Why Hummus Bros See Opportunity Beyond the High Street

Following their recent crowd funding raise, we sat down with Hummus Bros to learn more about the mediterranean brand and where the see their brand going to next.

QSR: Where did the idea for Hummus Bros come from?

I was studying with my business partner Ronen (Givon) at university. Ronen is from Israel originally and we both used to eat hummus a lot during our studies. When we finished our degrees we thought we should start something up and looking at the high street we saw that hummus could work really well because it can be eaten with everything and is suitable for all types of dietary requirements.

QSR: How did you move from the concept to opening your first store?

We actually started by giving our product away for free at markets, eventually upping the price and getting really valuable feedback in the process. This was very helpful for us as we didn't have a catering background. Starting like this meant that we could get our mistakes out of the way early on. After a while we found our first location on Wardour St.

But beyond this, our initial aim was to create a healthy Mediterranean food brand that we could deploy on the high street or in supermarkets. We were looking at the hummus that was being sold in supermarkets and the fact that there was no recognisable brand even though the hummus market is huge. There was no innovation and the product was full of chemicals to give it a long shelf life. So our longer term aim has always been to build a brand on the high street, before capitalising on that brand recognition by selling our hummus in supermarkets.

QSR: You also do a lot of corporate restaurant catering. Can you tell us a bit about that?

It initially happened organically- via a customer who used to come to our Cheapside branch every day. One day he said that he was moving offices, making it harder for him to drop in for lunch. The next thing we knew we got a call saying that he had gotten us a meeting with the Goldman Sachs canteen manager, who was interested in having us do a pop-up in their staff canteen and we haven’t looked back since.

We subsequently approached other banks such as JP Morgan, Morgan Stanley as well as other companies including British Airways, Google and Uber. Our corporate catering arm has gone from strength to strength. We did 350 pop ups last year and this year we hope to do 700, selling from 70 work place canteens.

QSR: What do you think these companies see in you? Why do they think offering your food to their staff is a good proposition?

From the company’s point of view I think one obvious benefit is more productive staff who leave the building less during their lunch break as they don’t have to go out to get food. But it goes beyond that too. Often times it is about bringing some innovation to the staff canteen. Whilst staff canteen produce is of good quality it tends to be generic i.e. a pasta bar, salad bar, pizza bar etc. Mix into this the fact that people are so acutely aware of branded food, and in an environment like this of non-branded food, Hummus Bros really stands out and helps improve staff satisfaction.

The next reason is that it works from the contract caterers’ perspective. They are under pressure to innovate. Having us in the canteens they run means a lot more people come in as they see a high street brand in there. This drives footfall and increases their average spend which is higher on our counter than neighbouring counters as people are more willing to spend when they see a brand. It’s a win-win.

QSR: What high street branded competition are you finding when you do these workplace catering pop ups?

Not too much. There are some barriers to entry. Because the contract caterers already have say a burger, pizza and pasta offering they're not really interested in bringing in anyone who competes with them. But our offering is unique- it's not a food offering that is easily explained. You also need to have a central kitchen that is accredited where you prepare your food. This is important as it means our kitchen is of a high enough standard to produce food for supermarkets. Not many QSRs have a central kitchen which is accredited to this level combined with an offering which is unique enough. I could see it working for Mexican burrito chains to the extent they have a central kitchen.

QSR: Who do you see as your competition?

From a customers point of view, if they’re eating out for lunch 5 times a week, they'll probably buy their lunch from a sandwich bar or healthy food chain like a Pret or pod 3 times a week, then for the remaining two times a week will look to push out the boat a bit and try something like a Mexican, Japanese or us. So from that point of view that's who we see as our competition.

In terms of who does the same thing as us there are very few, perhaps a Pil Pel or a Comptoir Libanais.

QSR: What sets you apart from the competition?

