John Shegerian: This episode of the Impact podcast is brought to you by Closed Loop Partners. Closed Loop Partners is a leading circular economy investor in the United States with an extensive network of Fortune 500 corporate investors, family offices, institutional investors, industry experts, and Impact partners. Closed Loops’ platform spans the arc of capital from venture capital to private equity, bridging gaps and fostering synergies to scale the circular economy. To find Closed Loop Partners, please go to www.closedlooppartners.com.
John: Hi. This is John Shegerian. I never could have imagined, when we started the Green is Good radio show back in 2006, that it would grow into a big podcast called The Green is Good Podcast. Now, we’ve evolved that podcast to the Impact podcast, which is more inclusive and more diverse than ever before. We did look back recently at some of our timeless Green is Good interviews and decided to share some of them with you now. Enjoy one of our great Green is Good episodes from our archives. Next week, I’ll be back with a fresh and new episode of the Impact podcast. Thanks again for listening. I’m grateful to all of you. This is John Shegerian.
Voice Over: Welcome to Green is Good, raising awareness of each individual’s impact on the environment and helping to create a more beautiful and sustainable world. Now, here is John Shegerian, Chairman and CEO of Electronic Recyclers International, and Mike Brady.
John: Welcome to Green is Good, Mike. It’s always great to be here in the studio with you.
Mike Brady: Well, there is so much. This is not just a studio. This is like a classroom for me, John, because well, it’s a classroom and recess all rolled into one, because we have so much fun every week, but also, it’s the learning, so much knowledge to[?] be had, so many people out there, not only talking the green talk, but walking the green walk.
John: Well, I agree with you Mike. It’s a classroom for me also, and we get to share with our listeners all the stuff, all the great information that we learn here every week. Today is no different than ever before, Mike. We’ve got our great friend, Seth Goldman, back with us from Honest Tea, and then we’ve got the Veggie Grill on the second after the show, so listen to this commercial, then come on back to Green is Good.
Voice Over: If a little green is good, more is even better. Now, back to Green is Good with John Shegerian and Mike Brady.
Mike: Welcome back to Green is Good. Today, we are so honored to have back on our show, Seth Goldman, the President and TEO of Honest Tea.
Welcome back to Green is Good, Seth Goldman.
Seth Goldman: Thank you. Good to be with you, guys.
Mike: Hey, Seth, we got so many good responses from all around the world after our last show. We decided we had to have you back on just to do a continuation of the progression and the evolving of Honest Tea. We’re just so thrilled that you’re back with us today. What is going on today? Where have we come? Where have you taken Honest Tea since we’ve spoken with you last?
Seth: Yeah. Well, there have been quite a few developments since we last spoke. Certainly, one of the most significant one is that the Coca-Cola Company exercised its option to buy the rest of the company. We now are owned by Coke, but we continue to operate as an independent unit, and I’m still the TEO, as I call myself, and we’re still based in Bethesda, Maryland with the same Senior Management Team and employees that we started with.
We’ve been expanding, we converted our line over to Fair Trade. That was in process when we spoke last time, but now, all of our bubble teas are Fair Trade certified, which is exciting. We just launched, this month, 2 really exciting new product lines. One is entirely new innovation called Honest CocoaNova, which is a line of infused cocoa drinks. We’ve taken cocoa and made it into a drink. It’s quite different than anything you’ve really tasted before. The other one is something we’re launching also this month. It’s a zero calorie lemonade that is sweetened organically with stevia, so there’s no calories. It’s just got a really nice taste with zero calories. It’s been a busy time [crosstalk] for sure.
Mike: Wow. All right. Well, you basically just laid out the whole show for us, because there’s so much to talk about. Let’s just start from the beginning, though. For those who weren’t lucky enough to hear your first show, share a little bit about the Seth Goldman story, your journey, how you founded Honest Tea, and what your company’s mission is.
Seth: Yep. I started Honest Tea 13 years ago. My co-founder was my professor from business school and we identified the need and the opportunity for a lot of beverages without so much sugar in them. That was really the starting premise, and we grew over time, and we converted a line toward all organic ingredients. Our position as a brand and as a company has been a commitment to health and to the environmental sustainability. Thirteen years is a long time when you’re an independent beverage company, so for us, on a steady track, expanding in the natural foods world and then beyond natural foods to some grocery and health oriented stores, and now, really, what’s happening this year and a process we started a few years ago, expanding our brand really into a much wider, mainstream audience. That’s the trajectory we’re on now.
Mike: When you started it, if you can simplify the mission, what was your simple mission when you started Honest Tea, just straight from the heart, from the TEO of Honest Tea?
Seth: Well, we take that word, honesty, seriously, Iit’s a commitment to doing things in a straightforward way, and we say that nature got it right. Our job is just to put in the bottle, so nothing fancy around. Really, the ingredients are all natural ingredients, certainly nothing artificial, and then that’s the way we seek to conduct the business, too. We tread as lightly on the earth as we can and try to respect both the Earth and our consumers, and make sure they’re taking in healthy products, and then to the extent we can respect our partners and with these fair trade partnerships, that is a great way to do that.
