November 14, 2005
Eagle Feather awards: Food for thought | O'Naturals serves its customers natural and organic foods, along with a spoonful of education about the environment
By Michaela Cavallaro
It's a sunny Monday morning in late October, and Mac McCabe is having trouble paying attention to the conversation at hand. He's seated at a table in the dining room of an O'Naturals restaurant, the Portland-based healthy fast food chain he runs. Nearby, a young manager in one of O'Naturals' signature baseball caps is consulting with a customer about the restaurant's wireless Internet connection, which is down at the moment. As McCabe chats, he keeps glancing over his shoulder at the situation. "Excuse me," he says finally. "I'll be right back." A moment later, McCabe is perched on the arm of a leather couch with the customer's laptop in front of him as he tries to convince the balky connection to link up.
McCabe is ultimately unsuccessful in that endeavor, but the episode demonstrates the extent of his involvement in even the tiniest details at O'Naturals, which he co-founded with Gary Hirshberg, CEO of Londonderry, N.H.-based Stonyfield Farms, in 2001. Hirshberg was convinced that families like his who value natural food would respond positively to a quick-service restaurant that emphasized fresh, organic food at fast-food prices. "We know that the supermarket customer who buys natural foods is also a heavy fast-food user because of lifestyle," says McCabe. "So we went to those people and said, 'What is it you want?'"
The answer, as O'Naturals sees it, is bright, airy spaces built in part with salvaged materials from sites such as the Pineland Center in New Gloucester and Brunswick Naval Air Station. Diners watch as their salads, stir-fries or sandwiches are made to order in front them, and eat them from plates and bowls using real silverware. Until recently, the restaurants' disposable cups were made from brown, rather than bleached, paper; McCabe says it was a disappointment to learn that the supplier had dropped the product from its line due to lack of sales.
In addition to adhering to these environmental principles, O'Naturals continually communicates its ideas to customers, with signs pointing out the salvaged construction materials and explaining the value of local food production. "It's critical to the planet," McCabe says simply. "We're as much talking about where food comes from and agricultural processes as we are what the food tastes like."
For its adherence to these principles, as well as O'Naturals' commitment to employees and its belief that its model will be proven successful financially ˆ although the company has not yet reached profitability ˆ O'Naturals was named Maine Businesses for Social Responsibility's Eagle Feather award winner in the large company category for 2005.
Today, O'Naturals operates restaurants in Falmouth, Portland, Acton, Mass., and, as of last April, Somerville, Mass. A fifth location in Portsmouth, N.H. proved unsuccessful and was scrapped after a year; McCabe blames the failure on a second-floor location and what he says is "a less vibrant downtown than we had realized."
The next step for the company, says McCabe, is franchising. O'Naturals is wrapping up the extensive paperwork necessary in order to sell franchises, and McCabe says he expects that process to begin "soon." He'd prefer that initial franchise buyers locate their restaurants in New England ˆ "close enough to be hands on," he says ˆ but, he adds, "If great partners show up in great locations ˆ Ann Arbor, Boulder ˆ we'll go there."
Adding more company-owned locations isn't much of an option at this point, says McCabe, because of what he describes as O'Naturals' "tiny" management team. "It's a capacity issue," he says.
The bottom line
While O'Naturals may have a small management team, its front-line staff is quite large: about 110 employees, half of whom work in Maine. When Hirshberg and McCabe started the company, they decided to put an emphasis on employee training, compensation and benefits. Over time, they've learned that employee training needs were greater than anticipated; new managers, for example, are now trained for two months, rather than the three or four weeks McCabe originally had envisioned. The result, says McCabe, is staff turnover he estimates as half that of mainstream, quick-service restaurants.
Still, he says, some turnover is inevitable. "Probably half our people are high school students, so they're going to leave eventually," he says. "But it's exciting how consistently they come back [to work at O'Naturals] on [college] vacation."
Reduced turnover obviously saves money, and McCabe says it also increases the quality of O'Naturals' customer service. "The person who serves you ˆ we call it the O'Naturalist ˆ is critical, and sometimes more critical than the food," he says. "The face on the experience is such an important factor in [gaining] repeat visitors."
The company also has built into its business plan weekly 10% Community Nights, in which each week a different nonprofit raises money by hosting a dinner at O'Naturals, which donates 10% of that night's profits to the cause, and O'Naturals Celebrates Schools, in which a local school promotes a specific project for which it is raising funds. The restaurant donates 10% of a week's dinner proceeds to the project, and allows school officials to set up an information table about it in the dining room. In O'Naturals' application for the Eagle Feather award, McCabe wrote, "All of these policies contribute to our bottom line because our revenues come from customers who are aligned with us in believing that you can serve delicious tasting meals without filling your body or your community with toxic substances."
As for that bottom line: McCabe says O'Naturals' three established locations are generating what he describes as "good to excellent cash." But, he says, "every time you open a new one, the company takes a step back. You end up overstaffing, adding different menu items ˆ it takes several months before you get everything straightened out."
