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An organic expansion
Sydney-based takeaway and dining chain, Iku Wholefood, hopes to expand its vegetarian, dairy-free concept further as the healthy cuisine movement continues to infiltrate the mainstream fast food sector.
“The market’s swinging in our direction for sure, but we’re still far ahead of the others,” says Ken Israel, owner of Iku.
He says Iku has engaged in “slow growth” since the first store opened in the inner-west suburb of Glebe, with 13 stores now under its belt.
Israel has been involved in the concept since its conception in 1985 as landlord of the two founders’ site, however, only purchased the business off them in the early 90s.
“I got into this business because of my own passion for healthy food and my own food journey. We’re not
your traditional retail food chain,” he says.
The former advertising art director quickly expanded the concept to a site in Darlinghurst but found the
existing business model wasn’t working.
“I wanted to open more stores but didn’t know how to do it and for years we lost money. We ended up
realising that we needed to run more of a commercial kitchen model so we separated the business.”
This means all food - including best sellers like casseroles and a dairy-free lasagna with soy-based
bechamel sauce - is now prepared daily at a central kitchen in Marrickville and then sold to the stores,
three of which are franchised.
Israel says the company as a whole turns over $5 million net annually, but the retail side of the business is
largely held up by the kitchen’s profits.
“If we didn’t have the stability of the kitchen we’d be out the back door. Our kitchen runs at a profit and our
retail side at a loss. Rents are just killers.
“We keep on saying to landlords that we want to be on a percentage model. We provide a service to the
community. We need more passionate landlords like I once was.”
Some of Iku’s stores have dine-in options, yet the best performing store - a takeaway only site at the MLC
Centre in the CBD - is exemplary of Iku’s focus.
“We’re trying to take the entertainment side out of eating. Food is about nutrition. Iku is not a place you take
your girlfriend for dinner. It’s about quick meals that are zen.”
Israel hopes to continue expanding via bricks and mortar as well as e-commerce, with an online orders site
soon to be launched.
The wholefood market is also an enticing option. Artisan supermarkets like Thomas Dux and Harris Farmer’s
Market are on the radar, as is an ongoing refresh of the bricks and mortar model.
“We’re going for a more contemporary look. At the time the orange made us stand out but now we’re going
for more natural wood finishes,” says Israel.
This article was originally published in Inside Retail's weekly edition for subscriber's only. |
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