DISRUPT YOURSELF: Building the Future of Restaurants with Digitally Native Brands at Dom Food Group

Ever wonder how restaurants are adapting to the rapidly changing world?  Join us in this enlightening episode of The Digital Restaurant Podcast as we dive into the future of the restaurant industry with our special guest, Mario Del Perro, a visionary from DOM Food Group and co-creator of Mendocino Farms.  Mario shares his unique perspective on the future of the restaurant industry as we delve into the importance of understanding your target audience, creating a craveable menu, and more as we dissect the essence of building a successful restaurant brand. Mario also enlightens us on the significance of a kitchen designed for off-premise and virtual orders and how to navigate the complex virtual kitchen space. 

We talk about the food delivery revolution and the ever critical topic of sustainability in the restaurant industry. You'll hear Mario's take on creating a delivery-friendly healthy menu that maintains freshness and flavor, even after a 45-minute journey. The conversation doesn't end there; we dive into the influence of Whole Foods Market and the significance of health and sustainability in the industry. It's a discussion you won't want to miss!

In this episode:

• 🌟 Digital Evolution [00:04:54]: Discover how Goop Kitchen, a digitally native brand, is revolutionizing the virtual kitchen space with its forward-thinking digital presence.
• 🍴 Culinary Diversity [00:04:00]: Mario sheds light on the importance of culinary diversity, creating differentiated and craveable products, and the rising trend of healthier food concepts.
• 🌱 Sustainability Meets Taste [00:16:19]: Delve into the challenges of crafting delicious, health-conscious food options and the strategic packaging decisions that tell a brand's story while maintaining food quality.
• 💡 Celebrity Impact [00:16:47]: Learn about Gwyneth Paltrow’s influence on Goop Kitchen and the authenticity she brings to the brand.
• 📈 The Future of Food [00:20:36]: Uncover the potential convergence of the restaurant and grocery sectors, and get a glimpse into the future strategies of Dom Food Group.

Whether you're a foodie, tech enthusiast, or someone passionate about the future of dining, this episode offers valuable insights into the ever-evolving landscape of the restaurant industry. Don't miss out on this opportunity to stay ahead of the curve!

Transcript

Speaker 1: 0:00

We're here at Create this week and recording some very special podcasts for Nations Restaurant News. We're going to be interviewing eight different executives from restaurants and also from the Ambassador Community to explore different themes of each of the chapters of the path to digital maturity.

Speaker 2: 0:53

So, mario Del Piro, thank you so much for joining us. We were doing Live at Create and we're going to talk about digital restaurant and you have become one, but you have a long history in the restaurant industry. Creator of Minnesota Farm.

Speaker 3: 1:07

Thank you for that. So Creator with my wife Ellen Chan. Yes, big fan, I find good partners. I like to think I'm really good at finding good partners.

Speaker 2: 1:18

And now at Del Piro, you are creating and incubating food concepts, as well as heavily involved in Goop Kitchen, so we'll talk a lot about those things today. We are excited to spend some time with you.

Speaker 3: 1:33

Thank you so much. It's mutual. I have a deep appreciation for what you guys continue to do for the industry, so informative and so helpful. So, yeah, I appreciate your word.

Speaker 1: 1:45

Well, our second book concludes, really, with saying where the future for restaurants may lie, and of course that is why we're very keen to speak to you, sir, because in many ways what you are building, we feel, is a vision of what many restaurants are going to head towards in the future. Now, don't agree. But of course, investing incubates food businesses that are leading scalable concepts of the future. Take us through some of the telltale signs for you of a restaurant brand's kind of future orientation.

Speaker 3: 2:18

Yes. So when I think of like what we're looking for, I think there's three boxes that need to be checked. And the first one is that it actually understands the audience that it's communicating to and it has like a real authentic voice with that audience. The second is like this is old, table stakes, but it better be filling a need that needs to be filled, and are they filling it more eloquently than others? Right? And then the last thing that we're really looking for is and again this is table stakes of, since you know the beginning of the first tavern in the first pub in medieval England, it better be cravable, it better be differentiated. So I mean for brands that we're looking for that's, those are the telltale signs.

Speaker 1: 3:13

There are quite a lot of chicken concepts out there today. There's quite a lot of brands that you could say are quite indistinguishable. What's given the fact you know you're behind a lot of things are very distinguishable. What is it to be distinguished in the food spaces? I mean, help us understand your kind of creative views on that.

