Smudging the line between restaurants, retailers

Once upon a time, restaurateurs and their investors questioned the wisdom of dabbling in retail. If consumers can eat your specialties at home, they reasoned, why bother visiting the restaurant?

But today, with supermarkets sporting all sorts of products emblazoned with restaurant logos, investors are asking a decidedly different question: Why aren’t you jumping on that (Bob Evans-brand) gravy train?

David Overton, CEO of The Cheesecake Factory, was grilled on that point by a financial analyst last week. “Well, we haven't decided to sell any of our actual dinner items or restaurant items yet,” danced Overton. “It's something that we could look at. We have been asked to do so…[but] the 70-something million people that came in the restaurant last year is where we're concentrating. I still think that's our greatest game at this point.”

Cheesecake, which just recently made concessions to such profound trends as discounting and offering mini-portions, may find the ranks of retail holdouts to be a lonely place. Panera Bread Co. ran through enough menu initiatives during an investment conference call on Thursday to suggest steroids testing for its R&D staff. One of the bigger ones, literally, mentioned by CEO Ron Shaich was a possible move into the retail sale of bulk baked goods.

He explained that units of the bakery-café chain have started retailing multipacks of muffins, scones and bagels. “You will see us focus on selling more seasonal breads at retail,” added Shaich. “We will regularly celebrate our gift worthy breads, things like Panettone, holiday bread, Irish soda bread, hot cross buns and a variety of sweet breakfast breads. We will also merchandise our breads to our guests for everyday use.”

Panera will be selling the baked goods through its own retail outlets rather than supermarkets, a twist that’s also being embraced by Starbucks. Its new retail push, the sale of Via instant coffees for home mixing, will be undertaken through the coffee giant’s own cafes, not a Piggly Wiggly or a King Kullen.

Other restaurants chains recently conferring with investors about retail initiatives include Bob Evans and California Pizza Kitchens, neither of which is a stranger to that alternative sales channel.

Indeed, Bob Evans is as much of a grocery-product supplier as it is a restaurant operator, a role it continues to expand by adding heat-and-eat products bearing the brand of its namesake restaurant chain. In its most recent quarter, for instance, the company added nine new retail choices, including “family-sized” portions of such comfort foods as mac and cheese and mashed potatoes.

But it also raised what should be a yellow light for restaurateurs branching into retail: During the most recent quarter, supermarket sales of Bob Evans-brand products decreased on a volume basis for the first time in more than seven years, executives noted.

Bob Evans wants to be hip. Do kids still say 'hip'?

When your clientele is literally dying out, the best option may be starting over with a new crowd. That’s what Bob Evans, one of the industry’s more grandpa-oriented chains, appears to be trying to do in its latest marketing effort.

The ranch-house-themed chain is reaching out to college students, many of whom may remember Bob Evans as that place where Nanna took them for biscuits and sausage gravy. Headquarters said it will roll a specially built trailer, the BOBurrito wagon, into five Midwestern campuses to give students a taste of the brand’s new breakfast burrito of the same name.

Youngsters can also learn about the BOBurrito via a new Facebook page and a microsite, www.BOBurrito.com. That’s heady stuff for a concept known for putting servers in western-style garb, right down to bolero ties.

But when the old folks who used to park themselves in a booth every morning are coming less often, what else can you do but make a pitch to their grandchildren?

It’s surprising, though, that the chain didn’t go a step farther and make the BOBurrito with a few all-natural ingredients, a touch that might’ve played well with the college crowd. But because the burrito is being introduced at a price of $5.99, additives-free components might’ve put too much of a dent in margins.