It’s tempting to see Guest Editor Mike Roberts’ new LYFE Kitchen and its array of socially responsible attributes as a departure from his old job as Global President and COO of McDonald’s.
But Roberts will have none of that.
He says he’s doing what he’s always done: following the customer. And for our third annual Guest Editor issue, that’s exactly what he chose to focus on: new ways of appealing to the customer. He has made LYFE Kitchen’s team—an Ocean’s 11-type collection of industry experts—available to Restaurant Business. We’ve gathered their collective wisdom for an issue dedicated to some of the best practices the industry has in addressing consumer satisfaction through what Roberts calls their “six” senses: the usual five plus social responsibility.
Here’s what Roberts is betting consumers will embrace in his new bid for their business and loyalty, the upstart fast-casual operation LYFE Kitchen:
- A wall of fresh herbs that patrons can pluck and pinch to release the aroma as they wait in line to order. The swathe of green isn’t to be confused with the growing wall, where microgreens are cultivated vertically and harvested once a month for use in chef specials.
- Those chefs, who are not only drafting menus from their test kitchens, but also executing recipes in the store. The kitchen meister, for instance, trained under Charlie Trotter.
- An open kitchen, where customers can watch the cooks clean and bake Brussels sprouts, a signature of LYFE (along with asparagus when it’s in season, which will help Unit #2 meet the anticipated demand for 11,000 pounds of side greens.)
- Ingredients that are local and seasonal whenever possible, and as unadulterated as a re-engineered new purchasing system can deliver. [Franchisee #1, who’ll be opening stores in Chicago, is the scion of a family that’s in the produce-supply business.]
- Flexitarian choices like vegetarian breakfasts, a beet and farro salad or an analog burger that Roberts swears is indistinguishable from the beef variety.
- A line of craft beers and a keg wine that’s been a hit, in part because customers and staff appreciate the elimination of glass bottles and corks from the waste and recycling streams. “It’s a no-brainer,” says Roberts.
- Checks averaging “$15 at lunch, slightly less at breakfast, slightly more at dinner,” according to Roberts.
- An ambience intended to appeal to Roberts’ ideas about the six senses.
Says Roberts: “It’s the integration of the experiences into this overall experience. Here at LYFE Kitchen, the experience has to exceed the food quality.
“It’s above fast-casual, it’s approaching fine dining in its presentation and look,” he explains. “You’ll be able to sit in seats you can relax in, the sound will be monitored. The air is fresh because there’s no fryer in the building. We want to refer to it as an LSR, a Lifestyle Restaurant.”
But Roberts is confident, after some acknowledged deep thinking when the idea was first pitched to him, that LYFE Kitchen is no boutique-y, highly niched concept that will never engage the consumer mainstream. He and his angel investors have estimated that the chain will grow from its current two units to at least 250 stores, at a projected annual sales volume of $2.4 million each. They see it as the next logical evolution of a restaurant concept that wants to be an integral part of Americans’ lives.
In their estimation, its time has arrived—and the preliminary numbers bear them out.
“We’re way over our projections on the sales, way under on our food costs, on our paper costs,” says Roberts. “We’re on a very, very, very good path right now.”
The sales and profit contributions are in addition to what’s being generated through LYFE Kitchen’s grocery-products operation, which began simultaneously with the restaurant launch. Frozen entrees are already available through Costco in several major markets, including California’s Bay Area. They are also available at Amazon.com and HSN.com.
The traction in the marketplace shouldn’t be a surprise, Roberts says. He views the conceptualization of LYFE Kitchen (the acronym, their tagline, stands for Love Your Food Everyday) as a milestone in the ongoing journey of the Information Age consumer.
Americans have shown a bent for healthier, more wholesome and more energizing restaurant foods for decades. That's why Roberts led McDonald’s while president to add products like parfaits made with quality yogurt and real fruit, and to revamp its salads with higher quality greens.
But there’s a palpable frustration, as a health-minded investment banker noticed in his quest to lose 35 pounds. The slimmed-down Steve Sidwell resented the sacrifices he had to make in flavor and sheer enjoyment to eat more healthfully. Smelling opportunity, he posed his dismay as an ah-ha to Roberts, an acquaintance who, since stepping down at McDonald’s, had done some consulting gigs and worked with former Chicago Mayor Richard Daly on an unsuccessful bid to recruit the 2016 Olympics to his home city.
“Steve said, ‘I got an idea—there’s significant under-met demand out there,’” Roberts recalls of that day in February 2010. “When you ask people about healthy food, they think in general, it’s not going to taste good, it’s not going to look good, it’s going to be expensive, and you’ll probably eat it in a grungy environment.”
While Sidwell’s initial idea was a healthy QSR, Roberts and the team studied the marketplace in depth. They all agreed the customer had changed. Chief brand and communications officer Mike Donahue says, “Customers are just as likely to vote with their purchasing power, and feet, on not only do you taste good, but do you operate your business in good taste.”
“All of this started to be a strong case for, ‘Oh, this is an opportunity,’” said Roberts.
The idea began to snowball. Sidwell, now president of LYFE’s grocery foods operation, became the nucleus for a brain trust that extended to Roberts and Donahue, the third co-founder and a 20-year veteran of McDonald’s, having served as former chief communications officer for the company, working his last five years there directly for Roberts. Donahue was also the inaugural chief of Big Mac’s first social responsibility team.
Culinary expertise was sought from two heartthrobs of the foodie community. Art Smith, Oprah Winfrey’s former personal chef and a TV star in his own right, became LYFE’s executive chef. Tal Ronnen, a well-known proponent of artful vegetarian cuisine, served as the executive consultant chef on plant-based choices. The expertise was deep, and the vision was unilateral. “Part of the process was all of them saying, ‘This is exactly what we’ve been looking for—someone’s finally going to do this,’” recalls Roberts.