Speaker 3: 3:33

Yeah, look, it can be more nuanced. But you know, we could have all said did there need to be another burger concept? But then Shake Shack came about right, so it doesn't have to be that you've created this new type of food. I mean, we were obviously my partners and I have been students of the business and participating in both casual dining and fast casual dining. But even in the creation of Goop Kitchen there were some some great signs that that were obvious. There are more movements that were like looking to identify that move.

Speaker 3: 4:11

The first movement that was obvious was that and this is pre-COVID, going into COVID is that people are wanting more off-premise and wanting, you know, now imagine DoorDash and Postmates and, for that matter, at the time, you know, some of the other bigger players were starting to come on board.

Speaker 3: 4:32

But the big deal for us was how do we actually take the digital brand to, kind of this next level, what is happening in the market right now? That isn't working and that's really how we, kind of back in, designed Goop Kitchen. So perfect movement is everyone wants better for you, but it better tastes great. What does that mean? Well, we have good. There's great indicators of places to learn from, you know, I think Medicino Farms is one, but Sweet Greens is another. There's actually a great concept that came out of LA called Tender Greens, so we had like some really really good premium fast casual players to look at. Now we asked ourselves what would be the next generation of that and we really were trying to design Goop Kitchen around that kind of that second generation of this premium fast casual.

Speaker 2: 5:25

I love that we would in the book, define it as a digitally native brand, and by that we mean it was really born on the internet. Right Goop, first and foremost, was a brand on the internet, a site on the internet. Right and everything about it interacts with consumers digitally and is optimized for that digital experience and then is fulfilled remotely. Yeah, so, as you went through that design process, how did you make it truly digitally forward and have that be the starting point, as opposed to something which I think most restaurants are doing, that's, tacking digital onto the side of the building? It's an afterthought.

Speaker 3: 6:08

Maybe we should do this right, almost like should we do off-premise as a. Maybe Can I go once farther back, meredith? I actually think that we were really looking at what wasn't working in the virtual kitchen space, because there's plenty of reasons to want to get into it. I mean, think about it. Billions of dollars have been spent on infrastructure. We just saw it not being the infrastructure not being used very well. So there's three things that we saw that were kind of hindering a lot of concepts from having great success. The first one was most of them whether it be the two players that we know about that we can leave unnamed unless they paid for in your sponsorship. No, they haven't, then they don't get the plug.

Speaker 3: 6:51

But most of their kitchens were really built in a mom and pop way. Well, you build a mom and pop engine, you're gonna get mom and pop sales. So the first thing that we were thinking of is you gotta build an actual Ferrari engine if you're gonna do Ferrari sales. So we need to reconceive. So, even though they built these buildings, we don't think the kitchens are designed for the sales that are needed, all right.

Speaker 3: 7:15

The second piece that was imperative was that in order to if you can do the sales, then you can actually oversee it. You can put in the systems, you can put in the senior level management and really run it like a restaurant group. Most of these places were being run in general. There's many of great brands out there, but in general they were being run like almost like a food truck right, with no senior level oversight, no mid-level oversight, not a lot of processes. You know none of those things. Then the last thing is is that they were creating these digital brands and actually going out and hanging their digital shingle on the digital highway and it's very expensive to have someone pull in, so expensive that then you stop doing the advertising, the marketing to find that and that customer acquisition cost doesn't work. So it wasn't a genius move, but we had realized with our relationship with Goop that this is a brand that actually people like they're purchasing, interacting on their iPhone, to your point, it's a digitally native brand. Now we just give them food.

Speaker 2: 8:25

Yeah, the consumers are already there.

Speaker 3: 8:27

It was not a leap. They're making things for the one time. It was not a leap. It was not a leap at all.

Speaker 1: 8:31

I love it. One of the things I think it's worthwhile for our audience just to do is talk about Goop for a moment, because obviously the food is the hero, but there's a certain Gwyneth involved as well. Is it related to that way? Take a straight. Well, tell us about Goop, tell us about the importance of that in this mix of them.

Speaker 3: 8:50

Well, you know the things that I would point out about both Goop and Gwyneth which I think are critical as people start to think about partnerships and navigating. That One is that, while Goop is a lifestyle brand, it's known for its beauty products, it's known for its G label, it's known for its wellness, as a site, as a content site, and actually the very first email that Gwyneth sent out 15 years ago was actually restaurant recommendations. So it is been. It's some of the most highly, some of the most of the content that's most interacted with is around food.

