Restaurants serve up home cooking for consumers

Restaurant-branded products are popular with consumers as people opt to prepare more meals at home. Consumer spending in restaurants in 2009 was down 3%, according to the NPD Group. All segments of the industry, from quick-service restaurants to fine dining, took a hit as consumers ate more meals at home in an effort to save money. The downturn began in summer 2008 and accelerated in mid-2009, according to NPD’s report.

At the same time, the popularity of celebrity chefs and restaurant culture among consumers continues to grow, driven in large part by the dominance of food-related media. There’s been a steady stream of restaurant-branded food products flowing into the market. “We’ve noticed more restaurant brands on the shelves of grocery and other retailers selling food, and the sales levels and trends for these products are significant and growing,” said Todd Hale, SVP consumer shopping insights at Nielsen.

Hale said for the 52-week period ended March 20, sales of a large sample of these brands across food, drug and mass merchandisers (including Walmart) reached $4.6 billion and were up 7.2% versus the prior year.

Dan Simons, principal of VSAG, a restaurant consulting and development firm based in Kensington, Md., believed more restaurant-branded products are on the horizon. “Anywhere a restaurant feels products won’t hurt the brand will offer potential,” he said.

“With fewer people going out to restaurants, chains are looking for new revenue streams, and bringing products to retail channels is a big opportunity,” said Eric Giandalone, director of research for Mintel Foodservice. “It’s also a way for a regional restaurant brand to expand its reach nationally.”

Giandalone said Hooter’s chicken wings and T.G.I. Friday’s mozzarella sticks have performed well across all three channels, since they are strong products that reinforce what those restaurants are known for. Packaged Facts data indicated that the Boston Market and California Pizza Kitchen brands have seen double-digit increases in sales.

One recent entry to the frozen entree category is Unilever’s P.F. Chang’s Home Menu line of eight frozen entrees. Inspired by the chain’s best-selling recipes, the line includes orange chicken, Shanghai-style beef, sweet and sour chicken, General Chang’s chicken, ginger chicken and broccoli, shrimp in garlic sauce and shrimp lo mein. All dishes can be prepared in 13 minutes or less and will retail for between $7.49 and $9.99. The product already is on shelves at Walmart and will be sold at Walgreens.

Rachel Porges, Unilever’s brand manager for the new line, said the company approached the new product line from an ethnic cuisine standpoint, and set out to find the partner for the brand. “P.F. Chang’s, with [its] great reputation for freshness and 200 bistros globally rose to the top of the list. It’s attractive to start a product line from a great brand.”

Giandalone called the product launch “the biggest surprise” in the category due to the restaurant chain’s upscale positioning. “Having the name positions it as a ‘better product,’ and if the line is treated right, it could be a big one. It will have to deliver on the promise,” he said.

Upscale branding and higher pricing has worked for Rao’s line of pastas and sauces, named for the tiny, 10-table, family-owned Northern Italian gem in upper Manhattan in New York City. The restaurant is notorious for an unyielding reservation-only policy and a several years-long waiting list—there is a standing reservation every night for all 10 tables, each “owned” like a condominium by Rao’s exclusive clientele. The brand has had double-digit increases despite top-of-category pricing on its jarred sauces, and has significantly expanded its distribution.

Frozen entrees isn’t the only food category seeing restaurant-branded introductions. Early this year, smoothie chain Jamba Juice launched a line of all-natural smoothie mixes. Available in Razzmatazz, Mango-a-Go-Go and Strawberries Wild—three of the most popular flavors at the chain’s nearly 750 locations—the 8-oz. smoothie package mix contains frozen fruit, nonfat yogurt and an antioxidant boost, and retails for between $2.99 and $3.29. Consumers only need to add fruit juice and blend to create their Jamba smoothie at home.

Starbucks is rolling out its Via instant coffee to food, drug and mass outlets. The company plans to roll out a stream of new products in the next year that debut in Starbucks retail locations and then make the crossover to mass retail outlets. Starbucks CEO Howard Schultz called consumer-packaged goods a “centerpiece” of the company’s growth strategy.