September 23, 2025 • 21 mins
If you’re not paying attention to catering, your restaurants are missing a huge opportunity to drive revenue, Costa Vida President Wade Allen tells Bloomberg Intelligence. In this episode of the Choppin’ It Up podcast, Allen sits down with BI’s senior restaurant and foodservice analyst Michael Halen to discuss how the fast-casual chain is driving top-line growth. He also comments on technology improvements and the roles that AI and agentic AI are best suited to fill at the restaurant level.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:13):
Welcome to Chopping It Up. I'm your host, Mike Hanlon,
the senior Restaurant and Food Service Analyst at Bloomberg Intelligence.
Our research and that a bi's five hundred analysts around
the globe can be found exclusively on the Bloomberg terminal.
If you enjoy the pod, do me a solid and
give us a five star review on Apple or Spotify.
Today we're joined by Wade Allen, president of Costa Vida
(00:33):
Fresh Mexican Grill, a fast casual restaurant chain. Welcome to the.
Speaker 2 (00:38):
Pod, Wade, his Michael, good to be here, man, super pumped.
Speaker 1 (00:41):
Yeah, Man, good to see you man. What attracted to
the brand?
Speaker 3 (00:44):
Ah Man, that is a that's an unpacking story, but
I'll tell you I met I engaged with this brand
in early two thousand. I grew up in Salt Lake City,
and I kind of went out to find greener pastures
and across the country and the world actually, but I
would come back and visit family. And I actually bumped
into Coasta Vida probably two thousand and three and one
(01:05):
of their first restaurants, and the.
Speaker 2 (01:07):
Taste was unique.
Speaker 3 (01:09):
The whole experience was something I had never gone through
with the freshness and the cues. So I knew about it,
my family raved about it. And then years later when
I was had been with Chili's for a decade and
I had Kevin Hawkman come in and we kind of transitioned,
and I was leaving the brand. Lo and Behold, I
spoke at an event and uh front and center with
(01:30):
the two CEOs for Coasta Vida and they said, Hey,
do you ever be interested in coming back to Utah
and leading this brand as a president? And I said,
sign me up, let me know when and I'll be there.
And that's kind of how it all came together.
Speaker 1 (01:42):
Oh that's very cool. You know, I'm not too familiar
with the brand. Can you tell me what makes Costa
Vida unique?
Speaker 3 (01:50):
Yeah, So, just to give you kind of a contextual reference,
it is a fast, casual fresh Mexican grill is what
we referenced it. But basically it's it's kind of the
fast as a counter service. So we do all fresh
food in the morning, we make all of our proteins,
we make chop all of our vegetables, and then we
place them on the line and we scoop and serve
throughout the day. The I think the most unique aspect
(02:13):
of Kostavita is this Baja flavor profile. And we we
have a product called sweet Pork that literally is legally addictive.
Speaker 2 (02:21):
I mean, it is so.
Speaker 3 (02:23):
Good, and we have we have a lot, a lot
of customers who love this product and just live and
die by it.
Speaker 2 (02:30):
You'll see that.
Speaker 3 (02:31):
You'll find the recipes online. Everybody's trying to copy it
and figure it out.
Speaker 2 (02:34):
You know.
Speaker 3 (02:34):
We we spend a lot of time kind of marinating
it and creating it in the mornings before we serve it.
But sweet pork, we have phenomenal Keeso, a really delicious
to matill ranch. I'm talking about core equities for the brand.
And then I think we have the best desserts in
fast casual. We have a Traceh's cake that I can't
get enough of, and then a key Lime and I'm
(02:55):
a huge key Lime connoisseur that I think could rival
any other fast casual restaurant or even catch dining restaurants dessert.
Speaker 2 (03:01):
So that's kind of the rundown.
Speaker 1 (03:03):
Makes me hungry, man, it sounds great. How would you
describe the company culture at Coasta Vida at Coasta Vida
and how do you maintain it as you grow.
Speaker 3 (03:13):
Yeah, we're very entrepreneurial, pretty scrappy. We punch away above
our weight. We're only just under one hundred restaurants. I'd
say we're probably mid nineties, depending on if we get
these next two in the ground here in the next month.
But we are very entrepreneurial, so we wear a lot of hats,
we play a lot of different roles.
Speaker 2 (03:33):
It is a super fun culture.
Speaker 3 (03:35):
So we take everybody to Mexico every year, back to
our roots of the Baja into Fort Devarta, and we
spend a week at Lake Powell here in Utah on
houseboats to engage as a culture and to kind of
learn about each other off and outside of work. So
it's very vibrant, it's very collaborative, and we're scrappy, right,
(03:56):
That's how i'd explain it.
Speaker 1 (03:58):
Yeah, it sounds like fun. How many restaurants and what's
the split between corporate and franchise units.
Speaker 3 (04:05):
Yeah, so we're ninety two today, hope to be close
to ninety five by the end of the year. We
may push into the beginning of the year with that
ninety five mark. We corporate owns thirty one and the
rest are franchised. Amongst about thirteen fourteen different partners. Most
of our franchise partners will own three or four, some
(04:28):
own as many as twelve. And we're scattered across the
western US, So we have been in Canada for a while.
We've kind of divested those restaurants, but really California, Nevada, Utah, Idaho, Arizona, Texas,
a little bit in Washington, and that's kind of kind
of the core set. We have a few east of
the Mississippi, but only a few right one of Tennessee.
(04:51):
We have one up in Minneapolis, Minnesota. That's kind of
one in Kansas City. That's kind of the rundown.
Speaker 1 (04:57):
Okay, what are the demographic So the typical Coast to
Beat a customer.
