CHAMPIONING AUTHENTICITY AMID CULINARY INNOVATION, SUPPLY CHAIN TRANSFORMATION AND BUSINESS EXPANSION
PROJECT PARTNER
CHAMPIONING AUTHENTICITY AMID CULINARY INNOVATION, SUPPLY CHAIN TRANSFORMATION AND BUSINESS EXPANSION
Hady Kfoury, Founder and CEO of NAYA tells us about the strategies behind the fast-casual chain’s success.
BUSINESS INTERVIEW
TRANSFORMATION
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NAYA has come a long way since it opened its first full-service restaurant in New York in 2008. The company pivoted to a fast-casual model and has seen incredible growth in the past 15 years.
ere to tell us more about the culinary innovation, supply chain transformation and sustainability strategies behind their success is Founder and CEO, Hady Kfoury.
Origins
Hady moved to the USA in 2004 and after working with celebrity chefs Daniel Boulud and Francois Payard for three years, he realised Lebanese cuisine was underrepresented in the New York food scene.
“I thought there was such a great opportunity to elevate the
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cuisine and bring it to where it deserves to be,” recounts Hady. “That's where the idea arose for NAYA in 2007. I raised money from my family and started working on my first restaurant. The process took me a while between finding real estate and starting the new venture. At the time, the market used to be called the landlord’s market. There were very few vacancies compared to today.
“To get a prime location in New York, you had to go to a landlord and present your business plan. The first question was always ‘How many restaurants do you own?’ and unless you already had an establishment, they turned you down. So it took me about a year to find a very basic location, nothing crazy or particularly fancy, and it wasn’t the prime location where I wanted to be.”
Hady’s plan was to open a fastcasual restaurant in an area with a dense population of offices, much like NAYA is today. But his first restaurant which opened in 2008 was in a more residential area, so it had to be full-service to match the expectations of local customers.
The ups and downs of this first establishment provided Hady
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with several valuable lessons but one of the key challenges was opening without any working capital.
“We opened in 2008 in November without any working capital because I had a certain budget to build the place and actually it cost one and a half times more than I anticipated. Unfortunately, I had to open the doors with no working capital and 70 per cent of restaurants fail in New York City in the first year due to a lack of working capital. We were fortunate to find generous suppliers who gave us 15 or 30 days of credit. Usually, nowadays, they'll start with COD (cash on delivery) until you're up and running for a few months and then they'll start giving you credit.
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“Hady’s plan was to open a fast-casual restaurant in an area with a dense population of offices, much like NAYA is today”
Fortunately, we were able to get credit from day one.
“Back then there was no social media – in the restaurant industry, you looked to the New York Times Wednesday paper because they had a whole dining section. It used to be the Bible of restaurants. We were lucky to feature in there a month after we opened since New York had never had a Lebanese restaurant. The next day we were inundated with customers and in a way that article saved us because we then didn’t have to worry about cashflow.”
From 2008 to 2010, the restaurant thrived. After the global economic crash in 2008 and the downturn in real estate prices, by 2010 Hady realised there was a valuable opportunity to expand his business enterprise at a reasonable price.
“In 2010, I decided to venture with an offshoot of NAYA called NAYA Express. It evolved into the model that I'm currently running, which is a fast-casual version of the original NAYA restaurant. We rebranded in 2017 and we dropped the word ‘Express’ from our name.”
The first four years after the first fast-casual store opened in 2010 were challenging. Hady recalls how difficult it was to build brand awareness in Midtown, Manhattan and survive when you only open five days per week because the vast majority of trade came from office workers. But despite these early challenges, NAYA rode out the rocky first years, started breaking even and then Hady began expanding –slowly but surely.
Fast forward to 2019, NAYA had seven locations and Hady brought in partners for the first time.
“We were the talk of Midtown,” beams Hady. “We could have continued with self-funded organic growth but with our partner TriSpan onboard we could accelerate our growth far quicker. TriSpan is a London and New York-based private equity firm with a dedicated fund for restaurants. The company is great at spotting emerging brands that have a promising future based on a proven concept. Since NAYA partnered with TriSpan we’ve been able to upscale our growth plans to add 10-15 locations per year.”
Hady opened back in 2008 has just been converted to a fully digital fast-casual restaurant in 2022.
Culinary Innovation
Throughout NAYA’s journey of growth since 2008, Hady stresses how culinary innovation has allowed the company’s menu, services and operations to develop alongside the evolving brand.
At NAYA, culinary innovation began with Hady’s family.
Here, Hady lauds his mother’s contributions to the first NAYA restaurant, where she helped bring authentic, quality Lebanese cooking to the business. The only issue? She was trying to apply the principles of home cooking in a restaurant setting. When a staple menu item like hummus took 72 hours to produce, Hady admits the business needed to adjust its culinary approach – although he stresses it was the love and passion for authentic Lebanese cuisine that put them on the map in the 2008 New York Times article.
Bringing the NAYA story full circle, the first full-service restaurant that
“Lebanese cuisine, in general, is very labour intensive,” explains Hady. “Once we moved to the fastcasual model we had to evolve in how we prepare ingredients and manage the kitchen. We kept our cooking authentic. But we started
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to use automation more and more. You see in Lebanon labour is very cheap. So at restaurants in Lebanon you could find 20 cooks in the kitchen, with one person just chopping parsley all day and another cutting onion all day. This model is not possible or practical here in the US. So you have to be smart with how you engineer your menu and how you cross-train the team to be able to do it all.