But Roberts himself suffered from what he called “a healthy paranoia.” He’d seen people of all varieties buy a lot of burgers, shakes and fries in his time. Was the public really ready for something this attuned to personal and environmental health?
“He thought it over for a long time about how much of his future would be involved with this,” recalled Donahue. He suggests that Roberts had the wherewithal after several decades in McDonald’s “C” suite to never have to work again. Roberts, age 62, doesn’t refute that assertion.
Then Roberts tried Smith and Ronnen’s menu. “Five minutes after, I said, ‘I’m going to do this,” he says.
Donahue remembered it as Roberts’ “Rocky” moment, when the hands shot up, the trumpets blared, and the chances of triumphing didn’t look so far-fetched at all.
There were certain non-negotiables that the brain trust set for the food. It had to be familiar, not the sort of edgy stuff a college-aged youngster might try on a dare. Customers can still get sausage, eggs and potatoes for breakfast, but the sausage is made from turkey, the eggs are organic and the potatoes come in the form of a hash made from fingerlings.
The food also had to be filling and affordable, with prep requirements that could be met by a multi-unit fast-casual operation stretching from coast to coast. So there’s a burger for under $9, also available with real or vegan cheese. The menu is fashioned around choice, believing they have the best of all customer preferences. There are fish, chicken and beef proteins. All chicken and beef items have “plant-based protein alternatives” as well as separate gluten-free, vegan and vegetarian menus. All meals are under 600 calories and 1,000 milligrams of sodium.
Roberts is loath to call the items innovations. “Chicken? That’s an innovation?” he says, tracing a question mark in the air. “Give me a break. It may be free-range chicken, and it may be served with Brussels sprouts, but it’s still chicken.”
Nor does he speak ill of what’s being sold today by the billions at his former employer. But he notes that times and tastes have changed dramatically, in part because so much information is available from digital media on food, nutrition and health. Roberts explains that just the day before they’d gotten online feedback from a customer saying the burger was overcooked. As it turns out, Roberts agreed. “This is about a new lexis, that constant pursuit of perfection. We have a lot of expectations of our guests.”
Besides, says Donahue, it’s not as if Roberts has really taken a sharp turn from the direction he was pursuing when he resigned from McDonald’s. One of the chain’s much-ballyhooed products at the time Roberts moved into power was an iceberg salad served in a clear plastic cup, an item derided as a gimmick. Roberts pushed for a better salad made with 16 flavorful lettuce varieties and served in a nicer package. The dressings were organic versions branded as Newman’s Own, a feat the Roberts’ team pursued with great vigor to emphasize the credibility of the changes, by spending six hours in a hotel meeting room with the former actor and Newman’s Own team to convince them of the passion behind their efforts.
He also started the chain on its drive to offer apple slices as replacements for French fries.
If associates from those days were privy to the decision-making at LYFE, “they would think of this as a continuation,” declares Donahue.
Roberts and Donahue, who resigned from McDonald’s at the same time, never said why they left, but many have speculated that Roberts, the president and COO, became impatient waiting on the promised CEO’s job, which was held by Jim Skinner after the untimely deaths of two previous CEOs within a year of each other. Word was that the McDonald’s board had established a succession plan that included the transition from Skinner to Roberts that was ultimately delayed beyond initial expectations, as the company results were doing so well when the plan was originally scheduled to take place.
Donahue says Roberts hasn’t swayed from the operations orientation that was instilled at McDonald’s. “It’s all about the execution,” he says.
Roberts acknowledges the point, though with apparent reluctance. A kitchen is a kitchen is a kitchen, he stresses; if LYFE’s differs from other fast-casual brands’, it’s probably because the equipment is newer and the technology is more advanced, not because of some magical understanding of ops he brought with him from McDonald’s.
Still, he says, offering a comment that shows both how far and how little he’s traveled from his McDonald’s days, “the farro will be made the same way in every LYFE Kitchen.”
The technology used in LYFE is presumably a leap forward from what Roberts knew from his McDonald’s days. The upstart uses screens in the kitchens that help the prep team and runners hit the objective of a reasonable wait time. The screen glows green when the cooks still have time. It switches to yellow when the 10-minute mark is fast approaching and burns red if the timeframe is exceeded. “Ninety-four percent of the orders are served within 10 minutes,” Roberts says.
The stores also handle far less cash than a McDonald’s does. “Over 80 percent of our transactions are on credit,” says Roberts. “A lot of our customers say, what is the tipping policy? We say we have not set a policy. So our employees tend to make on average $5 more an hour because of tips.”
The concept is being tweaked as LYFE is rolled out. The first store, for instance, measured just 3,300 sq. ft. The second one is 7,500 sq. ft., with a private dining room and a 10-seat second breakout in addition to the 140 seats in the main room. Due to its larger size, the Culver City location will become the training center, known as LYFE Kitchen University.
Units are already slated for elsewhere in California, the Denver area and Chicago. Then LYFE will head to the East Coast targeting New York, Boston and Florida as initial markets.
Roberts expects competition to form similar upstarts in the not-too-distant future. “I hope there’s a lot of people entering the space,” he says. “We need it, as a country we need it.”
It could also help LYFE because of a rising-tide dynamic, adds Donahue.
“This is a mission,” comments Roberts. “We started something. We tasted something. We want to share it. When we told people what we were doing, they smiled. The idea here is, do something with your life. Try. Make no small plans.”