Mike: For our listeners out there that have their desktop, their iPad, like I’m sitting in front of my iPad now, Mike’s got his laptop in front of him, open up and look right now at Seth’s amazing website, www.honesttea.com. It’s beautiful. It’s just a gorgeous website, and it will represent your wonderful brands. There’s so much on this website.
You know, Seth, you’re one of the good guys. You’re one of the real inspirations for all eco-preneurs out there that good guys do finish first. Talk a little bit about this whole Coca-Cola thing. Last time you’re on the show, they had invested some money, but they still had the option to purchase the rest of the company. You now say they exercised that option.
Seth: Right. They were minority investor and we welcomed that investment for a few reasons. Number one, we had investors who started with us 13 years ago, who, anytime you take money from an investor, usually the expectation, and certainly in my perspective, the commitment is that you’re going to give them their money back, and ideally, with a return on it. [crosstalk] Thirteen years is a long time to hold onto anyone’s money, so we felt an obligation to make sure our investors got their money back with a return. Even more so, we’ve been expanding and continually expanding, and yet as we’ve grown, we’ve seen that there are certain channels in, really, certain parts of the country we just haven’t been able to reach because the distribution map is too challenging. The partnership with Coke enabled us to connect our brand and get distribution all across the country. Today, and this is really the first time it’s been the case, you can now find Honest Tea in every State, and for that matter, in every Coca-Cola warehouse. We have the potential, and it’s something that happens over time, to be wherever Coca-Cola products are sold. For us, that’s the opportunity to take our mission to a much deeper level.
Mike: Well, that’s the ultimate conclusion to the great beginnings that you’ve built from scratch to where you took it. You’re really seeing it to where it could have gone all the way to the end.
Seth: Right. That’s another interesting aspect to the deal. Usually, when an entrepreneur company sells to a large company, the entrepreneur usually is often the first one to go because the entrepreneur has a Maverick attitude. You need one to succeed. What’s different about this deal was that I’m still very much here. I’m still running the company. In fact, personally, I didn’t cash out. Most of my equity is still in the company, so I’m still committed to building this.
Mike: That is just great. There’s so many entrepreneurs from all of United States. We track where all the downloads go after the show airs. It goes on the iTune and we see that we get tons of downloads from South Korea, Shanghai, London, South America, so these tons of young entrepreneurs that are always e-mailing Mike and I after shows, they love to have, we love when we have entrepreneurs like you want[?]. The morning after they exercise the option, [crosstalk] obviously, you just shared the great part about it, because truly, your wonderful brand is truly going to then get full sell through, all the networks in the markets that some people never get to see. When you wake up the next morning, is there a little sadness? What’s going on in your head?
Seth: It’s a very fair question. We’re now 8 weeks since the deal was closed, and I can tell you that it really doesn’t feel any different. Maybe there’s something wrong with that. Maybe I should be easing up on the the gas a little bit or taking a little time to smell the flowers[?]. What we do is so addictive, fun, and so fulfilling, that I still feel the urgency, and I see both the need and the opportunity, both in terms of where the American diet is.
I was just on this obesity panel in Cleveland last week, and there really is a crisis going on there. We’ve got some real needs that need to be addressed, and then obviously, the environmental issues. I know I don’t have to preach to you all about how serious the situation is and and how important it is to start implementing solutions, so I’m still driven by that. It gets me up every morning and I certainly don’t feel any less in control of the business than I did before the deal.
I will say, this is by design. I’ve talked to enough other entrepreneurs who, in fact, one of them was told, a green entrepreneur was told by his board, “Look, we’re going to sell the company and then you can go do what you want to do.” He said, “But I am doing what I want to do,” and I felt the same way, and so I was careful not to sort of sign myself out of it, out of what I like doing.
Mike: Well, you structured the deal, so it would really be a great partnership and it will be a win-win for both sides. That’s kudos to you, Seth, for [crosstalk] making it work. Seriously, not many people can really pull off the art and science of structuring that kind of deal with a wonderful and legendary brand like Coca-Cola, and you’ve done it. We’re really proud of you. That’s what makes you great at what you do.
Talk a little bit about now, let’s go back to the Fair Trade certified. Again, when you came on last time, you’re in the process, now it’s done. What does that mean? Break it down to layman’s terms so our listeners can get as excited as you are about it.
Seth: Yeah. Well, the first thing it means is that we now have third-party monitoring to make sure all the working conditions and all the tea gardens that we source have been inspected. Meaning, don’t just take our word for it. There’s a trusted entity that’s out there looking at the working conditions to make sure those are what we expect them to be. That, obviously, helps me sleep at night.
On top of that, we’re directing a portion of the sales, whenever we buy tea, a portion of the sales goes back to these communities for them to invest, as they see appropriate. Sometimes, it goes to help them create their own micro-enterprise loan fund, and that could be everything, from someone buying cows to help supply milk, or be part of the garden, or maybe one of the loans went to help one of the people of the village start an orchid business. It’s just all kinds of different ways that we’re helping these communities attain their own measure of economic self-sufficiency. That’s really, obviously, the biggest thing, the biggest impact we have on these communities is by buying tea. That’s really what the single biggest driver of economic [crosstalk], but to the extent that we can do it in a way that really helps them enhance their own economic condition is something that’s certainly consistent with our mission.
