By Samantha Bomkamp
WWR Article Summary (tl;dr) “Fooda” is a workplace food program that brings in a different pop-up restaurant to serve as the office lunch vendor each day. Now operating in 10 cities, Fooda takes a cut from each sale but says no money typically changes hands with the buildings in which it operates.
Office workers can get stuck in a vicious lunch cycle: Lunch from home? Boring. Eating out? Often too expensive, and there’s rarely enough time to get away from your desk.
Fooda CEO Orazio Buzza sees that problem as a business opportunity. Chicago-based Fooda is a workplace food program that brings in a different pop-up restaurant to serve as the office lunch vendor each day.
The company, which made $48.3 million in sales last year but is not yet profitable, has now grown to 10 cities and is in about 800 offices or buildings. Fooda takes a cut from each sale but says no money typically changes hands with the buildings in which it operates.
This interview has been edited for length and clarity.
Q: How did Fooda get started?
A: We started at Echo Global Logistics, the company that I was at before Fooda. I was the president of the company and as the company grew, one of the other people on the management team put together this food program where they solicited a restaurant to come into their space. That was in 2007. It eventually became a five-day a week program. It was one of our most-used perks at Echo.
About a year later, one of our people on the human resources team came in and said “Hey, some of our employees are complaining because the (food) lines are getting too long. And the reason they are getting too long is because a lot of people are in line are people who don’t work for Echo.”
Probably a week or two later, the light bulb went off in my head and I thought: Why not leverage that concept to build a business?
And so we started doing research on a couple things: One is what employers and employees were doing at the time. Two, how restaurants would perceive this. I thought if we could sign up some of the biggest companies in Chicago, then it would be an even stronger value proposition for a restaurant because they can really drum up some lunch business if they could have regular business with a company that could provide that.
And while we were doing that research, we started to test things at more and more sites, and get customer feedback.
Q: When did you officially launch the business, and how have you grown since?
A: We launched in Chicago in 2011, stayed only in Chicago until the end of 2013 when we added New York City. We just opened our 10th city.
Q: What was the 10th?
Q: What do you look for in a new city?
A: Our program works in dense urban areas and suburban surroundings, so really any of the top 50 metropolitan areas in the country would be a good target for us. But then on top of that, our program is primarily geared toward employers that have more than 400 or 500 people in a location.
We want to make sure there’s a good number of addressable customers in the locations that we work so we have a way to analyze a market, make sure there’s enough demand on the customer side, and then we also look at what the restaurant side looks like, in regards to independents versus regional and national chains. Of the restaurants we work with, probably 75 to 80 percent are local, independent restaurants and about 20 percent are chains.
Understanding the profile of a market going in and understanding how that makeup is going to look is important as part of the launch process.
Q: Do you spell out how the restaurants should serve within the popup?
A: Absolutely. We have a training program that, when a restaurant signs up for Fooda, we take them through. We work on the menu with them because we know what food travels well and what doesn’t. We work with them on pricing, and then we train them on how to package it, how to transport it, how to lay it out, what equipment they’re going to need.
Now, a subset of our restaurants have been doing large-scale catering for years and they clearly know what they’re doing, and it’s more of a guideline for those restaurants because they’re already experts.
Q: How often do you rotate restaurants and how do you choose?
A: A typical site wouldn’t see the same restaurant more than once every four to six weeks. We want to make sure they’re getting lots of variety and in turn, the restaurants get exposure to many more locations. The variety helps on both sides. It keeps things fresh.
Over time, they tend to have their favorites. We’ll analyze sales data, and based on site-level metrics, we’ll target a restaurant to go back more often at one site versus another depending on how it’s done previously.
Q: What food travels best and what doesn’t?
A: Barbecue travels really well, Mexican food travels really well. And salads, obviously. Anything cold does really well. We primarily sell hot food, and it’s all cooked at the restaurant and transported in catering equipment.
Things that get tricky are things like burgers and fries, or things that are deep-fried. We do have a couple of burger restaurants that are capable of doing a good job transporting but it’s definitely a lot harder to do that. Fries are almost impossible.
Q: What’s next for the company?
A: We added three cities this year, and so we’re just heads down, focused on expanding geographically. We’ll probably add another couple of cities this year. Next year, we’ll probably add eight to 10 cities.
Q: Do you tend to saturate a city before you move on to the next?
A: Yes. We have a launch team that focuses on one city at a time. At the end of the day, we’re a marketplace. In order to make an effective marketplace, you need critical mass. We need enough restaurants that we can offer really good quality and variety and we need enough companies that we can offer enough exposure and ongoing business to keep the restaurants interested.