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Restaurants Use Retail Licensing, Consumer Packaging To Increase Sales

Want to increase sales and profits? You can consider consumer packaging of your restaurant label brand and see how it goes.

Retail licensing, as well as consumer packaging of various restaurant label brands continue to go off as an increasing source of revenue for several restaurant operators. Starbucks, for one, has CPG (consumer packaged goods) revenue which exceeds one million dollars this year, and this revenue category only represents almost 9% of their total revenues. They have their signature coffees and teas, as well as coffee making equipments and other products.

CPG is defined as the kind of products that is consumed daily by an average consumer. They are consumable goods such as apparel, food and beverage, cleaning products and tobacco, among many others, that get used up and have to be
Marie Callendar'sreplaced frequently; they are distinctively different from items that consumers customarily keep for a long time, like furniture or cars.

Revenues in retail channels obtained from Marie Calendar’s and T.G.I. Friday’s retail brands are coming near 500 million dollars each. Beyond sales generation, retail licensing of restaurants present them an opportunity to keep their customers T.G.I. Friday’s Buffalo Sticksengaged in their brand.

Cinnabon has also been developing its CPG footprint for almost ten years now. It started the program with its Cinnabon Bread in 2002, and has been trudging along since.

“Cinnabon was able to build great brand awareness for their consumers through their partnership with large packaged goods brands, like Pillsbury and Kellogg’s,” said Janna Markle, vice president for licensing of the Valen Group, a brand licensing and market research firm.

Cinnabon Pecan Clusters“When you do this, you have to make sure that your licensed goods reflect what your customers expect from your brand or restaurant,” says Cara Becker, vice president for Consumer Products Licensing of Focus Brands, which operates Cinnabon. One product created by their chefs in smart chef apparel, considered as one of their triumphantly-licensed products, is the Cinnabon Candy Canes, which is sold only seasonally. The Cinnabon Candy Canes offers Cinnabon an additional chance to increase its brand awareness to its consumers, mainly at the shopping malls, and allows the customers to further involve them with the brand.

Some say that the move could be a market cannibalization, as these products may eat a restaurant’s own market. Market cannibalization is the negative impact of a restaurant brand’s new products on the sales performance of its existing related products. But marketing and licensing experts advise that this could well be avoided if restaurants dig deeper first and analyze the source – think of the possible effects of the success of the company’s new product before proceeding with the venture.

Many other restaurant brands have slowly risen to the occasion. They made sure that their successful retail products are non-competitive with their restaurant’s main line and would bank on away-from-home offerings.

“Taking their high quality goods to the customer’s tables at home meets the needs of consumers who cannot access restaurants at a certain time,” said Markle.

IHOP lucratively went into frozen breakfast products, as well as P.F. Chang, which forayed into frozen entrees. And with the promise of increased overall sales and lucrative profits, we can well assume that a host of other restaurants will gather up their staff and chefs in smart chef apparel to brainstorm about their best restaurant dishes that could be repackaged and marketed.