Restaurants & Retail

The success of restaurants like Burger King and California Pizza Kitchen in the grocery channel has led some restaurant execs to think "wow, this is easy," and others to worry "this must be a real threat to our franchisees." In both cases, they're wrong.

The food industry is changing in so many respects. Both convenience stores and supermarkets now compete with restaurants in offering meal solutions. The term "meal solutions" sounds like marketing-speak or FrankenEnglish, but it captures the idea that we don't sit down at the table to eat as much as we once did. You can "grab & go," eat a snack, eat several snacks, get take-out at a restaurant or from a supermarket, heat something in the microwave or get a sandwich from a vending machine. In many offices, vending machines and microwaves have replaced the company cafeteria, and busy workers often don't have the time to go out to eat.

Licensing is evolving to handle these changes, crossing boundaries and solving the needs of manufacturers and retailers for products that address what consumers want. We put together a deal between a major food brand with one of the premier food manufacturers for the latter to license cutting-edge technology in baked goods. As a major brand, they need certain economies of scale to justify investing in a new technology, so until the product line reaches maturity, the baked goods technology company will make the products under a contract manufacturing/co-packing agreement. Pretty slick for both sides.

In the case of restaurants, there have been experiments with in-store kiosks and mini-restaurants to try bringing the restaurant experience to shoppers. The most notable is the one that didn't work out well: McDonald's put restaurants in Wal-Marts, but it didn't "take." Burger King has launched its small footprint "Whopper Bar" with the goal of bringing the brand to places where a full-blown restaurant won't fit. We trust they'll be smart enough to stay out of retail environments. For one reason, grocery retailers dream of being restaurants, wanting to retain the dollars consumers spend eating out by offering them "meal solutions" while they do their food shopping. Wegmans and A&P are both converting parts of their stores into mini restaurants.

The key is understanding the different meal solutions the consumer is looking for: the mom standing in front of the freezer case looking for tonight's dinner has different "metrics" in her head about what will work for her needs than the young male "Super Fan" who goes to Burger King once or twice a week for an indulgent outing. Restaurants, food manufacturers and retailers all need to understand these differences and not conflate different eating experiences into one.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)