Speaker 2 (05:02):
Yeah, it is.
Speaker 3 (05:04):
She's the customer scuse female and is about feeding a
family of two or three kids. The focus is really
she's trying to eat healthy herself and feed her kids healthy.
We tend to compete best against the QSRs of the world,
So rather than feed your family out of a sack,
come to Coast to Beat and have fresh food for
roughly or close to the same price point.
Speaker 2 (05:27):
And she's.
Speaker 3 (05:30):
You know, when you look at that archetype she's super
engaged in her kids' lives, what they eat, what they consume,
tends to be kind of the mom, the soccer mom.
That's kind of the angle. I think household income is generally,
excuse a little bit higher than middle class, So I
would say kind of eighty to ninety thousand dollars household range.
But we do kind of run up and down depending
(05:51):
on the areas that we're in and the locations we're in.
As most economics, if you can afford it. That demographic
wants fresh food if they can get it. So that's
kind of the kind of the look of our customer.
Speaker 1 (06:02):
And are you so, are you mainly targeting targeting those
soccer moms or do you have some some ways to
target the kids as well.
Speaker 3 (06:09):
Yeah, we do. We have a great we have a
great kids meal. We have a great cinnamon tortilla that's
free with every one of our kids meals that comes,
which is really delicious, kids love. It's probably the number
one dessert resell. We play a lot in high schools
and junior highs and middle schools. We always talk about
being close to the action for the school, and that's
(06:31):
football's or football programs and basketball programs, sports programs we're in.
You know, we're part of the banquets at the end
of the year for all of the sports but also
all of the music departments. And we place our restaurants
pretty close to high schools because we know, I'll use
a bad term here, but we like to indoctor and
nate them young on our food. Right, Like, you get
(06:52):
them in and they love the food and it becomes
a staple for us because they stay with the brand.
Speaker 1 (06:58):
And high school boys can eat I say that from experience.
Speaker 3 (07:02):
Yeah, massive burritos and those guys will choot that they'll
pound their two of them.
Speaker 2 (07:06):
Right.
Speaker 1 (07:06):
So it's been widely publicized that fast casual sales are
under pressure this year. How it is close to Vita performed.
Speaker 3 (07:14):
It has been a tougher year than last year. Last
year we had a marquee year. I mean we made
more money last year and drove more profitability than ever.
This year has been tougher, stiffer headwind, but we've also
had a steeper hill to climb to get over year
over year sales in traffic right now, where as a
year to date we're up about half a percent in
sales and our traffic's about down about zero point seventy
(07:36):
five to a percentage point in traffic, though I will
tell you August was a little slow for US September
thus far, two weeks in, we're ripping.
Speaker 2 (07:47):
I'm looking to be off on our good run.
Speaker 3 (07:49):
So I'm hoping the back half of this year kind
of rebounds a little bit better to closer to the
three and a half percent we were up last year.
Speaker 1 (07:56):
Very cool. Have you what have you seen? Have you
seen any sort of benefit from Chipotle's recent troubles or
is there not too much overlap with them?
Speaker 3 (08:04):
I mean our markets with Chipotle, they're they're definitely present.
They're not the ones that I that I believe we're
still in market share from there, but they're in their
Their wabble, obviously is to our benefits, so we give
big portions. We always had leaned into the portions, but
we also have them early on priced in and and
in in our core set, so it wasn't as if
(08:28):
we had backed off of that kind of volume of food.
So I think there's probably some benefit there. I think
the bigger benefit for US has just been local players
that here have started to wabble. We've been able to pull.
Speaker 2 (08:40):
Markets share from and grow our business on our cop set.
Speaker 1 (08:43):
Yeah, and and just in generally, you know, casual dining,
it's lapping easier comps, but also supply and demand is
probably better in that space than QS are and fast
casual right now. I think that's part of the outperformance.
Do you have any uh, any other theories or thoughts
about why you think casual dining has been able to
(09:05):
outperform this year?
Speaker 3 (09:06):
Yeah, you know, I think I have to give credit
where credits due. I think the Chili's team has awakened
a lot of the younger consumers, the young millennials and
Gen Z population to a form of restaurants that they
weren't aware of, right. I don't think they played. I
don't think a lot of that generation spent a lot
(09:26):
of time going to an Applebe's or hanging out in
a Fridays or walking over to the Chilis. And so
the work that's been done at Chile's on the social
side and being part of that cultural zeitgeist has woken
up a generation to, oh, my goodness, there is another
option for us other than eating out of a sack
or going and paying pretty close to the same price
for food on a scoop and serve and so I
(09:48):
definitely think that's driving some of it, you know, from
the data I've seen, And Mike, we can correct me
on this, but it really feels like Chili's is a winner.
Roadhouse continues to deliver maybe all of Garden a little bit,
but the rest of the group I'm kind of watching
and they I don't know if they have the same
run or lift those those players were getting.
Speaker 2 (10:06):
And so what's driving casual dying?
Speaker 3 (10:08):
I really have to give the credit back to Chile's
to waking up the group and outperforming.
Speaker 1 (10:13):
Yeah, I think I think that's a big part of it.
And then Darden talked about value a little bit today.
You know, when QSR was able to raise prices before
everyone else in twenty twenty and early twenty twenty one,
you kind of and and then kept pace with the
price increases of everybody else. You know, they their prices
(10:33):
just kind of their price increases led the entire industry,
that's for sure.
Speaker 2 (10:38):
Yeah, Yeah, they were got way ahead of themselves, for sure.
Speaker 1 (10:41):
Yeah. What are what are your AUVs and what do
you have planned to boost SAM store sales in the
next twelve months.
