For many, a trip to the grocery store—formerly routine, carried out mindlessly—has become an anxiety-inducing experience due to concerns surrounding the coronavirus. Shoppers are concerned about maintaining social distance in crowded aisles and whether those cans of peas have been properly disinfected. That’s if they can find what they need, as panic buyers have left many shelves empty.
As Panera Bread struggles, like all restaurants, with less revenue as people quarantine, it has come up with a solution.
As of this week, the fast-casual chain known for its salads and sandwiches has begun selling grocery staples like bread, a gallon of milk and fresh produce with the aim of staying engaged with its audience and helping bulk up its bottom line during a time of crisis.
“When you go into a pandemic like this, you have to continually reevaluate what you’re doing,” said Chris Hollander, Panera Bread’s svp of marketing. “We wanted to understand what the new customer needs are and what expertise do we have to create solutions. It’s that simple.”
Panera Grocery is available at the chain’s drive-thru locations as well as delivery, a service the brand has expanded and bolstered over the last four years.
In marketing the new experience, Hollander told Adweek that the brand was relying heavily on PR out of the gate as well as paid social including Twitter, Instagram and Facebook. It even got a shoutout on The Tonight Show With Jimmy Fallon, where the host joked that the groceries arrived in a bread bowl.
While every industry has been shaken by the worldwide outbreak, there’s a unique disparity in the food world: Grocery sales have boomed while restaurants, forced to close their dining rooms, have already laid off millions. According to the National Restaurant Association, the industry may lose out on $225 billion in sales over the next three months due to closures. Conversely, grocery sales have surged 73% year-over-year, according to Black Box Intelligence.
Local restaurants and even bars have also gotten creative. In Brooklyn, bars like Diamond Lil in Greenpoint have been bottling Cocktails for Home, filling 28 oz. containers with its most popular drinks. Vinnie’s Pizzeria in Williamsburg sells a DIY Pizza, which includes uncooked dough, sauce and cheese, with instructions for a home oven.
Within the last two weeks, Dig—formerly Dig Inn—a fast-casual American restaurant located in the Northeast, began offering Dig at Home kits with ingredients and directions for consumers to make some of the brand’s quintessential offerings like mac and cheese and cornbread. The company also began selling farm boxes, which come with assorted vegetables with the ability to add on pantry staples like eggs, milk or flour. The boxes are delivered weekly to customers.
“Our ambition has always been to connect people with vegetables, no matter what that might look like,” said Kerry Steib, director of brand and marketing at Dig. The brand also owns a farm in upstate New York and had previously sold farm boxes, but on a smaller scale. “People are cooking at home more, and we still wanted to be really valuable. People look to our food for comfort.”
The brand has also shifted its social strategy, emphasizing its at-home products as well as engaging with viewers through Instagram Live segments hosted by its own chefs, teaching viewers how to make dishes at home such as flourless brownies.
On a broader scale, Sysco, one of the largest food suppliers in the country, also announced on March 23 that it would help its restaurant partners transition into Sysco Pop-Up Shops, essentially selling a restaurant’s stock of food staples.
Among the list of reasons it cited for why a restaurant would open a pop-up shop is keeping staff employed and continuing to turn a profit (or at least mitigating loss). Sysco declined to comment for this story.
While diversifying revenue like this might keep the lights on, analysts don’t see the trend continuing after the crisis.
“Turning a restaurant into a pantry or a grocery store—it’s probably just a survival mechanism right now,” said David Henkes, an svp at Technomic, a food service intelligence company. “Restaurants aren’t built to survive by selling groceries. If there were more money to be made selling groceries, they’d be selling groceries instead of pastries.”
But Hollander is more bullish, albeit noting that it was too early to know the results.
“We think this is a real line of business,” he said. “We’re certainly encouraged that this is going to be far from triage but helpful to our bottom line.”
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