Cava CEO Brett Schulman Talks Cyclospora Outbreak

Summary

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Bloomberg Talks: Cava CEO Brett Schulman on Cyclospora Outbreak & Business Growth

Episode Date: August 12, 2026
Host: Bloomberg
Guest: Brett Schulman, CEO of Cava

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Episode Overview

In this episode, Bloomberg interviews Brett Schulman, CEO of Cava, following the company's strong quarterly results and amidst consumer concerns around a cyclospora outbreak affecting the industry. The conversation covers Cava's robust financial performance, food safety measures, trends in consumer behavior—particularly around health and dietary shifts—inflation and pricing strategies, expansion tactics, digital innovation, and distinctive marketing approaches.

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Key Discussion Points & Insights

1. Quarterly Results & Approach to Guidance

• Cava’s stock rose on stronger-than-expected quarterly sales, with 9% comparable sales growth.
• Brett Schulman emphasized a prudent approach to financial guidance, citing ongoing food safety concerns, inflation, and volatile geopolitical factors.
  • "We want to be prudent with our guidance and take into account... broader concerns around food safety issues... inflationary pressures... and volatile geopolitical and macroeconomic environment." – Brett Schulman [00:56]

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2. Food Safety & The Cyclospora Outbreak

• Schulman firmly stated that Cava’s supply chain is unaffected by the cyclospora outbreak; no customers have gotten sick, and health authorities have not contacted Cava.
  • "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." – Brett Schulman [01:44]
  • "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... impacted by the recent issues." – Brett Schulman [02:11]

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3. Restaurant Expansion & Fast-Casual Growth

• Aggressive restaurant openings: 17 this quarter, approaching 500 total.
• Schulman highlights rising consumer demand for Mediterranean and fast-casual dining; customers are “trading in” from full-service restaurants and grocery stores:
  • "Our food is very unique, differentiated, not easily recreated at home... The Mediterranean style diet [is] the number one ranked diet for nine years running." – Brett Schulman [02:39]

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4. Shifting Consumer Behavior & Menu Innovations

• Noted trends include customers doubling up on protein, adults ordering kids meals, and increased interest in health and wellness (e.g., GLP-1 usage trends).
  • “We think GLP 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.” – Brett Schulman [03:35]
• Menu development: Cava introduced a pomegranate glazed salmon, their first seafood offering, aligning further with the Mediterranean diet.
  • "Seafood is a core aspect of the Mediterranean diet. We want to make it available to our guests." – Brett Schulman [04:09]
• Attachment sales (e.g., extra pita chips) are up, showcasing success with premium options.

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5. Digital Sales, Physical Experience & Omnichannel Strategy

• Digital sales now make up 39% of Cava’s revenue.
• Cava invests in both digital convenience and in-store experience (Project Soul).
  • “We want to have great digital channels and great physical channels... We want to be equally as relevant across those different channels.” – Brett Schulman [04:41]

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6. Marketing Approach & Community Engagement

• Cava spends less on traditional advertising than peers, relying on organic word of mouth, social media, and grassroots community events.
  • "We've seen great word of mouth, great user generated content... our community day program... and we invite our new neighbors to our table for a free meal..." – Brett Schulman [05:30]
• Introduction of “Mediterranean Summer Supper Series” for in-real-life marketing, focusing on community and connection.
  • "We're big about human connection in our brand. It's part of the Mediterranean way, the Mediterranean hospitality, the Mediterranean lifestyle." – Brett Schulman [06:07]

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7. Inflation, Pricing, and Value Proposition

• Restaurant-level margin slightly declined; cost pressure from inflation acknowledged.
• Schulman asserts a long-term strategy of underpricing inflation and holding back on further price increases.
  • "We took about a 1.5% menu price adjustment in January with no plans to take further price increase where inflation is running north of 3%... Really to invest in our guests and help grow that value proposition each and every year." – Brett Schulman [06:53]

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8. Expansion News & Future Plans

• Confirmed Cava’s plans to expand into the Bay Area next year.
  • "We did announce we are going to open in the Bay Area next year." – Brett Schulman [07:44]

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Notable Quotes & Memorable Moments

• On food safety:
  “Food safety is paramount to what we do. It's foundational to our guest relationship...” [01:44]
• On consumer shifts:
  “People are shifting their diets more and more to a Mediterranean style diet.” [02:39]
• On marketing philosophy:
  “We're big about human connection in our brand. It's part of the Mediterranean way, the Mediterranean hospitality, the Mediterranean lifestyle.” [06:07]
• On value and pricing:
  “We've underpriced CPI by over 10%, taken less than half the price increase of the average restaurant company...” [06:53]

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Important Timestamps

• [00:30] Cava’s Q2 sales performance and guidance rationale
• [01:21] Addressing the cyclospora outbreak and supply chain confidence
• [02:23] Expansion pace and "trading in" from other dining options
• [03:08] Impact of health trends (GLP-1/ozempic) on menu and ordering patterns
• [04:09] Salmon launch & premium menu strategies
• [04:26] Digital vs. in-store channels and Project Soul
• [05:12] Marketing efficiency and community engagement strategies
• [06:41] Margins, inflation, and price increase considerations
• [07:44] Bay Area expansion announcement

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Summary

This episode provides a comprehensive look into Cava’s business during a critical time for the fast-casual food sector. Brett Schulman demonstrates transparency on food safety, strategic discipline in expansion and financial guidance, and a data-driven yet human approach to growth and guest experience. The episode is essential listening for those interested in food industry leadership, marketing without heavy ad spend, and the evolving landscape of healthy fast-casual dining.