Mike: That’s great. That makes a lot of sense, and I see why you’re so excited about it. That even makes the honest part of your process, it even just validates it more, even though you’ve been doing it the right way from day one, it’s great to get that Fair Trade certification.
Talk a little bit about the National Forest Foundation. I’ve read it myself in the papers that you now have teamed up with them to plant trees across United States. Why the National Forest Foundation partnering with Honest Tea? Explain the relationship of the nexus there.
Seth: Well, there’s a fun back story to this, which actually goes back to our roots. When we started the company back in 1998, Barry and I were just finalizing the labels, and literally, at the eleventh hour, I said, “Hey, I want to just put a little logo on the back of the label,” and it’s a circle with a tree on it. You’ll still see it on the back of our bottles, and it says, “Plant a tree,” and it’s got a little picture of a tree. Barry said, “Well, what does that mean?” I said, this is back in 1998, “I don’t know exactly what it means, but it’s a commitment that we’re going to be doing more than just moving around boxes of liquid.” What we’ve seen over the years, obviously, the first step was making our product organic, and that was sort of a commitment to building something, but what’s been really exciting this year is we are literally planting trees. We have a promotion that we’re doing with retailers, when a consumer buys a certain amount of product, they can do a few things. Number one, they can get a reusable shopping bag, which is a more sustainable step[?], but they also have the ability to go on to our Facebook page and plant trees without having to get their hands dirty. It’s a way for us to help, and the trees are specifically planted in State parks, places where there are either through fire or through other environmental problems, there’s a real need to restore the greenery. Obviously, we all know the benefits of trees, it’s not only the shade and the beauty, but the role they play in helping convert CO2 back into oxygen. There’s a fundamental part of our own sustainability connected to trees. This is a really exciting partnership for us.
Mike: How many trees? What’s your goal?
Seth: We’re targeting 50,000 trees. Last year, we planted 10,000. This year, we’re hoping to both plant 50,000 trees and to give out over 100,000 reusable shopping bags. Every year, we grow, and the impact grows, as well.
Mike: Well, growing fivefold as far as planting the trees, Seth, I think we can all breathe a lot easier, thanks to your efforts.
Seth: I hope so.
Mike: For those again who just joined our show, please, we’re so honored today to have Seth Goldman, the TEO, President, and Founder of Honest Tea, on with us today. If you got your iPad or laptop in front of you, tune into his website. It is just amazing. www.honesttea.com. Going about what we were just talking about, on the website, there’s a beautiful banner that talks about the Plant a Tree program and how it works with regards to the forest and what’s in use with the bags that you give out.
Also, Seth, here, there’s something that says, “Rethink what you drink, drinkorganic.com. Watch the rap battle.” Wait a second. Now, what is this?
Seth: This one’s a lot of fun and this was really fun to do, especially on the heels[?] of the Coke deal, because they think the first instinct people think of, “Oh, you signed a deal with Coke and you start acting corporate. You start thinking conservatively,” and I won’t say we did it just because of that, but my longtime friend and board member, Gary Hirshberg from Stonyfield Farm, recently did a rap called “Just Eat Organic”. It’s a lot of fun and very informative, and he put on his[?} website. The tradition where rappers sort of start cues or take up response raps to each other, I wanted to point out that, “Yes. It’s important to eat organic, but you also have to rethink what you drink.” We got a lot of our employees and my son to join in putting together a two-minute rap video. It was a lot of fun. My favorite line in there was, “Middle-aged guys rapping, what could be sadder? I’ll tell you, homies[?], what you put in your bladder.” Talk about organic and why it’s important.
My oldest son is off to college next year and it was one chance to make sure he got embarrassed before he heads off to school.
John: That’s awesome.
Mike: That is awesome. Well, rapping aside, when you scroll down on your page, again, on your landing page, there’s beautiful photos of your drinks. I want to talk a little bit about them because some of them, you didn’t have before when I’ve started drinking your drink. For instance, I see Honest Kids. When did you launch Honest Kids, and how’s that doing?
Seth: That’s been on fire. In 2007, we had started selling our Honest [inaudible] line, which is a line of drinks with juice in them. At the same time that that line started to grow, my middle son came to me one day and said, “Hey, Dad, how come you sell all these healthy drinks to adults, but you put really sugary drinks in my lunchbox?” He totally caught me. I, without thinking like a lot of people was just buying, what we put in the store, and knew he needed a drink at lunch, so I looked at the calorie profile and there’s 100 calories per pouch. I said, “Oh, my gosh, that’s more sugar in that drink per ounce than a can of soda.” [crosstalk] That was really one of the founding motivations for launching a line of pouched Honest Kids, which is a pouched drink for kids. It’s not only for kids, by the way, but it is, obviously, the packaging of the pouch is perfect for a lunchbox. That line, last year, was almost 30% of our sales. [crosstalk] It’s really exploded in an exciting way, and obviously, it’s something that’s great for kids and also more sustainable because it is organic.
Mike: Then, I see next to that, you have Honest Kombucha. Kombucha tea seems to have been taken off. Talk a little bit about the launch and then how’s it come[?].
