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Foodservice brands move into the grocery aisle

Restaurants turn to CPG product sales as the coronavirus pandemic continues to restrict indoor dining.

4 min read


Foodservice brands move into the grocery aisle

Einstein Bros. Bagels

As the foodservice industry was forced to pivot to accommodate coronavirus-related lockdowns and protocols, even large-scale businesses struggled to keep sales up during the pandemic. Many increased takeout and delivery options as well as created meal kits for consumers to enjoy and/or prepare at home. Some restaurants even began selling ingredients to customers looking for pantry staples such as milk, bread and eggs. Bakery cafe chain Panera Bread started the practice last spring as a way “to move quickly to where the customer is, what the customers’ needs are,” said CEO Niren Chaudhary to USA Today.

While some chose to create their own grocery sections, many foodservice brands have brought their products to traditional grocery aisles. Fast food restaurant chain Chick-fil-A debuted its first consumer packaged goods product last April with the launch of bottled versions of its two most popular sauces at retail, and chef David Chang’s Momofuku restaurant group has also released a line of spices during the pandemic, which has already proved successful for the business, said CEO Marguerite Mariscal. These launches from foodservice brands were common before the pandemic reached the US, but have become even more relevant and critical now.

CPG sales provide a lifeline to restaurants

The restaurant industry has relied on income from sources other than on-premise dining since the pandemic began, and CPG sales have been a major contributor. Chef Christina Tosi’s Milk Bar bakery is another brand that launched CPG products during the pandemic; several flavors of Milk Bar’s iconic cookies were for sale at Whole Foods and Amazon last spring and rolled out in Target retailers across the country in the fall.

“Grocery stores have always been my North Star — it’s why I started baking the way I do,” Tosi said to Bloomberg. “The American cookie aisle is relatively stagnant, and that’s what we’re coming out for.” 

Bagel and coffee shop chain Einstein Bros. Bagels has had a robust CPG business far before the pandemic, and the category is vital to the company’s corporate strategy, according to Ernie Mattin, head of consumer packaged goods at Einstein. Its Branded Solution Program allows select food retailers to improve the quality of their in-store bakery bagels while leveraging the strength of the Einstein brand.

“Our CPG business hasn’t missed a beat,” said Mattin. “While the business has evolved from single-serve bagels into more pre-packed sleeves as a result of the pandemic, we have exceeded expectations in sales of our bagels and shmear at retail.”

Quality food at home

While coronavirus lockdowns and precautions have caused consumers to alter their eating habits, several CPG companies such as General Mills and McCormick & Co. have said they believe that these patterns and routines are likely to last beyond the pandemic.

“With more meals being prepared at home, consumers are seeking higher quality options to feed their families,” said Mattin.

In response to the overwhelming complaint heard about bagels purchased in grocery stores being a lack of freshness, Einstein introduced its latest CPG line in December: Take & Toast bagels, which are par-baked and meant to be finished in a toaster.

“We wanted to solve that problem by offering a high-quality, fresh-tasting bagel, allowing consumers to get as close as possible to the true bakery experience right from their own kitchens,” Mattin said. “From a retailer perspective, we recognize the challenge of delivering product consistency across in-store bakeries. With Take & Toast, we have eliminated that added complexity by offering a simple, thaw and sell format, that requires no on-site preparation.”

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