According to TechSci’s recent forecasts on the organic food
market, the sector is set to hit $45 billion in the next five years, as the
consumer trend towards health consciousness continues to solidify, driven by a
growing acceptance that a diet consisting of chemical-free, non-GMO, freshly
prepared ingredients has tremendous health benefits. Having already seen 11
percent YOY growth to around $40 billion last year, organic food is
experiencing tremendous sales penetration across the country according to the
Organic Trade Association, even in spite of supply shortages, and this is
particularly so in select regions like the West Coast. This increasingly
prevalent healthy eating culture still has considerable room to grow however,
with organic sales currently accounting for only 4% of total food sales and
organic agriculture currently representing less than 1 percent of all cropland
in the United States.
At the same time, the roughly $710 billion restaurant industry,
which saw 3.8 percent sales growth last year, has increasingly become a leading
devourer of consumer’s food dollar, now accounting for around 47 percent of all
food spending. These combined metrics have fueled the rise of restaurants that
cater to consumers who want to eat healthier, but there has been a decided lack
of variety in the sector until more recently, with the vast majority of
operators being boutique venues with limited menus that cater only to upscale
niche markets. This is a major reason sector players like Chipotle Mexican
Grill (NYSE: CMG) have been able to make a killing, stepping in and feeding the
mass market’s growing taste for organic produce, as well as free range meats
that aren’t pumped full of antibiotics.
One of the more attractive plays in this market is
first-of-its-kind family restaurant brand, Giggles N’ Hugs (OTCQB: GIGL), which
offers a unique combination of a large organic menu of gourmet quality food
served in a relaxed atmosphere and a large, active play area for the children
of restaurant goers. This approachable, yet premium-quality combination of an
organic menu with a sizeable kid-friendly play area that is attended by trained
aides, allows GIGL locations to not only court the growing consumer market that
is on the lookout for healthy, delicious menu options, but simultaneously
generate multiple revenue streams by offering features like hosted birthday
parties, and a child drop-off service so parents can go focus on shopping.
With three locations currently in some of LA’s most prime
demographic areas, including Century City (Westfield Mall), Glendale (Glendale
Galleria) and Topanga (Westfield Topanga Shopping Center), Giggles N’ Hugs’
presence in upscale malls and shopping areas has quickly differentiated its
restaurants within the organic sector. The company really stands out to parents
in these communities who want to get in a day’s shopping, because Giggles N’
Hugs is the first restaurant in LA to offer a child-drop off service. Children
are well-entertained too, with activities every half hour, including everything
from arts and crafts, to appearances by staff dressed up as some of their
favorite characters, and even events like karaoke, live puppet shows and dance
parties, all forming an excellent complement to the custom built play area full
of themed ball pits, swings, slides, and things to climb on or explore.
This superb model has enabled GIGL to attract the attention
of some of the biggest mall owners in the country, who are keen to see Giggles
N’ Hugs restaurants crop up at their establishments, in large part because of
the incredible synergy the model represents, both for mall-going parents, and
other stores in the mall. Far more than just another organic restaurant, each
Giggles N’ Hugs is like a healthy version of Chuck E. Cheese’s, only with
trained staff to attend to the children and healthy exercise-focused play,
instead of just video and ticket redemption games. Hence the success of the
company’s ongoing negotiations with sector operators like North American mall
giants General Growth Properties (NYSE: GGP) and Simon Property Group (NYSE:
SPG), as well as Westfield Group (ASX: WDC), which has a sizeable presence in
North America and Europe, as well as Australia and New Zealand (Scentre Group
division). The low hanging fruit on the West Coast, such as the San Francisco
and Seattle markets, make ideal expansion targets for the company, and regional
receptivity to organic foods will no doubt help drive GIGL’s success at opening
new locations throughout such markets.
GIGL is on track to meet its expansion target of having 12
more company-owned locations by the end of 2017 and the unique mix of offerings
the brand presents is helping the company to secure substantial rent discounts
and tenant allowances. Moreover, this model naturally lends itself to regions
around the world that, unlike sunny LA, are more prone to experience the kind
of weather patterns that drive large birthday parties indoors. By tapping
former Westfield senior executive Todd Star, who has over a decade under his
belt handling leasing for Westfield, GIGL is in a prime position to successfully
execute high value expansion deals with major mall owners like those mentioned
above. Star’s impressive resume, consisting of over three decades of experience
in multiple areas of real estate, make him the perfect tool for GIGL’s utility
belt, when it comes to achieving the growth objectives it has set, and
negotiating the best deals in select expansion target markets.
The company has seen a massive media presence crop up in
recent months as well, being featured everywhere from major finance
publications like Bloomberg Businessweek, Forbes and The Wall Street Journal,
to trendy style publications like Perez Hilton and Us Weekly, further
accelerating the brand presence Giggles N’ Hugs has already managed to
establish among consumers. Having posted a strong Q1, including an 11.7 percent
YOY revenue increase to just under $1 million, largely on the strength of
factors like a nearly 7 percent YOY reduction in total costs/operating
expenses, and consistent 21 percent net operating margins at its flagship Century
City location – Giggles N’ Hugs really is the portrait of a successful hybrid
restaurant concept, with intelligently chosen locations, and a proven ability
to deliver end-user resonance.
Get a closer look at the company by visiting
www.gigglesnhugs.com
About QualityStocks
QualityStocks
is committed to connecting subscribers with companies that have huge potential
to succeed in the short and long-term future. We offer several ways for
investors to find, evaluate, and learn more about investing in these companies.
The Quality Stocks Daily Blog http://blog.qualitystocks.net
The Quality Stocks Daily Videos http://videocharts.qualitystocks.net
The Quality Stocks “Ones to Watch” http://gotstocks.qualitystocks.net
Please see disclaimer on the QualityStocks website: http://disclaimer.qualitystocks.net
No comments:
Post a Comment