Seth: For us, it took off and then it faded away. That was a really fun line. We brought it out last year. It got a great response, but there were some challenges with Kombucha. It’s a fermented product. [crosstalk] It has some alcohol content, and what we found was, number one, the federal regulations around alcohol have been evolving. One of the things that we saw where it was headed was that if the product had the potential to become alcohol content increase, it would be regulated in a different way, and that’s a challenge. If someone didn’t store it the right way or was left on a loading dock and not kept cold, it could keep fermenting. We, reluctantly, have discontinued that line. We remember it fondly, but as much as we live with risky [crosstalk] entrepreneurs, that was one that was [crosstalk] a little beyond what we wanted to be comfortable with.
Mike: While I tried it, and it was delicious, I got to just tell you. I just want you to know, you have a family.
Seth: We do miss it.
Mike: Hey, so talk a little bit, at the top of the show, you talked about some of the new brands you just have out. They’re real exciting. Share that with our listeners.
Seth: Sure. This was a really exciting concept. It’s something we learned about 5 years ago, believe it or not, and it just took a long time to get to market. Cocoa is a really wonderful ingredient. It has natural antioxidants in it. It’s got theobromine and a whole array of health properties to it. Often, people don’t associate cocoa as a healthy product as they often get it in the form of chocolate, which has additional calories and fat. We said, “Well, what if you could take the health properties of cocoa and make them into a drink?” We worked together with the Hershey Company to develop this technology that enabled us to do that. The line, called Honest CocoaNova, comes in 3 varieties as a mint, a cherry and a mocha. It’s just hitting the market this month, and it’s primarily in the natural food stores, so you’ll see it in Whole Foods and natural foods retailers, but I expect it’ll expand beyond that, too, because it’s getting a phenomenal response. It’s really wonderful. You sort of get your chocolate fix, if that’s what you’re looking for, but with only 50 calories per bottle.
Mike: Right. Wonderful. Talk a little bit about also, what’s the next steps? Where’s the evolution? Besides your new drink line, [crosstalk] where do you want to go now? You’ve done it. You’ve grown this thing, and this wonderful company is growing going up to be the tree that you want it to be, and you’re going to get the distribution you’ve always dreamed about. What’s next? What are you seeing [crosstalk] on the horizon?
Seth: That’s really still at a very early stage. As much as we feel like we have made a lot of progress, I don’t want to, in any way, minimize because I know it’s been a lot of work. Now, we’re just getting started with the chance to make this a national beverage and a mainstream beverage, and one that people think about. I’d say, after all these years of work, now, we have the platform to make this a national brand. The challenge now is, we need to reach people and we need to be relevant to people who aren’t maybe our natural or our first audience, people who don’t necessarily understand what organic means. For a lot of people, we’re going to be the first organic product they taste. We’re launching this month in 1,400 Walmart stores across the country, and that’s a totally new channel. People there aren’t necessarily as familiar with what organic is, but Walmart is the largest retailer, overall, of organic foods just because I guess they’re the largest retailer of just about everything. Once again, it’s a chance to reach new people. Our challenge will be, how do we make sure we can, number one, gain access to those people? How do those people find out about our product? How do they be attracted to it? How do they start talking about it? How do they start making it a part of their daily habit?
Mike: Right. We’ve had the great people from Walmart on the show, and we’re so excited they’re going to be carrying your line of products because what we’ve learned about Walmart, is when they really do something, and they make a decision to carry your brand, they really get to move the needle.
Seth: Yeah, and they have this commitment to making healthier products more accessible. We fit very much in line with that.
Mike: Oh, that is just great news. You know, Seth, unfortunately, we’re down to the last 2 minutes or so. Some pearls of wisdom for our budding entrepreneurs out there, and also some things to do to be more green because we know that you really talk an amazing talk, but you walk a great walk. Share just some last thoughts with our listeners out there.
Seth: I think one important thing is to make sure you really stand for something and stick to it. As I look back now, 13 years, there were, and there still are occasions where someone says, “Hey, you know what, if you made this product a little bit sweeter, you could sell a lot more of it.” Well, it’s true, that’s where people’s appetite were, but if we had done that, we would have diluted what the brand stood for. Make sure you know what your brand is about, what your enterprise is about, and really stick to that. It doesn’t mean you don’t evolve, and obviously, we have evolved as a company and as a brand, but you really got to make sure you have a singular, differentiated reason for being, and then make sure that shines through. The only other thing I’d say is make sure you can communicate that point of difference, not just to yourself, but to your team. That’s why they understand that’s what it’s about. If you do that work well and you hire people who share that vision, everybody else will get it, and eventually, it will come on board.
Mike: Well, Seth, well said. We’re so honored to have you back. We’re going to invite you back again because [crosstalk] you’re always one of our great shows, and we know, for our listeners out there, please go to Seth’s beautiful website, www.honesttea.com. Also, drink Honest Tea and plant the tree.
Seth Goldman, you’re an amazing eco-prenuer and TEO, and truly living proof that green is good.
Voice Over: If a little green is good, more is even better. Now, back to Green is Good with John Shegerian and Mike Brady.
John: Welcome back to Green is Good, and Mike, Seth Goldman, again, proves to be a green rock star.
Mike: What a cool guy and just so humble. I really like that rap song he was talking about that his son did.
