Can LYFE Kitchen out-Chipotle Chipotle?

February 27, 2015, 4:07 PM UTC
Courtesy of LYFE Kitchen

Last week the Internet was abuzz with the discovery that most meals people eat at Chipotle are not actually “healthy.” While those barbacoa soft tacos may be made with antibiotic-free and hormone-free beef, they come with 880 calories, 88% of the day’s recommended saturated fat intake, and a whopping 111% of the recommended daily allowance of sodium.

Realizing that Chipotle’s “food with integrity” doesn’t necessarily translate into “health food,” some diners are trying another responsibly sourced fast-casual restaurant chain — one where the food is healthy enough that the company is reluctant to even advertise it that way: LYFE Kitchen.

“Our people are so excited to tell you how healthy we are, that they scare customers away sometimes,” says Mike Donahue, LYFE’s co-founder and Chief Brand Officer. “I beg them to not use the H word.” Instead, he says, “Talk about great taste, talk about flavor, talk about ingredients, talk about the food and taste quest that we went on. And then, by the way, ‘it’s good for you.’”

Aside from calorie counts, LYFE and Chipotle (CMG) have a lot in common. Both companies state commitments to using high-quality ingredients that come from animals raised humanely. Both aim to fundamentally change the way Americans eat. And both have those ubiquitous Golden Arches in their history: McDonald’s (MCD) was an early investor in Chipotle, and LYFE’s founders include two former McD’s executives. But unlike Chipotle — whose communications director, Chris Arnold, told the New York Times, “We don’t manage our menu around individual nutrients” health is central to LYFE’s way of serving customers.

LYFE Kitchen was founded in 2011 by Donahue, a onetime chief of communications at McDonald’s, along with ex-McDonald’s COO Mike Roberts and Stephen Sidwell, a former executive at meat-free food company Gardein. LYFE’s mantra is right there in the name: Love Your Food Everyday. And the motto — “Eat Good. Do Good. Feel Good.” — clarifies the ethos. Whether it’s in sourcing and preparing the food, building the brick-and-mortar shops, or managing waste, the company has planned its business around these principles.

Oprah’s former personal chef, Art Smith, and vegan chef and cookbook author Tal Ronnen, created LYFE’s menu, which is designed to have something for everyone. There’s gluten-free pizza, vegan “unfried chicken,” a farmer’s market salad, fish tacos, steak, and no shortage of vegetables. (Highly recommended: The Quinoa Crunch Bowl.) The food is baked, broiled or steamed — never fried. No item tops 600 calories. LYFE doesn’t use high-fructose corn syrup, butter or cream, trans fats, MSG or preservatives. Calories and sodium are listed on the menu, with basic ingredients and symbols for gluten-free and vegan. There are cocktails, wine, and beer—and “LYFE waters,” which use fresh-squeezed juices, herbs and infused teas.

Even Michael Jacobson, Executive Director of the restaurant watchdog group the Center for Science in the Public Interest, gave the menu a rare endorsement. Noting that it’s difficult to gage LYFE’s meals without knowing the full list of ingredients, their weights, and how nutrition numbers were calculated, he told Fortune, “With those caveats, LYFE’s meals include a lot of interesting grain and vegetable ingredients, and none of their meals has the gargantuan calorie, saturated fat, and sodium levels that so many restaurant meals have.”

Not every ingredient at LYFE is organic or locally grown. But LYFE’s director of supply chain, Jim Campbell, says that more than half of what’s served in the summer in Southern California comes from within 350 miles of the restaurants. He hopes 20-30% of the ingredients at the new LYFE Kitchen in midtown Manhattan will be locally sourced in the spring.

Some ingredients will never be local, but were still chosen with sustainability in mind. The Mahi Mahi in the restaurant’s popular fish tacos, for example, comes all the way from Ecuador. “One of the reasons we chose the wild Mahi is that they’re very prolific,” says Campbell. “The fishing industry hasn’t really damaged the fishery because it recovers so fast.”

Meats are from farms certified by the Global Animal Partnership (“GAP”), so animals haven’t been raised in crates or cages, given growth hormones, or fed non-therapeutic antibiotics. “LYFE Kitchen shows that the trends are real about how consumers are moving in a direction to eat more plant-based food,” says Josh Balk, a spokesman for the Humane Society of the United States. “The company also sees animal welfare as a key issue.”

And it’s not just the food that’s healthy. LYFE’s restaurant buildings are WELL Certified, meaning that they meet certain standards for air, water, light and other qualities. Seating is made from materials such as reclaimed plastic bottles, and customers eat on real china and drink from glasses instead of paper cups. In Palo Alto, tables are made from the University of San Francisco stadium’s old bleachers. “It’s more money than a normal buildout,” Donahue says. “We believe, at the end of the day, the ROI will be there because the more people find out about it, the more they will frequent us.”

Meeting the growth goal may be a big challenge. Three years ago, the company targeted 500 to 1,000 restaurants within five years. The New York City LYFE Kitchen, which opened in December, was No. 14. Donahue says they’ve recalibrated their growth strategy since 2012. “We’ll do a steady pace right now of maybe 10 restaurants a year for the next few [years].”

Memphis-based Carlisle Corp., a major owner of Wendy’s restaurants, bought a stake in LYFE in August 2014, and has provided essential expertise, Donahue says. “They came in and were able to cut out a lot of expenses but keep our priorities,” he explains.

Carlisle VP Chance Carlisle moved in as president and CEO of LYFE last summer. And the new blood seems to be LYFE-enforcing. Using McDonald’s 2013 average monthly per-store sales of $2.6 million as a benchmark, Donahue says, “We have some [restaurants] that are doing exceedingly higher than that, and we have some that haven’t reached that plateau. Overall, we’re pleased,” he says.

Meanwhile, he and LYFE’s team are carefully weighing expansion plans. “We’re calling it smart growth.”

Read More

Great ResignationInflationSupply ChainsLeadership