By Thomas Heath
Washington Post Staff Writer
Monday, March 10, 2008
Like lots of business plans, the one for a bug-like contraption offering healthful food on the streets of Washington bubbled up from some buddies kicking ideas back and forth.
As they mulled their quest for selling the perfect pizza slice on the streets of Washington, Gabe Klein, who had worked for Zipcar, the by-the-hour car rental company, began to think about other possibilities. Pizza soon evolved into health food, and On the Fly was born.
"People are used to a much higher quality street food experience than you can get in D.C.," said the Connecticut native. "We looked at that need and said that is something we can fill."
Klein, 37, and two friends founded On the Fly, offering locally produced, good-for-you food in both mobile and bricks-and-mortar cafes -- "smartkarts" and "smartkafes" -- that are showing up in downtown Washington.
This is not your father's hot dog stand.
On the Fly says its target audience is the earth-loving, health-conscious, exercising, frugal-but-affluent urbanite who lives or works in downtown Washington.
Starting at a 2,500-square-foot central kitchen on Capitol Hill, On the Fly creates a menu ranging from homemade hummus to a four-soy salad with tofu and shiitake mushrooms. The macaroni and cheese includes whole wheat pasta and low-fat smoked gouda. You can get organic smoothies and fresh-cut pineapple, but there's no sugary corn syrup in the house.
They also sell specialties from local restaurants, such as a chicken barbecue sandwich from Rocklands on Wisconsin Avenue or a veggie empanada from Julia's Empanadas in Adams Morgan. The bread is whole grain, but good luck finding mayonnaise or butter to smear on it.
"It's Whole Foods meets 7-Eleven," said On the Fly finance chief Michel Heitstuman, 48, an engineer who once worked for IBM and AOL.
On the Fly hasn't arrived without controversy.
D.C. Council member Jim Graham (D-Ward 1) voted to change the city's licensing laws to allow On the Fly and similar businesses to operate on the streets, which angered some vendors already doing business.
"I wanted to allow more creative vending opportunities," Graham said.
George Harrop, who started and sold a group of upscale espresso bars in downtown Washington, said that aside from controlling costs, which is the bugaboo of most food businesses, On the Fly must become something special to its customers in order to be a success.
"The demographic looking for health food is looking for experience," Harrop said. "If they can provide that, they might have a chance of success. But does the perception of health food fit with a truck on the street?"
In this case, a truck that resembles a fly.
The "smartkarts" are electric vehicles built by a Chrysler division in Fargo, N.D., and are specially outfitted with steam wells, holding ovens and refrigeration so that On the Fly can serve hot food at regular locations. Two are in service: the Diego specializes in Latin food and is stationed at Eighth and H streets NW, while Smokin' Joe at Seventh and F NW has a barbecue menu. A third vehicle, Ms. Miyagi, will arrive later this month and offer Asian Fusion cuisine at a location yet to be named.
The conventional cafes are above the Farragut North Metro station and at the Results Gym on G Street SE.
Klein, Heitstuman and their partner, Christopher Lynch, 38, owner of L'Enfant Cafe, divide up duties: Klein knows transportation and the city; Lynch knows food; Heitstuman minds the money. They raised about $1 million to get their business off the ground, including nearly $500,000 borrowed from banks. The three partners chipped in $100,000, and investors made up the difference
"I am in it for the long haul," said Jenny Crawford, a real estate agent who invested in the firm because she said there's a niche for good street food in D.C. "We have the option of reinvesting or pulling out at the end of 2009, and then annually after that."
Heitstuman said the firm hopes to be cash positive this year, depending on how fast it grows. The company, which employs 15, within months plans to have eight food carts stationed around the city at a cost of up to $40,000 per truck. A third cafe may open this summer.
There could be more after that, depending on revenue and demand. They also have their eye on a spot somewhere near the new Washington Nationals Park, the baseball stadium that opens March 30.
"Our business plan is to provide great food for people of D.C. and other cities as we move forward in an environmentally conscious way," Klein said. "We are trying to provide a healthy alternative where people live, work and play in high-density areas with the highest traffic. And if we do the right thing for our customers, and do the right thing for the environment, they we will get a good return."
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