How a restaurant increased production 8x during the pandemic

"You said we're a team. One person struggles, we all struggle. One person triumphs, we all triumph." - Jason Lyle, Coach Carter (2005)

I live in Richmond, California. More commonly known as the city Coach Carter was set (god, I love that movie), and even more commonly mistaken as the Richmond District, the neighborhood that occupies the northwest corner of San Francisco.

Richmond is in the East Bay, about 15 minutes north of Berkeley. Any resident of the Richmond/San Pablo area knows the legendary street named Fitzgerald Drive. Fitzgerald Drive is a one-mile strip that features every mainstream fast food restaurant. Starting with In-n-Out, you're quickly introduced to Taco Bell, Carls Jr., Panda Express, KFC, Mels, Sizzler (think IHOP), Round Table Pizza, and finally capped by Wendy's, Burger King, and Wingstop all sharing the same lot.

If this sounds like paradise, come take over my lease! If you shivered to imagine your middle school chubby self (like I did), you're not alone (or maybe I am). Either way, over the past two years it's become hard to keep track of how many times I wish I had a healthy option for a quick meal in the area.

At this time, the restaurant and hospitality industry has experienced massive furloughs as many restaurants, especially Asian restaurants, have struggled to stay open for takeout and delivery due to supply chain shortages and staffing issues.

However, one restaurant has experienced the opposite and has instead achieved a growth spurt as a result of the current landscape. During the pandemic, Everytable went from producing 20,000 meals per week to 160,000 meals.

Everytable has a revolutionary restaurant model that aims to make nutritious, fresh food affordable, and accessible to all. In today's essay, I'm going to break down:

1. Everytable’s Operational Strategy

2. Why Everytable scaled production 8x

3. Everytable’s long-term vision for impact

Everytable’s Operational Strategy

Everytable is most well known for its variable pricing structure. They operate seven grab and go restaurants across Los Angeles, stretching from Brentwood to Compton. Pictured above, at the locations that serve affluent communities, they sell their ready-made meals for $8. While at their underserved community locations, they sell the same meals for $4.50-$5.00.

Initially, people might assume that the volume of sales at their affluent community locations are driving favorable margins to sustain their pricing model. However, it's almost the opposite:

1. Everytable has higher sales volume at their underserved community locations - if we were to take a weighted-average of revenue per meal sold, it would be lower than $6.50.

2. The margins at both locations are positive - each location is standalone profitable.

How Everytable is able to achieve this is through economies of scale. Everytable rents out a single commissary kitchen where they produce all the meals needed to operate their seven locations. This allows them to order from suppliers at a discounted rate and produce larger volumes of food to stock their stores.

The restaurant industry is known to have tight margins, with an average of 3-5%. Sweetgreen doesn't sell $15 salads to be pretentious and become a meme in the Finance and Tech community, but rather they have to price at that level due to their thin margins. Everytable having the ability to offer $8 meals at their affluent locations is one competitive advantage they have then over competitors like Sweetgreen where meals are almost double the price.

Regardless, come pandemic, both restaurants would suffer if demand was severely cut.

Why Everytable scaled production by 8x

Pre-pandemic, Everytable's volume of meals to serve all seven locations was 20,000 meals per week out of their commissary kitchen. At that point they were hitting less than 20% capacity for the space.

Sam Polk, Founder of Everytable, was quick to pivot Everytable once shit went down. This was done in two ways:

1. Scaling their subscription meal delivery service (think Freshly) and shutting down their corporate partnerships and stores.

2. Securing a partnership with the city of Los Angeles to be a food provider for senior meal programs and Project Room Key.

Los Angeles Mayor Eric Garcetti, announced a free senior meal program for the stay at home ordinance which allowed seniors to receive a couple of meal deliveries per week. After landing a contract with the city, Everytable became the exclusive provider of those meals. Additionally, Project Room Key was launched which is an effort to mobilize the homeless population and have them stay in vacant hotels and motels to halt the compounding spread of COVID-19.

The above pushed Everytable from 20,000 meals to 160,000 meals per week. For one city, that's quite the scale. To be able to do this in under a month? Incredible.

Further, as mentioned earlier, Everytable relies on economies of scale to drive a sustainable business model. Pushing volume 8x further helped their margins. Brilliant.

Everytable’s Long-Term Vision for Impact

Post-pandemic, it's hard to speculate what the restaurant industry will look like, but with automation of jobs and companies moving to remote work models (driving worldwide competition for jobs), there will be more need than ever for affordable, healthy food for the American population.

Everytable recently went through the bureaucratic hurdle to be able to accept EBT as payment for their meals, though there are looming questions about affordability even at their price level.

Though they only serve the LA area, for now, I hope they expand beyond the area and create products that not only target adults but children and babies as well.

Anyways, if I'm still in Richmond in the next two years, I hope that at the end of Fitzgerald Drive, there's an Everytable that we can count on.

Note: Big thank you to my friend, a current operations manager at Everytable, who provided such valuable information to construct this essay.

🔎 This Week’s Three

1. Binge-ing Airbnb’s Virtual Experiences, Worth It?

Reading this article helped me recognize Run the World’s upside.

Click here to read some eccentric experiences you could have on Airbnb.

2. Inside Kobe Bryant and Michael Jordan’s Private Friendship

What blows me away is Kobe’s tenacity that is exemplified through a deeper look at the transformation from mentorship to friendship with Michael and Kobe. The way Kobe’s curiosity shifts as he progressed in his life and journey is insane.

Click here to read about this legendary relationship.

3. University of California Will Stop Using SAT, ACT

Four reasons why I think this is a good move:

First - I didn’t read into what UC schools are considering for alternatives but with a smaller geographical subset of students to serve, if they create an alternative test hopefully it’s more culturally responsive to students in all areas of California. The SAT and ACT have to be nationally standardized which makes it harder to keep culturally relevant.

Second - Standardized test scores correlate with SES. Low-income individuals can’t afford test-prep programs that have capitalized on affluent individual’s ability to afford test-prep classes. This would hopefully level the playing field slightly.

Third - As earlier mentioned content is not culturally responsive and marginalized communities have teachers/educators that are struggling to teach to grade level, nevertheless build in the curriculum to teach how to test-take which is a skill necessary to succeed on a standardized test. Skills like timing, when to guess, how to start a problem/read a passage. That significantly disadvantages students who are at terrible public schools.

Fourth - Standardized tests have been extended to an asset on resumes to land jobs. It could shift hiring to be more equitable based on performance in college (this one I’m not too confident about)

Click here to read the news report.

Final Thoughts

Thanks for making it through to this point. I hope you all enjoy the long weekend!

Chocolate cake,

Daniel