How Mendocino Farms is Rethinking the Fast Casual Paradigm
Sandwich concepts don't usually do 40 percent of their business during the dinner daypart. Sandwich concepts don't usually build out 3,000-square-foot spaces. Sandwich concepts don't usually do over $3 million in average unit volume (or $2 million, or $1 million).
For starters, there’s the menu, which features mostly local and sustainably sourced ingredients. Sandwiches include options like the Peruvian Steak Sandwich, the Spicy Lemongrass Steak Banh Mi, and the BBQ Tempeh Picnic Sandwich, while a wide range of salads make up 30 percent of total sales. Then there are the restaurants; there are dedicated kids’ areas with activities like foosball tables, corn hole, and chalkboards, and large patios that facilitate community within local neighborhoods.
“We’ve really positioned Mendocino Farms to disrupt upscale casual dining in suburbia,” Del Pero says. “We’re the upscale gathering place.”
One of the recent moves Mendocino Farms has made in its attempt to rethink the limited-service paradigm is to reject the idea of trade dress, opting to hire different designers for every new location and having them style each restaurant according to the neighborhood.
“A lot of people say that will slow down our scaling, that we’re not going to be able to open as quickly,” Del Pero says. “I always say back, ‘When was fastness always best?’ We’re not trying to see how many we can open. We’re trying to see how many we can open that are iconic and are neighborhood anchors.”
Real estate is a major factor in Mendocino Farms’ ongoing success. While the company first launched in an 800-square-foot space in downtown Los Angeles—one that was only open from 11 a.m. to 3 p.m. Monday through Friday—the company now pursues large-box real estate locations. The goal, Del Pero says, is to locate within more affluent neighborhoods and position the brand as a “high-end neighborhood café.”
As for core demographic, Del Pero says Mendocino Farms tailors its target according to each location. If there are more kids in the neighborhood, the company will build out a more sophisticated kids’ area. If there are more young adults, there will be an enhanced beverage program. On the whole, though, he sees young women as being key to Mendocino Farms’ success—the “lululemon mom,” as he puts it, referencing the athletic apparel retailer.
“We think if we can really take care of her, then her husband will love the place and her kids will love the place,” Del Pero says.
Late in 2015, Mendocino Farms secured an investment from premium grocer Whole Foods Market, which included an opportunity for the brand to open in select Whole Foods locations; the first opened last year, and Del Pero says the idea is to provide a food hall–style dining area within Whole Foods’ prepared-foods section. He adds that the brand is also activating the partnership by learning from the grocer about how to scale sustainability and a high-quality supply chain.
Mendocino Farms expanded into San Diego last year and has leases signed for restaurants in the Bay Area. Del Pero says the brand will expand outside of California by the end of 2018, and that he and Chen are researching opportunities for growth from coast to coast.