Former Lululemon CEO Christine Day wants to reinvent the frozen dinner

Imagine you could do it all over again, start a new company in any industry. Imagine you had no legacy customers to satisfy, no assets to maintain, no dividend to pay—nothing to stop you from creating the perfect postmodern organization.What would you do?If you’re a seasoned and successful chief executive like Christine Day, you just might join something that looks a little like Luvo Inc., an ambitious young company that makes, of all things, healthy frozen dinners.

Day’s the former Starbucks vice-president who, in 2008, moved a few hours’ drive north from Seattle to take the helm at Vancouver-based Lululemon Athletica. In the five years she ran the yoga wear retailer, sales grew 350%. Up to the day in 2013 she announced she’d be stepping down, its shares appreciated more than 400%.

To the surprise of many, the 51-year-old didn’t go back to the U.S., where the British Columbia-raised executive had lived since her college days. Nor did she step into another corner office at a multibillion-dollar company. Instead, last April, she joined tiny Luvo. A puzzling choice, at least to some.

Just before Christmas, Day took a break from negotiations with private-equity firms to explain her decision. In part, she had been craving the challenge of a startup: “You’re building the brand, you’re building the business model and the culture of the company and, frankly, all the growth and value creation is ahead of you.” But she also says she was drawn by the company’s values and potential to do good in the world. “Purpose- and passion-led companies are really important to me. And when I look at the state of nutrition and the state of the food industry, I think it’s ripe for disruption.”

Luvo’s healthy frozen meals are about as far as you can get from the Hungry-Man dinners typically collecting frost in the freezer aisle. Rather than salty Salisbury steaks, Luvo’s lineup includes burritos filled with chicken poblano verde or organic roasted eggplant and quinoa, pizzas topped with ricotta and apricot glaze, and entrees like red wine braised beef with polenta (All sell for between $4 and $8). Each contains fewer than 500 calories and 500 milligrams of sodium, along with antibiotic-free meat and foodie-friendly ingredients such as flaxseed-and-coriander flatbreads produced in Modena, Italy.

Luvo only made its Canadian debut in February, but the brand is better known in the U.S., where it’s stocked in 6,000 supermarkets, served on Delta Air Lines flights and pitched by celebrity investors that include retired New York Yankee Derek Jeter, NFL player Troy Polamalu and best-selling self-help author Dr. Mark Hyman. Last year Fast Company named Luvo one of the world’s 50 most innovative companies. And in January it was the subject of a Celebrity Apprentice challenge. In the episode, Day tasked the competing teams (which included Geraldo Rivera, Leeza Gibbons and former 90210 star Ian Ziering) with creating a pop-up Luvo bistro to showcase the brand. If it felt the slightest bit silly, you couldn’t tell from Day’s friendly but confident demeanour. While there may have been a whiff of flop sweat to those misfits, the fact Day has gone from minding one of the world’s premier lifestyle brands to shilling frozen burritos doesn’t mean she should be cast with them. TV dinners or no, Day just might have chosen the perfect Canadian startup, at the perfect moment, to launch her next act.

From its inception, Luvo has been a hybrid of passion and profit potential. Around 2010, Stephen Sidwell grew so tired of being out of shape—the result of too many fast-food lunches and white-tablecloth dinners—that the Vancouver investment banker embarked on a personal transformation. At first he tried a rigid diet plan pitched by an athlete on TV, but it gave him headaches and made him tired and grumpy. He tried to enlist his wife to cook healthy meals all the time, but it was exhausting, and the kids wouldn’t eat them. Finally he hired Stephen Ford, a nutritionist trained at the University of British Columbia, as his personal chef. Sidwell’s demand: three balanced meals a day, with no more than 1,700 calories in total and low on salt. “To my surprise, the food tasted amazing,” he says. Sidwell lost 30 pounds in three months, yet Ford’s meal plan didn’t leave him hungry or short on energy. It led him to ask, “Why isn’t this food available everywhere? This was so easy. It took no discipline on my part, because there was no sacrifice.”