There are some obvious menu differentiators but beyond that I think it is that we are really aware of what goes into our food. We take a lot of care in sourcing our food. Our chicken is free range, we source a lot of our produce locally and because we know every ingredient that goes into our food we can advise on food allergies. On our website and menu we have the 16 top intolerances for people to choose from and we can then come up with a recommendation based on those choices. One in 10 of our customers now come to us saying they have some form of intolerance or are trying to reduce something that they are eating. To meet those requirements you need to put a lot of time and effort in to training staff. We were doing this long before the requirements came out. I'd say people see us as a healthy option because we know everything that we are putting in our food.

We also are trying to differentiate ourselves by going into corporate catering and wanting to get into supermarkets. We're investing a lot in our brand. In my view our biggest asset is the brand.

QSR: Who is your target market?

Our main market is the lunchtime urban professionals aged 25-55 years old. They are predominantly women, possibly because of our healthy food focus. We do a lot of office deliveries too to tech and finance companies too. We are open in the evenings too but we don't have alcohol licences so we aren't probably considered as much for evening meals though our Soho branch does remain busy.

QSR: What's your most popular menu item?

Chicken with falafel and hummus.

QSR: You’ve recently conducted an equity fundraising via Seedrs. Tell us about the fundraising? Why did you choose this route?

The reason we went for crowd funding is that what you get through it is not just investors but investors that become your ambassadors. We’ve found people have become passionate about our brand. For example we had one investor who then put us in touch with the catering manager at his company because he wanted to see us as a success. We also get feedback from investors telling us about opportunities they’ve seen, asking us if we’ve seen or thought about certain things. With crowd funding we find that you get more than just money.

Also, just look at what’s happening with banks. They’ve made it clear that they’re not looking at small businesses on the high street- apparently it’s not where they want to deploy their capital.

QSR: What are you going to do with the money you raise?

Our number one priority is opening more high street locations- two by year end.

The second thing is upgrading our central kitchen. We grew 70% in the last year and are hoping to grow at 100% (top line sales) in the upcoming year.

Finally we want to come up with a prototype for packaging suitable for supermarkets and start developing a relationship with a co-producer to make the product for the larger supermarket chains. There is quite a bit of work in this. On one level it is easy in that no current hummus tubs stand out – they all look exactly the same but our packaging needs to stand out, be practical and communicate the fact that the taste and health benefits are completely different. We’re going to be using the same technology that they use for cold press juices which will mean that we don’t have to add preservatives to the food to give it a longer shelf life. It will mean the hummus will be just like it tastes in the shop.

QSR: In terms of store openings- where do you see those being?

Up until a few years ago we thought our offering was very London centric but since then we've noticed similar concepts to ours in Leeds and Manchester and Birmingham. More people are becoming familiar with hummus so I think that opens up the potential to open more stores outside of the capital.

QSR: How big do you think the brand can become?

The sky’s the limit. We're actually speaking to someone now about franchising in India and the U.S. There is actually a great synergy with India. We have a lot of Indian customers because of our vegetarian and vegan options as well as options without onions and garlic which makes it an interesting market for us.

In London we could have 20 stores and 3-4 in other major cities so probably 50-100 across the country.

QSR: You mentioned franchising – where would you look for franchise partners?

Franchising appeals in areas we don’t know so well. We’d be keen to tap into the knowledge base of others who really know a particular city and the best locations to open up within that city. Whilst we could always go and get that knowledge I think it is better to team up with someone local who is also invested in the company and driven to make it a success. Also for overseas markets there are foreign business practices that I wouldn’t be aware of that franchise partners would which would make franchising a sensible option in those markets.

QSR: What’s been the easiest and most difficult aspects of getting Hummus Bros to where it is today?

I think what is difficult has changed a lot over the years. Starting out with no expertise in the industry meant that you wouldn’t always be getting the right deals or dealing with the right people. It has taken us time to make the right relationships and build our team to push Hummus Bros forward. We’ve got a really great team now, but that took time, and finding the right suppliers to work with also took a lot of time – we’re now getting great service at a great price. But those relationships don’t happen over night.

One aspect we thought would be more challenging would be building up the brand. We did a Yougov poll about a year ago that showed that over one million Londoners knew about Hummus Bros. We were surprised how big our brand reach was. I didn’t think we’d be able to get to that stage in the time we’d been operating. It’s been a lot easier than I’d thought.