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Decoding Success of Triple Bottom-Line Brands


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A new crop of companies have emerged in recent years, in the mold of Whole Foods Market, with a purpose that goes beyond profits. Encompassing people and the planet alongside profits, so-called triple bottom-line brands are an interesting phenomenon, and were the subject of a seminar at this year’s Restaurant Finance & Development Conference in Las Vegas.

The speakers at “Inside the Economics of the Triple Bottom-Line Brands” included CEOs and co-founders of new-age restaurant brands including Snappy Salads, Mendocino Farms, Modmarket and Bean Sprouts. These aren’t franchised brands, but they offer a look at the very progressive future of modern food concepts.

Taking into account a variety of factors that improve the lives of customers, staff and suppliers, along with local farmers and the wider environment as a whole, these restaurant brands have some policies that sound equal parts amazing and expensive.

How could these brands possibly turn a profit? Many of the seminar’s discussion points zeroed in on this very conundrum.

Modmarket co-founder, Rob McColgan, addressed this with his first remarks.  

He said achieving excellent unit-level economics is the key to ensuring that his concept grows, exponentially increasing Modmarket’s ability to encourage healthier eating habits across the country.

“The four-wall unit economics have to be great if we want to change the way people are eating on a national scale,” he said. “Doing things the right way has been a driving force [and] so far it’s been a success.”

Acknowledging that he didn’t start the brand to just sell sandwiches, Mario Del Pero of Mendocino Farms made it clear that his company’s farm-to-table approach brought unique challenges that included going directly to farms that supply his company to shadow their work and provide suggestions on how they could lower the cost of key ingredients, like goat cheese, rather than immediately firing the farm and looking for a cheaper supplier.

After sending an email to Whole Foods Market CEO Walter Robb, the upscale grocery giant invested in Del Pero’s brand and is now sharing its strategies for scaling up sustainable sourcing practices.

With higher food costs than most brands, Kelly Parthen of Bean Sprouts--a kid-focused healthy restaurant concept--said the company had to look at everything from portion sizes to its marketing budget to find creative ways to trim costs that would allow the brand to continue sourcing better ingredients.

That focus brought about a massive change, where Bean Sprouts elected to put its restaurants right where families already hang out (think museums, science centers, etc…) so it wouldn’t have a need to spend money on marketing to attract its customers.

Chris Dahlander of Snappy Salads dove into the details, including the higher costs it pays for biodegradable paper straws, LED light fixtures and bottled water, detailing its own cost cutting that enabled it to focus on wider goals outside of its profits.

With advanced lighting, he said his dining rooms only consume an average of 350 watts of electricity. While that’s only one small way of saving money, his brand sales are up 9.5 percent year over year, with packaging costs that comprise just 4 percent of the bottom line--not bad considering the benefits from not contributing to the great Pacific Ocean garbage dump.

As a way to improve customer service, reduce turnover and also reduce marketing costs, the brand puts a focus on very extensive employee training so his staff can spread the message about the brand’s priorities in a lower key way than putting up loud signs throughout the restaurant proclaiming its corporate ideals.

Pretty smart stuff, although the seminar made clear that the heads of triple bottom-line brands do indeed have to work much harder and smarter in order to achieve the profitability inherently necessary to build scale and add locations to truly make a difference in how Americans eat.

I look forward to digging into this trend further, and would love to hear from franchisors and franchisees for their own ways (big or small) to make the world a better place without torpedoing the bottom line.

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is associate editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is editor-in-chief of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is staff writer at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonLaura Michaels is managing editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
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Nancy WeingartnerNancy Weingartner is editor-at-large of Franchise Times magazine and the editor of the Food On Demand media project. You can reach her at 612-767-3200 or at nancyw@franchisetimes.com.
Follow her on Twitter at http://twitter.com/nanweingartner.
 

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