Cava

What is Cava?

Cava, who recently went public in June of 2023, has been a rising star in the fast-casual dining scene by offering a fresh take on Mediterranean cuisine. Similar to Chipotle and Subway, their menu revolves around customizable, healthy and flavorful meals, ranging from build-your-own bowls, salads, pitas, and a variety of unique, bold sauces. Cava has also extended its brand into grocery stores nationwide with its line of dips and spreads, taking a bite out of the $4 billion hummus market in the U.S.

Background

Cava was founded in 2006 by childhood friends Ted Xenohristos, Ike Grigoropoulos, and Dimitri Moshovitis; all children of Greek immigrants. They initially started with a full-service restaurant, Cava Mezze, in Rockville, Maryland, before seeing an opportunity to shift to a fast-casual concept that aligned more with changing dining trends. The first Cava Grill was launched in Bethesda, Maryland, in 2011.

Growth

Cava’s meteoric rise in the fast-casual dining industry is a tale of strategic moves, a firm grasp of market trends, and culinary innovation. In 2006, the founders began their journey with Cava Mezze, a full-service Mediterranean restaurant. However, they noticed a shift in consumer behavior towards favoring quick, affordable, yet high-quality meals, triggering their pivot to a fast-casual concept - Cava Grill, launched in 2011.

The introduction of Cava Grill was met with resounding success. Consumers instantly connected with its offering of fresh, customizable, and health-centric meals, which was a refreshing alternative to the typically saturated fast-food market.

In a move to meet the growing demand, Cava implemented an aggressive expansion strategy, rapidly adding locations primarily in urban and suburban areas where health-conscious consumers were most prevalent.

On top of this growth, the founders identified an opportunity to bring their signature Mediterranean flavors to American households. In 2014, they ventured into retail, launching their line of dips and spreads in Whole Foods Market stores. This move, essentially placing their brand into the booming hummus market, diversified their revenue streams and amplified their brand visibility to consumers who hadn't yet dined at their restaurants.

In 2018, Cava made a huge move in acquiring fast-casual chain Zoe's Kitchen, a move that not only doubled their footprint but also solidified their position as a powerhouse in the fast-casual Mediterranean market.

Present Day

As of now, Cava has over 250 locations nationwide and they are continuing to expand. They also IPOd in June of 2023. Cava’s continued success is largely attributed to its innovative approach to fast-casual dining and its commitment to serving “food that brings out the best in all of us”.

Key Takeaways:

1. Market Recognition: Cava’s founders were quick to recognize a gap in the market for a healthy, fast-casual Mediterranean offering. Seeing the big shift towards fast casual dining, they hopped on a wave that included companies like Chipotle and Qdoba, offering easily customizable options that offered a healthy alternative to traditional fast food.

2. Strategic Expansion: Cava did not confine itself to the realm of fast-casual dining. The founders seized an opportunity to extend their culinary influence by introducing a line of dips and spreads in grocery stores nationwide. This move not only diversified their revenue stream but also helped increase brand visibility and recognition.

3. Bold Acquisitions: The acquisition of Zoe's Kitchen was a strategic decision that enabled Cava to cement its position in the fast-casual Mediterranean segment. By absorbing a competitor, Cava managed to rapidly expand by converting Zoe’s Kitchens into the Cava Brand.