Speaker 3: 9:33

Gwyneth has a very particular point of view around food. She actually has three best-selling cookbooks. She has a fourth that completely delineate her point of view and it is a bit unique. She does truly believe that, like, healthy, food has to taste great. I mean her phrase is you know, if something's not good, it's a bummer bar. You know what I mean Like no bummer bars. And then the other aspect is so I would say, first and foremost, that it is food credible. She has a real authenticity, there's a real point of view.

Speaker 2: 10:08

So it's not just putting her name out of food.

Speaker 3: 10:11

Yeah. The second one is she's completely our partner and every single thing is tasted by her. Every single thing has to go through. We literally put the R&D kitchen next for our office in the Goop headquarters. She eats Goop kitchen more than I do, so we get an enormous. She has an incredible palate. We get tons of feedback. So she's a very, very integral partner and everything is approved by her. So we really feel like you know, as far as watering down the product or that we would scale too fast, she is the protector of the brand and we love that dynamic. So, yeah, no, it makes it a lot easier to create because we've got like very tight guardrails.

Speaker 1: 10:54

What I love about that is that you answer the question with the food first. The celebrity was set in that sense right, in the sense that it was all about the food and the celebrity endorsement of the food. And I think a lot of folks at times get nervous about celebrity endorsements because of the nature that sometimes that can go the wrong way, as we might know from other stories this year. But look, I think the important thing here is that the mission that you all are together about giving healthy food into more people I think is a really important part.

Speaker 3: 11:20

Yeah, no, I, you know it's critical and I think that there's been some you know great brands again. You know I reference, you know, the Mendocino Farms, the sweet greens of the world that really have made better food and kind of democratized it. Where it's not so, you know, it's maybe a dollar or two more expensive, yet literally has taken a kind of a higher stance around supply chain. It was important for us with the Goop Kitchen brand to still make it very accessible it's only one or two dollars more than Mendocino Farms and sweet greens and we've really kind of we take it on the cost of goods side to make sure that we are over indexing on the accessibility side. And I think it's both well for us to kind of building that relationship with our guests and widening, I guess, the birth of kind of the Goop brand, which has been known for having some things that are pretty expensive.

Speaker 1: 12:14

Yeah, we all live in California and we know there are different dietary tastes across the country. In the world Does good work elsewhere, do you think?

Speaker 3: 12:24

Well, I mean, you know we always like to say at Dom Food Group like in everything that we invest in and everything that we incubate, we want to build an enormous amount of cheat code. Right, that's like our little phrase. Now, that can mean a lot of things. You know, with this brand, as Meredith eloquently pointed out, it's a digitally native brand. We can literally look and scrape sales of certain products from Goop to neighborhoods on where to put these restaurants.

Speaker 2: 12:53

Amazing, that's a good screw in the joy right. Remember they were a coffee shipment business and they looked at where the coffee was shipping to and that is where they put the ingredients. That's why they entered Chicago right after Seattle. It's a great call-out and it's amazing absolutely amazing that you're able to use the data in that way to figure out where you will be popular. Yeah, incredible. And how many locations are there now?

Speaker 3: 13:15

So there's five locations now. So, around the LA area, we just entered Costa Mesa Not more than a couple months ago.

Speaker 2: 13:25

I am most familiar with that location because it is in my neighborhood. So again, thank you very much. I now have a Mendocino Farms and a Goop kitchen.

Speaker 3: 13:32

We built it for you.

Speaker 2: 13:34

Within a mile of my house. That's fantastic and, of course, as soon as I saw that it were opened, I ordered from it. Amazing, and actually took an unboxing video of the packaging, which I'll post separately. Very cool.

Speaker 3: 13:48

I did that because it was really impactful. Thank you.

Speaker 2: 13:52

And it felt very much like I was receiving a gift. Tell me as you thought about putting that packaging together. How did you make those choices? Why did you choose what you chose? And then, separately, we'll show people what it looked like.

Speaker 3: 14:09

Yeah. So really we were a bit of a quandary because we don't have a brick and mortar. So how do you interact? How do you feel the brand Right?

Speaker 3: 14:19

So we knew that in our packaging there needed to be a lot of storytelling. A lot of representation of the brand's values needed to be articulated, some spoken, some unspoken. So that was step one that we needed to do that. So all the way down to we had to find someone. Apparently, even if you have the most recyclable paper the handle on the recyclable paper bags the fancy ones aren't recyclable. So we had to have a custom made recyclable handle, which had never been done in the business for as much as we could do. So we had that. That was custom. The other big thing for us and those two pieces was one is we knew that our guest was not going to enjoy that product for probably 30 to 45 minutes after it left our kitchen. So we needed to make sure that it wasn't like will it still be good in 45 minutes, was not? The threshold is so we're going to eat it 45 minutes. Is it delicious? And if it's not, then we need to actually re-engineer.