Speaker 3 (10:49):
So our our AUV is a brand, franchise and corporate
together is about two point one million. It's kind of
where we sit. We do run slightly better evs on
our corporate stores at about two four or two five,
depending on the area that you're in in our our
So that's that's kind of lifting us a little bit
as we go through, and then it's about two million
(11:12):
with our with our franchise partners. My focus really has
always been on comp store set and it's about operational excellence,
and so I'm super dialed in on brand standards and consistency.
When we run the standard and we stay close to
our brand's commitment of quality food and uh, you know,
portion size, we do really really well. I think we've
(11:33):
got We're working on empowering and engaging our team members
more so. We're working on getting our turnover down. You know,
we're kind of hovering in that one hundred plus mark
managers excluded, kind of just slightly over the hundred marked
with our team members, and I think we can do
a better job there and empower them when they're on
the line working with the guests to make the right
decision to give a little bit more knowing that we'll
get a return transaction out of that and not Nickel
(11:54):
dime our customers.
Speaker 2 (11:56):
And then the last one.
Speaker 3 (11:56):
Is I really really talk about systems and efficiencies in
systems and process and when we run the same systems
and processes with our restaurants and our I team can
support those KDS systems and the POS systems and making
sure that we're doing all the right stuff from the
HRS systems, that then we have success. So I think
the the one thing I am really working on for
(12:18):
next year on this comp number is we were really
smart on pricing. We're not going to overstep ourselves. We
always are very conservative, but we know what the impacts
can be. And then I so I take I do.
I will take price, but I'll be smart on the
way to take price. And then I'm really trying to
get the brand essence in our in our marketing, which
is really about this term so good.
Speaker 2 (12:40):
When everybody eats costavda to go, man, that is just
so good.
Speaker 3 (12:43):
And so we've coined that and we're using it hard
in our in our marketing about fresh quality product and
this kind of echoing chime of so good. So I'm
hoping those will all lead to better comp sales next year.
Speaker 1 (12:57):
Oh that's awesome. I say so good all the time.
Speaker 2 (13:01):
I love it.
Speaker 1 (13:02):
Due, that's awesome. So what kind of unit growth do
you expect moving forward next you know, next year, twenty
twenty seven, and where are you really excited about expanding?
Speaker 2 (13:16):
Yeah?
Speaker 3 (13:16):
So I this year, we've put together a plan. We
call it the H five five five hundred, So in
five years, five step plan to grow to half a million,
half a billion dollars in evaluation across our restaurant set.
So there is a plan in place. The first year
is really about kind of we got to get our unigo.
You talked about it unit growth going. That's a big
part of this equation. And I feel like our opportunity
(13:40):
obviously is to win outside Utah, we just dominate. We'll
open a restaurant and we'll hit three million, you know,
without a lot of work.
Speaker 1 (13:47):
Wow.
Speaker 3 (13:48):
In Vegas and Colorado and Arizona and Texas, we got
to get our AUVs kind of north of that two
million and starting to rip, and they don't know our
brand as well. And so that for me is I'm
gonna I'm going to open in these outer mark It's
I've got a plan in a strategy in order to
open big and open and be consistent, to drive quickly
to get our return back and make sure that we
(14:10):
hurdle into profitability. We're looking at probably eight to ten
a year in this first in this next year, and
then our goal is to stay on that clip with
our franchise partners also growing at not quite that aggressive,
but i'd say i'd say three to five across the
franchise set every year. And then it's about looking for
(14:31):
acquisition opportunities as they come along that we could take
into our brand. You know, obviously clean those up, make
them coasters, and grow into a complementary foothold that we
don't have today. That's what that five five five hundred
is focused on.
Speaker 1 (14:46):
Oh so that's interesting. So it's similar to Kava and
what they did.
Speaker 3 (14:51):
Right, Yeah, yeah, just following that playbook and seeing that
that playbook can work.
Speaker 1 (14:55):
Yeah, I mean it really boosted their store growth and
same source of sales growth, all that good stuff. Very cool.
Your catering business is pretty sizable, man. You know, I
listened to your panel at prosper you know, I was impressed. Uh,
talk to me a little bit about Costavita's approach to
(15:15):
that business.
Speaker 3 (15:17):
Yeah, you know, I I'm still the term that Noah
Glass used rightature bleachers and uh teachers is what he said, right,
But it's exactly what our strategy has.
Speaker 2 (15:28):
Been with Costa.
Speaker 3 (15:30):
We we have the distinct advantage of having food that
carries really well, you know, putting it in heat wheels
and carrying it to a work facility or a school,
and a great packaging display goes a long way for
Costa and so we we kind of leaned into this,
you know, this this halo of being in Salt Lake City.
Speaker 2 (15:50):
You're around a lot of churches and a lot of
church going people, and so that was.
Speaker 3 (15:53):
An easy lean in on, well, every one of these
churches around here are going to have something on Saturday
night or Wednesday night.
Speaker 2 (15:59):
Can we cater it? Right? And then we started leaning
into schools, and.
Speaker 3 (16:02):
Then we lean into two PTA's and then we've learned
leaned into school districts and that's been a big opportunity
for us to just continues to pay well and pay back.
We have a fleet called fleet. We have a handful
of individuals who are solely dedicated and focused on caterings
across a certain number of restaurants, and so their whole
(16:24):
focus is drum up sales, make connections, be in the
chamber of commerce, talk to schools, talk to people, you know.
So when the phone rings they show up, they white
glove it, they put it out there, and that business
starts to then churn up. And that's been a great
model for us, and it's.
Speaker 2 (16:40):
Been really really strong.
