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Multiple Streams of Income: Adding Products to Your Restaurant Sales

Restaurants have always operated on tight margins. But, with today’s labor, supply, and inflation challenges, those margins can shrink even further if operators aren’t paying close and daily attention to their bottom line and consider adding multiple streams of income.

While restauranteurs have always been a scrappy, resilient bunch, which explains why we love them so much, that side of their nature grew exponentially when faced with the disruptions brought on by the pandemic. They pivoted and sidestepped repeatedly, set up outdoor igloos and indoor partitions, and bought stock in sanitizers and disinfectants. When dining rooms closed down, they searched for alternative revenue streams and found them by selling products, turning to delivery, and setting up stations for curbside pickup. 

And many of those income opportunities have stayed the course, even as restaurants returned to the new normal. For many, that included sticking with the branded products and the alternative revenue streams they developed. For those of you who have yet to enter the branded merchandise sector, you’ll be happy to know that it’s not rocket science. There are a few tried and true steps you’ll need to take to get your delicious dressing that customers rave about from the kitchen and into a bottle and then sold in your restaurant and onto grocery shelves. Let’s explore how it’s done. 

Choose the Product

This is the fun part, and, seeing as this product will represent your brand, it’s also a critical key to successfully expanding your footprint. What item makes your restaurant stand out? What’s one of your customers’ favorite dishes? Are the ingredients available year-round? I know that I would personally go out of my way to purchase PF Chang’s trio sauce. Yes, you’ll see the copycat online recipes, but trust me, something is missing. That’s the secret to finding your branded product—a unique creation that’s hard to replicate, and so good people will be thrilled to see you’ve bottled it up. Voila, you’ve created an alternative revenue stream.

Speaking of bottling it up, if you’re making a food product, you’ll need to ensure you adhere to FDA label requirements. It’s best to turn to a company well-versed in creating labels and one that probably works with a food scientist who can perform nutritional analysis.  

Determine its Cost and Volume

In addition to laying out a recipe and figuring out the cost of all the ingredients, you’ll want to consider the time it takes to create and add in labor and packaging. Now comes the tricky part. How much are you going to sell? If you’re selling locally, you may be able to produce it independently with a few employees. On the other hand, if you’re considering a broader market that includes grocery stores and an e-commerce site, consider going the route of a co-packer. 

Find Your Partner

A co-packer is a manufacturing company that produces, packages, and stores your product. These professionals know how to create recipes for scale. They’ll also know about shelf life and how to extend it. Many charge a set-up fee for the first run and lower costs for any future productions. 

Test batches will ensure your finished product is as close to the original as possible. Make sure to carry this test through to how your end customer will use your product. For example, if it’s a dressing, take a finished bottle and a salad to your neighbor’s backyard party and make sure everyone tries a bite and gives their honest opinion. 

Your co-packing partner will also help you choose the right package for the type of product and ensure the package complies with USDA and FDA regulations. 

Going Big

If you’re looking to take the world by storm, you may consider finding a reliable and trustworthy broker. They know the ends and outs of getting into the big-box retailers and can also help you gain space with small local vendors. 

Always consider costs and the return on your investment when choosing the best approach. Getting your product out to the public can add a second stream of income and increase your brand’s awareness. 

FAQ

What are the four product strategies? 

Once you have your item in hand, it’s time to market it. The four Ps of marketing are place, price, product, and promotion. 

What are the revenue streams of a restaurant? 

There are six main revenue streams for restaurants, though those with a creative mind have certainly come up with more. For us mere mortals, they are selling restaurant-branded merchandise, promoting gift cards, writing a cookbook, selling groceries, offering meal kits for delivery as well as online ordering and takeout, and catering services.

What can a restaurant do to generate more income? 

There are two ways to generate more profit—bring in more sales or reduce costs. In addition to increasing revenue streams, make sure to optimize your menu, control inventory, increase your brand awareness with a solid marketing and social media strategy, and teach your staff the power of upselling. 

  

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