As the Somerville location continues to establish itself ˆ and, presumably, investors start to show interest in opening O'Naturals franchises ˆ McCabe feels confident the company will achieve profitability. "The first question when we started this was, if we build it, will they come?" he says. "The second question is, can we achieve the restaurant margins, the restaurant cost of goods, and therefore make it profitable and desirable for a franchise environment? We think the answer is yes."
McCabe is ultimately unsuccessful in that endeavor, but the episode demonstrates the extent of his involvement in even the tiniest details at O'Naturals, which he co-founded with Gary Hirshberg, CEO of Londonderry, N.H.-based Stonyfield Farms, in 2001. Hirshberg was convinced that families like his who value natural food would respond positively to a quick-service restaurant that emphasized fresh, organic food at fast-food prices. "We know that the supermarket customer who buys natural foods is also a heavy fast-food user because of lifestyle," says McCabe. "So we went to those people and said, 'What is it you want?'"
The answer, as O'Naturals sees it, is bright, airy spaces built in part with salvaged materials from sites such as the Pineland Center in New Gloucester and Brunswick Naval Air Station. Diners watch as their salads, stir-fries or sandwiches are made to order in front them, and eat them from plates and bowls using real silverware. Until recently, the restaurants' disposable cups were made from brown, rather than bleached, paper; McCabe says it was a disappointment to learn that the supplier had dropped the product from its line due to lack of sales.
In addition to adhering to these environmental principles, O'Naturals continually communicates its ideas to customers, with signs pointing out the salvaged construction materials and explaining the value of local food production. "It's critical to the planet," McCabe says simply. "We're as much talking about where food comes from and agricultural processes as we are what the food tastes like."
For its adherence to these principles, as well as O'Naturals' commitment to employees and its belief that its model will be proven successful financially ˆ although the company has not yet reached profitability ˆ O'Naturals was named Maine Businesses for Social Responsibility's Eagle Feather award winner in the large company category for 2005.
Today, O'Naturals operates restaurants in Falmouth, Portland, Acton, Mass., and, as of last April, Somerville, Mass. A fifth location in Portsmouth, N.H. proved unsuccessful and was scrapped after a year; McCabe blames the failure on a second-floor location and what he says is "a less vibrant downtown than we had realized."
The next step for the company, says McCabe, is franchising. O'Naturals is wrapping up the extensive paperwork necessary in order to sell franchises, and McCabe says he expects that process to begin "soon." He'd prefer that initial franchise buyers locate their restaurants in New England ˆ "close enough to be hands on," he says ˆ but, he adds, "If great partners show up in great locations ˆ Ann Arbor, Boulder ˆ we'll go there."
Adding more company-owned locations isn't much of an option at this point, says McCabe, because of what he describes as O'Naturals' "tiny" management team. "It's a capacity issue," he says.
The bottom line
While O'Naturals may have a small management team, its front-line staff is quite large: about 110 employees, half of whom work in Maine. When Hirshberg and McCabe started the company, they decided to put an emphasis on employee training, compensation and benefits. Over time, they've learned that employee training needs were greater than anticipated; new managers, for example, are now trained for two months, rather than the three or four weeks McCabe originally had envisioned. The result, says McCabe, is staff turnover he estimates as half that of mainstream, quick-service restaurants.
Still, he says, some turnover is inevitable. "Probably half our people are high school students, so they're going to leave eventually," he says. "But it's exciting how consistently they come back [to work at O'Naturals] on [college] vacation."
Reduced turnover obviously saves money, and McCabe says it also increases the quality of O'Naturals' customer service. "The person who serves you ˆ we call it the O'Naturalist ˆ is critical, and sometimes more critical than the food," he says. "The face on the experience is such an important factor in [gaining] repeat visitors."
The company also has built into its business plan weekly 10% Community Nights, in which each week a different nonprofit raises money by hosting a dinner at O'Naturals, which donates 10% of that night's profits to the cause, and O'Naturals Celebrates Schools, in which a local school promotes a specific project for which it is raising funds. The restaurant donates 10% of a week's dinner proceeds to the project, and allows school officials to set up an information table about it in the dining room. In O'Naturals' application for the Eagle Feather award, McCabe wrote, "All of these policies contribute to our bottom line because our revenues come from customers who are aligned with us in believing that you can serve delicious tasting meals without filling your body or your community with toxic substances."
As for that bottom line: McCabe says O'Naturals' three established locations are generating what he describes as "good to excellent cash." But, he says, "every time you open a new one, the company takes a step back. You end up overstaffing, adding different menu items ˆ it takes several months before you get everything straightened out."
As the Somerville location continues to establish itself ˆ and, presumably, investors start to show interest in opening O'Naturals franchises ˆ McCabe feels confident the company will achieve profitability. "The first question when we started this was, if we build it, will they come?" he says. "The second question is, can we achieve the restaurant margins, the restaurant cost of goods, and therefore make it profitable and desirable for a franchise environment? We think the answer is yes."
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