WEBVTT - Cava’s Rebhun on Driving Brand Awareness, Sales

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<v Speaker 1>Welcome to Chopping It Up. I'm your host, Mike Hallon,

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<v Speaker 1>the senior Restaurant and Food Service Analyst at Bloomberg Intelligence.

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<v Speaker 1>Our research and that a bi's five hundred analysts around

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<v Speaker 1>the globe can be found exclusively on the Bloomberg terminal. Today,

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<v Speaker 1>we're joined by Andy Rebin, chief Experience Officer at Cava.

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<v Speaker 1>Thanks for joining me, Andy.

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<v Speaker 2>Hey, Mike, great to see you again.

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<v Speaker 1>Yeah. Man, it's been over a year and a half.

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<v Speaker 1>We're long overdue for this episode. Man, it's great to

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<v Speaker 1>finally catch up with you. Thank you again for having me.

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<v Speaker 2>Yeah.

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<v Speaker 1>For sure. Man, So when we met, you were the

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<v Speaker 1>CMO at l Poyolco. Now you've been at Kava for

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<v Speaker 1>almost a year and a half. Man, time flies. Can

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<v Speaker 1>you talk about the culture that Brett and the team

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<v Speaker 1>have built there.

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<v Speaker 2>For sure, Kava's culture is really aligned with our mission

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<v Speaker 2>of bringing heart, health and humanity to food. It really

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<v Speaker 2>drives everything we do. Everything we do is grounded in

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<v Speaker 2>the Mediterranean Way, where food is at the center of connection.

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<v Speaker 2>We implore a spirit of generosity to our guests, team members,

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<v Speaker 2>in community. It's really ingrained in the culture. We have

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<v Speaker 2>a special feature called the Love button, which I know

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<v Speaker 2>has gained some traction in social media. But if someone's

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<v Speaker 2>having a bad day, we want to treat a regular

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<v Speaker 2>and say thanks for coming in. And also some of

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<v Speaker 2>our newer guests have the opportunity to experience that. We

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<v Speaker 2>really create engaging experience through delicious, innovative and naturally good

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<v Speaker 2>for you food. It helps people eat well and live

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<v Speaker 2>well and it's really food without compromise. And our company

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<v Speaker 2>culture is aligned with the heritage and values of our founders.

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<v Speaker 2>I know you mentioned Brett and Ted, Iike and Dimitri.

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<v Speaker 2>They really focus on that generosity, warmth and welcoming everyone

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<v Speaker 2>to our table. So it's a really beautiful culture and

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<v Speaker 2>it was a huge reason why I joined the.

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<v Speaker 1>Organ So what's different about the new Project Soul store design.

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<v Speaker 2>Yeah, it's incredible. It really reflects elements of our heritage

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<v Speaker 2>and culture. It makes our physical channel even more experiential

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<v Speaker 2>and welcoming. Consumers still want to dine out, and Project

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<v Speaker 2>Soul really allows us to re emphasize what it means

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<v Speaker 2>to have Mediterranean hospitality. We reflected this in our new

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<v Speaker 2>Wicker Park location, which features some of these elements, and

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<v Speaker 2>we continue to refine the model we've rolled out a

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<v Speaker 2>few so far in twenty twenty four. You can actually

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<v Speaker 2>check out our newest freestanding Project Soul location on McPherson

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<v Speaker 2>Boulevard in Fort Worth, Texas, and you'll notice there's softer seating,

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<v Speaker 2>increased greenery, and really a warmer brand palette to create

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<v Speaker 2>a comfortable, welcoming environment and really better express our concept essence.

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<v Speaker 2>So I'm really excited for you to check that one out, Mike.

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<v Speaker 1>Very cool. I'm looking to go plant shopping this weekend. Man,

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<v Speaker 1>I need more greenery in my apartment.

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<v Speaker 2>I love it all right.

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<v Speaker 1>So you were CMO at Lpoil Loco. So how does

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<v Speaker 1>your current role differ from your last one?