Speaker 2: 15:23

So have you taken your food for a ride and see how it is? 45 minutes.

Speaker 3: 15:27

I wish that we had video of walking around in the middle of the pandemic, the Goop headquarters of which you know. We were like the only ones there, but literally jostling the bags like as if we were a driver that didn't care.

Speaker 2: 15:41

It's a top tip everyone, by the way.

Speaker 3: 15:43

we don't think we don't think drivers don't care, but we were trying to go to the lowest combinator of the every driver and still actually them presenting it.

Speaker 3: 15:52

And so we would do our final tastings, you know, with Gwyneth, were after 45 minutes of jostling. Wow, that's great. So that's why you saw innovations like we had, while we do have full boxes for certain salads or certain bowls that we've almost done bento style, and that was to try to keep those things in place. And then the last one and this comes from, you know, we have some pretty deep roots Dom food group in grocery. So both as investors in in Mendocino farms actually had Whole Foods Market as one of its early investors and we tried to do a ton of projects with them. We needed to build one of the first store in stores, but we had a ton of time developing salads for Whole Foods, none of which were successful. But you learn from your mistakes, right.

Speaker 3: 16:45

And so in the design, what we were really hoping for and we were really happy that came to fruition was that we thought that based on delivery, because people I don't care like you know how wealthy you are you want a good value and how can you offset those costs for delivery. So what we were hoping for is that people would order multiple for multiple of their occasions, so maybe for three meals on these salads and could we get a three day shelf life and we were setting this aside. So a lot of that packaging is so it can go back in your refrigerator and actually still be delicious the next day. And in fact we have some of the largest cart sizes that Dorda has ever seen in the restaurant space because we actually have a hopefully a Meredith ordering three salads or maybe I don't know, I'm going to grab that for my kids' lunches and we're getting very, very large cart sizes because we have a great shelf life on the product.

Speaker 1: 17:45

We talked about health. We talked about sustainability with regards to the bags that you just described, and is that going to be something we're going to see more from restaurants going forward? Do you think or do you think health and sustainability is becoming more and more important and you can answer that without the dom pattern if you wish, because I'm just curious, because it feels like there's a huge opportunity in our industry to explore more of these things, and that could extend also to the way in which delivery works as well.

Speaker 3: 18:13

Yeah, look, I I've already referenced, I think, what, what, what the Whole Foods market, lift, and what John Mackie and what you know, that the vision and that team and what they executed and even you know still being done. You know somewhat, post Amazon Acquisition, you know, like I mean, like Walmart has an organic section now, right, like it's amazing, but that's that's those. You know. Whole Food market, you know lift, right, it really kind of introduced and there's a lot of pieces to that where, if I was to really Kind of prognosticate like where's like the world can you know possibly go? Is that? I think that we have a consumer base that is constantly wanting to be more and more educated and that's exciting.

Speaker 3: 19:06

You know people now and now, with virtual kitchens, which is a probably a whole nother podcast, when you talk about is you know the capability of doing Food that is more niche, that really couldn't support a brick and mortar. You're not gonna open a, a Keto restaurant. I mean you might open a gluten-free restaurant, but you know so, true, but you know, like, goop Kitchen is gluten-free. We just like, we're only, we're only telling you if you wanted to find that, you know what I mean. But we're, you're able, in the virtual kitchen space to actually do a more niche concept. Yeah, so, as you know, you have like these themes that are big, that you know, to Buenos Credit, she's been talking about them for five, eight years things around gut health, things around inflammation, and like what in the power of like that food is really thy medicine, you know? But but Again, it's got a taste great, right. So do I think that that's like a trend that's not going away a hundred percent, but again, I think, where a lot of people miss it, it's got a taste great, right. You've got to be able to deliver someone. I mean, have you had the brownie yet? Oh, oh, my god, we got to get you the brownie. So, like chef Kim floresca, create a brownie with no refined sugar that you lose your mind for gluten-free, no refined sugar. Yeah, wow, right, it should be a. By the way, it should be a bummer bar. It should be called a bummer bar, but it's not. It's a delicious bar. So so you know, there's that.

