Supersize this: McDonald's alums big bet on healthy food
No strangers to food in the fast lane, a handful of former McDonald's executives are trying to crack the code on providing food on the go that tastes good, and is good for you.
Those behind LYFE Kitchen hope that this relatively straightforward mission will enable it to grow at breakneck speed—much like the Golden Arches before it.
"The No. 1 thing ... to us, and what sets us apart, is our relentless focus on taste," said Stephen Sidwell, founder and CEO of LYFE's grocery division. "If we make our food taste better than unhealthy alternatives, it's really easy to make the right choice."
The company has both restaurant and grocery divisions. Its items, made with organic ingredients when possible, incorporate whole grains, responsibly raised meats, and local fruits and vegetables. Since introducing frozen products in January, the line has expanded to Whole Foods Market, Safeway, Costco and Stop & Shop.
"By September, we'll be in approximately 6,000 [locations] across the country," Sidwell predicted. "Pretty much every major grocery store across the country will be carrying our products."
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LYFE (for "love your food everyday") opened its first restaurant in 2011 in Palo Alto, Calif., and a second earlier this year in a Los Angeles suburb. Three to five more are in the works, with the company scouting locations in Chicago and the LA area. Each dish has fewer than 600 calories—a limit practically unheard of in restaurants—with entrées priced at about $15.
From these restaurants, the brand's been able to gauge consumer response to items before they hit store shelves. Many of its frozen meals are restaurant inspired—but only to a point since many ingredients don't always translate well to reheated items.
For example, the berries in the restaurant's oatmeal dish became frozen apples, pineapples and peaches instead in the boxed version because those reheat better, said John Mitchell, vice president of product development for LYFE's grocery unit.
"Our objective isn't really to replicate exactly the restaurant," Mitchell added. "We just like to use it as a sounding board for the grocery items."
At the helm of the company's restaurant division sits Mike Roberts, a former McDonald's global president and chief operating officer. The company's team also includes the person who invented the French fry carton and carry-out tray along with someone who created the McDonald's social responsibility team. This fast-food background shows up in the restaurant's emphasis on efficiency, technology and sourcing.
"What we've done in every part of our business from the senior management team to the chefs to our ambassadors is to be able to attract the best of the best," Sidwell said. "In order to bring this quality of food of America, we needed people that could help us scale as fast as possible. That's what our team is experienced in."
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The restaurant's top chefs come from a more upscale food background and include media mogul Oprah Winfrey's personal chef of 10 years and a vegan chef who cooked for Winfrey during her three-week vegetarian and vegan diet.
To fund its rapid expansion plans, the company's raised more than $40 million from family, friends and various company ambassadors. So far, the company hasn't turned to venture-capital or private-equity funding—a decision it's made for two reasons, Sidwell said.
"We have been very effective at just raising capital through our own network, and we feel that we are a brand for the people, by the people, including our investors," he said.
"We want to give small investors an opportunity to invest in us and grow with us who believe in our mission and vision," he added.
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LYFE's two-pronged approach could prove more effective than merely concentrating on restaurant expansion in light of one recent survey from the NPD Group, a market research group. It found that more than 50 percent of adults say they eat healthful meals always or most of the time at home, but only one in four say they eat healthy fare when they go out to eat.
"The bottom line is that even with an increasing number of restaurants offering healthier menu items or posting calories and other nutritional information, at the end of the day, consumers see dining out as a treat, an indulgence," said Bonnie Riggs, NPD restaurant industry analyst.
Despite these consumer preferences, restaurateurs are still banking on the viability of more healthful dining. In fact, a recent National Restaurant Association survey of professional chefs found that healthful kids' meals, children's nutrition, environmental sustainability and whole-grain items all placed in the top 10 expected trends for 2013.
Sidwell is optimistic, too.
"If we can make it taste good enough, it can be a catalyst of change where we take sacrifice, will power and discipline out of the equation," he said. "If we make it easy to make the right choice, we know people will."
—By CNBC's Katie Little. Follow her