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<v Speaker 2>So current role is Chief Experience Officer. I lead the marketing,

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<v Speaker 2>digital and catering teams and really focus on that end

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<v Speaker 2>to end user journey from everything that the customer does

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<v Speaker 2>before they get into our restaurant. So all of our advertising,

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<v Speaker 2>everything that would motivate a consumer to choose us, whether

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<v Speaker 2>it be helping inform the menu strategy, really building the

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<v Speaker 2>life cycle marketing capability through our loyalty program, and then

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<v Speaker 2>building the off premise in group occation through catering and

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<v Speaker 2>It's really a cool opportunity at Kava because it really

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<v Speaker 2>focuses on all elements of what that experience means. We're

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<v Speaker 2>rapidly growing across the United States and really trying to

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<v Speaker 2>build that experience from day one and even before consumers

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<v Speaker 2>find out about the brand. It's a really great opportunity

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<v Speaker 2>for us to build that journey and think about how

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<v Speaker 2>all our different touch points are going to help inform

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<v Speaker 2>the vision of cop for the future.

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<v Speaker 1>Awesome man. Yeah, and you see a lot about how

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<v Speaker 1>it's bringing Mediterranean cuisine, so I guess to a lot

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<v Speaker 1>of parts of the country that didn't have it prior.

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<v Speaker 1>Do you have any data on how fast Mediterranean's growing

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<v Speaker 1>in the US?

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<v Speaker 2>Yeah, Well, we believe Mediterranean is obviously the next major

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<v Speaker 2>cultural cuisine category. It's ranked number one diet eight years running.

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<v Speaker 2>As our nation has become more diverse, consumers are craving

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<v Speaker 2>more bold, interesting flavors, and consumers are also increasingly focused

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<v Speaker 2>on wellness but really unwilling to trade taste for health,

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<v Speaker 2>and Mediterranean definitely checks a lot of those boxes. We

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<v Speaker 2>have over seventeen billion combinations at Kava, so it's one

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<v Speaker 2>of those cuisine categories that you can dip your toe

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<v Speaker 2>into lamb or Harisa chicken, or hummus or tasiki. It's fun.

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<v Speaker 2>I love love the food. I can get something unique

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<v Speaker 2>every single day. It's amazing.

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<v Speaker 1>No, it's cool, man. I'm a huge fan of Mediterranean

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<v Speaker 1>food and cobs great. So, yeah, you don't have to

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<v Speaker 1>sell me. Talk to me about the importance of value

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<v Speaker 1>in this economy.

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<v Speaker 2>Yeah, value is very important. I think you've seen as

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<v Speaker 2>fast food restaurant chains have become a little bit more expensive,

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<v Speaker 2>the value equation of kava is becoming more reasonable for

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<v Speaker 2>consumers to trade up. You know, many times you find

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<v Speaker 2>two or three dollars difference between the menu prices, and

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<v Speaker 2>when you think about kava. Our food is delicious. You

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<v Speaker 2>bring in that Horisa chicken, you bring in hummus, rice,

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<v Speaker 2>super greens. It's really a full, complete meal. And many

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<v Speaker 2>consumers can have one or two meals out of our

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<v Speaker 2>food because our portions are very generous. And so you know,

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<v Speaker 2>you think about what value means. It's really about consumer experience.

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<v Speaker 2>It's about the food and really welcoming environment. And we

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<v Speaker 2>do that at our restaurants and through our digital channels.

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<v Speaker 1>Awesome. Yeah, and I noticed no price hikes in California, right.

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<v Speaker 2>Yeah, We've we've maintained a very good price value experience

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<v Speaker 2>equation in our California market for sure.

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<v Speaker 1>And that's good man. I mean, I've seen outperformance in

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<v Speaker 1>the companies I cover. Unfortunately I don't cover Cave yet.

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<v Speaker 1>I'm hoping soon. But you know, for Winkstop and Texas

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<v Speaker 1>Roadhouse are two names that really come to mind that

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<v Speaker 1>underpriced competitors, and it's really helped their traffic. Can you

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<v Speaker 1>talk a little bit about how the IPO has impacted sales?

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<v Speaker 2>Yeah, it's difficult to tease out one thing as you

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<v Speaker 2>look at our revenue growth, but the IPO clearly increased

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<v Speaker 2>brand awareness and the interest which helps drive some of

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<v Speaker 2>the sales on the near and long term. But you know,

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<v Speaker 2>we've really focused on building what it means to be

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<v Speaker 2>a category defining Mediterranean brand, and you know, the IPO

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<v Speaker 2>was one of several different levers that I think we've

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<v Speaker 2>pulled to really increased brand awareness across the United States.

