As many restaurant chains move into grocery aisles amid consumers’ shift toward food at home, Asian street food chain Wow Bao is leveraging consumer packaged goods (CPG) to not only open up a new revenue stream but also to generate familiarity for its offerings.
The brand announced via emailed press release that it is partnering with Walmart to grow its CPG business from 1,000 grocery stores in the continental United States to more than 4,000.
In an interview with PYMNTS, Geoff Alexander, president and CEO of the restaurant chain, which has close to 700 virtual locations in addition to a handful of brick-and-mortar spots, explained that the brand’s move into CPG will help boost familiarity with the product (bao — a type of steamed bun that originated in East Asia), which in turn will expand the audience for its restaurants.
“Bao has been around for thousands of years, … but bao is very new to the market in the United States,” Alexander said. “We’re getting this … signature menu item into as many hands as possible, which will only then enhance the opportunities on a much larger scale. So, I think this is an incredible win for our dark kitchen partners, our airport partners, our college campuses that we work with, and getting people to know what bao is.”
Alexander added that, in turn, all those different types of locations will help generate familiarity for the brand’s CPG offerings, creating “cross-marketing promotion that works on both sides.”
Now is a good time for restaurants to be getting into CPG, with consumers both eating at home more often and seeking more quick, convenient meal options at the grocery store.
Supplemental research from PYMNTS’ “Connected Dining” series revealed that 58% of consumers made restaurant purchases in June, representing a 9 percentage point drop from May — and the steepest difference in monthly purchase percentages since last November.
Additionally, findings from the May edition of the study, “Connected Dining: Ready-to-Eat Meals are Eating Restaurants’ Lunch,” which drew from an April Survey of more than 2,300 U.S. adults, revealed that a whopping 57% of consumers (roughly 96 million people) had bought ready-to-eat meals in the previous month. Fifty-eight percent of those who did so cited having less time to prepare their own food as a key reason.
A handful of restaurants have been moving into the space or expanding their presence throughout this year. Tim Hortons announced this month its first U.S. CPG product. Earlier this year, Kraft Heinz shared that it is launching a line of coffees in partnership with casual dining chain IHOP. Red Lobster debuted its first line of frozen seafood products in February. Panera announced in-restaurant loyalty rewards for customers who buy its CPG products in June.
“The grocery store is trying to be the one-stop shop,” Alexander said. “Whether it’s for ready-to-eat meals, food for another night, or the typical grocery shop, they’re trying to entice the consumer to use the grocery store in many different ways. The fact that we’re in the freezer section, the fact that we’re in [in-supermarket sushi bars], really makes us lend ourselves to that environment, which is an extremely exciting opportunity.”