The Veggie Grill chain has a new $22 million infusion of capital to fuel the plant-based concept’s growth outside the West Coast, the company said Wednesday.
The equity funding comes from both new and existing investors, including private-equity firm and largest single shareholder Brentwood Associates, as well as Powerplant Ventures, a venture capital firm created by Veggie Grill founders Kevin Boylan and T.K. Pillan.
Steve Heeley, Veggie Grill’s CEO, said the funding is earmarked for growth to help the 28-unit chain double in size within three years.
“We plan to continue to grow in current markets in Southern California, as well as possibly Seattle, where we have three units. But we’re also looking to move out of the West Coast region,” said Heeley. “We’re still evaluating markets, but we’re looking at the Midwest and the East Coast.”
Heeley said the plan is to focus on “a handful” of markets where Veggie Grill can build solid brand awareness. The new units will be company owned and Veggie Grill is not looking at franchising.
The chain will likely target more urban locations, where there is a potential for strong takeout and delivery business, and the restaurant size can be shrunk slightly to about 2,000- to 2,200-square feet. Traditionally, Veggie Grills have been around 2,600- to 3,000-square feet, said Heeley.
Down the road, Veggie Grill plans to move into nontraditional locations, particularly universities and airports, he added.
“We’re getting universities approaching us,” said Heeley. “The demand for veggie-based food is really accelerating, so they’re getting feedback from students and faculty that they want not just healthy concepts but more specifically veggie-based food.”
Fundamentally, Veggie Grill has tapped growing interest in plant-based eating, and not only from vegetarians and vegans, but from consumers in general who are looking to eat less meat.
“Our market research shows us there are a large number of what we call ‘veggie positive’ people who are our target consumer,” he said. “It’s not just vegetarians and vegans but people who want to move vegetables to the center of the plate.”
Veggie Grill, for example, will be the first fast-casual chain to serve the new Beyond Burger, created by Beyond Meat as a plant-based alternative to ground beef.
Correction: Oct. 27, 2016 This story has been updated to specify Brentwood Associates’ stake in Veggie Grill, and that the chain is the first in the fast-casual segment to offer the Beyond Burger product.