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<v Speaker 2>We really have leaned into our social media. It's been

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<v Speaker 2>a huge part of our growth strategy and it's been

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<v Speaker 2>effective from a cost perspective as well as just making

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<v Speaker 2>sure that people feel that accessibility and that personality, and

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<v Speaker 2>so it's definitely been a combination of factors that has

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<v Speaker 2>helped really increase that brand awareness.

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<v Speaker 1>I think I saw that customer awareness is about forty percent.

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<v Speaker 1>How much has it have grown over the last few years.

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<v Speaker 2>Yeah, awareness is growing as we've expanded our presence across

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<v Speaker 2>the country. We have more than three hundred and forty

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<v Speaker 2>restaurants now in twenty five states in the District of Columbia,

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<v Speaker 2>and like I stated earlier, we have an extremely passionate

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<v Speaker 2>fan base on social media who have followed us and

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<v Speaker 2>have reposted a lot of earned media has helped support

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<v Speaker 2>that brand awareness as well as our CpG business has grown,

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<v Speaker 2>so people are making the connection between the restaurant and

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<v Speaker 2>what we sell in CpG. So brand awareness has grown.

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<v Speaker 2>It's been really exciting to see as we've opened up

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<v Speaker 2>more locations and had a more well rounded media strategy.

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<v Speaker 1>Yeah awesome, I'm the Red Pepper Hummus for years.

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<v Speaker 2>Local that's awesome. So here, so yeah, thank you?

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<v Speaker 1>Yeah so yeah, yeah. Man, I'm customer. I've been a

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<v Speaker 1>longtime customer, both in and outside the restaurant, dude, and

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<v Speaker 1>this is just you know, This is a small sample size,

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<v Speaker 1>this is my local kava, but it sure seems like

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<v Speaker 1>the customers are getting younger.

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<v Speaker 2>Yeah, I mean, look, we have a broad appeal across

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<v Speaker 2>ages and genders, geographies and market types. It's really one

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<v Speaker 2>of the things that's made the company successful. We don't

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<v Speaker 2>talk about the specific demographics, but we do do well

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<v Speaker 2>among some of our younger consumers, and like I stated earlier,

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<v Speaker 2>lots of diversity. From a background perspective, they really create

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<v Speaker 2>bold and interesting flavors over the more standard cuisine. Eating

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<v Speaker 2>is a form of self expression, and so with our

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<v Speaker 2>Mediterranean way hospitality, delicious and differentiated food, it clearly resonates

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<v Speaker 2>with this cohort.

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<v Speaker 1>Yeah, there's definitely been They've definitely taken over my local

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<v Speaker 1>kava for sure. Man grilled steak that was has been

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<v Speaker 1>highly successful for you. I think even on the call,

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<v Speaker 1>Brett said it was even more successful than you had expected.

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<v Speaker 1>You know, is there anything interesting about who's ordering that

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<v Speaker 1>the demographics of the customers that are ordering that order.

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<v Speaker 2>We don't really talk about the demographic deal, you know,

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<v Speaker 2>detail for competitive reasons, but our menu with steak and

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<v Speaker 2>it really has broad appeal. You know, we've seen it

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<v Speaker 2>ordered at lunch, at dinner. It's light, it feels really good,

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<v Speaker 2>especially when you pair it with our super greens. It's

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<v Speaker 2>a really delicious entree to have throughout the day, and

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<v Speaker 2>so we've seen customers order it at all day parts

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<v Speaker 2>in all types of customer bases.

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<v Speaker 1>So I'm usually a Lamb meatball guy, So i haven't

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<v Speaker 1>had the steak. Yeah, I'm going to have to try it.

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<v Speaker 2>Sounds like that might be dinner tonight in the Haleen household.

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<v Speaker 1>Dude, it might be. I you know, I'm we eat

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<v Speaker 1>a lot of steak and ground beef here, so you know,

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<v Speaker 1>when I go out, I try not to eat it.