Speaker 3 (16:41):
I mean, we were probably a four percent catering business
for years and then we made the jump to the
high sixes and now we're knocking on the door to
get into the ten mark, the nine to ten mark,
and that has materially changed our business, and so much so, Michael,
that this is how it looks when I look at
the year to date or every now year to date,
every single day in sales. Sometimes there's volatility, and that
(17:03):
number depending on how big the catering sales were this
year versus last year, and so I have to exclude
catering from that and then look at it again and say, Okay,
the comp sets up slightly, but the catering just got
you know, we just killed it yesterday, and catering across
the brand. So I think it and I said it
at prosper I'll say it again, if you're not paying
(17:24):
attention to this, you're missing a huge opportunity to drive
a revenue stream that you you that is pretty easy
to get going if you're focused on it.
Speaker 1 (17:31):
Yeah, and I have the packaging and the display is right.
It's a good way to attract new customers too, right.
Speaker 2 (17:37):
Yeah.
Speaker 3 (17:37):
Absolutely brings them to the brand they've never been to
and they go, Man, I got to get more of this, right.
Speaker 1 (17:42):
Yeah, you guys are really ahead of the curve.
Speaker 2 (17:43):
It's great.
Speaker 1 (17:44):
Are you working on any technology initiatives at the moment.
Speaker 3 (17:47):
I've got a couple of AI things I'm dabbling with
trying to figure out. We get a lot of calls
into our call center for kind of i'll call them
mundane questions. Do you have a patio, what are your hours?
Kind of bring a dog to the restaurant, you know
that kind of stuff. AI is super good to answer
that stuff right out of the gate and pretty responsive.
I'm looking on I'm working on outdoor boards as well
(18:08):
for our restaurants in the drive through, and it's part
of a bigger initiative to ensure that our POS system
is intimately connected with all of our boards, both in
the restaurant and outside of the restaurant. So if we
eighty six an item on the POS, not only does
it go across our restaurants digitally, but then it sends
that command to OLO and to the third party is
to have it pulled off as well from that particular store.
(18:29):
So I know there's others ahead of us on this part,
but this for us is a big initiative. And the
digital boards to reduce missing it incorrect where they read
back in real time what you're ordering, so the guest
understands that is the correct order, which will dramatically reduce
that pain point of I didn't get the extra ranch,
now my salad's ruined, or I got the wrong protein
(18:52):
on the burrito which I'm going to feed it to
the dog now because I'm mad, kind of stuff. So
that's the initiatives that we're really really trying to.
Speaker 1 (19:01):
Okay cool, and you know, I know you have a
strong technology background. What roles do you see AI and
AGENTIC AI you know, playing for playing for you right
and and senior management in the restaurant business.
Speaker 3 (19:15):
I I definitely think that it will it'll help the
manager be more focused on being hospitable and less being
stuck in the back office.
Speaker 2 (19:26):
So there's these processes.
Speaker 3 (19:27):
That run or need to be run, or an analysis
that needs to be consumed by the human brain before
they go out on the line to engage with the guests.
And a lot of times we get stuck in the
back office and then we start hiding in the back
office and that becomes our day. What we want is
the AI to run that analysis to present easy solutions
or easy answers to questions they may have in real
(19:49):
time to allow to get out of the back office
and be more on the line, engaging with guests, promoting
the food, promoting the experience.
Speaker 2 (19:56):
So I know that's.
Speaker 3 (19:58):
General, but I do believe that it's going to start
with GMS in the back office and improvements on how
that works.
Speaker 2 (20:05):
I'm a huge buff on computer vision.
Speaker 3 (20:07):
I still think you know, we work with Savvy, which
is a group here, but there's a lot of different
computer systems out there that our vision AI systems that
will help you kind of security wise.
Speaker 2 (20:16):
And look at what's going on in restaurant. But I
think there's a huge opportunity.
Speaker 3 (20:19):
For AI to be involved there to help almost build
like a remember when you played sports, you watched film, right,
and you'd like figure out what happened.
Speaker 2 (20:29):
Well.
Speaker 3 (20:30):
AI needs to be able to identify quickly where are
the pain points in this camera that we've seen throughout
the day, pull them out, short them up, tag them
to an idea of a transaction, and then let me
brief my team for five minutes in the morning.
Speaker 2 (20:45):
Hey, let's look at some film. What went wrong? What
went right? How could we made it better?
Speaker 3 (20:49):
Like I started thinking about that and go when when
I played rugby, we'd watched film all day long, and
that's how I got better.
Speaker 2 (20:54):
It was because I knew what I was doing wrong.
Speaker 3 (20:56):
So there's there's something there I think that we could
tease out at some point.
Speaker 2 (21:01):
Very cool.
Speaker 1 (21:02):
Thanks for doing this, Wade, it was good to see you.
Good to catch up.
Speaker 2 (21:05):
Thanks man, appreciate it. Man, it's been great all right.
Speaker 1 (21:08):
I also want to thank the audience for tuning in.
If you'd like to find your nearest Coasta Vida, go
to costavida dot com. If you liked our discussion, please
share it with your friends and colleagues. Check back soon
for an interview with Kirk Grogan, co founder and COO
at Tip House
Welcome to Chopping It Up. I'm your host, Mike Hanlon,
the senior Restaurant and Food Service Analyst at Bloomberg Intelligence.
Our research and that a bi's five hundred analysts around
the globe can be found exclusively on the Bloomberg terminal.
If you enjoy the pod, do me a solid and
give us a five star review on Apple or Spotify.
Today we're joined by Wade Allen, president of Costa Vida
(00:33):
Fresh Mexican Grill, a fast casual restaurant chain. Welcome to the.
Speaker 2 (00:38):
Pod, Wade, his Michael, good to be here, man, super pumped.
