For a long time, Boloco has charged guests who order vegetarian burritos or bowls a little less than those who ordered meat. And for about 10 years we charged those who ordered White Meat chicken (something few other burrito joints offer) an extra buck or so compared to those who ordered dark Thigh Meat chicken. Sorry, did you say you wanted guacamole on your Summer burrito? That cost you another $1 to $2 depending on size.
The logic for pricing vegetarian menu items lower was pretty simple. A lot of the meat items cost more for us to purchase so we charged a bit more to try to keep our “food costs” close to the industry-standard 30% target.
When we started testing the “pay last” service system a year ago (see reasons why here if interested), we also decided to test one price fits all. Order whatever your stomach desires in a certain size tortilla or bowl, and the price was always the same – say adios to the dreaded question “guac for extra?”. We’ve found that simplicity matters to a lot of people. And people tell us that not being nickel and dimed (or “dollared”) for extra ingredients is a good idea to help guests focus exclusively on creating their perfect entrée without wondering what the price will be. And guess what? We sell a TON of guacamole today versus a year ago – double, in fact – because it doesn’t cost anything extra. A lot of charred broccoli too – even though it never cost extra, people weren’t sure, so they hesitated to add it. Now there is no pause!
The inevitable problem – and one that we are still wrestling with – is that people like my wife Maggie who didn’t always get guacamole and never got meat are paying more than they used to for their basic vegetarian or vegan bowl or burrito. And while total complaints are still less than 25 across all 9 of our restaurants, as time passes more people are raising their hand in protest. Nobody likes to see prices go up. And vegetarians often assume they will pay less because that’s how it’s so often been done.
On that note… we did price all of our main dishes – with or without meat – to be similarly priced to what our neighbors charge for their basic vegetarian dishes. And when compared to some of the newer players (Sweetgreen, Dig Inn, By Chloe, etc.) we are still cheaper when comparing apples to apples – or perhaps I should say carrots to carrots. Add meat and/or guacamole and we win the value game handily.
Here’s our unique challenge at Boloco. As one of the few fast food chains that is a certified B Corporation – and really for the last 19 of 20 years – we have been committed to paying our full-time team members a living wage. One of the biggest problems in our industry is that business success is too often achieved because of the ability to legally underpay the many employees who do most of the heavy sweating while working in restaurants. For nearly two decades we’ve sought to change that. The wages we pay our team members are some of the highest in the country, and yet most of you reading this would be hard-pressed to make ends meet even at those levels.
With that in mind, back to pricing. The actions required for human beings to prepare a meal, from the time the raw ingredients enter our restaurants to the time they are laid to rest on your burrito or in your bowl, carry a very high labor cost. That cost doesn’t vary a whole lot regardless of whether its veggie or meat. So, when you factor in the cost of paying a living wage – a just wage – to the people who you see every day in our restaurants, there is an argument that the price of all burritos regardless of content could be priced about the same. So, we bit the bullet and decided to test it exactly the same.
An analogy to consider…just like the cost to Apple of 8G of memory vs. 32G or 128G is never exactly reflected in the varying price of an iPhone – they choose very convenient pricing models you may have noticed – we felt it was better to provide one price for each size that, on average, allowed us to pay our people well and in turn earn a responsible profit. And on the topic of profit, we just started turning one again in February of 2017… you can read all about our travails of the past few years here. For those who think we are being greedy and running a money machine, I assure you nothing could be further from the truth. We put people first, we give the benefit of the doubt to customers in nearly every situation, and we have never felt better about our philosophy in a too-often ugly business world. It’s still far from perfect, but we know we are focused on issues that would change the restaurant industry if everyone acted in the way we do.
I’m sure some of you have feedback – I hope so – please feel free to comment or tweet or email whatever you like. We are listening and I will respond to many personally. We appreciate you, and your input, and your loyalty, more than you might ever imagine. We need your help to get this right, so please do share.
CEO & Co-Founder