Next Level Burger Acquires Veggie Grill to Become North America’s Largest Fast-Casual Vegan Chain

In one of the largest M&A deals in the US plant-based space, Next Level Burger has acquired fast-casual chain Veggie Grill. The move comes a year after the latter was saved from bankruptcy, and makes Next Level Burger the largest fast-casual vegan chain in North America.

Plant-based burger chain Next Level Burger has acquired vegan restaurant group Veggie Grill from VegInvest, an investment fund that rescued the latter from the brink of collapse last year. The move will see VegInvest join Next Level Burger as a shareholder and partner.

The acquisition makes Next Level Burger the largest vegan fast-casual chain in North America with 27 locations, after adding Veggie Grill’s 17 sites to its existing roster of 10. “We’re not just writing a new chapter for Veggie Grill – we’re starting a new book,” said Next Level Burger co-founder and CEO Matt de Gruyter.

De Gruyter will also take over from Veggie Grill co-founder and CEO TK Pillan, who will exit the company alongside fellow co-founders Ray White and Kevin Boylan. It’s a sea change for a brand that nearly collapsed last year “after some decisions led to a make-or-break moment for its continuance”.

Next Level Burger’s expansion drive

Next Level Burger was launched by de Gruyter and his wife Cierra in 2014 as a mission-driven restaurant chain aligning human health, ecological sustainability, and an ethical supply chain. “Since our founding in 2014, our company mission has been focused on a triple bottom line philosophy of doing good, having fun and making money,” de Gruyter said in 2022.

A decade after its launch, the company is present in eight cities nationwide, with six in-store locations at Whole Foods Market. Next Level Burger says it has stopped nearly 60 million lbs of carbon emissions from being released into the atmosphere, converted almost two billion gallons of fresh water, and supported “acres and acres” of organic farmland.

While a 100% plant-based brand, 53% of Next Level Burger’s customers don’t identify as vegan, according to a 339-person survey it carried out last year. In fact, a fifth of respondents said they would have eaten a meat-based dish at another eatery or home had they not eaten at the vegan burger joint, underscoring its efficacy in displacing animal-sourced foods with plant-based.

Its acquisition of Veggie Grill comes 16 months after it raised $20M to fund its expansion plans – the fast-food chain hopes to open 1,000 locations in the long term. “Veggie Grill by Next Level will mean all sorts of changes: organic produce, non-GMO ingredients and ensuring living wages for our many team members across the country,” said de Gruyter. “Everything guests know and love about Veggie Grill is about to be taken to the Next Level, but know that the fan favourites aren’t going anywhere.”

Overcoming a tumultuous period

Veggie Grill, which was founded in Irvine, California in 2006, has been a leader in the US plant-based foodservice sector ever since. The restaurant chain is known for partnering with vegan brands on innovative dishes, including Yo Eggs, Beyond Meat and TiNDLE Foods.

But much like the overall vegan market in the country, the company has faced significant headwinds recently. While it currently has 17 locations, Veggie Grill boasted 29 only a few months ago. But a drop in post-pandemic office-worker footfall meant it had to cut over 40% of its foodservice footprint.

“Instead of trying to continue to manage units that, without office traffic, would not be profitable, we determined it would be a better long-term move to right-size our fleet of restaurants,” Pillan explained to Food Dive in September. “This allows us to really focus on the restaurants where the economics are strong, continue to focus on innovating on the menu, and then grow into other locations based on this new world of how consumers really use fast-casual restaurants.”

In 2021, it launched a second dining concept called Stand-Up Burgers, citing growing consumer demand. But this brand diverted Veggie Grill’s energy and did not turn the tide around for its quieter locations, as Pillan had hoped. He spoke of the difficulty of creating “just one great brand, let alone two”, adding that closing Stand-Up Burgers would allow the company to refocus on its core offerings. (Veggie Grill also operates vegan taqueria Más Veggies, which has 16 locations nationwide.)

Veggie Grill’s struggle mirrors that of the wider plant-based industry, where major brands like Beyond Meat have faced continuous losses, while some have shut operations. And while one report revealed that foodservice sales for plant-based meat reached an all-time high in the US, pound sales still haven’t reached pre-pandemic levels, with restaurants like VeganBurg (San Francisco), Love.Life (Los Angeles), Souley Vegan (Oakland), Stalk & Spade (Minnesota) and Citizen Eatery (Austin) all closing down in 2023.

But on the back of its Veggie Grill acquisition, Next Level Burger’s de Gruyter remains optimistic about the industry. “I believe in my bones that the exponential growth of the plant-based industry is an inevitability,” he told Green Queen. “We are on the right side of history, from climate change to human and planetary health, and the science is clear that the future of sustainability requires a shift toward eating plant-based. Our millions of guests served to date seem to agree, and we’re just getting started.”