John: I loved it, too. Again drink Honest Tea, plant a tree, that’s a simple message for all of us out there to support Seth’s great brand. If you’d like the beverage half of green is good today, Mike, our listeners are going to love the second half. It’s the food half of Green is Good. We’ve got on the second half for the show, Greg Dollarhyde the CEO of Veggie Grill. Everyone should listen to this commercial and then come on back to Green is Good.
Advertiser: If a little green is good, more is even better. Now, back to Green is Good with John Shegerian and Mike Brady.
Mike: Welcome back to Green is Good, and we’re so honored to have with us today, hospitality and restauranteur, rock star, Greg Dollarhyde.
Greg, welcome to Green is Good.
Greg Dollarhyde: Mike and John, hi. How are you doing?
Mike: We are great today in Fresno, California, and you’re down in the Manhattan Beach area?
Greg: Yeah, our headquarters are in Manhattan Beach and all our restaurants are located in Los Angeles.
Mike: Well, Greg, we have you on today because you’re the CEO of Veggie Grill. We’re going to talk a lot about that on today’s show, but we want to talk a little bit about your fascinating journey throughout your career and how you’ve got to where you are today. Your resume, I could spend all 23 minutes, literally sharing with our great listeners out there, your amazing resume, but I want you to share it instead. Your journey includes TGIF’s, Pizza Hut, and Baja Fresh before he ever got to become the CEO of Veggie Grill. Share with us a little bit about that journey.
Greg: Well, I started out in Southern California, washing dishes and preparing food like a lot of people in the restaurant business. I know a lot of CEOs in restaurant chains started out exactly the same way. They just got into the business, liked it, got bitten by the bug. Growing up from there, I ran kitchens and ran a restaurant as a general manager, and had a chance to go work for a chain called Victoria Station a long time ago, where I ran into one of the founders. He said, “You can come work for us. I think you got to go back to school,” because I didn’t finish college. They talked me into going to Cornell, and I went to the Cornell Hotel School and the Cornell Business School. After that, my horizons really opened up, my eyes, really opened up. I grew up, pretty much on the beach in Southern California, and going back to Ithaca, New York with my sandals. I learned a lot about what business was about.
I was able to take that that experience in the restaurant business, as well as the training from Cornell, and landed as the Assistant to the President of TGI Friday’s when it had 19 restaurants. [crosstalk] The reason I went there is because it was doing something no one was doing. It was huge volumes, very popular, and the fern bar business was a big hit. It’s back in the magical period in the United States after birth control and before AIDS. You can imagine, TGI Friday’s, those days was just one of the places to be. [crosstalk] That’s how it started. I just stayed in the business the whole time, and always tried to create value, look for opportunities for growth. I really loved the growth business, and that’s where you have the most fun when you watch people build their careers and build their fortunes, and grow.
John: How far did you take TGIF?
Greg: I’m sorry?
John: How far did you take it? How many locations when you exited TGIF?
Greg: When I left TGI Friday’s, they have 125 locations, on its way to being in [crosstalk] 40 different countries. There’s been many successive presidents after that.
John: What did you do over at Pizza Hut and why did that add to the great experience that you have?
Greg: Well, Pizza Hut, what I learned there was just throughput. I worked in delivery while I was General Manager and Vice President, a new concept development for pizza. What that meant was trying to get pizza in different places like in stadiums, malls, and drive-through units. We were testing a lot of different formats for Pizza Hut, but the most accessible format that I was responsible for was the airport. We had just started going to the airport. [crosstalk] now, it’s hard to go to the airport and not find a Pizza Hut, the Personal Pan Pizzas. That program, we are rolling out with Marriott, which was host the time, also, trying to figure out what you can do to little pizzas in a stadium in a sleeve, and take it back to your seat and enjoy your pizza. That’s rapid throughput in a Stadium. When you get to halftime, here you go. You better have the food ready, and get it moving. That was great experience for me, and also deliver units, where you’re dealing with a whole different animal where you can get pizzas out in 12 minutes and get them in the car, get them to someone’s house, for, hopefully, 30 minutes from the time they call. I learned a lot about systems and throughput and sort of like a big [inaudible] PepsiCo was a 200,000 employee company, so there was a lot to learn?
John: Wow. Then you ended up at Baja Fresh.
Greg: Yeah. We bought Baja Fresh with the financial partners on the East Coast. I led the team to buy Baja from Jimmy Magglos when he had founded it 10 years before taking a third trustee debt[?] in his house and a loan from his mom to start the first Baja Fresh. It’s one of the great success stories. I met Jimmy in 1997. He wanted to get some money off the table, so we bought 80% of the company from him in ’98, and then we [inaudible] was delusional along the way, of course, as you kept raising money to [crosstalk]. We went from 30 restaurants to about 270 in 4 years. I know he ended up selling it to Wendy’s. When we were getting ready to go public, Wendy’s made an offer. We couldn’t really refuse all cash, [crosstalk] $285 million. It was time to let them take the reign[?].
John: Again, a great brand. My kids love that place. My wife and I love it. You could eat very healthy there. Now, we’re seeing the migration in your journeyStart sharing with our listeners, please, Greg, the Veggie Grill story and how you ended up to be the CEO. Obviously, you really are a hospitality rock star. Talk about meeting the founders and and how you saw that this is the future of food.
