Cava Takes on Restaurant Industry Giants With Competitive Digital Infrastructure

Fast-casual restaurant Cava may still be a relatively small chain compared to industry giants, but with its investments into the digital space, the brand is looking to take on the largest players in the sector.

On a call accompanying its first second quarter FY2023 earnings release, the first such report since the chain’s blockbuster initial public offering (IPO) in June, the brand shared how its revamp of its app, its new digital ordering website, and its in-house microservices platform set the restaurant up for omnichannel success.

“This flexible platform positions us for sustainable growth, and our upfront investment in it will create leverage as we scale,” Cava president and CEO Brett Schulman told analysts. “We believe it’s an in-house digital platform few restaurants our size, much less many larger brands, have.”

Indeed, the results bear this out. The mid-sized chain, which had 279 locations at the close of the quarter, shared in its earnings release that its digital revenue mix was 36%. That’s comparable to that of competitor Chipotle, which has more than 3,200 locations, and which most recently reported last month that digital channels accounted for 38% of its food and beverage revenue.

As part of the brand’s eCommerce investments, Cava has built out catering and digital ordering facilities that operate apart from its physical stores.

“We have 10 digital kitchens that support centralized catering hub production and digital order pickup, along with five hybrid kitchens that offer standard in-restaurant dining and digital pickup, with expanded kitchens to support centralized catering production,” Schulman explained.

Certainly, digital pickup orders represent a significant share of total restaurant purchases.

Results from the February edition of PYMNTS’ Connected Dining study, “Connected Dining: Rising Costs Push Consumers Toward Pickup,” which drew from a survey of more than 2,100 U.S. consumers earlier this year, showed that 39% of restaurant customers reported having placed their last order for pickup.

Plus, adoption of restaurants’ digital platforms is growing. Additional data from a PYMNTS survey of nearly 2,500 U.S. consumers for the “ConnectedEconomy Monthly Report: The Urban-Rural Health Divide Edition” showed that digital participation in the restaurant sector is up 9% year over year among high- and low-income consumers and up 2% among middle-income diners.

Additionally, Cava is looking to improve its loyalty program with greater personalization capabilities to further drive digital engagement. The company plans to begin pilot tests before the end of the year, with plans for a full launch towards the end of next year.

These kinds of initiatives can be key, with the majority of consumers now engaging with restaurant rewards. Findings from PYMNTS’ March study, “Connected Dining: Consumers Like the Taste of Discount Meals,” which drew from a survey of more than 1,800 U.S. consumers, found that 51% were using restaurant loyalty programs.

“We are in the early phase of relaunching our [loyalty] program,” Schulman said, “creating the infrastructure to further drive traffic, mix, and check as we scale. … The team is developing foundational customer segmentation capabilities that will enhance personalization of the guest experience, … [The program] will be geared toward developing deeper connections with our guests, driving more frequent, relevant experiences that add value for both them and our business.”