Speaker 1 (00:41):
Yeah, Man, good to see you man. What attracted to
the brand?
Speaker 3 (00:44):
Ah Man, that is a that's an unpacking story, but
I'll tell you I met I engaged with this brand
in early two thousand. I grew up in Salt Lake City,
and I kind of went out to find greener pastures
and across the country and the world actually, but I
would come back and visit family. And I actually bumped
into Coasta Vida probably two thousand and three and one
(01:05):
of their first restaurants, and the.
Speaker 2 (01:07):
Taste was unique.
Speaker 3 (01:09):
The whole experience was something I had never gone through
with the freshness and the cues. So I knew about it,
my family raved about it. And then years later when
I was had been with Chili's for a decade and
I had Kevin Hawkman come in and we kind of transitioned,
and I was leaving the brand. Lo and Behold, I
spoke at an event and uh front and center with
(01:30):
the two CEOs for Coasta Vida and they said, Hey,
do you ever be interested in coming back to Utah
and leading this brand as a president? And I said,
sign me up, let me know when and I'll be there.
And that's kind of how it all came together.
Speaker 1 (01:42):
Oh that's very cool. You know, I'm not too familiar
with the brand. Can you tell me what makes Costa
Vida unique?
Speaker 3 (01:50):
Yeah, So, just to give you kind of a contextual reference,
it is a fast, casual fresh Mexican grill is what
we referenced it. But basically it's it's kind of the
fast as a counter service. So we do all fresh
food in the morning, we make all of our proteins,
we make chop all of our vegetables, and then we
place them on the line and we scoop and serve
throughout the day. The I think the most unique aspect
(02:13):
of Kostavita is this Baja flavor profile. And we we
have a product called sweet Pork that literally is legally addictive.
Speaker 2 (02:21):
I mean, it is so.
Speaker 3 (02:23):
Good, and we have we have a lot, a lot
of customers who love this product and just live and
die by it.
Speaker 2 (02:30):
You'll see that.
Speaker 3 (02:31):
You'll find the recipes online. Everybody's trying to copy it
and figure it out.
Speaker 2 (02:34):
You know.
Speaker 3 (02:34):
We we spend a lot of time kind of marinating
it and creating it in the mornings before we serve it.
But sweet pork, we have phenomenal Keeso, a really delicious
to matill ranch. I'm talking about core equities for the brand.
And then I think we have the best desserts in
fast casual. We have a Traceh's cake that I can't
get enough of, and then a key Lime and I'm
(02:55):
a huge key Lime connoisseur that I think could rival
any other fast casual restaurant or even catch dining restaurants dessert.
Speaker 2 (03:01):
So that's kind of the rundown.
Speaker 1 (03:03):
Makes me hungry, man, it sounds great. How would you
describe the company culture at Coasta Vida at Coasta Vida
and how do you maintain it as you grow.
Speaker 3 (03:13):
Yeah, we're very entrepreneurial, pretty scrappy. We punch away above
our weight. We're only just under one hundred restaurants. I'd
say we're probably mid nineties, depending on if we get
these next two in the ground here in the next month.
But we are very entrepreneurial, so we wear a lot of hats,
we play a lot of different roles.
Speaker 2 (03:33):
It is a super fun culture.
Speaker 3 (03:35):
So we take everybody to Mexico every year, back to
our roots of the Baja into Fort Devarta, and we
spend a week at Lake Powell here in Utah on
houseboats to engage as a culture and to kind of
learn about each other off and outside of work. So
it's very vibrant, it's very collaborative, and we're scrappy, right,
(03:56):
That's how i'd explain it.
Speaker 1 (03:58):
Yeah, it sounds like fun. How many restaurants and what's
the split between corporate and franchise units.
Speaker 3 (04:05):
Yeah, so we're ninety two today, hope to be close
to ninety five by the end of the year. We
may push into the beginning of the year with that
ninety five mark. We corporate owns thirty one and the
rest are franchised. Amongst about thirteen fourteen different partners. Most
of our franchise partners will own three or four, some
(04:28):
own as many as twelve. And we're scattered across the
western US, So we have been in Canada for a while.
We've kind of divested those restaurants, but really California, Nevada, Utah, Idaho, Arizona, Texas,
a little bit in Washington, and that's kind of kind
of the core set. We have a few east of
the Mississippi, but only a few right one of Tennessee.
(04:51):
We have one up in Minneapolis, Minnesota. That's kind of
one in Kansas City. That's kind of the rundown.
Speaker 1 (04:57):
Okay, what are the demographic So the typical Coast to
Beat a customer.
Speaker 2 (05:02):
Yeah, it is.
Speaker 3 (05:04):
She's the customer scuse female and is about feeding a
family of two or three kids. The focus is really
she's trying to eat healthy herself and feed her kids healthy.
We tend to compete best against the QSRs of the world,
So rather than feed your family out of a sack,
come to Coast to Beat and have fresh food for
roughly or close to the same price point.
Speaker 2 (05:27):
And she's.
Speaker 3 (05:30):
You know, when you look at that archetype she's super
engaged in her kids' lives, what they eat, what they consume,
tends to be kind of the mom, the soccer mom.
That's kind of the angle. I think household income is generally,
excuse a little bit higher than middle class, So I
would say kind of eighty to ninety thousand dollars household range.
But we do kind of run up and down depending
(05:51):
on the areas that we're in and the locations we're in.
As most economics, if you can afford it. That demographic
wants fresh food if they can get it. So that's
kind of the kind of the look of our customer.
Speaker 1 (06:02):
And are you so, are you mainly targeting targeting those
soccer moms or do you have some some ways to
target the kids as well.
