VF Franchise Consulting

Element Fresh has redefined healthy dining in China

Sep 18, 2017

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Now bound for wider Asia, a fresh-food restaurant concept focusing on expats has caught the imagination of more than 1 million mainland Chinese.

Salads, organic food and superfoods are not usually the first types of cuisine one considers staples in Mainland China, but a young American entrepreneur has hatched a fast-growing chain of quick-service restaurants serving up just that to thousands of Chinese and expat diners every day.

Now the concept is heading to other Asian cities as its reputation spreads.

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Best known for its salads, sandwiches, juices, and smoothies, Element Fresh also offers a variety of Asian dishes and a creative dinner menu, expanding into steaks, fish and pasta. With a positioning statement “Enjoying fresh food!”, The company’s unique selling point is delivering diners “the freshest food in China”.

Element Fresh was founded by Bostonian Scott Minoie, a self-professed “lifelong foodie, and chef”, and his mate Sheldon Habiger, who started a catering service in Shanghai which they morphed into a health-food and juice bar.

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In 2002, a loyal customer who happened to be a leasing executive from the Shanghai Centre, suggested they take some space in the mixed-use development, which as well as a popular shopping mall, houses thousands of office workers during the day. A few other customers pitched in some cash to help the idea come to fruition.

The store opened on July 12, 2002, and is now part of a 40-strong chain. Within the next three years, another 30 stores are planned on the mainland, all company-owned, and the first in other Asian cities to be run under a franchise system.

Asiawide franchise specialist VF Franchise Consulting is representing Element Fresh throughout the region.

“After 15 years of tried, true, tested success in China, it’s a nice time to take it abroad,” Paul Barbone, Element Fresh’s international franchise business director, told Inside Retail on the sidelines of a VF Franchise Consultants business-matching event in Manila.

“Hong Kong, Singapore, and Bangkok – those big centres are very attractive, they’re definitely places we aspire to be. Vietnam is still emerging, so it is not an easy sell. We are here looking at Manila. We would never rule out North America, and Australia has been discussed.”

Barbone has spent 18 years in the Middle East expanding globally recognized franchise brands there, so that region is on the radar as well, but for now, the focus is on Southeast Asia – and Hong Kong, given its proximity to the mainland.

More than salad

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Timing is often a decisive factor in new concepts, and it certainly played a big part in the success of Element Fresh.

When Minoie landed in China on an exploratory journey that has never come to an end, the whole foods, organic and superfoods market was emerging, not just in the US but globally.

In a country where a lot of food had the goodness fried, steamed or otherwise cooked out of it, the alternative of eating raw vegetables was not attractive. So he began piecing together a viable business opportunity, starting with raw vegetables in a salad format, dressed up to look delicious.

From there, the concept parlayed into what has today become a very popular destination – initially with westerners and now with local Chinese.

“I say we are the leaders in casual dining,” says Barbone. “We are definitely a pioneer. People have mimicked what we are doing, so we have to be a step ahead of people copying us, but we’re still the leaders.”

Barbone has seen some good concepts in China, but not developed to the same scale as Element Fresh.

“A lot of the players have difficulty competing in Shanghai on many levels. One of those may be just the scalability of their organisation and trying to get locations to expand. That said, we do benefit from that, but it only came from taking a relative risk in the early 2000s and not becoming complacent in those decisions.”

Resisting bland

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While the core of Element Fresh’s menu started out with salads, the whole concept has expanded into a full dining experience, from breakfasts to smoothies and full-sized entrees.

“The main thing we sell is gourmet salads, topped with protein options. With marinated, grilled chicken, meats and seafood, we offer a whole plethora of proteins. Grilled foods have taste – you can’t always eat bland food.

“We are not vegetarian. The health aspect comes in with a lot of these things – like the dressings – being properly portioned. That said, a person could order a salad and ask the waiter for more dressing. That’s OK, but that’s where most of the calorific intake comes from. Yogurt green miso dressing is good in moderation, but it becomes unhealthy if you eat too much of it.”

