Tom Vaughan takes a look at how to offer a one-stop shop
Jamie Oliver's cookbooks, Antonio Carluccio's delis, James Martin's cookware, even Ainsley Harriot's couscous - for celebrity chefs, forays into the retail sector can be a lucrative sideline. But what about the chefs and restaurateurs without the recognition afforded by a prime-time cookery show? Are retail opportunities a realistic avenue? Or an unnecessarily expensive distraction that could see you take your eye off your business?
Chris O'Connor and James Brundle, owners of Eat 17 in London's Walthamstow, moved into the hospitality industry after running a successful deli (see panel). And the knowhow they picked up after years spent selling speciality produce meant that when they hit upon their own unique product - a burger relish called Bacon Jam - they were in a position to do something about it.
"We were making onion marmalade for the burgers at Eat 17. As chefs, we wanted to experiment, and we threw some bacon in with the onions, and thought, 'This is really good, maybe we should make it in its own right',"
The pair jarred up the newly named Bacon Jam and put it in their neighbouring deli. Before they knew it, the relish had made the local and then the national news and Tesco was knocking at the door. Fast-forward four years and 150,000 jars of Bacon Jam will be produced in 2016. Yet what effect, if any, did Bacon Jam have on the pair's restaurant? "Without a doubt, it has helped marketing massively," says O'Connor. "It's a nice little story to say 'We've produced this in the restaurant - do you want to take it home and see what you think?' In terms of bridging the gap between the kitchen, front of house and the customer, it has been a great conversation starter."
Brewing up inspiration James Mackenzie, owner of the Michelin-starred Pipe and Glass Inn in South Dalton, Yorkshire, also found himself breaking into a new industry more by luck than planning. Five years ago, to help promote the Malton Food Lovers Festival, he was invited by the Great Yorkshire Brewery with Andrew Pern, owner of the nearby Star Inn at Harome, to brew special beer. "We didn't want it to be run of the mill; we wanted it to be a foodie-orientated beer," explains Mackenzie. "We thought about putting herbs in it, which was something the brewers hadn't done before, and also sweetening it with honey, which can be a bit controversial
The result, a sweet golden ale livened up with the addition of lemon thyme, was named Two Chefs beer. Initially, the few barrels produced were sold at the festival and the pair's restaurants, but a couple of years later, when they asked the brewery if they could bottle it, things began to change. "That changed the dynamic completely. Now it's in retail outlets throughout the country, and it's been exported to Japan, Hong Kong and Dubai," says Mackenzie. It was for similar reasons that Mackenzie decided, back in 2008, to self-publish his own cookbook - another savvy means of getting the Pipe and Glass's name out there. However, he warns, doing the idea justice is no mean feat.
"I think chefs sometimes say, 'I'll do a cookbook, it'll be great,' but when it comes down to it, it's a lot of hard work. It took me two and half years." On The Menu was released in 2011 with a print run of 9,000 that is finally coming to an end, and Mackenzie is weighing up whether to repeat it. "It gets your name out there to people who might not have heard of you or your restaurant," he says. "I get tweets from America and Australia about it."
Today, both Two Chefs beer and On The Menu are available to buy at the Pipe and Glass, with Mackenzie devoting a small space front of house to advertise them. "When people come here they like things to take away. It's a subtle way of marketing. You've got to be savvy these days in building brand quality," he says.
But what about restaurateurs who want to extend this and give a big chunk of their site over to retail space, perhaps selling deli or bakery produce - is it a wise use of valuable square footage? Since the 1980s, Terence Conran's restaurants, such as Bluebird and Le Pont de La Tour, both in London, have successfully combined retail and restaurant. And when Albion launched in London's Shoreditch in 2009, it followed a similar model to good effect.
"At Albion, retail probably takes 15% of the floor space, but it can sometimes take 30% of the revenue," explains Peter Prescott, former operations director for Conran Restaurants and now founder of restaurant group Prescott and Conran.
One of the advantages of having retail space is the site's appearance, he says: "It softens the entrance. It makes it a bit more welcoming. You are more likely to step inside a shop than you are a restaurant. If you walk through the shop to get to the restaurant, it is more accessible and you can just browse. And if you then decide to stay and have a meal, then great."
