Restaurant defense against a bear market and competition

We’ve written and spoken a lot about the change in the market and the potential for a recession. In our recent podcast, we talked a bit about plans restaurants can make now to fend off the bear market. In fact, there are lots of ways brands should be protecting themselves now for tomorrow.

Four main facets will help build relevance, manage costs and separate brands from competitors.

1. Healthy Habits

Better-for-you is on trend. Local ingredients are on trend. Novel menu items and updated options? On trend. Brands that are built on true health of their menu will have an advantage. A brand like MAD Greens that offers robust salads with protein and tons of flavor can outlast the recession. If operators are able to keep prices reasonable. Flexibility to welcome multiple dietary needs or restrictions also helps stop vetoes.

There are lots of restaurants with similar nutritional profiles to MAD Greens. Top healthy brands should strive to get credit for all that is good about ingredients, suppliers and prep. Brands that best communicate or partner with those who can are rewarded with credibility. And store traffic.

Concepts that aren’t quite as healthy as Sweetgreen can still find ways to add items or options to reach health-conscious customers now. Small changes to recipes or suppliers can add up to noticeable changes in nutritional content, especially for those trying to cut out gluten, sugar or sodium.

2. Scale Your Suppliers

Scale usually means handling growth. But smaller brands don’t necessarily need the huge national footprint of larger suppliers. Especially when pulling back on inventory. Focus on partners that can get you what you need, can go small and can grow as needed, too.

In the past 12 months we have seen the let down when suppliers are pushed. Chipotle outgrew its favored sources and some believe that caused the meltdown they are facing now. Smart brands are finding ways to partner with suppliers to better shift when needed.

This might mean developing seasonal menus that adapt to changes in supply chain. Traditionally, brands like QSR have long leads on their menu that makes it hard for suppliers who might fall short or withhold inventory. Look at this fall’s avocado shortage for examples of brands shifting strategy at the last minute and finding ways to accommodate guests.

Changing items to maximize supply can also act as market news. New items or featured ingredients can drive traffic as menu innovations or LTOs.

3. It’s Not a Restaurant, It’s a Base of Operations

Sure the brand is a physical space. The digital space has been pretty good to restaurant brands too. Don’t neglect social media, and mobile technologies that allow you to reach out from the restaurant. Guests have an expectation for communication with the brands they love. Use these platforms to let them be heard.

When thinking about a bear market, it’s time to consider offers. Digital is also a great way to test offers, to follow which items drive the most clicks all the way through traffic and redemption. That is just the beginning. Using mobile to unlock new experiences for frequent guests and people near by can be powerful. Look at what Starbucks has done using their app.

Digital services can also power new revenue through delivery and catering. Use each restaurant as a base for outgoing meals or added dayparts, and promote along with the brand or even separately. Thinking about the brand beyond the place itself leads to big picture opportunities.

4. Value Proposition, Not Just Value

The trend during tough economic times is to slash costs and show consumers lower costs items. Guests understand that value goes beyond cost. By communicating the value proposition of your brand today, you can hedge against tougher times to come.

This value proposition will come from choices you make now to emphasize the items above. Can your brand stand for convenient delivery? Standard menu items that are just a bit better for you? Unique seasonal or local items?

If the bear market comes, it’s true that consumers will be paying attention to price. But they will rationalize that price if brands have done their job and explaining why they’re worth it. This is the time to create those explanations.

Interview With Gluten-Free Flour Brand, Blends by Orly

gluten free, flour, cpg, grocery, brand
Orly Gottesman has figured out how to sell a niche product to an audience in need

At Food & Restaurant Marketing, we are obsessed with understanding the type of insights that allow brands to break through a crowded category like the gluten-free industry. This 3.2 billion dollar industry (Statista 2016) demands brands to take unique approaches to positioning their products. With almost 30% of all adults in the U.S. trying to avoid gluten, we wanted to talk with someone who is intimately involved with the industry to discover insights about this ever-growing audience and what drives them to consider gluten-free products.