Transcript

[Bloomberg Tech Announcer]

AI is entering its most consequential phase where scale, safety and sovereignty will determine who leads and who lags. Join Bloomberg Tech in London on November 2nd and 3rd as global leaders across business, finance and policy examine the defining trade offs shaping the future of AI. Thank you to our presenting sponsor, Salesforce and supporting sponsors Ida Ireland and Schneider Electric. Learn more at BloombergLive.com TechLondon

[Bloomberg Host]

let's take a look at shares of Kava. They're up after reporting a faster than expected rise in sales in the most recent quarter. Salmon pita chips offsetting a mid July slump tied to consumer concerns around leafy greens. Joining us right now is the CEO of Kava, Brett Schulman, live here in Studio Too. Great to see you here. 9% comp growth. That was great. That was above estimates. Talk to me a little bit about the forecasts. You maintain the forecast, you didn't, you didn't cut it, but you didn't raise it either. Why not?

[Brett Schulman]

Well, we want to be prudent with our guidance and 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 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 want to be prudent with that guidance but very pleased with the the strength we saw in the quarter.

[Bloomberg Host]

Just to be clear, there's been no link at all to this outbreak to Kava, But I do have to ask you, as a restaurant CEO, I'm sure you had to take a close look at your supply, 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]

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 Host]

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]

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.

[Bloomberg Analyst]

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

[Brett Schulman]

Yeah, we see people trading into kava 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. And 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 Host]

Well, I'm curious, I was, I was looking through the conference call transcript and this GOP one issue was addressed ozempic here. And you talked about this idea that people are actively reshaping their orders, doubling up protein, adults are ordering kid size portions, etcetera, etcetera. 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]

We think GLP 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.

[Bloomberg Analyst]

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

[Brett Schulman]

Yeah, well, we are seeing people opt into 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. We want 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.

[Bloomberg Analyst]

Another interesting thing, digital sales are now 39% of your revenue. And I'm guilty of ordering and you know, your order is like something $20, the delivery fee something like $10 is that becoming the new trend now is that what you see will be the next leg to push canvas growth further.

[Brett Schulman]

We see growth in all of our channels and we don't think it's an either or. We think it's an end. We want to have great digital channels and great physical channels. That's why we've invested recently in Project Soul, which creates even warmer environments and better esthetics in our dining room. So if you do choose to have a meal, you feel like you can have it in our dining room and be comfortable, or if you're running errands, you can use the app or even have it delivered to you. Because we know that most of our guests depending on the day of the week or where they are in the world and their need, they cross channel traffic us. So we want to be equally as relevant across those different channels.

[Bloomberg Host]

Talk to me about your marketing strategy. Because we were talking earlier about, you know, the GOP wines and the eating healthy. My first thought was, okay, how are you selling that to the public? But I remember looking at your marketing at least what's, what's in the filing there. You don't spend a whole lot on advertising. The market is not relative to some of the other fast casual, fast food chains.

[Brett Schulman]

We've been very able to be very efficient with our marketing. We've seen great word of mouth, great user generated content on social media and our community day program. And we open a new restaurant in every market that we open and we invite our new neighbors to our table for a free meal. We suggest donations, we'll match those donations. They're not required, but if you do donate, we'll match it. And that goes to a local philanthropic food partner addressing food insecurity in the, in the market.

[Bloomberg Host]

But do you think that that, that might have to change? I mean, as this company matures and you start to reach saturation points in certain markets, I mean, there is this idea of making sure people are always aware that you're there because there are a lot of options out there.

[Brett Schulman]

Well, there's always opportunities for us to continue to grow our brand awareness beyond just opening restaurants and some of the activities we do today. And an example of that is we just did our Mediterranean Summer Supper series. So we did three different cities. We brought people to a communal table together to celebrate food, to celebrate meeting one another in a human connection form. So we're big about human connection in our brand. It's part of the Mediterranean way, the Mediterranean hospitality, the Mediterranean lifestyle. Not just the food, but the hospitality and the human connection. So you'll see more in real life marketing activities like that that help drive that human connection.

[Bloomberg Analyst]

And your restaurant level margin fell some 60 basis points. I mean we know that you've got strong sales growth, but costs are not standing still. I mean inflation is all we talk about. How much more can you absorb before you have to raise prices again?

[Brett Schulman]

Well, that's been part of our long term strategy where we've wanted to underprice inflation this year was no different. We took about a 1.5% menu price adjustment in January with no plans to take further price increase where inflation is running north of 3% this year. So we in recent years underpriced CPI by over 10%, taken less than half the price increase of the average restaurant company. Really to invest in our guests and help grow that value proposition each and every year. That's making us giving us the ability to welcome more people to our table.

[Bloomberg Host]

All right, Brett, always great to have you. Another great quarter and we are seeing to catch up with you again and see how things are going, particularly with this marketing strategy. I'm actually very fascinated by this. Did you do you watched the prediction markets by the way, because you know you were all over that. Like what was he going to say on the call? What do you say this word, what do you say that someone was talking about? Manifest. It's manifesting something in San Francisco or something or another. We did like you're like in the zeitgeist.

[Brett Schulman]

We did announce we are going to open in the Bay Area next year. So you know.

[Bloomberg Host]

All right, well somebody prayed above and they got their wish. Brett, always a pleasure. Brett Shulman there, the CEO over at Comma.