Brett Schulman thought Cava Group's second location in a Tyson's Corner, Va., mall would spark the Mediterranean-food restaurant's plan to go national. Instead, no one showed up.
The lack of customers at the new location in 2012 surprised Schulman and Cava's other three co-founders. After all, the foursome opened a full-service successful restaurant, Cava Mezze Grill, in Rockville, Md. They also developed a line of dips, spreads and dressings sold in grocery stores.
But Schulman, who has been Cava's CEO since 2010, figured out the problem with the new location. No one came because the entrance was too far from the mall's main corridor. And there was little money for marketing. So he thought of an out-of-the box solution.
"Instead of advertising we held a community day, serving free meals and matching donations to a local nonprofit addressing food insecurity," Schulman said. "It was so successful that within a few months we had long lines waiting to get in. And now we launch every new location the same way."
Schulman says that early misstep informs the company's rapid growth. "You can learn more from your failures when you have to be creative than when things seem to be going smoothly," he said.
Brett Schulman: Fuel Your Success
The results from Cava's early "failure" are impressive.
Cava expects to boost the number of its Mediterranean-diet-inspired restaurants from 309 last year to as high as 359 in 2024. Revenue in 2023 hit more than $720 million, an increase of 59.8% over 2022. And net income reached $13.3 million including all costs vs. a loss of $59 million the prior year.
Cava's initial public offering took off in June 2023. The IPO priced at $22 a share and closed that day at $43.78. Since then, shares have rocketed an additional 83%, easily topping the S&P 500. And the company's future looks bright, too. Analysts think Cava's revenue will surpass $874 million this year.
Schulman: Learn Perseverance Early
All this from Schulman, 51, who didn't come from a restaurant background. He grew up in Philadelphia, where his father worked his way up at a Buick dealership. They moved to Bethesda, Md., when an opportunity came up to become a partner at a dealership.
Schulman's first job was in the summer at age 14. He washed cars. But Schulman learned more than just how to polish fenders. His father showed him how to inspire people.
"I witnessed firsthand how my father cared for his team members and his engaging style with customers," Schulman said. "I also saw how much his work ethic contributed to everyone's success."
But some potholes loomed. The partner sold the real estate on which the dealership sat. The sale happened at a tough time — during the late-1980s recession. That left Schulman's father struggling to pay the bills, and he eventually lost the business while Brett was in high school. That struggle left an imprint on the young Schulman.
"Success has to be earned every day as you face new challenges. I watched as he (his father) persevered and created a new career selling cars, eventually becoming an executive at a public company until he retired," Schulman said. "He was resilient and never thought of himself as a victim."
Plan Your Goals, But Be Prepared to Take Detours
Schulman attended the University of Maryland from 1991 to 1995. He expected to go to law school after earning a B.A. in behavioral and social sciences. Instead, Deutsche Bank Alex. Brown recruited him for two years of investment banking. He did four more years in the industry at FBR LLC.
"It was great training to learn about so many industries, different business models, and how companies raise capital and then put it to work for a compelling return on their investment by building the business or the brand," said Schulman. "We've applied some of those lessons to Cava."
Ply Your Skills At Another Industry Like Schulman
Schulman's wife sparked his interest in healthy food. His wife, Mary, started a snack company, Snikiddy Snacks, where he served as COO from 2006 to 2010 and then as partner until 2015. Ultimately, Utz Brands bought Snikiddy.
"Mary helped me develop a passion for food, and I got very interested in its manufacturing at scale," he said.
But then a friend from college asked Schulman to help his cousin Ted Xenohristos. Xenohristos, with his two partners, opened Cava Mezze Grill. They had some success, but needed help getting to the next level.
"Their line of dips and spreads were in 200 stores, but it was a huge challenge trying to produce these in a 1,500-square-foot kitchen (with) the help of specialized producers known as co-packers," Schulman said. "I liked their hummus, so after I left Snikiddy I started to do consulting for them."
He saw the opportunity. The Mediterranean diet is highly ranked by nutritionists due to its health benefits. It's high in unprocessed foods, fiber, healthy fats and protein.
"Our guests love the wide variety of dishes they can customize that are both flavorful and filling, no matter their dietary preferences or allergies, so we often have long lines to get into our dining rooms," he said. "We also can compete with the growing limited-services sector and restaurants serving the wellness category."
Integrate Your Supply Chain, Says Schulman
Schulman realized, though, he needed to spend money to make money.
The young company built a 30,000-square-foot food processing facility in Maryland to keep up with demand from grocery stores for its food. And Cava recently added a 55,000-square-foot facility in Virginia.
"We now have our products in over 800 stores, but their most important function is to supply our restaurants, and this vertical integration is our secret sauce for being able to provide Mediterranean foods cost-effectively," he said. "We're planning to expand our consumer packaged goods."
Schulman's background in investment banking lets the company make smart deals to grow, too. Cava bought Zoe's Kitchen in 2018 for $300 million. But he says combining the companies was tough and not something he'd tackled before.
"We didn't fully understand the severity of the challenges we would face in merging it, but we persevered and were correct about its real estate value as we expanded into parts of the country where people are moving," Schulman said.
Urge The Workforce To Collaborate
Startups often fail because founders find out employees do not collaborate as well as they thought they would, Schulman says.
"We succeeded because before I joined we found our values and philosophy were aligned about our vision for creating a company that could offer delicious, fresh and healthy foods by an organization where people found it fun to work," Schulman said. "We also had different strengths."
Retention of employees is high by design. Employees like the benefits, increases in pay over time, and how they are trained and treated by management. Some also report happiness working at a company trying to improve nationwide nutrition habits.
"Heart, health, humanity" is the company's slogan. Leaders remind employees they are in the hospitality business, not simply a provider of food and a place to eat.
"I've been in the restaurant industry for a long time and truly believe Brett is a visionary," said Chief Experience Officer Andy Rebhun."He has the perfect combination of leadership characteristics to accelerate the growth of a brand while keeping what makes it special."
Brett Schulman's Keys
- Co-founder and CEO of Cava Group, a restaurant chain specializing in fast-casual Mediterranean diet dishes.
- Overcame: Food inflation driven by supply-chain challenges.
- Lesson: "You need a little naivete as an entrepreneur. You have to have a very strong belief in what you are doing, backed up with determination and perseverance."
