Cava CEO Brett Schulman Talks Cyclospora Outbreak

**Bloomberg** (0:00)
Let's take a look at shares of Cava. They're up after reporting a faster than expected rise in sales in the most recent quarter. Salmon, pita chips, offsetting amidst July slump tied to consumer concerns around leafy greens. Joining us right now is the CEO of Cava, Brett Schulman, live here in Studio Two. Brett, great to see you here. 9% comp growth, that was great, that was above estimates.
Talk to me a little bit about the forecast. You maintained the forecast, you didn't cut it, but you didn't raise it either, why not?

**Brett Schulman** (0:26)
Well, we wanted to be prudent with our guidance to take into account what we noted to be the impact of some of the broader concerns around food safety issues, even though our supply chain or ingredients have not been connected to the issues, as well as some of the inflationary pressures that may persist throughout the year, and then certainly the volatile geopolitical and macroeconomic environment. So we wanted to be prudent with that guidance, but very pleased with the strength we saw in the quarter.

**Bloomberg** (0:51)
Just to be clear, there's been no link at all to this outbreak to Cava, but I do have to ask you, as a restaurant CEO, I'm sure you had to take a close look at your supply chain, your food quality, to make sure that there was no concern. You're confident right now that your supply chain is clean, none of your customers have gotten sick, and that going forward, you can sell with confidence.

**Brett Schulman** (1:14)
That's correct. No, there has been no connection to our supply chain. We have not been contacted by any public health officials, but we are closely monitoring the situation. We have an external advisory committee of industry-leading experts, because food safety is paramount to what we do. It's foundational to our guest relationship, and we want to make sure that our guests have the confidence that we are committed to having a food-safe environment.

**Bloomberg** (1:35)
Just one other quick question on that. Have you been in contact at all with any health officials, either at the federal level or at the state level?

**Brett Schulman** (1:41)
No, no, we have not been contacted, nor have we been involved. And again, we have not had any connection within our supply chain to any ingredients or farms or facilities that were impacted by the recent issues.

**SPEAKER_3** (1:53)
You're also opening restaurants at a pretty aggressive pace. I think 17 this quarter and around nearly 500 How much of this growth is Cava-specific, or how much of this is really maybe consumers trading down restaurants for more fast, casual meals like Cava?

**Brett Schulman** (2:09)
Yeah, we see people trading into Cava from full-service restaurants, from other limited-service restaurants, or as an alternative to the grocery store. Our food is very unique, differentiated, not easily recreated at home. I think people are shifting their diets more and more to a Mediterranean-style diet. It's the number one ranked diet for nine years running and delivering on all the needs that the modern consumer is looking for. Protein-dense, fiber-rich, nutrient-dense cuisine that is flavorful, but also healthful for you.

**Bloomberg** (2:38)
Well, I'm curious that I was looking through the conference called Transcript, and this GLP-1 issue was addressed, so it was an ozempic here. And you talked about this idea that people are actively reshaping their orders, doubling up protein, adults are ordering kid size portions, et cetera, et cetera. So give me a sense as to how you're adapting to that. Are you anticipating that these types of trends are indeed long-term structural and not just some fad that we'll move away from in a couple of weeks?

**Brett Schulman** (3:05)
We think GLPs are kind of just one part of this larger shift to people more interested in longevity, in health and wellness, but also bolder, more interesting flavors, and that's where our food sits at the intersection of. So we feel like whether it's GLP or some of these other secular trends, it's moving more people to our style of eating.

**SPEAKER_3** (3:24)
And you also called out, which is interesting to me, the pomegranate glazed salmon. Is that part of Cava's new strategy, introducing more higher end items and hopefully driving sales when it comes to that? Because even the extra pita chips, I don't think I've ever paid extra for a pita chip, but it seems like people are.

**Brett Schulman** (3:39)
Yeah, well, we are seeing people opt in to our premium proteins and attachment items. And salmon was really to have our first seafood item on the menu. Seafood is a core aspect of the Mediterranean diet, and we wanted to make it available to our guests. So very excited to have that on the menu and the reception that it's received from our guests.