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<v Speaker 1>But yeah, I know what's going to happen. I'm going

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<v Speaker 1>to get the grilled steak and it's can be awesome,

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<v Speaker 1>But then I'm also going to be like I need now,

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<v Speaker 1>i need Lamb meet Ball. So I think you might

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<v Speaker 1>get an incremental visit from me this month.

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<v Speaker 2>Amazing, thank you.

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<v Speaker 1>So on the last Ernie's called, Brett mentioned there were

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<v Speaker 1>some gaps in the menu that you're going to try

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<v Speaker 1>to attempt to fill through innovation. Is there anything you

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<v Speaker 1>could share about those gaps?

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<v Speaker 2>Yeah, I think to offer just a little clarity there.

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<v Speaker 2>Guests have been asking for a beef option, so we

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<v Speaker 2>saw a perceived gap and we felt we could fill

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<v Speaker 2>it with steak. It's already something for there's really already

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<v Speaker 2>something for everyone at Kava, and we really felt like

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<v Speaker 2>steak was another opportunity to add to that. Everyday Craving

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<v Speaker 2>shared this earlier, but seventeen billion possible combinations, and we

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<v Speaker 2>really try to use our culinary authority and strength and

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<v Speaker 2>innovation to provide that newness for the guests. We really

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<v Speaker 2>try to offer items that aren't available elsewhere and then

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<v Speaker 2>put our spin on it. Grilled steak is obviously seasoned

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<v Speaker 2>with our bold Mediterranean spices, sun dried tomatoes, smoky a

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<v Speaker 2>lepo pepper, It's fired on our grill. You really can't

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<v Speaker 2>find anything else like it, So I'm excited that you're

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<v Speaker 2>gonna have it for dinner tonight. And then we recently

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<v Speaker 2>came out with garlic ranch peda chips. It's our first

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<v Speaker 2>ever new peda chip flavor. Peda chips have been a

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<v Speaker 2>cult favorite both in the restaurants and on social media,

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<v Speaker 2>and we really felt like there was an opportunity to

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<v Speaker 2>lean into it.

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<v Speaker 1>My son, he'll like to hear that he likes to

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<v Speaker 1>peda chips. I'm going to give you one of my

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<v Speaker 1>cooking secrets.

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<v Speaker 2>Man.

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<v Speaker 1>I use Aleppo on my steaks too, so it sounds

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<v Speaker 1>like it's right up my alley. And you mentioned social

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<v Speaker 1>media advertising is doing well for you. I guess where

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<v Speaker 1>do you do? You know where have you been most

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<v Speaker 1>successful on social media? And do you have any plans?

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<v Speaker 1>Are there anything big coming up either this year and next?

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<v Speaker 2>Yeah? So social media continues to be a strong in

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<v Speaker 2>cost effective marketing strategy for us, particularly with people in

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<v Speaker 2>driving consideration. Our campaigns have been affected because they've been organic, authentic,

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<v Speaker 2>and really expressed that genuine love guests have for Kava.

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<v Speaker 2>What I really like about it too is as we've

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<v Speaker 2>opened up in new markets like Chicago, there was a

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<v Speaker 2>really growing speculation about when we were getting ready to open,

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<v Speaker 2>and once we opened, we had incredible amount of receptivity

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<v Speaker 2>for that Wicker Park location. We had a organic video

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<v Speaker 2>post by a guy by the name of Cody Premer

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<v Speaker 2>who did something called make me your Favorite. It has

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<v Speaker 2>over forty million views now and many of our brand

0:12:31.280 --> 0:12:34.679
<v Speaker 2>fans were passionate before they work with us. So a

0:12:34.720 --> 0:12:37.760
<v Speaker 2>great example would be Lindsay Horan. She's captain of the

0:12:37.840 --> 0:12:40.360
<v Speaker 2>US women's soccer team. Her and her team reached out

0:12:40.400 --> 0:12:43.120
<v Speaker 2>to us heading into the Olympics, and she loves our

0:12:43.160 --> 0:12:46.440
<v Speaker 2>food and incorporates it into her training regimen. And she

0:12:46.520 --> 0:12:48.079
<v Speaker 2>has an extensive and growing following.

