Growing Taste for Mediterranean

March 5, 2013

Inside a refurbished two-story warehouse in Paterson’s down-at-the-heels Bunker Hill area, a homegrown company is riding the nation’s wave of enthusiasm for Mediterranean cuisine.

Workers dressed in white overalls operated a mechanized production line Wednesday morning, mixing, cutting and shaping fillo — a paper-thin dough made by Kontos Foods that is used to make Greek or Middle Eastern pastries.

The production line, which was opened about a month ago, is the latest move in a steady expansion by family-owned Kontos, which in recent years has included buying its leased manufacturing and distribution facility, expanding the building and buying another one to house the fillo dough operation.

The projects were backed by the New Jersey Economic Development Authority, which issued bonds that were acquired by TD Bank. The two property acquisitions, the purchase of machinery and equipment, and related expenses cost $11.5 million, according to EDA records.

And despite the fact that the company added a second floor to double the size of the latest acquisition to 45,000 square feet, the expansion is still not enough, said Warren Stoll, the company’s marketing director.

“This was pretty much maxed out the day we started,” said Stoll, as he showed off the refurbished building with Steve Kontos, company vice president and a co-founder.

“We are working 24 hours a day to fill orders for Singapore, Taiwan, Korea and China,” Kontos said. He said the company added a second floor to the building, rather than develop the parking lot, so that it would still have space to expand there in the future.

The company was started in 1987 by Kontos and his father, Evris, at the time making pita bread. It now has 200 employees, 10 of whom were added when the new facility was opened. And the product line has since expanded to include 50 bread products, as well as yogurts, crepes, wraps and other items sold nationwide through retail outlets and to restaurants and hotels.

While the expansion is driven in part by growing name recognition for Kontos products, another key factor is the rising interest among American consumers in Mediterranean foods, Stoll said.

Darren Tristano, executive vice president for Technomic, a Chicago-based food industry research company, said the increased interest in Mediterranean foods can be seen in the rise of Greek-concept franchises, such as Little Greek and Hungry Greek in Florida, and the Garbanzo Mediterranean Grill chain, which is soon to open a restaurant in Florham Park. In New Jersey, the It’s Greek to Me chain now has 10 restaurants, six of them in Bergen or Passaic counties.

“The second important indicator is the health and wellness trend,” in which Mediterranean food is perceived by consumers to be healthy, Tristano said. “These Mediterranean-style foods are designed for healthfulness, for lower calorie counts and are generally fresh in nature.”


Zoës adds to its N. Texas presence

January 11, 2013

Zoës Kitchen, a Mediterranean-themed, fast-casual restaurant, named a new chief executive Wednesday and announced plans to expand its regional office in Plano, where the CEO and other top executives are based.

Kevin Miles, 47, takes over as chief executive of the Birmingham, Ala.-based company effective immediately. He formerly was president and chief operating officer, and has been running the company for years.

The Plano office opened in April. The chain’s 18th Texas location will open Nov. 8 on Southlake Boulevard in Southlake.

North Texas is now the company’s largest market, and is taking on more importance as the company grows.

“We’ve hired several executives that are based out of this office,” said Miles, mentioning vice presidents of marketing and real estate and the director of information technology.

“As we continue to grow the company, most of the new hires will be based in this office,” he added. “More of the operations of the business are in Dallas.”

As the top executive, Miles sees his role as visionary as the chain carves out a larger swath of the growing Mediterranean-food market.

Zoës operates in the fast-casual restaurant segment (think Chipotle except with hummus and pita), which is the fastest growing part of the restaurant industry. Fast casual is quicker and generally less expensive than a sit-down casual dining restaurant, but with higher-quality food than is found in some fast-food restaurants.

 In 2011, the fast-casual Mediterranean segment posted sales of between $200 million and $250 million, according to Darren Tristano, executive vice president of Chicago-based Technomic Inc., a restaurant research firm.

 “With the overall [fast-casual] segment at $27 billion, this represents less than 1 percent of the total market,” he said.

 The Mediterranean segment is starting to see accelerated growth and “likely will grow by leaps and bounds as American consumers see the healthfulness and taste of fresh Mediterranean foods,” Tristano said.

 Sales at fast-casual Mediterranean restaurants could reach $1 billion within 10 years, he said, fueled by the growth of chains like Zoës.

Miles described Zoës, which was founded in Birmingham in 1995, as the “fastest-growing Mediterranean concept out there today.” Fast Casual magazine, a trade publication, ranked it as the second fastest-growing chain in the fast-casual segment.

Zoës ended 2011 with 54 locations and expects to end 2012 with about 70 outlets, for a growth rate of about 28 percent. That’s on top of a growth rate of almost 40 percent in 2011.

All but seven of the Zoës locations open now are company-owned. In 2007 the company was purchased by investors, including California-based Brentwood Associates.

The chain plans to add 35 locations next year, including up to three in North Texas. Nearly all 35 also will be company-owned.

The privately held company declined to reveal total chainwide sales. It said sales grew by 50 percent between 2010 and 2011 and are expected to grow by 40 percent this year.

“As we continue to grow, my role becomes much more strategic,” said Miles, who joined the company in 2009. “I need to be more the visionary for the brand and strategically position us to grow.”