Greg: I’ll have a million things about Veggie Grill, they’re fantastic, besides the guys who founded it, but basically, in the early ’90s, I started seeing that the restaurant business, there was this new way of eating called “Good food, fast”. It wasn’t called fast-casual back then. What it was was a way to, unlike fast food, QSR food, we’re drive-thru and kind of heat lamp-y kind of food, and the like, it wasn’t really good back in the late ’80s, early 90s. You had casual theme. like Friday’s and Applebee’s, and all that. There were sit-down restaurants with hostesses and waiters. It was this way of eating that was coming around where you go to counter, get much better food than fast food, but not had to deal with servers, bartenders, hostesses, and all that in a sit-down restaurant.
This fast-casual thing really got me interested in the business because it’s smaller footprints, less investment, but you still have great food and a lot of satisfied customers. That’s what Baja Fresh was, fast-casual, company I just was running, Zoës Kitchen, fast-casual. Chipotle, one of the most popular restaurants for us, today, in America, is fast-casual. [crosstalk] Veggir Grill is the same thing, fantastic food, fast-casual, but with a really important twist. That is, the food is incredibly delicious and indulgent, like rich, but it’s 100% plant-based. No butter, no eggs, no animal fat, no trans fats, no high fructose corn syrup, nothing. All really clean food.
I got introduced to Pillan and Kevin about a year and a half ago. I’m always out, looking at restaurants, especially in fast casual. Some friends of ours introduced this, and I went down to their second restaurant they had in El Segundo. I was blown away by the food. “Wow, this is amazingly good for the fact that it’s 100% plant-based,” You think of vegetarian, vegan, or plant-based food, you think of bland, mushy bowls of food, a lot of salad, and all that kind of stuff, but this was burgers, fries, fried chicken sandwich formats, beautiful salads that would be the envy of Cheesecake Factory, and it was all in this 2,500 square-foot restaurant. You were cranking it out in this little, tiny kitchen. I was blown away. Of course, my investment in other restaurant [inaudible] has got going. “What are you guys doing?” They invited me on to their Board of Advisors.
Last summer, I made a small investment in the company. They wouldn’t want to make me make a very big investment because they didn’t need the money. This winter, they invited me on to the Board of Directors. I knew they were talking about growing, taking this thing to the next level, and I said, “Well, what are you guys going to do for a CEO?” They said, “Well, funny, we were going to ask you the same question. What are you doing?” Conversations kept going, and pretty soon, we realized we could strike a deal that everybody would win. I’m really excited about what the future of this brand looks like.
John: Wow. I’m really excited for the country, too. For those who just joined us, we are so honored to have Greg Dollarhyde on. He’s the CEO of Veggie Grill. Mike and I have our webs opened. If you have got your iPad or your laptop in front of you, open up to their great website, veggiegrill.com. I’ve got the menu in front of me, Mike. I don’t know about you, but I’m starving, looking at this amazing menu here.
Mike: That’s why I have been letting you do all the talking, John. I’ve been trying to not drool too much. Seriously, Greg, I’m looking this over. Number one, I’m looking at the price point. Your price point is right on, partner, with any restaurant. I mean, I’m looking at it and it’s really right there, like any restaurants you’d go to, but what’s amazing to me, I look at these chicken dishes. First, the picture of the chicken salad and all of that, I’m thinking, “Wait a second. Vegetarian chicken?” I’m looking to see how it’s made, just a brief description. They’d go on to the menu, not only Santa Fe crispy chicken, but you’ve also got the beef lovers taken care of. If they want to start to migrate towards a vegetarian way of eating, you’ve got carne asada there, the All-American burger, you’ve got veggie cheeseburgers, Chipotle barbecue. This looks amazing. Like John, I’m really hungry, and I wish we were sitting and doing this radio show inside your restaurant.
Greg: Someday, if you guys want to do a live remote, we’ll empty the place and you can fire it up. We’ll make everything on the menu.
Mike: We might take you up on that. We’re not that far away from you. Honestly, this looks amazing.
Talk about this. Vegan food is becoming the rage. From Bill Clinton to Oprah Winfrey, everyone’s talking about vegan food. Now, I love eating vegan food. Share with our listeners. What’s the biggest myth, Greg? What’s the biggest hurdle that you have to overcome when you talk about plant-based vegan food?
Greg: Yeah. Well, first off is the guys. Educated women who are worried about how they look and how they feel, they get it right away. They come try us. They’re the early adopters. They’re the first ones. When we open up a restaurant and a new market, they’re the first ones in, and they know exactly what they want. They want All Hail Kale Salad. They want the lighter food. They jump right on it, and they tell their friends. When you open up a restaurant, a Veggie Grill, for the first time, you see a lot of women between the ages of 25 and 55, usually pretty well-educated or very hip, they’re the first ones in. [crosstalk]
What happens is, they start realizing that there’s food there for the guys. The guys are typically like, “I don’t like vegetarian food. I don’t want to eat a bunch of brown rice and sautéed vegetables, I want something that’ll stick to my ribs. I’m hungry.” [crosstalk] What’s amazing, this is what really got me most excited about Veggie Grill, besides I like the food, it’s very diligent and delicious. What got me excited about it? I was in these restaurants and these restaurants everybody, from cops to yogis. You’ve got big, burly policeman in there. They’re having a burger or chicken sandwich, and they don’t know that it’s 100% plant-based. We don’t bother them with information they don’t ask. They just eat the food and come and go. You have the yoga crowd, and those people, they’re seeking out vegan-based food.
