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ORGANIC TO GO HEADS EAST FOR HEALTHY GROWTH

By Dakota Smith

Seated at one of Organic to Go’s outdoor tables on Wilshire Boulevard in Los Angeles on a recent Tuesday, Briana Conway had just finished her lunchtime salad and was going over some work documents.

In Los Angeles on a weeklong business trip and unfamiliar with area lunch spots, the 25-year-old had spied Organic to Go from her building across the street. “I saw the sign,” said Conway, who was visiting from Kansas City, “and thought, ‘They probably have healthy options.’ ”

Conway’s first visit to Organic to Go, a Seattle-based company with 15 units on the West Coast, didn’t disappoint, and she predicted she’d return for lunch the next day.

With a name like Organic to Go, the chain lets customers know what to expect. Seventy percent of Organic to Go’s breakfast and lunch offerings are stamped USDA organic, and the remainder of its fare uses natural ingredients. The company defines “natural” as food that is, among other things, “minimally processed and free of irradiation, artificial additives, and ingredients such as artificial colors and sweeteners.” Geared at working professionals willing to pay a premium for organic choices — dishes here cost about 50 cents more than competing fast-casual restaurants — Organic to Go offers a healthy mix of pre-made options, including egg-white breakfast burritos, Mediterranean pasta salads and grilled salmon. The stores also offer smoothies, baked goods, desserts and an extensive salad bar. Other brands are also represented, with Organic to Go stocking Newman’s Own potato chips, health bars from Odwalla and drinks from Honest Teas, Adina Juices and Vitamin Water. If sit-down restaurants have already caught on to the organic trend, few quick-service restaurants focus on the market, says Annika Stensson, manager of media relations for the National Restaurant Association. (Quick service is defined as a restaurant without a server, an establishment where customers usually pay at a register.) “If a quick-service restaurant is serving organic, they are ahead of the curve,” said Stensson.

Pamphlets about Organic to Go’s approach to healthy living can be found throughout the store, while wraparound text on select store walls reads, in part: “Our commitment to purity starts at the farm, it’s what’s inside that counts!” Additionally, photos on the walls display vendors used by Organic to Go. At the Wilshire store, a photo of a farmer from the Regli Family Organic Dairy Farm, a vendor from Ferndale, Calif., was displayed.

According to Organic to Go founder and CEO Jason Brown, the company works hard to know everything it can about its vendors. (Incidentally, Organic to Go and grocery store chain Whole Foods share many of the same vendors.) “If we are buying from Freebird Farms in Pennsylvania, we want to know how they are raising their chickens,” said Brown.

A self-described former hippie who attended the University of Colorado at Boulder in the 1970s, Brown says the idea for Organic to Go came to him while he was running another company, a nutrition company he eventually sold to Drugstore.com. “There was always this great disconnect between what I ate at home and what I ate at business meetings,” said Brown. “I’d have all this great, clean food in my fridge, but during meetings, we’d always be eating mystery meat.”

He cites Pret A Manger, a London-based fast-casual company known for its fresh fare, as inspiration for Organic to Go. Founded in 1968, Pret A Manger currently has stores in the U.K., U.S., Hong Kong and Singapore, according to the company’s Web site.

The retailer opened its first unit in 2004, a 1,000-square-foot space in a small strip mall in Issaquah, Wash. Organic to Go now runs 15 stores in Washington and California. Additionally, the company operates about 100 kiosks in hospitals, universities and office parks in Washington and California.

Forty-five percent of its business comes from in-store sales, 45 percent from delivery and catering and 10 percent from kiosk sales. Although it is primarily a lunch spot, about 20 percent of Organic to Go’s in-store business is breakfast. Additionally, Brown says it’s not uncommon for a lunchtime customer to grab an extra item and eat it for dinner.

Striving to create a relaxed environment, Organic to Go’s stores, which range from 1,000 to 2,000 square feet, offer numerous tables and couches, as well as free Wi-Fi.“We’re a happy social place,” said Brown. (One drawback for on-the-go professionals: The majority of Organic to Go’s stores don’t offer working power outlets for laptops.)

In 2008 the company will head east, looking to open spots in Denver; Dallas; Alexandria, Va.; and Boston, according to Brown. “We’re comfortable with most retail spots,” said Brown, noting that the company will continue to look for roughly 2,000-square-foot stores. “We’re comfortable being in a stand-alone spot, a mall, or being in the belly of a big office building.” But if Organic to Go works well in both small and large shopping centers, the chain is definitely an “urban concept, not a suburban concept,” he said.

For landlords concerned about odor, there is no cooking done in Organic to Go’s stores. Food is prepared in an outside location and heated up at stores by means of Turbo Chef technology, says Brown.

Creating a brand around the organic market is a convenient way to differentiate oneself from competitors, according to Paco Underhill, the founder and managing director of Envirosell, a New York City-based research and consulting firm studying the retail and service industries.

Plus, with customers increasingly flocking to organic fare, organic is now a “moral decision,” according to Underhill. “It makes us feel better to know what we are eating, and thus, we’re willing to pay a premium for it.”

Spending on organic continues to increase year over year. In 2006 U.S. consumers spent $17.8 billion on organic products (food and nonfood goods), a 21.8 percent jump from 2005, according to the Organic Trade Association, a Chicago-based trade group of organic businesses. Of that figure, sales of organic foods (defined as food purchased at places like grocery stores or farmer’s markets) grew 20.5 percent in 2006 from 2005, and accounted for $16.7 billion in consumer sales, according to the group.

Despite the increasing number of people going organic, Organic to Go is tapping a narrow audience, believes Robert Sandelman, founder of Sandelman & Associates, a San Clemente, Calif.-based market research company covering the restaurant industry. “It’s not something that is going to have mass appeal,” said Sandelman. “It’s not going to be taken hold of by the average consumer.”

Still, he notes that the fast-casual healthy segment of the lunch market is growing quickly, largely because there aren’t many competitors. According to Sandelman’s research, last year, the average consumer spent $5.04 on lunch (by comparison, they spent $5.44 on dinner and $4.35 on breakfast).

Organic to Go’s practice of offering free Wi-Fi at every store is important, he adds, because customers who want healthy fare also want to be able to check their e-mail or work during lunch.

If Wi-Fi is crucial, so is quality fare. “More important than calling something organic is that the food must taste good,” said Underhill. Certainly a handful of the customers at the Wilshire restaurant that Tuesday reported the organic fare tasted not just good, but great. “It’s delicious, my compliments to the chef,” said James Krohn, 58, who was enjoying a grilled- cheese sandwich and vegetable chili.

A Santa Monica resident, Krohn says he eats at the restaurant whenever he finds himself in this part of Los Angeles. “Obviously, organic food tastes better,” said Krohn, who works as a bodyguard for executives and celebrities. Krohn, a vegetarian, also says he believes in Organic to Go’s “healthy body, healthy minds” attitude. “People who serve organic food are operating at a higher level of consciousness.”