0:12:48.440 --> 0:12:51.240
<v Speaker 1>And I saw your testing some ads on connected TV.

0:12:51.559 --> 0:12:53.719
<v Speaker 1>So what kind of av bump do you think you

0:12:53.760 --> 0:12:55.319
<v Speaker 1>can get from National Advertising?

0:12:56.040 --> 0:12:58.600
<v Speaker 2>Yeah, we ran a very small test several months ago.

0:12:59.360 --> 0:13:03.400
<v Speaker 2>It performed well, and we continue to learn and we

0:13:03.440 --> 0:13:06.880
<v Speaker 2>continue to be focused on digital, social and earned media.

0:13:07.440 --> 0:13:09.200
<v Speaker 1>Yeah, it's something I'm going to be watching, you know,

0:13:09.240 --> 0:13:13.600
<v Speaker 1>because you know, obviously it's more online and connected media now,

0:13:13.640 --> 0:13:18.040
<v Speaker 1>but you know, TV ads still have an ROI and

0:13:18.120 --> 0:13:20.280
<v Speaker 1>you know there's some examples of some chains. I once

0:13:20.320 --> 0:13:22.600
<v Speaker 1>say when National man, they kind of blew up Sonic

0:13:22.800 --> 0:13:25.800
<v Speaker 1>pop Eyes. You know, from what I know of Kava,

0:13:25.880 --> 0:13:28.160
<v Speaker 1>it's always been a leader in terms of, you know,

0:13:28.360 --> 0:13:31.520
<v Speaker 1>in restaurant technology, right and so I know that you

0:13:31.520 --> 0:13:35.480
<v Speaker 1>have your fingers in a lot of different technologies right now.

0:13:35.559 --> 0:13:39.040
<v Speaker 1>Can you talk a little bit about the Connected Kitchen initiative?

0:13:39.400 --> 0:13:41.640
<v Speaker 2>Yeah, we're really in the second wave of our digital

0:13:41.679 --> 0:13:45.280
<v Speaker 2>transformation at Kava and the Connected Kitchen initiative is just

0:13:45.320 --> 0:13:49.559
<v Speaker 2>another example of our attempt to continue to lean into it.

0:13:49.640 --> 0:13:52.200
<v Speaker 2>And so we're using data driven and gen AI tech

0:13:52.320 --> 0:13:56.680
<v Speaker 2>to drive quality and consistency, increase order accuracy, and boost

0:13:56.679 --> 0:13:59.079
<v Speaker 2>our speed of service. So we're running a small pilot

0:13:59.400 --> 0:14:02.960
<v Speaker 2>of AI video tech that monitors how quickly ingredients on

0:14:03.040 --> 0:14:05.920
<v Speaker 2>the in restaurant makeline are being depleted, and it also

0:14:05.920 --> 0:14:07.960
<v Speaker 2>alerts the team in real time for prep and cook

0:14:07.960 --> 0:14:11.560
<v Speaker 2>batch amounts. So it's a really really neat technology and

0:14:11.600 --> 0:14:13.720
<v Speaker 2>it's going to really help us as we continue to grow.

0:14:13.960 --> 0:14:17.360
<v Speaker 1>Okay, very cool, and there's been talk about some labor

0:14:17.400 --> 0:14:20.720
<v Speaker 1>model improvements right I think is hourly turnover improved twenty

0:14:20.760 --> 0:14:22.200
<v Speaker 1>eight percent in the second quarter.

0:14:22.400 --> 0:14:25.480
<v Speaker 2>Yeah, we're we're also doing some testing on labor deployment,

0:14:25.560 --> 0:14:29.160
<v Speaker 2>so we're reallocating hours to deliver better food, better hospitality,

0:14:29.200 --> 0:14:32.200
<v Speaker 2>and more efficient speed of service. This test is progressing.

