Could the next fast-food success story be Greek-influenced food?
Some investors are convinced that Cava, a 12-year-old chain, could be the next Chipotle. While Chipotle fashions itself as a chain of semi-upscale Mexican food, Cava aims to add the same kind of ethos to Mediterranean cuisine.
At the present time, Cava is unprofitable, but it is in growth mode. Cava opened its first location in 2011 and currently operates more than 260 restaurants in 24 states. This month, Cava priced its initial public offering at $22 a share and sold 14.4 million shares, raising nearly $318 million.
“We think the markets are always welcoming long-term sustainable growth stories, especially category-defining brands, as we try and define the Mediterranean category,” Cava Co-founder and CEO Brett Schulman told Reuters.
In the U.K., the chain Going Greek has claimed success with eight London restaurants opened since 2019. In the U.S., Greek food is composed of smaller chains and food trucks, but Cava is reaching for some of what made Chipotle a hit since going public in 2006.
Since that time, Chipotle’s stock has gained 100% and the stock regularly trades at more than 50 times its earnings. After such success, it’s not surprising that investors are looking for a similar growth story. Cava may be that.