Sustainable Development Society Hosts Organic Fast-Food Entrepreneur

Mac McCabe is revolutionizing the fast-food industry, one Organic Yukon Gold Fry at a time. McCabe (MBA ’71) is President and CEO of O’Naturals, an all-natural, mainly organic fast-food chain that aims to offer consumers an alternative to the fat-laden,
environmentally-unfriendly mega-chains that McCabe wryly refers to as “The Evil Empire”.

McCabe addressed a group of 20 students on January 16th as part of the Harvard Student Environmental Round Table (H-SERT) speaker series, sponsored by The Sustainable Development Society. McCabe both entertained and educated the crowd with his description of launching O’Naturals.

Gary Hirshberg, CEO of Stoneyfield Farms, approached McCabe with the concept in 1997. McCabe immediately accepted the role of President and CEO and set about raising seed financing and hiring a small team.

Before launching, McCabe’s team spent 500 hours conducting interviews and focus groups with Bread & Circus customers in Portland, Boston, and New York City. The goal was get the target customer’s description of their ideal fast-food alternative. The result was a completely customer-driven business plan – everything from the menu to the floor plan was determined by customer input.

With the dotcom craze in full swing in September 1999, raising second round financing for a non-technology firm was no easy task. With perseverance, McCabe managed to raise enough funding to secure a site for the first store in Falmouth, Maine, a suburb of Portland. In keeping with the company’s environmentally sustainable mission, the building was constructed using green design principles. For example, the interior walls are made of wood salvaged from the hangars at the Brunswick naval air station.

The final challenge before opening for business was expanding the team. Customer service was a key point of differentiation, and they needed a customer-service guru with experience in the fast-food industry. McCabe found a perfect candidate in David Bulger, a Disney food service veteran, whom he hired as Director of Operations. From there, they assembled the in-store team, and opened the first store in Falmouth on May 18th, 2000.

O’Naturals has been a striking success. It has struck a chord with the local community, proving that investing in customer research up front really does make a difference. Customer loyalty is high, with many patrons coming by more than four times a week. The main draw is the tasty, healthy food, which includes flat bread sandwiches, fresh salads, soups, and Asian stir-fry. Although low-fat and vegan options are available, the emphasis is on taste rather than health. The menu includes decadent items such as steak sandwiches (naturally raised, of course) and organic cheesecake. In addition to delicious food, kid-friendliness is also a key to the chain’s success. The restaurant includes a kids’ corner, complete with a model train, Lego’s, and a selection of children’s books.

Although the venture is not yet profitable (in part due to the downturn in the economy since September 11), it is on its way to breakeven. McCabe and Hirshberg have plans to open two more O’Naturals this year, and are exploring sites around Boston and Portland. Three additional sites are slated for 2003. Thereafter, the goal is to expand nationwide using a modified franchise model, but McCabe is wary of growing too fast.

Going forward, scalability seems to be the major hurdle facing O’Naturals. Several students questioned whether his team can replicate the Falmouth restaurant’s combination of high quality food, exemplary customer service, and community involvement. McCabe is convinced that the business it scaleable. “Ultimately, achieving scale requires hiring high-caliber people who are passionate about O’Naturals’ mission.” he concluded.