Pastas are becoming more and more popular at Element Fresh, but in line with the overall theme, whole-grain pasta is served.

“We serve a great Australian steak. People look at that and say, ‘That’s not healthy’, but red meat in general in moderation is healthy – a 250g cut rather than a huge American-style 330g serving, of course, and complemented with vegetables.

“We give customers an opportunity to be healthy. I eat a lot of Element Fresh and I like the way I feel after leaving the restaurant: I’m not drained, my body is not focused on dealing with fat.”

The juices and smoothies are 100 percent real fruit. “The first time I went to one of the restaurants I was surprised they don’t put ice in the juices. People can ask for ice, but when they buy a 16-ounce juice they want a 16-ounce juice, not 12 ounces of juice and four ounces of ice. We are going to be fully transparent, and when people order a juice, they get a juice.”

As much as possible in China, the company uses organic ingredients. It also uses superfoods, such as kale in a pesto (instead of basil) and, of course, berries.

With 1 million followers on WeChat, the company invests a lot of time trying to educate people on the benefits of various foods and of healthy eating. “We take that very seriously and we want to engage with them,” says Barbone.

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Behind the scenes

A significant factor in Element Fresh’s stellar growth is what the business does outside its restaurants.

“We work with suppliers to help them understand why we need things grown in a certain way. It’s about long-term relationships and making sure all the things we do are taken on board.

“Then we have the only HACCP-certified central kitchen in Mainland China. We are very particular about how we handle our food. Food safety is top of Chinese consumers’ minds (after recent KFC and other scares). We have our own lab in the central kitchen testing everything we produce.”

The company also has its own fleet of distribution trucks rather than relying on third parties, thus ensuring temperature control and food-safety standards are met throughout the whole life of the food it sells.

“It really is A to Z, and people appreciate that. When walking around Shanghai and looking at some of these beef noodle huts where some guy is literally chopping his meat on the sidewalk, I think, ‘OK, I am never eating there’. Many food-court outlets, such as steak places, pick a steak off a tray, grill it and cut it up. They don’t keep their steaks chilled but at ambient temperature, In North America, those places would be shut down in a nano-second.”

Perhaps that has helped attract Chinese to the brand in growing numbers. What clearly started as an offer targeting expats is now very much a concept embraced by locals.

Inside Retail asked how the brand managed to convert Chinese to the concept.

“People want to familiarise themselves with more western-style things, and over time we gained popularity. Those trends take off in China at 10 times the pace of elsewhere. When there is a shift in the market, it’s counted in thousands rather than tens.

“You can’t eat beef noodles every day, and people are looking at other foods. We are challenging a lot of cultural norms.”

Pricewise, Elements Fresh is very mid-range. “A lot of people see us as expensive. For those people, I’d love to show them our central kitchen.”

That said, a salad is priced around US$10 and a juice from $3 to $4. The average check runs at about $14 to $15 a person.

Deuce for juice

A key factor in the brand’s growth is a partnership with former international tennis player Li Na, in an ambassadorial role. However, she is involved in much more than just marketing activities. Li Na helps with menu development, “putting her fingerprint” on the brand, which has even stretched to a co-branded restaurant in her home city of Wuhan.

“She wanted to do something special. The restaurant has Li Na themes and branding that really talks to the relationship we have with her. Scott and her see eye to eye. She wants to be an ambassador not only for Element Fresh but for a healthy lifestyle, which coincides with our philosophy.”

China’s second-best-known sports star, Li Na also retains a relationship with Nike, keeping her profile high all over the nation.

Apart from Wuhan, most of Element Fresh’s growth focus in China has been on Shanghai, where there are now 17 eateries, and Beijing, with 12. But now the company is expanding into tier-two cities, mostly across the south, including Chengdu, Guangzhou, Nanjing, and Shenzhen.

Still privately owned, the company has grown to a payroll of 2500 staff members and serves more than 15,000 guests daily.

Positioned as “healthy dining, redefined”, Element Fresh is a concept that will offer tailormade food for Asia’s local populations and expatriates.

Serve it up!

Robert Stockdill

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