Speaker 3 (06:09):
Yeah, we do. We have a great we have a
great kids meal. We have a great cinnamon tortilla that's
free with every one of our kids meals that comes,
which is really delicious, kids love. It's probably the number
one dessert resell. We play a lot in high schools
and junior highs and middle schools. We always talk about
being close to the action for the school, and that's
(06:31):
football's or football programs and basketball programs, sports programs we're in.
You know, we're part of the banquets at the end
of the year for all of the sports but also
all of the music departments. And we place our restaurants
pretty close to high schools because we know, I'll use
a bad term here, but we like to indoctor and
nate them young on our food. Right, Like, you get
(06:52):
them in and they love the food and it becomes
a staple for us because they stay with the brand.
Speaker 1 (06:58):
And high school boys can eat I say that from experience.
Speaker 3 (07:02):
Yeah, massive burritos and those guys will choot that they'll
pound their two of them.
Speaker 2 (07:06):
Right.
Speaker 1 (07:06):
So it's been widely publicized that fast casual sales are
under pressure this year. How it is close to Vita performed.
Speaker 3 (07:14):
It has been a tougher year than last year. Last
year we had a marquee year. I mean we made
more money last year and drove more profitability than ever.
This year has been tougher, stiffer headwind, but we've also
had a steeper hill to climb to get over year
over year sales in traffic right now, where as a
year to date we're up about half a percent in
sales and our traffic's about down about zero point seventy
(07:36):
five to a percentage point in traffic, though I will
tell you August was a little slow for US September
thus far, two weeks in, we're ripping.
Speaker 2 (07:47):
I'm looking to be off on our good run.
Speaker 3 (07:49):
So I'm hoping the back half of this year kind
of rebounds a little bit better to closer to the
three and a half percent we were up last year.
Speaker 1 (07:56):
Very cool. Have you what have you seen? Have you
seen any sort of benefit from Chipotle's recent troubles or
is there not too much overlap with them?
Speaker 3 (08:04):
I mean our markets with Chipotle, they're they're definitely present.
They're not the ones that I that I believe we're
still in market share from there, but they're in their
Their wabble, obviously is to our benefits, so we give
big portions. We always had leaned into the portions, but
we also have them early on priced in and and
in in our core set, so it wasn't as if
(08:28):
we had backed off of that kind of volume of food.
So I think there's probably some benefit there. I think
the bigger benefit for US has just been local players
that here have started to wabble. We've been able to pull.
Speaker 2 (08:40):
Markets share from and grow our business on our cop set.
Speaker 1 (08:43):
Yeah, and and just in generally, you know, casual dining,
it's lapping easier comps, but also supply and demand is
probably better in that space than QS are and fast
casual right now. I think that's part of the outperformance.
Do you have any uh, any other theories or thoughts
about why you think casual dining has been able to
(09:05):
outperform this year?
Speaker 3 (09:06):
Yeah, you know, I think I have to give credit
where credits due. I think the Chili's team has awakened
a lot of the younger consumers, the young millennials and
Gen Z population to a form of restaurants that they
weren't aware of, right. I don't think they played. I
don't think a lot of that generation spent a lot
(09:26):
of time going to an Applebe's or hanging out in
a Fridays or walking over to the Chilis. And so
the work that's been done at Chile's on the social
side and being part of that cultural zeitgeist has woken
up a generation to, oh, my goodness, there is another
option for us other than eating out of a sack
or going and paying pretty close to the same price
for food on a scoop and serve and so I
(09:48):
definitely think that's driving some of it, you know, from
the data I've seen, And Mike, we can correct me
on this, but it really feels like Chili's is a winner.
Roadhouse continues to deliver maybe all of Garden a little bit,
but the rest of the group I'm kind of watching
and they I don't know if they have the same
run or lift those those players were getting.
Speaker 2 (10:06):
And so what's driving casual dying?
Speaker 3 (10:08):
I really have to give the credit back to Chile's
to waking up the group and outperforming.
Speaker 1 (10:13):
Yeah, I think I think that's a big part of it.
And then Darden talked about value a little bit today.
You know, when QSR was able to raise prices before
everyone else in twenty twenty and early twenty twenty one,
you kind of and and then kept pace with the
price increases of everybody else. You know, they their prices
(10:33):
just kind of their price increases led the entire industry,
that's for sure.
Speaker 2 (10:38):
Yeah, Yeah, they were got way ahead of themselves, for sure.
Speaker 1 (10:41):
Yeah. What are what are your AUVs and what do
you have planned to boost SAM store sales in the
next twelve months.
Speaker 3 (10:49):
So our our AUV is a brand, franchise and corporate
together is about two point one million. It's kind of
where we sit. We do run slightly better evs on
our corporate stores at about two four or two five,
depending on the area that you're in in our our
So that's that's kind of lifting us a little bit
as we go through, and then it's about two million
(11:12):
with our with our franchise partners. My focus really has
always been on comp store set and it's about operational excellence,
and so I'm super dialed in on brand standards and consistency.
When we run the standard and we stay close to
our brand's commitment of quality food and uh, you know,
portion size, we do really really well. I think we've
(11:33):
got We're working on empowering and engaging our team members
more so. We're working on getting our turnover down. You know,
we're kind of hovering in that one hundred plus mark
managers excluded, kind of just slightly over the hundred marked
with our team members, and I think we can do
a better job there and empower them when they're on
the line working with the guests to make the right
decision to give a little bit more knowing that we'll
get a return transaction out of that and not Nickel
(11:54):
dime our customers.
Speaker 2 (11:56):
And then the last one.
