Restaurant Industry Insights

Restaurants Getting in On the Grocery Store & Retail Craze

What started a few years ago as a way to stay afloat has transitioned into an additional revenue stream for many restaurants and a profitable one at that. One of the newest brands to enter the grocery store market is Hooters. 

According to Restaurant Business, the brand is starting its foray into stores with a line of frozen chicken wings and popcorn chicken. The chosen flavors include Dry Rub Smokes, BBQ Smoked, and Buffalo-Style. Not one to do anything small, you can find their first offerings in about 1,300 Publix Super Markets, with more expected by year’s end.

Other Brands in Grocery Stores

TGI Fridays has been in the frozen food business for over 20 years with items like mozzarella sticks with marinara sauce and loaded cheddar & bacon potato skins. They have 25 different appetizers in grocery stores around the country. They recently received $137 million from Kraft Heinz for an exclusive licensing deal with perpetual rights to sell their frozen appetizers. 

Wow Bao is increasing its retail footprint, going from about 6,000 to over 7,000 U.S. grocery stores in 2024. A brand under Chicago’s famous Lettuce Entertain You Enterprises, it took advantage of Chicago’s grocery stores in 2012, making its way into a handful of locations. In 2017, it was acquired by Valor Equity Partners. 

Today, it’s gone from offering three bun flavors to 10 and is planning on adding potstickers to the list. In 2022, it got into the U.S.’s largest grocery retailer—Walmart. Wow Bao owns over 90% of the frozen bao market. It’s also gone from three brick and mortars to 800 virtual kitchens and thousands of grocery stores.

Getting Your Restaurant Ready for Retail

Do you have a signature dish you think is ready for the masses? Here are a few things to consider before jumping into the retail division. 

  • Research: Most concepts know the direction they’re headed when it comes to grocery stores. Chicken wings, potstickers, and PF Chang’s frozen entrees are popular contenders. There’s a fine line, however, between popular and saturated. Discover your competition in the area and how their items are selling.
  • Recipe: A professional recipe developer will ensure your signature dish is ready for the frozen aisles. Mass produced translates to cost-effective, which may mean changing some ingredients. They’ll also create a recipe that ensures a viable shelf life. 
  • Co-Packer: Then, it’s up to a co-packer to make and package the product for you. A co-packer will only take you on if you have the confidence and the numbers to back it up. They make money through volume and want to know your brand is ready for the big time.
  • Packaging: While your co-packer will go over all the options and the best packaging for your product, you’ll need to be clear on brand messaging. Know your target market and why they should select your product over the many other options. Share your word’s of wisdom on your package and remember to retain your brand’s voice at all times.
  • Safety Certifications: Every store has safety certification requirements. Your co-packer should already know these and have the requirements in place. It is, however, always good to confirm.

For some restaurants, the steps are too many, and the costs are too high to enter the grocery store arena. There are, however, many other options in the retail industry. Branded merchandise is a popular one and is easy to sell onsite and add to an online store.

Subscriptions have also gained traction with additional revenue you can count on every month. Some common and successful subscriptions include wine, coffee, meal kits, and other tasting clubs.

FAQS

How can I add more revenue streams to my restaurant?

Restauranteurs are nothing if not innovative, and creative revenue streams are no exception. Some restaurant streams to consider include merchandise, cooking classes, catering, cookbooks, and meal kits.

What profitable restaurants are selling items in grocery stores?

Momofuku, a high-end restaurant, believes its consumer goods business will account for about 50% of its revenue. Packaged goods often have a higher profit margin for restaurants than onsite dining.


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