Whole Foods Market has made a minority investment in Los Angeles-based restaurant chain Mendocino Farms, marking the first restaurant partnership for the natural foods grocery chain, according to Nation’s Restaurant News. Whole Foods Market has not disclosed the terms of the investment.
With the partnership, Mendocino Farms looks to further expand its presence into the San Diego and San Francisco Bay Area markets in late 2016. The 11-unit sandwich chain plans to test new locations inside select Whole Foods Market stores and 365 by Whole Foods Market stores.
Mario Del Pero, Co-Founder of Mendocino Farms, said the first location will be in a Whole Foods in Orange County, Calif., but the test may also include locations in Northern California. Mendocino Farms will wholly operate the units in Whole Foods locations.
“I see it as about a 250-unit concept that could be in maybe 40 great cities, with a few special stores in each city, and an incredible supply chain and great team members, and guests loving us,” Del Poro said in an interview with NRN. “We’re very passionate about bringing a quality product and delivering it in a quality way, so we’re very particular about not watering down what we’re doing.”
With the introduction of the 365 by Whole Foods format, as well as the company’s elimination of approximately 1,500 jobs, Whole Foods is making changes to better compete with mainstream retailers that have included natural and organic foods as part of their offering.
The shift may include more restaurant concepts beyond the partnership with Mendocino Farms. In the grocery chain’s July earnings call with Wall Street analysts, officials said the 365 format stores will include the “Friends of 365” concept, in which the retailer will rent out space to local vendors as a way to lower capital investment and labor costs.
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