5 Costco principles incorporated into The Organic Coup

Literally meaning “organic takeover,” The Organic Coup is trying to leave as big of a mark on the restaurant business as Costco has left on the retail industry. That sounds like a lofty goal, but The Organic Coup was launched by two former Costco execs and counts Costco founder Jim Sinegal as an investor. According to the company website, “Every part of The Organic Coup’s business” was built and inspired by Costco.

“Within the culture of Costco, you have a ton of autonomy, and I really think that because of that autonomy, it allowed for so much creativity,” said co-founder Erica Welton. “And we basically took that business model.”

Having a certified organic menu means The Organic Coup’s ingredients are all free of GMOs, antibiotics, and toxic chemicals and pesticides. Welton was inspired to launch an organic restaurant after seeing the demand for organic ingredients while working as a food buyer for Costco. “In the last four years, we saw this huge surge, with people turning away from these iconic, conventional [retail] brands and to these organic items,” she said. “And the more items we brought in that were organic, the sales were huge.”

She was also inspired by her personal experience as a mom. While working for Costco, Welton began buying all-organic ingredients to cook for her family, but struggled to find organic offerings at restaurants, especially at fast-food places. She partnered with another Costco exec, former senior vice president Dennis Hoover, to launch The Organic Coup and capitalize on the void of all-organic restaurants.

When trying to source clean ingredients like organic options, a common challenge for restaurant operators is finding vendors that can meet the volume of demand. The Organic Coup was able to tap Welton’s vendor relationships. While Costco was surpassing Whole Foods as the largest seller of organic products, Welton was building relationships with its many organic suppliers, and she tapped into those partnerships to build The Organic Coup’s menu.

The sourcing enabled The Organic Coup to offer organics at an average check estimated by Technomic at $12.

Like Costco, The Organic Coup features a simple industrial design that includes cement floors, metal high-top chairs and open kitchens displaying boxes of beverages and snacks. Units are takeaway-focused, typically measuring only 500 to 900 square feet with limited seating.

The simple approach extends to the menu: To streamline operations, The Organic Coup offers just three entrees—a fried chicken sandwich, wrap or bowl—featuring the same shredded veggie mix and choice of housemade sauces. The menu is rounded out by organic popcorn and a selection of organic beverages.

With the no-frills approach, units are averaging sales at an annualized rate of $2.2 million, according to a Technomic estimate.

The Organic Coup boasts investing in “Team Coup” by paying its employees more than California’s minimum wage of $10 per hour. Workers at its suburban locations start at $14 an hour, while the employees at the San Francisco site receive $16.

Since launching in November in Pleasanton, Calif., The Organic Coup has been on a steady growth path, opening two additional units in the Bay Area in San Francisco’s Financial District and in Pleasant Hill, Calif. Three more units are slated to open by the end of this summer, including its first sites in Oakland and Palo Alto, Calif.

Welton said she’s received hundreds of emails to franchise and enter new markets, but for now they’re sticking to company-owned locations in California. The concept aims to reach 10 locations by the end of this year before expanding beyond California.

As it grows, The Organic Coup is testing new menu items based on customer feedback. The Pleasanton restaurant added organic tater tots after customers requested a side option, and at its San Francisco site—which sees a lot of morning traffic—The Organic Coup serves a breakfast burrito.