Speaker 3 (11:56):
Is I really really talk about systems and efficiencies in
systems and process and when we run the same systems
and processes with our restaurants and our I team can
support those KDS systems and the POS systems and making
sure that we're doing all the right stuff from the
HRS systems, that then we have success. So I think
the the one thing I am really working on for
(12:18):
next year on this comp number is we were really
smart on pricing. We're not going to overstep ourselves. We
always are very conservative, but we know what the impacts
can be. And then I so I take I do.
I will take price, but I'll be smart on the
way to take price. And then I'm really trying to
get the brand essence in our in our marketing, which
is really about this term so good.
Speaker 2 (12:40):
When everybody eats costavda to go, man, that is just
so good.
Speaker 3 (12:43):
And so we've coined that and we're using it hard
in our in our marketing about fresh quality product and
this kind of echoing chime of so good. So I'm
hoping those will all lead to better comp sales next year.
Speaker 1 (12:57):
Oh that's awesome. I say so good all the time.
Speaker 2 (13:01):
I love it.
Speaker 1 (13:02):
Due, that's awesome. So what kind of unit growth do
you expect moving forward next you know, next year, twenty
twenty seven, and where are you really excited about expanding?
Speaker 2 (13:16):
Yeah?
Speaker 3 (13:16):
So I this year, we've put together a plan. We
call it the H five five five hundred, So in
five years, five step plan to grow to half a million,
half a billion dollars in evaluation across our restaurant set.
So there is a plan in place. The first year
is really about kind of we got to get our unigo.
You talked about it unit growth going. That's a big
part of this equation. And I feel like our opportunity
(13:40):
obviously is to win outside Utah, we just dominate. We'll
open a restaurant and we'll hit three million, you know,
without a lot of work.
Speaker 1 (13:47):
Wow.
Speaker 3 (13:48):
In Vegas and Colorado and Arizona and Texas, we got
to get our AUVs kind of north of that two
million and starting to rip, and they don't know our
brand as well. And so that for me is I'm
gonna I'm going to open in these outer mark It's
I've got a plan in a strategy in order to
open big and open and be consistent, to drive quickly
to get our return back and make sure that we
(14:10):
hurdle into profitability. We're looking at probably eight to ten
a year in this first in this next year, and
then our goal is to stay on that clip with
our franchise partners also growing at not quite that aggressive,
but i'd say i'd say three to five across the
franchise set every year. And then it's about looking for
(14:31):
acquisition opportunities as they come along that we could take
into our brand. You know, obviously clean those up, make
them coasters, and grow into a complementary foothold that we
don't have today. That's what that five five five hundred
is focused on.
Speaker 1 (14:46):
Oh so that's interesting. So it's similar to Kava and
what they did.
Speaker 3 (14:51):
Right, Yeah, yeah, just following that playbook and seeing that
that playbook can work.
Speaker 1 (14:55):
Yeah, I mean it really boosted their store growth and
same source of sales growth, all that good stuff. Very cool.
Your catering business is pretty sizable, man. You know, I
listened to your panel at prosper you know, I was impressed. Uh,
talk to me a little bit about Costavita's approach to
(15:15):
that business.
Speaker 3 (15:17):
Yeah, you know, I I'm still the term that Noah
Glass used rightature bleachers and uh teachers is what he said, right,
But it's exactly what our strategy has.
Speaker 2 (15:28):
Been with Costa.
Speaker 3 (15:30):
We we have the distinct advantage of having food that
carries really well, you know, putting it in heat wheels
and carrying it to a work facility or a school,
and a great packaging display goes a long way for
Costa and so we we kind of leaned into this,
you know, this this halo of being in Salt Lake City.
Speaker 2 (15:50):
You're around a lot of churches and a lot of
church going people, and so that was.
Speaker 3 (15:53):
An easy lean in on, well, every one of these
churches around here are going to have something on Saturday
night or Wednesday night.
Speaker 2 (15:59):
Can we cater it? Right? And then we started leaning
into schools, and.
Speaker 3 (16:02):
Then we lean into two PTA's and then we've learned
leaned into school districts and that's been a big opportunity
for us to just continues to pay well and pay back.
We have a fleet called fleet. We have a handful
of individuals who are solely dedicated and focused on caterings
across a certain number of restaurants, and so their whole
(16:24):
focus is drum up sales, make connections, be in the
chamber of commerce, talk to schools, talk to people, you know.
So when the phone rings they show up, they white
glove it, they put it out there, and that business
starts to then churn up. And that's been a great
model for us, and it's.
Speaker 2 (16:40):
Been really really strong.
Speaker 3 (16:41):
I mean, we were probably a four percent catering business
for years and then we made the jump to the
high sixes and now we're knocking on the door to
get into the ten mark, the nine to ten mark,
and that has materially changed our business, and so much so, Michael,
that this is how it looks when I look at
the year to date or every now year to date,
every single day in sales. Sometimes there's volatility, and that
(17:03):
number depending on how big the catering sales were this
year versus last year, and so I have to exclude
catering from that and then look at it again and say, Okay,
the comp sets up slightly, but the catering just got
you know, we just killed it yesterday, and catering across
the brand. So I think it and I said it
at prosper I'll say it again, if you're not paying
(17:24):
attention to this, you're missing a huge opportunity to drive
a revenue stream that you you that is pretty easy
to get going if you're focused on it.
Speaker 1 (17:31):
Yeah, and I have the packaging and the display is right.
It's a good way to attract new customers too, right.
Speaker 2 (17:37):
Yeah.
Speaker 3 (17:37):
Absolutely brings them to the brand they've never been to
and they go, Man, I got to get more of this, right.
Speaker 1 (17:42):
Yeah, you guys are really ahead of the curve.