Speaker 3: 20:42

You know we she ended up spending weeks with with our executive sous chef Brett, creating the miso salmon dish. Now, miso salmon, as we all like. If you've ever tried to do a miso cod. It is refined sugar on top of refined sugar on top of refined sugar. Yet we have a miso salmon that has no refined sugar, right, so it's. It's those pieces of the puzzle. That that, hopefully, that you know, I don't think that we're necessarily, you know, the leader in at five units, but at least we're a data point for others to look at, and as are some of these other great brands that are far bigger, but I think we're definitely a pace car and we're on the precipice of kind of showing people that you can make money selling healthier food yeah, showing people with us, and part of that is in the food innovation like you're talking about with the brownie here or the Mesa salmon and showing that it can be done, but then, as you said, showing them not only can it be done can be excellent.

Speaker 2: 21:44

Consumers can want it and you can make money doing it, and I think that then causes brands that already have a huge installed base to say how do we start innovating and eventually you end up with one where you're having an organic section right, right, yeah, no, I mean, well said, look, we spent almost a year and a half on our gluten-free dough for our gluten-free pizza year and a half but our threshold wasn't can we make a good tasting gluten-free pizza?

Speaker 3: 22:15

Our threshold was can we give it to a six-year-old? And they don't ask Mommy, daddy, why does this pizza taste different? So you know, we held ourselves to just this higher threshold, right that it wasn't like oh, it's great tasting health food. It needs to be great tasting food, right.

Speaker 1: 22:33

Let's finish up and talk about the future for a Dom Food Group. What does that look like? What does success a year from now feel like? Where do you think you're going to be in five, ten years from now? And is food innovation going to continue to be at the heart of the business and all of that other parts of the technology roadmap that you guys excited?

Speaker 3: 22:50

Yeah, I mean, you know we can talk at length. You know we have, I think, one of my partners, one of the most progressive people in kind of the digital marketing space, nathan Tan, who now you know, runs multiple digital marketing teams in multiple different brands. You know we have a partnership in a CPG product with a 150-year-old One of the largest meat companies in the world has done their first JV with our company because, you know, they wanted to create relevant food and they've been able to reinvent themselves to stay, you know, in business for 150 years, which we could all wish that we could say that. So you know I commend them that they did their first JV deal with us. So what does it look like?

Speaker 3: 23:39

At the end of the day and you almost referenced this multiple times in your book I think we're at one of the most unique spots in the last 40 years in the restaurant space. You have this convergence of restaurant and grocery. That's fascinating. You have this unbelievable infrastructure that we've already referenced of virtual kitchens. You have this unbelievable infrastructure of delivery that's existing and all of it is currently a bit of the Wild West and we're now just learning things right. It's almost it feels like that we're in the gold rush and we've had the first wave of individual miners and now actually more. You see more sophisticated companies starting to step in. I mean, looking, what Chick-fil-A is doing in the virtual kitchen space is genius. The fact that they pulled out all their delivery drivers and you don't know when you order delivery from Chick-fil-A but it's coming from one of these virtual kitchens, or Starbucks has created their thoughtful throttling, so 22 Starbucks are offloading extra delivery to the virtual kitchen space. I mean, this is, you know, now when you're starting to see the Levi Strausses and some of these other bigger players coming into the gold rush. So it's a really, really interesting time and we love being able to be kind of on the forefront of that.

Speaker 3: 25:12

I also think that this blending or blurring of grocery is fascinating. Looking at a concept which you know I would say only works in LA and New York, but it's untrue, erwan. I mean here is I mean, yeah, it's a grocery store, but it's like 50, 60% prepared foods. I mean that is a perfect example of blurring the lines of restaurant grocery. Like, what a great time they're in the space. So what does it look like in five years from now that? I think that Dom Food Group. We're continuing to try to hire the best and brightest people, the thought leaders in each one of these categories, to come join our team, and I believe that we'll be kind of at the forefront of that, and hopefully with a bunch of our friends, because I do think that all ships rise with high tides Wow.

Speaker 1: 26:02

With that, I think we should bring it to an end. Thank you so much for joining us. We really appreciate it. We're big fans, and good luck to you and the rest of the team Appreciate the business, appreciate you guys.

Speaker 3: 26:11

Thank you so much, thanks so much.

Speaker 1: 26:13

The Digital Restaurant podcast is available for you to follow and subscribe. Wherever you listen to your podcasts, watch us, rate us and subscribe to the Digital Restaurant on YouTube, and follow along on all our social media digital restaurant channels. Thanks for listening.