0:14:32.280 --> 0:14:36.000
<v Speaker 2>It's in twenty nine restaurant where net neutral labor dollars

0:14:36.000 --> 0:14:39.640
<v Speaker 2>and labor hours in the test locations. We're really focusing

0:14:39.720 --> 0:14:41.800
<v Speaker 2>on more time to coach and train and more time

0:14:41.840 --> 0:14:44.680
<v Speaker 2>to interact with guests and a more positive work environment

0:14:44.720 --> 0:14:49.000
<v Speaker 2>and we'll continue testing throughout twenty twenty four, with hopefully

0:14:49.440 --> 0:14:52.040
<v Speaker 2>the intent to rollout in twenty twenty five if the

0:14:52.080 --> 0:14:53.560
<v Speaker 2>results meet the expectations.

0:14:54.000 --> 0:14:56.960
<v Speaker 1>All right, great, And then I also saw something about

0:14:57.000 --> 0:14:59.920
<v Speaker 1>real time guess feedback technology. What's out of.

0:15:00.480 --> 0:15:04.800
<v Speaker 2>Yeah, we're doing restaurant health testing. That technology that really

0:15:04.880 --> 0:15:07.080
<v Speaker 2>allows us to try to keep a finger on the

0:15:07.120 --> 0:15:10.400
<v Speaker 2>pulse of the business down to the specific locations, and

0:15:10.480 --> 0:15:14.120
<v Speaker 2>it really supports our teams in consistently delivering an exceptional

0:15:14.120 --> 0:15:15.000
<v Speaker 2>guest experience.

0:15:15.480 --> 0:15:17.600
<v Speaker 1>Awesome. All right, So the most important question, what's your

0:15:17.640 --> 0:15:18.520
<v Speaker 1>favorite kava order?

0:15:19.200 --> 0:15:23.960
<v Speaker 2>My favorite kava order spinach, brown rice, I get hummus,

0:15:24.160 --> 0:15:27.240
<v Speaker 2>two scoops of eggplant, I do half horisa chicken, half

0:15:27.320 --> 0:15:34.200
<v Speaker 2>roasted veggies, tomato, onion, tomato, cucumber, feta, pickled onions, avocado,

0:15:34.400 --> 0:15:38.280
<v Speaker 2>and then I do either scub or I do Greek vinagrette.

0:15:38.640 --> 0:15:40.640
<v Speaker 2>I have that down to a tea. That was the

0:15:40.680 --> 0:15:41.960
<v Speaker 2>easiest question of the day.

0:15:42.080 --> 0:15:46.120
<v Speaker 1>You do have that? You do have that down to

0:15:46.120 --> 0:15:48.040
<v Speaker 1>a tea? Because it's gonna take me a little while

0:15:48.080 --> 0:15:52.480
<v Speaker 1>to think about everything. But now I'm a lamb meatball guy.

0:15:52.960 --> 0:15:56.760
<v Speaker 1>I have I definitely herisa crazy feta and that red

0:15:56.760 --> 0:16:03.640
<v Speaker 1>pepper Hummus pickles, hot peppers. I'm definitely missing some other

0:16:03.680 --> 0:16:06.320
<v Speaker 1>stuff in there, but yeah, Covas CoV is great man.

0:16:07.120 --> 0:16:08.880
<v Speaker 1>And you guys, you guys do a great job. Man.

0:16:09.000 --> 0:16:12.760
<v Speaker 1>I I'm I'm very excited to continue following this story

0:16:12.800 --> 0:16:15.960
<v Speaker 1>and hopefully covering it pretty soon. Well, listen, man, thanks

0:16:15.960 --> 0:16:18.240
<v Speaker 1>for joining me. This was a lot of fun. It's

0:16:18.280 --> 0:16:20.480
<v Speaker 1>great to see you. You know, obviously our guests can't

0:16:20.480 --> 0:16:22.080
<v Speaker 1>see you, but it was good to see you. It's

0:16:22.120 --> 0:16:22.640
<v Speaker 1>been a while.

0:16:23.120 --> 0:16:24.960
<v Speaker 2>Great to see you too, Mike, Thank you so much.

0:16:25.280 --> 0:16:27.080
<v Speaker 1>Yeah, and I want to thank the audience for tuning in.

0:16:27.120 --> 0:16:29.360
<v Speaker 1>If you liked the episode, please subscribe and leave us

0:16:29.360 --> 0:16:32.320
<v Speaker 1>a review. Check back soon for another installment of Chopping

0:16:32.320 --> 0:16:32.640
<v Speaker 1>It Up.