Blends by Orly

Orly Gottesman, a Le Cordon Bleu graduate, discovered her passion for baking while at culinary school. During that same time, Orly’s husband Josh discovered he had celiac disease. Josh, who grew up in the baking and restaurant business, thought his life was over. He’d never be able to enjoy a bagel again. Orly saw an opportunity to focus her studies on gluten-free and worked with the head chef of the baking program to conduct an independent study around gluten-free baking.

From there, Orly set out to create the highest quality gluten-free flour blends for those that love baking. Blends by Orly launched in August 2014 and since that time, Orly has been navigating her brand through a rapidly growing industry.

I recently sat down with Orly over Skype to learn more about her business and customers.

AB: What have you learned about your current audience that made you take a different look at how you thought about your brand?

OG: First, we learned that this is a very female-focused product. For a demo, we would bake a whole bunch of product, mostly cookies. Women would love them and say, “oh wow that’s a really great idea to make cookies with this blend.” Men would come over and say, “where can I buy these?” Then we’d tell them that actually the product is the flour and you actually have to bake them. They’d look at me and say, “oh, I don’t bake.” Even a man who had three children with celiac walked up to me, loved the cookies and said, “not for me.”

I find that I’m wasting my time talking to men. Even the buyers at supermarkets, the female buyers always get it more than the male buyers, unless they are a chef.

The other key element I’ve found is that the blends don’t sell as well in cities or densely populated areas like Manhattan. Kitchens are tiny and people generally won’t bake if they feel like they don’t have enough space in their kitchen. We sell much better in suburban areas. People that do a lot of cooking and entertaining are really our sweet spot in terms of a target audience. Also, it’s a higher priced product, so it’s a given that we are seeing higher income customers interested in our product.

AB: How large is the gluten-free business and how many people suffer from celiac disease?

OG: 1% of the total population suffer from celiac disease. Many of my customers actually don’t have celiac disease. They do, though, find themselves sensitive to gluten or have other autoimmune diseases. Gluten can cause inflammation, so many people get off gluten to support an anti-inflammatory diet. The good thing about my blends is that they provide options for dietary restrictions like a sugar-free, gluten-free diet.

AB: Any opportunities or feedback from your customers on new products?

OG: I have recently launched a kosher baking mix for Challah in three different flavors: traditional, chocolate chip, and poppyseed & onion. That was very specific and the opportunity was clear in terms of bringing a new product to the market that doesn’t exist.

I’m also thinking a lot about distributing a pre-baked gluten free bread product. Blends are great for a very specific audience. If I’m going to expand, I think it’ll have to be with ready-made products. I don’t want to come out with just another cake mix.

AB: How are you attracting the audience that is considering a gluten-free diet?

OG: We are beginning to send nutritionists promotional material. Nutritionists are the first ones a doctor sends them to if they need to alter their diet. For example, I was diagnosed with hypoglycemia and I learned I was eating too much sugar and gluten. These nutritionists will recommend easing up on the gluten. They aren’t going to recommend trying a gluten- free brownie mix. They’re going to recommend finding a wholesome gluten-free flour like one of my blends. Some of the specialty markets we are in will have nutritionists on site, so we talk to them and let them know about our product. We’re starting to consider the right time to put together a plan for marketing.

AB: What was your initial strategy for distribution and how has that changed over time?

OG: Starting out it was “the chicken or the egg” scenario. We started out doing all the distribution ourselves. Obviously, you’re not going to find a distributor to take you on initially if you don’t have accounts, and then a lot of stores don’t want to take you unless you have a distributor. Our initial strategy was to just pound the pavement and go to stores that would allow us to distribute directly to them. It was truly door to door sales and cold calling.

Once we had enough stores with our product, we then decided to go to the distributors and show them what we accomplished and why we are a great product that people need. We got a distributor on board with us and focused only on New York and New Jersey. We took this same model of starting out by self-distributing in Chicago and then moved to a local distributor there as well as on the West Coast. But it’s a very long process.

AB: What’s the biggest challenge you are facing right now with distribution?

OG: We realized we really need brokers. We were a little late in the game here, but we’re learning fast that the brokers are the ones who get your product moving off the shelves and keep the orders coming.

If you’re interested in learning more about Blends by Orly, please check out her website where you can learn more about her gluten-free flour blends and order product: http://blendsbyorly.com/