Why Emerging Chains Won’t Grow (very quickly)

O rganizers dubbed this year’s Restaurant Industry Conference in Los Angeles “What’s Your Why?” — as in, the reason for your business’ existence. When it came to the emerging restaurant chains on a sustainable procurement panel, the answer was fairly obvious: To source high-quality food from local vendors.

After all, declared Mendocino Farms CEO Mario Del Pero, one of three panelists: “Could we promote local farmers who deserved it?”

But doing so was threatening the fast-casual chain’s ability to add more restaurants because the small farms that supplied them were usually incapable of producing enough to match their growth.

Erick Oberholtzer, co-founder of Tender Greens, conceded the 22-unit chain has already out-grown boutique farms. “The more you grow, the harder it is to find farmers who can supply your needs,” he said, adding that slow growth allowed farmers to “grow with you.”

Snooze co-founder Adam Schlegel said he hired his Sysco sales rep to explain to broad-liners the importance of local sourcing. That, in turn, helped the chain’s sausage vendor to expand its business outside of Denver. “Broad-liners see this trend, and they are trying to adjust their products,” he added.

Yet there were advantages to remaining small. Among them, Del Pero claimed, were the close relationships formed with vendors. He cited how the chain helped a farm that had grown too many strawberries: “They called us and asked, ‘Any thoughts?’

Mendocino Farms took the extra fruit off their hands and froze it, later creating a strawberry-based drink. “What does a good partner do? We pivot,” he added. “It’s not just about the bottom line.”