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Why The Organic Coup is One of the Industry’s Most Important Companies

(To follow my day-to-day organic food adventures, please be sure to add me on Snapchat: maxorganic)

At first glance, it might seem like an outlandish statement to say that The Organic Coup is one of the organic industry’s most important companies. After all, it only has two locations and was started by people who have never run a restaurant before.

But when you understand just who these individuals are and the concept they have launched, you’ll come to see that this is not hyperbole in the slightest.

Based in California, The Organic Coup is the country’s first certified organic fast-food restaurant and was founded by Erica Welton and Dennis Hoover, two of the most influential organic food executives in the U.S.

Both of them spent their careers at Costco, where Erica was an extremely admired and astute food buyer for 12 years. She also had the foresight to bring organic milk into the company in 2003. After 33 years, Dennis retired as Senior Vice President for the Northern California region, overseeing 15,000 people and responsible for $11 billion in revenue.

(Dennis Hoover, Erica Welton)

Costco’s corporate culture, which gives each region tremendous autonomy, allowed Erica and Dennis to move away from chemical-laden foods and place a much greater emphasis on organic. As such, these two are widely credited as being the key figures in helping Costco grow its yearly organic business to $4 billion, which accounts for approximately 10% of the entire organic industry.

A WINNING MODEL, IN EVERY WAY

Along with their incredibly deep network of contacts and a proven ability to buy products, manage employees, and run operations, Erica and Dennis shrewdly created a certified organic restaurant concept that did not exist – one that is scalable.

While certified organic food products can be found in mainstream supermarkets everywhere, certified organic restaurants can be found practically nowhere. I believe that out of the few dozen certified organic restaurants in the U.S., the reason that not one has become a national brand has less to do with accessing capital and more to do with unscalable business models.

And that is the brilliance of The Organic Coup.

Scalability, especially as it relates to a certified organic restaurant, is all about the menu. The fewer the ingredients, the easier it is to execute from an operational perspective. More than that, a certified organic restaurant concept must be able to source an everyday supply of certified organic ingredients – without exception.

“Our experience is our business model, and it had to be efficient. Because everything is organic, we couldn’t have 100 items. We knew that we had to be disciplined,” acknowledged Dennis Hoover.

Deciding on which suppliers to use was a critical aspect of the business, particularly if the company aims to have hundreds or even thousands of locations. Yet, the ability to meet the growing demand was not the company’s only criteria.

“We chose vendors based on their quality of products, and they all differentiate themselves in their category. Plus, they’re all local,” said Erica Welton.

Some of these vendors include:

Mary’s Chicken – Mary’s free-range organic chickens are exploding in popularity because people love how they taste. This is largely due to the air-chill cooling process, which keeps the juices and flavor intact. The company is also Non-GMO Project verified and received a Step 3 rating from the Global Animal Partnership.

Nutiva – Nutiva is one of the premier superfood brands in the U.S. and supplies The Organic Coup with organic coconut oil, in which its chicken is deep-fried.

Hodo Soy Beanery – Hodo Soy is the country’s leading artisanal tofu maker and supplies the company with its organic tofu burgers.

THE GOODS

At its Pleasanton and San Francisco locations, The Organic Coup launched with a core menu of:

The Coup Signature Sandwich – chicken breast with spicy shredded vegetables on a toasted artisan bun
The Coup Wrap – chicken breast with spicy shredded vegetables on a multi-grain tortilla
The Coup Bowl – chicken breast on a bed of spicy shredded vegetables

Dressings – mustard vin, spicy bbq ranch, sesame ginger, and ranch

Organic Coup Popcorn – popcorn covered in caramel and drizzled in chocolate
Organic Coup Drinks – organic sodas and water

Pleasanton currently sells chicken tenders, and tofu burgers are now offered at each location.

“Anything we add has to make sense for our business and our customers. We decided against French fries because everyone else has them, so we added tater tots. In San Francisco, we are launching a breakfast burrito next week. We are also exploring pre-made salads and will be testing a veggie patty,” explained Erica Welton.

RAVING FANS CLAMORING FOR MORE

From Day 1, customers have been flooding the stores and lines are consistently out the door, proof that this concept is working.

“The acceptance has been overwhelming, and it just confirms our belief that there are so many people who want to eat clean food. We get emails from all over the world with people asking when we are going to open up in their cities. In the last week alone, we have gotten 300 requests about franchising opportunities,” said Dennis Hoover.

The very strong response by customers has not been lost on the investor community, as the company just closed a $7M round of financing, led by Costco Co-Founder Jim Sinegal. With this money, The Organic Coup intends to end 2016 with a total of 8-10 locations.

MY TAKE

Aside from its very impressive management team, a few things really stand out to me about this company.

First, our country desperately needs certified organic restaurants everywhere, and I believe that The Organic Coup will be the reason that this finally becomes a reality. Aside from having their own locations, The Organic Coup will serve as an inspiration to others.

Erica Welton and Dennis Hoover have shown the world what the model needs to be, and this model can and should be replicated with other foods such as pasta, salads, quinoa, hamburgers, pizza, burritos, falafel, and rice bowls.

Second, I am insanely impressed by management’s commitment to organic.

Getting organic certification for the restaurant is no small feat, but Erica and Dennis did not stop there. Employees are given Organic 101 tests, and they must also be able to articulate what makes The Organic Coup’s vendors so special. All of this learning all has a ripple effect because when employees have a good understanding of clean food, they can share this knowledge of organic with their family and friends.

Before launching The Organic Coup, Dennis Hoover was very clear about his intentions.

“I said that if I’m going to get involved, it is going to be big and it is going to be disruptive.”

This company will be big and it will be disruptive. And it already has become incredibly important.