of the brand through the opening of the first restaurant. In addition to friends and family, investors include Thomas Tull, chief executive of Legendary Pictures, which produced “The Dark Knight,” “The Hangover” and “Inception,” and Jim Wiatt, former chairman of William Morris Entertainment.
