Moving Into Retail
Consumers can now enjoy the flavor of an Olive Garden salad at home.
This spring the Orlando, Florida-based restaurant chain started testing several of its products in grocery stores.
There are salad dressings, a four Italian cheese blend; fresh Mozzarella, and shaved Parmesan-Reggiano, all sold in Sam’s Club stores.
“We’re looking at other ways to extend the brand beyond the four walls of the restaurant,” says spokesman Rich Jeffers.
“We’re looking at peripheral products— nothing around food because everything we make in the restaurants is hand-crafted, so we chose other things that are natural extensions.”
Not only are the retail products a way to boost sales, but they’re also, “a way to extend the brand beyond the restaurant,” Jeffers points out.
Other restaurants realize the benefits of selling their products outside and sometimes it can be the saving of a company.
Skillet Street Food, a diner and food truck operation in Seattle almost went out of business in 2009, but then Martha Stewart put the company’s bacon jam in her Christmas catalog.
“It was actually what saved us,” says Josh Henderson, owner and chef. “We sold almost $150,000 of bacon jam in a month. That was monumental. Now we sell through the U.S. and Canada.”
Henderson’s annual sales from bacon jam are now half a million dollars but feels he’s hit a ceiling. The next step is deciding whether he wants to grow the business. “Are we going to become a bigger brand?” Henderson says. “If we get bigger, we need to hire people.”
The jam was first created at Skillet but is now produced in Nebraska to its specs. It is distributed from there to around 300 retailers across the country—to gift shops, wine shops, Whole Foods, and other retailers.
The big challenge, Henderson says, has been introducing the bacon jam to consumers. “Once people taste it it’s one thing but until then they’re just going to look at it. It’s a $14 product and there’s no way for people to know [what it tastes like].
But he hasn’t had to do a lot of marketing. “Mostly it’s been viral,” he says, through sites like Facebook, and deal sites like Gilt City. The bacon jam is front and central on Skillet’s website though, and Henderson says that is the origin or 40 percent of sales.
Havana Central, a three-location Cuban chain based in New York Citystarted selling its hot sauces in retail locations in 2005. They’ve been so popular that this spring the company started selling them in a mixed trio pack.
And later this year Havana Central will make its first foray into the packaged food category with a line of frozen empanadas.
“It’s a revenue opportunity but it’s a branding opportunity as much as anything else,” says founder and president Jeremy Merrin.
He expects consumers who recognize the Havana Central brand to be keen to try them at home, and hopes that others will get to know the brand through the products and then become new restaurant customers.
To start with, the empanadas will be carried in grocery stores near the Havana Central stores, since, says Merrin, “we have a decent amount of brand recognition in the areas that we are in. But if we see success we’ll push it further and further.”
The hot sauces were launched with no marketing or promotional support but things will be very different for the empanadas.
“It’s been a big learning curve,” Merrin says. Think about all we need to understand: FDA manufacturing, distribution, packaging, and what the deals are that we should make from our end. This is an expertise that we don’t have so we have to buy it or hire it. We also have to decide as a brand how we want this positioned.”
So far, finding the right manufacturer has been the biggest challenge, he says. “Next is finding the right distributor who we can trust and rely upon and keep the integrity of the brand. We were doing a lot of networking and we rely heavily on references. And we won’t make a deal until we’re comfortable.”
The empanadas will be sold for $1.50 to $2 apiece—less then in the restaurant where they’re $3 each or three for $8.
“We want them to be less expensive than we offer them in the restaurant to represent a value, but on the other hand it shouldn’t be so cheap that it seems to be a cheap product,” Merrin says.
By Amanda Baltazar