Sidwell had already had a big score in the food business. In 2009 he and Yves Potvin (of Yves Veggie Cuisine fame) founded Gardein, a meat-substitute brand, which sold to Pinnacle Foods Inc. in 2014 for $175 million. The entrepreneurial wheels in his brain were turning again. He called Mike Roberts, the former chief operating officer of McDonald’s, now working as a consultant, for advice. At first Roberts wasn’t convinced. “How about I have my chef come cook for you?” Sidwell offered. Ford wound up spending 10 days at Roberts’s home in Chicago. By the end, the industry veteran wanted in.

“We had the idea from the beginning of creating a lifestyle brand where you’d have ready access to great-tasting, quality food wherever you are,” Sidwell says. But Roberts’s forte was food service, as was that of his consulting partner, Mike Donahue, another one-time McDonald’s exec. The team decided to start with a healthy restaurant chain. In the business plan it was called Stephanie’s Place, after Sidwell’s daughter (his wife’s name, Wendy, being already taken). Before the first outlet opened in Palo Alto, Calif., in 2011, a marketing firm came up with the name LYFE Kitchen, short for Love Your Food Everyday.

True to Sidwell’s vision, the company soon started selling a frozen version of its entrees and snacks in grocery stores under the name LYFE Kitchen Retail. As they grew in tandem, though, “the demands of the two different businesses were significant,” Donahue says. One being fresh and one frozen, they had completely different supply chains. There was also a potential conflict between the restaurants’ franchise model and the retail side’s corporate one. So in 2013 the partners split the company in two. The ownership was identical for both firms, at least at first, but the management was divided, with Donahue and Roberts taking the restaurants, and Sidwell helming what would become Luvo in Vancouver. (The Carlisle family of Memphis would later take a controlling stake in LYFE Kitchen, which now has 14 locations in the U.S. and plans to open up to 10 more this year.)

Sidwell had never met Christine Day when he read in a newspaper that she was stepping down from Lululemon. “I thought, Wow, she’d be perfect for Luvo,” Sidwell says. (A financier by trade, he never intended to run the company himself.) She had a demonstrated understanding of marketing, finance and operations, as well as consumer desires. But most of all, she had the ability to execute a business plan, Sidwell says. “In any startup, one of the most critical skills is execution.”

When Day arrived at Lululemon in 2008, she was considered a welcome change from the more top-down leadership style of predecessor Robert Meers. She gave store managers leeway (and a budget) to design their stores as they saw fit, to suit the neighbourhood and the clientele. (This echoes a point made by Starbucks founder Howard Schultz in his memoir, in which he credited Day with devising the way the coffee shops should be slightly different from one another, “like sisters,” rather than corporate clones.) When a decision was made, she was careful to spell out to employees why it was made. She was no fan of quantitative market research, urging executives to instead spend time in stores, folding clothes and talking to customers. But like Lululemon founder Chip Wilson, she espoused an Ayn Randian level of personal accountability, demanding people fix their own mistakes. When they couldn’t, as in the case of chief product officer Sheree Waterson and the company’s sheer pants debacle—in which customers reacted angrily to fabric so thin it bared their behinds—they were shown the door.

Day came away from Lululemon in January 2014 largely unscathed. True, she had detractors. In May 2013, Carolyn Beauchesne, a blogger who runs a site called Lululemon Addict, wrote that “Day has ruined everything special about Lululemon. The bulletproof quality, the fit, the femininity, the Lululemonness of the product.” And last year, a Stanford case study ascribed to Day a good deal of the responsibility for the company’s fabric quality problems. But if Lululemon was perceived to be coming apart at the seams, investors saw Day as the glue holding it together. The day she announced her pending resignation in June 2013, LULU shares slumped 17.5% on the Nasdaq.

“A lot of CEOs I come across are very driven and firm, and Christine is all of that, but she has this incredibly compassionate side too,” says Sue Matheson, who chairs the B.C. chapter of MacKay CEO Forums, where Day rubs shoulders with an otherwise all-male group of captains of industry. “When you look at her history with Starbucks and Lululemon, how can you not believe she’s going to be able to grow this company in the same way?”