Investment firm Mercato Partners announced today the launch of its inaugural food- and beverage-focused fund. Called Savory, the $90 million fund will invest in “compelling, up-and-coming restaurant concepts,” according to a press release sent to The Spoon.
Specifically, the fund will focus on “emerging multi-unit concepts,” according to the announcement, and the Savory website says the fund is investing in restaurant operators with 2–20 units to help them with further growth.
That’s no small feat nowadays, with the restaurant industry still flailing from statewide dining room closures brought on by the COVID-19 pandemic. Even with reopening guidelines in place and many businesses operating dining rooms again, no one is 100 percent sure how to proceed forward or, for that matter, keep growing. Even huge brands are shuttering locations, laying off staff, and filing bankruptcy. Smaller restaurant chains are even worse off.
Savory noted as much in today’s release, also adding that the unprecedented changes brought on by the pandemic will close many restaurants for good but also open up opportunities for “brands that are fresh, nimble, and well-funded to prosper in the food and beverage landscape for years to come.” No doubt all of these challenges are baked into the various strategies Savory will work on with its portfolio restaurants.
Three concepts so far are in that portfolio: Mo’Bettahs, R&R BBQ and Swig. Savory said in the release it can profitably grow concepts at a rate “exceeding 40% year-over-year” and that it has continued to do so even during the current crisis.
The operations team behind the fund is made up of over 50 restaurant industry vets and have expertise in everything from real estate development to supply chain logistics, facilities management, and event management. Tech isn’t specifically mentioned, though the bulk of the operations team comes from the Four Foods Group, a restaurant operator whose past portfolio brands include Little Caesars. Little Caesars has been among the brands to leverage tech to enable more off-premises orders. Kneaders, also in the portfolio, has also doubled down on off-premises orders and the tech that goes along with that during the pandemic.
The fund was created by Mercato Partners founder Greg Warnock partnered and restaurant industry veteran Andrew K. Smith, who also started Four Foods Group.