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“After we had four or five locations we opened our commissary, which supported 50 or 60 per cent of our menu”
“So as we started evolving the way we prep with a reasonable amount of kitchen staff, then we brought in the right equipment to speed up our preparation process even further. We did extensive R&D and accepted we’d encounter a lot of trial and error during this time. But we always asked the question: how can we keep up production while maintaining the authenticity aspect of the menu?
“After we had four or five locations we opened our commissary, which supported 50 or 60 per cent of our menu. It offered a bigger space where we could produce all our dips and sauces, cut and marinade our meats and then ship the items to the stores every day. Produce was still cut on-site every day at every location to ensure ingredient freshness.”
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Today, roughly 50 per cent of NAYA’s menu items are produced in its commissary but Hady indicates they will be removing it from their operations in the near future by looking for the right copackers.
“Moving away from the commissary to copackers has been a very big challenge so far,” admits Hady. “But the goal is always authenticity and to keep our unique flavour profiles. It’s a work in progress but we're almost there, working day and night on the project because we outgrew our commissary. Once we have the right co-partnerships in place, we will be able to grow tremendously.
“First, we won’t be dependent on the geographic location of our commissary, so we could expand anywhere in the US. Second, we won’t be beholden to products with a shelf life of two or three weeks and can start implementing HPP (high pressure pasteurisation), for example, which will extend the shelf life for 60 to 90 days without any
preservatives. This is where we are focusing our culinary innovation, putting a lot of work and effort into our products so we can keep on growing – while still putting the customer first and championing authentic Lebanese cooking.”
One of the key early co-partners NAYA has started working with is Fadaro Foods.
“Fadaro Foods has been a great partner to NAYA in terms of securing our produce. We get our produce from them daily across all our locations, covering the New York tri-state area. We've been very happy with Fadaro’s service and their products. For instance, with tomatoes, we have certain size and firmness specifications to be able to chop them easily. Fadaro Foods meet these needs very well, but they also deliver flexibly based on our needs – day or night. As such, they've been great partners in terms of freshness, due to their local sourcing, and they offer great quality and prices. They've
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“Fadaro Foods has been a great partner to NAYA in terms of securing our produce. We get our produce from them daily across all our locations, covering the New York tri-state area”
been very supportive and very accommodating, especially now we have 21 restaurants, and we buy a lot of produce.”
Sustainability
Alongside their culinary innovation, NAYA strives for sustainability in its operations on several fronts and within their supply chain.
“We support local businesses and source our produce locally as much as possible,” says Hady. “Also our containers are made from fibre and we’re investing more and more into electric equipment to move away from gas appliances. Our newer NAYA stores are 100 per cent electric.
“We are also introducing a reusable bowl for our customers. Guests grab their meal in the bowl and then they can bring it back and we’ll either give them a newer version, recycle it, or rewash and reuse it. The advantage is customers using the
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“When it comes to new locations, we are focusing this year on the sustainability aspect of our construction”
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recyclable bowl will receive a 10 per cent discount on their order, motivating them to bring it back.
“When it comes to new locations, we are focusing this year on the sustainability aspect of our construction. We're trying to use natural and recyclable materials as much as possible. Across all our locations, established or
under construction, we use smart thermostats and all our lights are sensor-based so they turn off by themselves too. We also use smart sensors with our taps, soap dispensers and dryers to limit our environmental footprint. As many of our cleaning products as possible are organic and we try to use limited plastic, opting for glass instead. They’re baby steps
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but they all contribute towards our greater emphasis on ESG and sustainability.”
NAYA works with multiple suppliers but Hady explains how the company tries to consolidate its supply chain to further improve its sustainability.
“Say we have four suppliers making
four deliveries in four trucks –the environmental impact soon starts to add up. So we try to consolidate our suppliers as much as possible and reduce the total number of orders we place. As we move away from the commissary and towards co-partners, maintaining our emphasis on local products wherever possible, we are trying to keep making
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progress with our company’s impact on the world around us.”
So what does the future hold for NAYA?
Today NAYA has 21 restaurants: 14 in New York with establishments in three other states – Connecticut, Pennsylvania and New Jersey.
Hady shares how the goal is to open 25 restaurants in New York with expansion radiating outwards on the east coast north to Boston and south towards Washington DC.
“We are trying to grow as much as possible,” says Hady. “We’re not looking to the west coast because we would like to maintain our local approach to sourcing from our New York City base of operations and avoid using aeroplanes. We’ve proven our concept in urban areas so next we would like to break into suburban areas because here the potential for growth is limitless. One of our major goals at this point is to open 50 stores by 2025 and if things go as planned, hopefully, we will become a public company at some point.”
Learn more about NAYA by visiting their website eatnaya.com.
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Connect with Hady
Added Value
Mentor appreciation
Hady expresses deep gratitude to his first culinary mentor, celebrity chef Daniel Boulud.
“Daniel is a legend in New York and the US in general,” says Hady. “He’s had a tremendous impact on me and mentored many successful chefs and restaurant operators. His impact on cuisine in the US has been profound.”
Formative education
Alongside his appreciation for his time spent with Chef Daniel, Hady celebrates his formative years spent attending the École hôtelière de Lausanne, the worldrenowned Swiss hospitality school.
Events
Hady recently returned from the National Restaurant Association Show in Chicago and he is looking forward to the next event in Chicago, May 18-21, 2024.
Every year Hady attends the North American Association of Food Equipment Manufacturers (NAFEM) show and insists it’s a must for anyone involved in the food service industry.
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