(Bloomberg) -- In 2008, when Sam Polk was a senior distressed trader at King Street Capital Management, stress was his operating principle. King Street was one of the world’s largest distressed hedge funds at the time. “Bear Stearns went down, Lehman Brothers went down. Structures we thought were stable were disappearing in front of our eyes,” recalls Polk, who spent the time leveraging bets against the assets of the shut-down banks.
Polk left Wall Street in February 2010, frustrated that while the country was awash in job losses and foreclosures, his co-workers worried about their bonuses.
“When I left, my brother said, ‘Imagine what you’ll be doing 10 years from now.’ Well, here I am, doing something almost as stressful,” says Polk.
As the founder of Everytable, Polk is surveying a pair of massive crises, the coronavirus pandemic and the Black Lives Matter protests, and feeding the same struggling people he read about a decade ago in books such as Taylor Branch’s trilogy about Martin Luther King Jr.
The Los Angeles-based fast-casual enterprise makes healthy, inexpensive bowls of popular dishes, from Jamaican-Style Curry Chicken to Vegan Taco Salad, that sell for $5 to $8, with prices varying in accordance with what the neighborhood can afford. In July 2019, he closed a $7 million funding round to expand a subscription program, a SmartFridge vending machine business, and additional storefronts.
Polk made his company for-profit after struggling with a nonprofit, Groceryships, now called Feast, that he started after he left Wall Street. “I learned nonprofits are set up to not scale and to always be in need of cash. I wanted to leverage economic power, but for people at the bottom of the pyramid.” (He remains on the board of directors for Feast, which provides wellness education and healthy food access in communities across the U.S.)
“Sam’s a free spirit who has gone through a real transformation as a person and focused his life on a new purpose,” observes Scott Goodwin, co-founder of Diameter Capital and one of Polk’s Wall Street backers.
“The position I’m in now is the polar opposite of where I was,” Polk continues. “Everytable was founded in the fight for social and racial justice. After all ‘food deserts’ don’t just happen—they are a product of systemic and structural racism, community disinvestment, an economy that works for only a select few.”
Since the start of the pandemic, Everytable has been feeding some of Southern California’s most vulnerable people. The company is delivering around 170,000 meals a week to the homeless community, the homebound elderly, and community college students who normally depend on school pantries, as well as customers ordering lunch and/or dinner. The Federal Emergency Management Agency is paying for a majority of deliveries to the needy, including some $5.8 million for more than 80% of the senior meals, with the Mayor’s Fund for Los Angeles chipping in. Polk says Everytable sells the meals to government agencies for $4.50 apiece.
“Our volume has grown about eight times what it was before corona,” says Polk. Apart from providing the government-bought meals, he’s kept two of his 10 Everytable locations open. With shelter-in-place rules in effect, the company’s subscription business has risen about 400% since the beginning of March. Everytable has hired more than 100 people to keep up with demand, with Chief Executive Officer Polk taking shifts to drive around south L.A. delivering food, too.
Polk credits a central kitchen model that allows the team to scale up quickly and efficiently. “We designed a restaurant company in a different way. We take a massive fleet of refrigerated vehicles, we have a sophisticated logistics team—and packing team and inventory management,” he says, projecting that Everytable will show a monthly profit for the first time after he closes May’s financial results.
The manic energy of 16-hour days reminds Polk of trading amid the financial crash. “The best trades were during the crisis. I remember buying Clear Channel bonds for 6 cents on the dollar, then going up to 100 cents on the dollar. The Lehman Brothers auction settled on 8.25 cents on the dollar, and it recovered in the 40s and 50s. There is no more fun time to be a distressed trader then when things are distressed.”
“I thrive in these environments,” he continues, noting the excitement that comes with making deals that get the meals he created paid for. “It’s invigorating in a way that’s like trading bonds on Wall Street.”
Everytable is to continue evolving toward a social equity franchise program, announced last year, in which company stores will be owned and operated by talented entrepreneurs of color. The program will go into effect by the first quarter of 2021, boosted by a $2.5 million investment at the end of January from the Annenberg Foundation and the California Wellness Foundation. Everytable plans to open 50 social equity franchises in Southern California in two to three years.
“They might not otherwise have access to capital to start their own business,” says Polk. “Creating pathways to ownership is a powerful way to rebalance the scales in an otherwise unbalanced economy.”
(In sixth paragraph, corrects name and operating status of the non-profit Polk founded.)
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