Great vision to capture the trend ........
Costco leaders bankroll organic fast-food chain
Originally published May 28, 2016 at 8:00 am Updated May 29, 2016 at 8:10 pm
By Seattle Times staff
Seattle Times business staff and wire services
Costco and organics seem increasingly intertwined these days.
The Issaquah-based warehouse giant in recent years has become a dominant seller of organic produce. And now Costco’s co-founder and a top executive are investing in a planned restaurant chain — founded by two former Costco employees — that bills itself as the first fast-food restaurant to qualify as Certified Organic under U.S. Department of Agriculture rules.
Costco co-founder and former CEO Jim Sinegal, along with Chief Financial Officer Richard Galanti, are among the investors in The Organic Coup, which opened its first restaurant in November and has two locations in the San Francisco Bay Area.
The Organic Coup, which serves a “spicy organic air chilled chicken breast” sandwich, wrap or bowl, as well as caramel popcorn drizzled with chocolate, was founded by former Costco execs Erica Welton and Dennis Hoover.
Welton, who worked 14 years at Costco, spent a dozen years there as a food buyer.
The more she became involved in buying organic food for Costco, and moving her own household toward eating and using more organic products, the more she “saw this huge hole in the market,” Welton said.
“Just being a working mom, whether traveling for business or running around with my kids, you need something quick and on the go,” Welton said. “There were no options (for quick organic food) for me and my family.”
Hoover worked for 33 years at Costco, retiring earlier this year as senior vice president for the Bay Area region.
Hoover said he approached Sinegal to say he was retiring and “asked if he would support me in my next venture. Jim has never said no to me in 33 years.”
Hoover declined to say how much Sinegal and Galanti invested but said The Organic Coup raised $7 million in its first round of financing, with Sinegal as the primary investor.
Galanti sees “a booming future in organics,” he said.
“Organic is something that’s top of mind and continues to grow. Combining it with fast food seemed novel and compelling.”
But mainly, said Galanti, he believes in Hoover and Welton: “I invest in people.”
The investment, as noted by Business Insider, will allow the chain to expand.
Hoover said the plan is to open up to 10 locations this year, then decide how many to open next year.
A location in the Seattle area is “on our target,” he said.
The USDA itself does not certify restaurants as organic. But restaurants may apply to private or public certification agents to become USDA Organic-certified “handlers,” as Organic Coup is.
Such handler certification means products sold as organic must have at least 95 percent certified organic content, and that the restaurant must prevent the mingling of organic with nonorganic products, and protect organic products from contact with prohibited substances.
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