Mediterranean restaurant chain, Kava made its market debut here
at the New York Stock Exchange today and shares popped
nearly doubled in their debut ending the day at about
$44 a share after pricing at$22 a piece last
night. Well, I spoke with the CEO of
CAVA earlier today to talk about the company's plans going
forward and to hear his pitch to investors on its
market debut. Take a look the next big cultural
cuisine category. Mediterranean fastest growing category in fast casual
. We have a clear, dominant leadership position in
it. We've got this massive white space opportunity that
we've proven portability across the country in multiple markets.
And we've supported with really robust infrastructure to be able
to successfully scale and grow and take advantage of that
white space opportunity. Why now a big ipo and
a market that hasn't seen a lot of them,
but certainly the conditions have changed. We think the
market is always welcoming to long term sustainable growth stories
, especially category defining brands and Chris. It's really
three things. One is that we are a consumer
facing brand. And so we want this growth story
in the public realm where our guests can have ownership
and the public can have ownership in this great growth
story. And second, as we define the Mediterranean
category across the country, we really want to bring
awareness to what we're doing and the positive impact our
food has. And then third, we have a
clean balance sheet, but this further strengthens and fortifies
our balance sheet as we think about restaurant growth and
we think about those macro economic headwinds that we've all
been talking about. I think every month for the
last 12 months, if they do manifest themselves,
this allows us to stay on wavering on our long
term vision and really take advantage of that white space
opportunity in front of us in the category. We
continue to define an IPO, of course, a
great opportunity to raise money to focus on that expansion
as you were just explaining, what are the going
to be used for specifically? Yes. So we
operate in 22 states in the district of Columbia today
. That means there's 26 states in the Continental us
, we haven't opened in and plus there are significant
growth opportunities in the 22 states we do operate in
. So we're really focused on great restaurant growth going
forward. What can consumers expect if they walk into
a car? Yeah, so that's a great thing
. 38 items on our line that translate to over
17.4 billion combinations. So whether you want a plant
based meal, you want to gluten or lactose from
your diet or if you just want spicy lamb meatballs
, crazy fat and body rice. Everyone can come
to come and be happy. Look, the price
point for consumers is so important these days as we've
seen inflation really pick up the past 18 months.
Finally a little bit on the downside. Of course
, your supply chain will dictate prices to some extent
. What kind of pricing power are you providing?
That makes this an affordable option for eaters? Yeah
, I talked about all that infrastructure we've invested over
the years, whether it's our vertical integration, manufacturing
, our dips and spreads or our direct source scalable
supply chain. And what that allowed us to do
last year is only take less than 5% in restaurant
pricing. When others were taking double digit pricing,
really lean into that value proposition for our guests so
that we can welcome everyone to our table big day
for your company. Of course, investors want to
know the path to profitability. How do you get
there? So we've got a really powerful restaurant unit
Economic engine as Evan by 50 million of restaurant level
profit in the first quarter, that's compared to 91
million all of last year. So this great restaurant
Economic Engine that continues to grow as we open more
restaurants and we come out of the transformation of our
Zoe's acquisition. So all of our new unit restaurant
growth really contributing to that profit engine and then that
massive white space opportunity in front of us with the
infrastructure I talked about for us to leverage as we
now scale and grow. I'm sure our viewers want
to know if a cop is coming to a location
near them. What can you tell us about the
expansion plan specifically? So I talked about growing in
the 22 states that we currently operate in and we
did announce that we're going to Chicago our first market
in the Midwest. So Midwest is a region we
do not have any restaurants in. And we're excited
to bring our Mediterranean way to food safety. Of
course, another important topic right, to make sure
that people can not only enjoy their meal, but
that it's safe and sustainable as well. What is
your company doing on? Yes. So I mentioned
our manufacturing facility which our dips and spreads actually predated
our fast casual business. That's an FDA inspected pathogen
tested certified facility. So we kind of grew up
in a food safety world with mock recalls and that
now is translated to the restaurant. So whether it's
our Zen checklist and food safety audits from a third
party auditor partner, we want to make sure we
have a safe food, safe environment, both for
our guests and for our team members. All right
, thanks to the CEO of Kava for joining me
earlier on its big market debut and a welcome reception
from investors today.