Speaker 2 (17:43):
It's great.
Speaker 1 (17:44):
Are you working on any technology initiatives at the moment.
Speaker 3 (17:47):
I've got a couple of AI things I'm dabbling with
trying to figure out. We get a lot of calls
into our call center for kind of i'll call them
mundane questions. Do you have a patio, what are your hours?
Kind of bring a dog to the restaurant, you know
that kind of stuff. AI is super good to answer
that stuff right out of the gate and pretty responsive.
I'm looking on I'm working on outdoor boards as well
(18:08):
for our restaurants in the drive through, and it's part
of a bigger initiative to ensure that our POS system
is intimately connected with all of our boards, both in
the restaurant and outside of the restaurant. So if we
eighty six an item on the POS, not only does
it go across our restaurants digitally, but then it sends
that command to OLO and to the third party is
to have it pulled off as well from that particular store.
(18:29):
So I know there's others ahead of us on this part,
but this for us is a big initiative. And the
digital boards to reduce missing it incorrect where they read
back in real time what you're ordering, so the guest
understands that is the correct order, which will dramatically reduce
that pain point of I didn't get the extra ranch,
now my salad's ruined, or I got the wrong protein
(18:52):
on the burrito which I'm going to feed it to
the dog now because I'm mad, kind of stuff. So
that's the initiatives that we're really really trying to.
Speaker 1 (19:01):
Okay cool, and you know, I know you have a
strong technology background. What roles do you see AI and
AGENTIC AI you know, playing for playing for you right
and and senior management in the restaurant business.
Speaker 3 (19:15):
I I definitely think that it will it'll help the
manager be more focused on being hospitable and less being
stuck in the back office.
Speaker 2 (19:26):
So there's these processes.
Speaker 3 (19:27):
That run or need to be run, or an analysis
that needs to be consumed by the human brain before
they go out on the line to engage with the guests.
And a lot of times we get stuck in the
back office and then we start hiding in the back
office and that becomes our day. What we want is
the AI to run that analysis to present easy solutions
or easy answers to questions they may have in real
(19:49):
time to allow to get out of the back office
and be more on the line, engaging with guests, promoting
the food, promoting the experience.
Speaker 2 (19:56):
So I know that's.
Speaker 3 (19:58):
General, but I do believe that it's going to start
with GMS in the back office and improvements on how
that works.
Speaker 2 (20:05):
I'm a huge buff on computer vision.
Speaker 3 (20:07):
I still think you know, we work with Savvy, which
is a group here, but there's a lot of different
computer systems out there that our vision AI systems that
will help you kind of security wise.
Speaker 2 (20:16):
And look at what's going on in restaurant. But I
think there's a huge opportunity.
Speaker 3 (20:19):
For AI to be involved there to help almost build
like a remember when you played sports, you watched film, right,
and you'd like figure out what happened.
Speaker 2 (20:29):
Well.
Speaker 3 (20:30):
AI needs to be able to identify quickly where are
the pain points in this camera that we've seen throughout
the day, pull them out, short them up, tag them
to an idea of a transaction, and then let me
brief my team for five minutes in the morning.
Speaker 2 (20:45):
Hey, let's look at some film. What went wrong? What
went right? How could we made it better?
Speaker 3 (20:49):
Like I started thinking about that and go when when
I played rugby, we'd watched film all day long, and
that's how I got better.
Speaker 2 (20:54):
It was because I knew what I was doing wrong.
Speaker 3 (20:56):
So there's there's something there I think that we could
tease out at some point.
Speaker 2 (21:01):
Very cool.
Speaker 1 (21:02):
Thanks for doing this, Wade, it was good to see you.
Good to catch up.
Speaker 2 (21:05):
Thanks man, appreciate it. Man, it's been great all right.
Speaker 1 (21:08):
I also want to thank the audience for tuning in.
If you'd like to find your nearest Coasta Vida, go
to costavida dot com. If you liked our discussion, please
share it with your friends and colleagues. Check back soon
for an interview with Kirk Grogan, co founder and COO
at Tip House
Host
Michael Halen
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Ruthie's Table 4
For more than 30 years The River Cafe in London, has been the home-from-home of artists, architects, designers, actors, collectors, writers, activists, and politicians. Michael Caine, Glenn Close, JJ Abrams, Steve McQueen, Victoria and David Beckham, and Lily Allen, are just some of the people who love to call The River Cafe home. On River Cafe Table 4, Rogers sits down with her customers—who have become friends—to talk about food memories. Table 4 explores how food impacts every aspect of our lives. “Foods is politics, food is cultural, food is how you express love, food is about your heritage, it defines who you and who you want to be,” says Rogers. Each week, Rogers invites her guest to reminisce about family suppers and first dates, what they cook, how they eat when performing, the restaurants they choose, and what food they seek when they need comfort. And to punctuate each episode of Table 4, guests such as Ralph Fiennes, Emily Blunt, and Alfonso Cuarón, read their favourite recipe from one of the best-selling River Cafe cookbooks. Table 4 itself, is situated near The River Cafe’s open kitchen, close to the bright pink wood-fired oven and next to the glossy yellow pass, where Ruthie oversees the restaurant. You are invited to take a seat at this intimate table and join the conversation. For more information, recipes, and ingredients, go to https://shoptherivercafe.co.uk/ Web: https://rivercafe.co.uk/ Instagram: www.instagram.com/therivercafelondon/ Facebook: https://en-gb.facebook.com/therivercafelondon/ For more podcasts from iHeartRadio, visit the iheartradio app, apple podcasts, or wherever you listen to your favorite shows. Learn more about your ad-choices at https://www.iheartpodcastnetwork.com
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.