Annals of Coherent Entrepreneurial Strategy: Clover Food Lab

Last week I was at MIT and had my first experience of Clover Food Lab. No, it isn’t some fancy new scientific research institute. Instead, it is a food truck. Except that I didn’t visit a food truck but felt that I had. The Clover I visited was, in fact, a cafe/restaurant/I don’t know what to call it, located in Kendall Square.

Clover is vegetarian. It does produce a fairly limited range of vegetarian foods. I tried it for lunch and breakfast. I felt healthier for it and, for vegetarian food, it was good. But that’s my taste. But what I really admired about Clover was its strategy.

First some background. Clover started as a food truck founded in 2008 by MIT material science graduate and Harvard MBA, Ayr Muir. One has to imagine that after all that education, the day he told his parents that he was going into the food truck business would have been an awkward one.

Of course, today, Clover is a chain operating all around Boston with 70 employees and 11 locations (including permanent ones like the one in Kendall Square).

But what is incredible is that it has kept its food truck roots. When you walk into the Clover Kendall location, it is hard to know what to do. It is packed and the kitchen is right there — not hidden — and you can see a flurry of activity. There is no order counter. Instead, there are some folks who have iPhones ready to take your order. Suffice it to say, they look like people waiting for their order and checking their Facebook. Except there are enough ‘customers in the know’ that you work that out.

But what to order? See that whiteboard menu on the Food Truck. Well, that is still there in the store but on a large flat screen but still in hand-written form. So you have this fancy screen with a written menu on it! And the menu is simple, grouped by items with prices such as $2, $3 and $5. No cents here. It wasn’t too descriptive and nor was it extensive. It also changed everyday. That day, I picked a pita thing and went on. Thanks to Square, the order was processed and then apparently travelled to iPods sitting at various workstations in the kitchen.

This is the first time I have seen an Apple store type infrastructure actually implemented outside of an Apple store. So there was no shouting between the staff of orders. Just an efficient line of tasks. And there had to be because all of the ingredients were cut fresh and there were tons of orders being fulfilled. A few minutes later we were done and eating.

So let’s analyse the strategy. What’s good about food trucks? They are (a) convenient and (b) know how to handle lunch time traffic efficiently. But why do they do this? Because things are kept simple menu-wise so that people can make orders easily, pay easily and pick their stuff up without fuss. What will get in the way of that? People who don’t know what they are doing. Not just employees (hence the tightly engineered workflow) but also customers trying to work out what they want. When I talked about Clover to others at MIT some complained that they didn’t like to go there because it was confusing. When I thought about that I saw that as a feature rather than a bug. They don’t want tourists, they want regulars. Just like a food truck. (Which, by the way, is just one of the reasons the movie, The Chef, makes no sense).

There is, of course, another element to the strategy — the whole vegetarian/environmentally friendly identity. Clover embed this in their stations by exposing the kitchen to the world. I think we all know that we are better off not knowing where burgers come from and having them appear to us nicely wrapped. But Clover wants people to see what’s happening. You can see the fresh fruit. You can see it all being prepared. You get the sense that, yes, this is somehow healthier than your other options. Suffice it to say, it makes you feel good. This even happens down to the coffee — which is not espresso but excellent — and appears to be individually tendered rather than mechanical or out of a bucket.

So let’s step back for a moment and consider their strategy. An entrepreneurial strategy has four elements: (i) you choose the competition; (ii) you choose the customer; (iii) you choose the technology and (iv) you choose your identity. Your choices for each have to fit. For Clover Food Labs, the competition is pretty simple as they are an independent chain selling a differentiated product into a breakfast/lunch market. They are competing for customers now and not locking them into future market power. That is, they are focused on execution. Their customer choice is very specific — they want regulars and not tourists. They don’t want once off queues and if they have a queue they want it to move quickly. Notice that had they wanted it all, they might have had trouble. Their technology choice is a mix of low tech and high tech. The high tech comes from the information flow using iPhones etc. The low tech is everything else. This is because of their focus on fresh foods. Here is Clover’s description of their technology choice:

If you work at Chipotle, or Panera, or McDonald’s you might think we’re crazy

At Clover we do a lot of things unlike other fast food companies. Why? For taste of course.

It’s hard to overstate how radically different we operate vs. our competitors. The way we operate is unheard of in our industry. I mean unheard of to the point that others don’t believe me until I show them around. No, really, there is no back-of-house, everything we do is visible to our customers. At Clover we:

– Have no freezers. In the entire company. Not one.
– Change our menu day-to-day to stay in sync with the best tasting seasonal ingredients.
– Cut food as close as we can to when you’re going to eat (e.g., tomatoes are cut when you order)
– Keep your money in your region. (40-85% of our ingredients are from the Northeast)
– Use an unheard of amount of organic ingredients (typically 30-60% depending on time of year)
– Don’t EVER use any preservatives, “natural flavors,” “flavor enhancers,” “artificial flavors”*
– Make food that will improve your health (no need to tell the kids, but that food is good for them)
– Allow you to see us making your food. We have no “back of house” anywhere in our company.
– 100% of what we hand you is compostable. OK, nothing to do with taste. But it’s the right thing to do.

No freezers! And there is more to their entire technology than just that. Look here for a full description. Suffice it to say, that is both a commitment as well as a hark back to food truck roots.

Finally, there is Clover’s identity. Not surprisingly, they have an environmentally friendly and also local vibe (whatever you think about locally sourced food, that is what they are doing). But what is interesting is that they started as a food truck with all manner of things that represented and have no deviated from that. They have maintained that even as they started to build out into permanent locations. They still have trucks, of course, but one imagines that these are like mobile experiments. They find an area, secure a regular customer base before taking root. In the process, they manage to solve perhaps the key risk in restaurant location.

Put all of that together and you have coherent strategy. When you are in Boston I encourage you to visit them and bask in the strategic coherence. Oh and, yes, just order the $5 thing. You don’t want to hold up the process.