At Albion's fourth site, which launched in Clerkenwell in June this year, the group has geared more of its retail produce towards food made fresh on-site in a bid to cut down on storage and improve margins. "When we first
opened the Bankside Albion, our bakeries were at capacity and we had to buy in bread," explains Prescott. "We were buying a loaf for £1.50 and selling it at £1.75 or £2 and you have wastage to allow for and over-ordering, underordering and everything else. That is when it will go wrong, but when it is coming from your own kitchen, there is less chance of that and more control over what you are doing."
Selling your own produce also avoids a major pitfall, says Prescott: "If you are just selling somebody else's product, it could very easily become a bit of a problem." Combined with long opening hours, the small margins and high costs, it could easily result in financial difficulties, he says. To not stock your own items also misses something of an open goal. Allowing space for retail items offers a brilliant opportunity to market your own quality. Over the past two decades, mid-market restaurant chain Carluccio's has been more successful than most at combining hospitality and retail and the vast majority of its deli produce is Carluccio's branded. "It's a great opportunity to increase our exposure and our customers' opportunity to interact with our brand," explains chief executive Neil Wickers.
In fact, with the launch of a new concept - Carluccio's Deli and Dining in London's Spitalfields - the chain is working hard to better integrate the two sides of its sites. "Historically we had the restaurant and deli as two separate elements," explains Wickers. "But what has made Carluccio's unique over the years is its deli and the provenance and authenticity of its food. For a lot of our customers the food was a secret hidden within the deli. At the new site we use more of the ingredients from the deli in the restaurant to showcase them."
The marketing opportunities are certainly there for the savvy restaurateur, but could dipping your toe in the retail sector end up costing you an arm and a leg? Although Bacon Jam is now set up as its own company, surely - with restaurant margins so famously tight - its success helps the pair financially? "Definitely," says O'Connor. "It also makes it a little bit more fun for us. We're not always worried about the restaurant - we've got another interest and a whole other industry we can get lost in - one different to the restaurant industry."
Bacon Jam, of course, is a rare breakout hit. Yet, while retail enterprises aren't necessarily going to make you a fortune, there's no reason why you should lose money. The costs of Two Chefs beer have been met by the brewery (although Mackenzie and Pern don't see a return), while Mackenzie has covered his own costs in producing his cookbook. Diversifying into retail can seem like a lot of extra work to take on in addition to running a
restaurant. However, in an age when restaurants have to be brand builders on top of everything else, it can be a powerful marketing tool.
"Is it a lot of hard work? Yes. Do you make a lot of money out of it? Not really. You only make a lot of money if you are James Martin or Jamie Oliver," says Mackenzie. "But what it does is it puts you on a different level and gets your name out there. It's about that all-important brand awareness."
Case study - Bacon Jam
Chris O'Connor and James Brundle chose an unusual route into the hospitality trade. In 2006 the pair decided to take over a rundown shop called Paul's Wines in Walthamstow - a site that, in O'Connor's words "hadn't had a lick of paint since the 1970s".
The pair began stocking speciality food produce, then baking their own pies and pastries and adding a deli. Within a couple of years, the shop had built up a following in the local area and, when the restaurant next door
became available, they decided to take the plunge, and opened an informal brasserie called Eat 17.
After experimenting with relishes for their burgers, they decided in 2012 to add some bacon to their onion marmalade and Bacon Jam was born. "We started selling it in the shop and sold 100 jars in the first weekend,"
explains O'Connor. "The local paper did an article on it, so we asked a customer of ours to do some branding for it and create a label. From the local press it went to national press and then ended up on The Jonathan Ross Show. We were blown away - it was like, "What the hell? We've just started making that in our kitchen.'"
The pair decided to increase production and see if they could stock it in other delis, but were soon approached by a buyer from Tesco who had read about it in the press. "We quickly realised it was a conversation we had
to have," says O'Connor.
Today, Bacon Jam is set up as a separate company with manufacturing outsourced to a third party. The relish is on the shelves of supermarkets the country over and this year the company is set to produce a whopping 150,000 jars as well as move into the catering sector.
How to get into retail
- Stick to what you're good at, whether that's making bread, sauces, chutneys or drinks.
- Don't expect to make money. Treat it as a means of building brand awareness and attracting new customers to your restaurant.
- Carefully consider how much time, resources and floor space you are putting into the retail side. Is it earning its keep? Is it getting your name out there? Social media is the perfect platform to investigate its popularity.
- Make sure both sides - restaurant and retail - are fully integrated. Are customers aware of what is available for sale? Have you showcased it properly?
- Have fun. Even if you are only dipping your toe in the water, it is the chance to enter a whole new industry with different challenges from hospitality.