The myth, I think, that we’re trying to overcome, is that [inaudible] everybody just bland and mushy, sautéed vegetables, salads, and bowls. Sometimes, the vegetarian restaurants are slow and they’re expensive. We try to make this fast and affordable. You also get service in the dining room that you would get in any other fast-casual, even when a little more people come by and refill your teas, they take your plates, but there’s no tipping. You’ve got the combination of delicious food, fair price, great crowd of people, and a menu that really works across the spectrum of people who are vegans and vegetarians, over to from the cops to the yogis, they’re in there.
Mike: We’re looking at this menu here, Chillin’ Chicken, Veggie Steak, Too Good Tempe, I’m starving here. Talk about, like is your chicken your biggest seller, and what’s the secret to the chicken?
Greg: Yeah. The biggest seller is the Santa Fe chicken sandwich, and that’s like the gateway drug, so to speak [crosstalk]. Veggie Grill is, you walk in and it’s funny, because people will be in active centers, like near a Whole Foods or something like that. People will [inaudible] stumble in, [inaudible] menu and go. You can tell they don’t know if they were going to stay or not. We try to intercept them and we say, “Now, I know this kind of looks like, maybe it’s complicated. Let’s make it easy for you. Just have a Santa Fe crispy chicken sandwich and have the sweetheart fries, which are made out of sweet potato. [crosstalk] If you don’t like it, it’s on us.” Everybody takes that one. No one doesn’t take us [inaudible] that offer, free lunch, if they don’t like it. We buy so few free lunches, because people taste it.
I work at [inaudible]. I love working in the restaurants during busy lunches and talking to the customers. I’ve had more people, you wouldn’t believe, tell me and go, “Okay. I thought you guys were a vegan restaurant. This chicken, where did you get this chicken from? Why is this vegan, and you guys tell [inaudible]. “It really is not chicken. It really is made from vegetable proteins, and in a very special way, it’s marinated with our “special recipe, secret recipe”, and then we batter it with a certain kind of batter, using coconut milk ant the like, and it just works. It just tastes good.”
John: Well, you know, it’s amazing. How many times have we heard, “Go ahead. Try it. It tastes like chicken.” Well, in this case, it really does.
Mike: You know, Greg, you’re right now in West Hollywood, LA’s Farmer Market, Santa Monica, El Segundo, Rolling Hills, Irvine, you’ve got a couple locations, you’re a guy with a big vision. You’re a serial entrepreneur with massive success in your rear-view mirror, but with big dreams again. Where can you take this now?
Greg: Well, we’re going to keep building our base in Los Angeles, but clearly, there’s a lot of this kind of eating up and down the West Coast, all the way from, Delmar to Seattle. People are eating more healthfully, and I want to make this, and this is going to sound really cocky, I want to be careful, but I think we can be the West Coast phenomenon for this kind of food. Again, it’s very approachable. It’s burgers and fries, sandwiches and salads that you recognize. When you see them, you taste them, you’ll love the flavors, but you’ll recognize it. It’s not weird. I think it’s going to catch on pretty well with the West Coast, because that’s going to be our focus right now, to stay in this time zone and probably Scottsdale, and then that market.
I think the next market is really would be the Northeast because there is a lot of demand. We get a lot of requests, “When are you going to open in this city? When you coming to-,” and we’re 6 little restaurants on the West Coast, we do get, “When are you coming to DC? When are you coming to New York?
Mike: Boston, New York, I’m sure.
Greg: My two favorite markets on the East Coast are Manhattan and Washington DC. [crosstalk] People are educated, they’re hip, they’re forward thinking, they’re on the move, and that’s our kind of customer.
Mike: You know, Greg, we have a picture of you here in the studio, and our listeners can see it up on our website, greenisgood.fm. You look like a healthy guy. We love CEOs that just not only talk a great talk, and obviously, you’re extraordinarily articulate, but walk a great walk. Talk a little bit about the evolution of your own diet. Are you now a vegan?
Greg: Yeah. I’m a 99.9% vegan. It was funny, it started as a challenge. When I started talking to Kevin and TK Pillan, they said, “Well, have you ever tried to eat vegan?” I said, “No, I eat healthfully. I eat a lot of fish. I don’t eat a lot of heavy, fat-weighted foods, but no, I’m not a vegan. My daughter’s a vegan, but I’ve never done it.” They said, “Well, have you ever thought of just trying it?” I said, “Okay.” It sort of threw the gauntlet down. “I give it 6 weeks,” so I ate 100% totally vegan for 6 weeks. I went down to the South Pacific for a surfing week and came back, and I’ve lost some weight. I still have my energy. It was funny because I expected to miss the protein. However, I used to start to do more research into this. I start realizing, there’s plenty of protein in plant-based eating, but what’s more important is, there’s plenty of nutrients. It’s a much more nutrient-rich way of eating. 100 calories of a kale salad is a lot different than 100 calories of bacon, even though they’re the same, still 100 calories. [crosstalk]
I started to get into it, and then it started become a game. “How can I eat vegan? Where can I go?” I’m in an airport in Atlanta. “What am I going to eat in Atlanta that’s vegan? Where am I going to go? How can I figure this out, besides just having french-fries, because they’re vegan?” It started to become like it more of a games, than more of a way of eating. Our food guy, Ray White, who is really a food Shaman, as far as I’m concerned, [inaudible] 16, 17 years and just plant-based, he said something to me that really caught my attention. It was like, “The more you eat this way, the more you want to eat this way. Your body actually starts to crave it,” and I’ll be damned, he’s right. It starts to happen that way.
