From Tables to Shelves: The Rise of Restaurant-to-Retail Movement in Egypt

The COVID-19 pandemic forced businesses around the world to adapt, and the restaurant industry in Egypt was no exception. One trend that emerged, initially driven by necessity, has blossomed into a full-fledged market opportunity: the rise of restaurant-to-retail or consumer packaged goods (CPGs). This resourceful pivot highlighted the potential of the restaurant to thrive on the shelves of supermarkets, and it's here to stay.

Brand Power in the supermarket Aisle

For restaurants with strong brand recognition, the transition to CPGs can be a natural and lucrative extension. Established names already have a loyal customer base eager to bring their favorite flavors home. This head start gives them a significant advantage when competing for shelf space and consumer attention.

Egyptian Success Stories: From Restaurants to Household Names

Several Egyptian restaurants have successfully navigated the restaurant-to-retail space:

• El Abd Dessert Shop: Their iconic chocolate chip cookies are now a staple in Egyptian households, showcasing how a beloved bakery brand can translate its success into the CPG world.

• Tabali: They were early adopters, launching packaged fool (fava bean stew) and even bread, allowing customers to recreate their signature dishes at home.

• Avec Karim: This high-end catering brand leveraged their reputation for quality by offering gourmet CPGs like foie gras and smoked duck, bringing a taste of luxury to supermarket shelves.

• Costa Coffee: Recognizing the convenience factor, they offer espresso pods, allowing coffee lovers to enjoy their signature blend at home.

• Moko: The chocolate cafe is getting into the packaged goods business with their gourmet chocolate range.

• Dara Ice Cream: Egyptians could enjoy their favorite Dara's ice cream flavors beyond the scoop shop with take-home ice cream cones or tubs.

• Caracas Cafe: They capitalized on their expertise in Lebanese cuisine by offering hummus and other popular appetizers in supermarkets, making it easier for Egyptians to enjoy their authentic flavors.

Bringing Restaurant Flavors Home: A Lucrative Opportunity

There are several reasons why restaurants in Egypt, and around the world, are finding success in retail:

• Reaching New Customers: Brick-and-mortar restaurants have a limited reach. CPGs allow them to tap into a wider customer base who might not have visited their establishments before.
• Building Brand Loyalty: Placing their familiar logo and flavors in supermarkets keeps the brand at the forefront of consumers' minds, even between visits.
• Revenue Diversification: The restaurant industry is competitive and can be vulnerable to economic downturns. A successful CPG line offers a new revenue stream, providing stability and growth.

Consumers also benefit from this trend:

• Convenience: Enjoy restaurant favorites from the comfort of home without the hassle of dining out.
• Affordability: CPGs can sometimes be a more budget-friendly option compared to a full restaurant meal.
• Variety: The growing selection of restaurant-branded products expands grocery options and introduces new flavors.

Charting the Course: Going to Market in Egypt

While the potential is undeniable, navigating the restaurant-to-retail space requires a strategic approach. Here's how Egyptian restaurants can enter the market:

• Direct vs. Indirect Distribution: Larger brandsdirectly approaching supermarkets to negotiate shelf space. Smaller players could benefit from partnering with established food distributors who have existing relationships with retailers.
• Co-packing: For most brands, outsourcing production to co-packing facilities can ensure quality control and scalability without major upfront investments in manufacturing equipment.

A Smart Start: Online Grocery Platforms

Many Egyptian restaurants, particularly those new to CPGs, can find a valuable entry point through online grocery platforms like Breadfast and Rabbit. These platforms offer several advantages:

• Lower Barrier to Entry: Unlike traditional supermarkets, online grocery platforms often have no listing fees, making it a more affordable option for restaurants starting out.
• Direct Customer Engagement: Selling through online platforms allows restaurants to gather valuable customer data and feedback, informing future product development and marketing efforts.
• Testing the Waters: Online grocery offers a lower-risk environment to test the market for a new CPG before scaling up to traditional brick-and-mortar supermarkets.

Building the Dream Team: The Talent Needed for Success

Creating and maintaining a successful CPG line requires a dedicated team:

• Product Development: Hiring food scientists or experienced recipe developers is crucial for creating shelf-stable versions of restaurant dishes while maintaining quality and flavor profile.
• Marketing & Sales: Building a separate team for marketing and sales is essential to reach supermarket shoppers and convince them to choose the brand's CPGs. Expertise in retail marketing and brand building is key.
• Supply Chain Management: A dedicated team is needed to manage the production schedule, inventory control, and logistics to ensure smooth delivery of products to supermarkets (or online platforms).

Unit Economics & The Power of Diversification

The restaurant-to-retail model offers a compelling economic proposition:

• Higher Margins: CPGs generally enjoy higher profit margins compared to restaurant meals, as they eliminate overhead costs like staff salaries and rent.
• Lower Costs: Production at scale can lead to lower ingredient costs per unit compared to preparing dishes in a restaurant setting.
• Slower Growth: Building a successful CPG brand takes time and consistent marketing efforts. While revenue streams can be significant, growth might be slower compared to established restaurants.

Beyond Revenue: The Strategic Advantages of CPGs

The benefits of restaurant-to-retail extend beyond just generating additional revenue:

• Scalability: CPGs have the potential to reach a much wider customer base compared to a single restaurant location, offering significant revenue growth potential.
• Brand Awareness: A successful CPG line can raise awareness for the parent restaurant, driving more foot traffic to their physical locations.
• Revenue Diversification: CPGs offer a new revenue stream, providing stability and mitigating risks associated with the unpredictable restaurant industry.

Beyond Real Examples: A World of Possibilities

The potential for restaurant-to-retail extends far beyond existing success stories. Here are some exciting hypothetical examples:

• Pastaweesy: Imagine their signature tomato sauce bottled for home cooks, allowing them to recreate their delicious pasta dishes at home.
• BRGR: Frozen gourmet burgers from BRGR could revolutionize the home-cooking experience, offering restaurant-quality convenience.
• What the Crust: This popular pizza chain could launch a line of frozen pizzas, bringing their unique flavor combinations to supermarket freezers.
• Zooba: Their famous dips and condiments, a staple of their street food experience, could be bottled and sold in supermarkets, allowing customers to add Zooba's signature flavors to any dish.
• Abo Laban: This iconic dairy brand could expand their offerings with innovative CPGs like yogurt parfaits or tres leches, catering to the growing demand for convenient and delicious dairy products.
• Aldahan: Imagine premium cuts of meat from Aldahan packaged for home grilling, allowing customers to bring their restaurant-quality barbecue experience to their own backyards.

Conclusion:

The restaurant-to-retail trend offers exciting possibilities for Egyptian brands. By carefully considering distribution strategies, production and packaging, and the unique economics of CPGs, restaurants can successfully extend their reach and bring beloved flavors into homes across the country. While not a replacement for the restaurant experience, it presents a valuable revenue stream and brand-building opportunity for the ever-evolving Egyptian food scene.

Let me know what restaurant CPGs you'd love to see next!

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