It's Not What You Make, It's What You Can Sell

Restaurant execs often make a classic mistake when contemplating leveraging their brand to retail.

They assume the need to find a company who can make Product X (fill in the name of your favorite restaurant menu item or items).

The reality is that many food marketers don't make the products they sell. They contract with a firm who already has the plant equipment, experience and ability to make the product for them. It's called "co-packing."

Some of these firms have zero experience or ability selling the product. That's because most retailers have pre-existing sales networks they rely on for bringing products onto their shelves. Not to mention the cost of getting conventional retailers to carry a new product. They expert bribes-- er, slotting fees-- to carry that product.

So what's a poor restaurant executive to do?

Market-research firm Hartman Group has released a study claiming it’s service that sells, not products or brands. The use Apple as their prime example, while singling out Cincinnati-based Procter & Gamble for buying up chains in the car wash and men's grooming-products categories. Other companies that “get it” (in their opinion) include Beecher’s Handmade cheese, where consumers can see their fromage being made right before their eyes— and presumably will remember the brand when they see it at retail.

The problem with Hartman’s paradigm is that Apple often seems to be the exception that proves the rule. Its quirky products defy the logic of the electronics business, even though they are often inferior in quality and features to its competition (anyone who’s had their iPod battery die on them knows what I mean). And while 16 locations for the Mr. Clean Car Wash might sound like a lot, it’s nothing in comparison to P&G’s core business. Numerous non-retailing companies, including Disney and NASCAR, have been lured into the “company store” morass. Most of them quietly shutter the experiments long after the hoopla has died down.

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