I’m not going to say everybody has to. Most people I know want to eat in this healthful way once in a while, but mainly, people want enjoyment. Food is one of the last things in where you can really just sit down and have it your way, [crosstalk] eat it, and satisfy, and enjoy yourself, enjoy it with friends. We don’t prophesize. We don’t say, “The choices aren’t as good. [inaudible] is this choice.” We just say, “This is a choice, and for me has been a choice that through Veggie Grill, I’ve been exposed to a lot more ways to eat plant-based, and I’m not missing anything.”
John: That’s awesome. It looks like one of your tag lines here on your website is “the perfect indulgence”. Speaking of indulgence, I have a big sweet tooth. I see here, carrot cake, chocolate pudding, chocolate chip cookies. How good are these desserts? How do you make them without eggs and butter?
Greg: Yeah. That’s where Ray White comes in, the food magician. By way of a story, my girlfriend’s party, I had a birthday party for her in the last[?] summer, and I brought Veggie Grill’s carrot cake in. They can make it either in flat, small pieces that they use in a day-to-day basis, or they can make these great, big cakes that you can use for a catered event or something like that. I got a couple of these great big cakes. There was about 50, 60 people there. We started cutting up this cake, handed it around, and I didn’t tell anybody it was plant-based. Everybody loved it, “This is so good. Where did you get this?” I start telling them, “Yeah, you know what? This is vegan carrot cake,” and people look at you, like, “Right. No way.”
The way the company does it, it’s a way of using tofu for the carrot cake, tofu and natural vegetable oils, and evaporated cane juice instead of sugar. We use agave syrup instead of honey, because honey isn’t vegan. Ray found ways to blend these ingredients, in a way, in tofu. It’s amazing, the amount of products that are coming out now, that are plant-based, that are so close to the real thing, like Tofutti cream cheese, and things like that.
We’re able to, now, have those ingredients at our disposal, that 10, 15 years ago, they weren’t even around. [crosstalk] We stay in touch with the manufacturers and we’re working always with a couple manufacturers to find ways to improve it, but that’s how you do it. It’s natural vegetable oils, tofus. What you can do with soybeans now is just, frankly, amazing. All of our soybeans don’t have any GMO and that kind of thing.
Mike: You know, Greg, we’re down to the last minute and a half or so, and I just want to ask one last question. Talk about how Veggie Grill is good for the planet, besides good for our tummies.
Greg: Well, you know, a couple ways. One is, our business, we use all biodegradable plastic bags, and all of our take-out materials come from recycled materials or recyclable. The floors of the restaurants are made out of sustainable bamboo. When we serve our wine, we don’t use bottles. We have these tanks that get refilled, so we don’t have to add to the landfill with a bunch of bottles. A couple of our restaurants, we have people that come by and pick up our rice bran oil that we use for frying the fries and the like. They use it in their car. We try to do stuff like that. That’s more like a local kind of, [inaudible] level. [crosstalk]
On a bigger level, eating plant-based is much more sustainable than livestock. You know what’s going on in Brazil with the rainforest. Clearing the rainforest degrades[?] cattle. There is massive amounts of petrol chemicals being used to raise livestock, methane gases are dramatically higher from livestock. In the long run, in this planet, it’s not a sustainable way to live. We’re going to spend way too much economic inputs to make and grow that kind of food versus growing sustainable plant-based food. It’s like 10 times more efficient on the land to grow the same amount of protein for plant-based and livestock. We’re not busting anybody’s choices. I’ll tell you, in the old days, big old steak and a bottle of Cabernet, yum. However, when we have 7, 8, 9 billion people on the planet, we’re going to have to be more creative.
Mike: Well, perfect. Greg, we’re going to have you back on because we know that you’re going to grow this amazing brand, Veggie Grill, like you’ve grown all the other brands you’ve touched before. For all our listeners out there, go to Greg’s website, veggiegrill.com. Find out where there’s a location near you, right now in Southern California, but soon in a city coming to you, soon, when Greg brings them there. Good foods, fast. Veggie Grill, veggiegrill.com.
Greg Dollarhyde, you’re a hospitality and restaurant tour rock star, but now, you’re also a visionary eco-preneur and truly, living proof that green is good.
Greg: Thanks, guys.
John: This program will be available for downloading in a couple of days from our station’s website. Keyword, podcast. Thanks for listening, and join us again next week, at the same time, for another edition of Green is Good.
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