Veggie Grill, the largest plant-based restaurant chain in the U.S., is retreating from its rapid expansion plan and has closed 12 of its stores, including one located in downtown.
In a public relations strategy fit for the modern era, the El Segundo company’s co-founder and chief executive officer, T.K. Pillan, took to the company’s Instagram feed in late August to announce the news, writing that the closures will recalibrate a restaurant that once thrived on lunch-hour foot traffic in central business districts.
The closures, which spanned the past few months and make up about 40% of Veggie Grill’s total location count, were inclusive of its secondary brand Stand-Up Burgers.
Veggie Grill will still operate 17 units in states including California, Oregon, Washington and Massachusetts.
In an era that has seen plant-based dining surge in popularity, Pillan acknowledged his brand did not keep pace with changing consumer behavior.
“We thought our growth would be at a higher trajectory,” Pillan said. “Expectations got ahead of where some of these plant-based companies could deliver.”
Restaurant Business Magazine reported a change in the company’s funding structure last month. Private equity firm Brentwood Associates Inc. is no longer the majority owner. Pillan did not comment on changes in capital commitments, but did confirm that all stakeholders are still involved.
The company’s most recent fundraising round was at the end of 2016, when it raised $22 million between Brentwood Associates and Venice-based venture capital firm PowerPlant Management LLC, which recently filed to rebrand as GroundForce Capital.
Competition in the segment has grown heated. Veggie Grill, which was founded in 2006, enjoyed near-monopoly status among plant-based chains. However, the landscape grew more crowded with the emergence of brands such as downtown-based Monty’s Good Burgers LLC, Native Foods Acquisition LLC, and The Plant Power Restaurant Group LLC. Traditional restaurants, too, have jumped on the bandwagon.
Fighting for market share, Veggie Grill launched Stand-Up Burgers in 2021 in partnership with Manhattan Beach vegan giant Beyond Meat Inc., but Pillan said the two-pronged approach was too much for a restaurant business attempting to regain traffic after the pandemic.
“One great restaurant brand is hard enough,” Pillan said.
