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National Restaurant Association - Turn restaurant success into retail revenue

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Turn restaurant success into retail revenue

Your guests can’t get enough of your barbecue sauce. Some even ask if they can buy extra to take home. Don’t miss out on the opportunity to boost your bottom line by turning hot menu items into retail products. Here are some tips from restaurant-industry experts to help move in-demand items from the menu and onto retail shelves.

Fill a demand.  Don’t go to market with something that can’t win on the shelf, says Amy O’Neil, founder and COO of PhaseNextHospitality, a franchise-operating company based in Plano, Texas. “Consumers are very much interested in unique new flavors and open to bringing them home,” she says. But she notes that the competition is stiff. “You have to start with something that’s craveable, that you know there’s pent-up demand for and that people want to take home from your restaurant.”

Start small. Launching two new products means buying double the slots at the warehouse and at the grocery store, says Cincinnati-based Gold Star Chili brand manager Samir Daoud, so it’s often smarter to focus on one product at a time. “Start with the product people know you for,” he suggests. “Anything more will add costs.”

Offer something unique. When Lawry’s Foods launched its garlic, lemon pepper and orange citrus marinades in grocery stores, the only flavor of marinade for sale at the time was teriyaki, says Rich Cope, marketing director for Lawry’s Restaurants. “It has to be something distinctive,” he advises. “National retailers don’t want 12 varieties of Italian. They want something new and different.”

Do your research. “Research is everything,” notes Daoud. Ask yourself the following questions before you begin:

  • Who will make your recipe?  Are they certified?  Are they willing to make small batches in the beginning?
  •  Who will can or package it?  Who will design the label or packaging?
  • Who will store the inventory?
  • Who will distribute it?
  • What size product do people want?
  • What are people willing to pay for it?

“If you find out a bottle of your competitor’s product doesn’t sell for more than $1.99 and your manufacturer is telling you you’ll be out there at $2.99, that’s an uphill battle you may not want to climb,” says Daoud.

Consider using a specialty distributor. Lawry’s Foods brought attention to its new marinades by paying specialty distributors — middlemen between the producer and the retailer — for a slot in their designated shelf space until they had the sales numbers to afford direct distribution and slotting fees.

Keep the magic. “Whatever you take that’s magic in a bottle in your restaurant needs to still be magic in a bottle on the retail shelf, and translating those things can be difficult,” says O’Neil, a former senior vice president of retail for Caribou Coffee. “You go into these types of efforts to expand the brand and you want to protect that” or you could damage the restaurant’s overall reputation.

Use multiple methods to promote your product. Most retailers have demo teams who give away new products and coupons. “It’s expensive, but it’s a great way to get your product out there,” says Daoud. He also pays to advertise Gold Star Chili products via freestanding inserts (FSIs) and in-store signs. In addition, the company puts product coupons on the back of receipts at Gold Star Chili restaurants.

Create a complimentary relationship. The two sides – restaurant and retail – need to complement and enhance your operations, so make sure your retail offerings embody the same attributes as your restaurant side, says Rob Goldberg, executive vice president of Tommy Bahama, which operates retail-and-restaurant hybrids in addition to its stand-alone stores. “The two sides should really say something about each other. They’re complimentary. Otherwise don’t do it.”

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