The Shopping Channel: Why Restaurants Are Drawn to the Shiny Lights of Grocery Store Shelves
The hummus and harissa preparations began just before midnight, after the customers and staff cleared out. The Cava Mezze retail team worked through the night at what was then their sole restaurant location in Rockville. They’d use blow dryers to seal on the plastic over their containers of dip and package it all up on the bar. At 4 a.m., they’d place everything in ice-filled coolers and deliver it to Roots Market, the natural and organic foods grocery in Olney and Clarksville, Md.
Today, five years later, the operation occupies a squat, beige 6,000-square-foot manufacturing facility in Rockville. Forty-pound buckets of tahini are stacked to the ceiling, and sacks of chickpeas are piled like sandbags on a levee in the area where suppliers drop off raw ingredients. A set of doors opens to an even bigger room with industrial ovens for roasting eggplant and garlic and metal tables for prep work. Everything is still mixed in small batches, but the blow dryers are gone. Now, fancy automated machines seal and label the plastic containers, passing each one through a metal detector as is required by food auditing companies. Boxed and ready to go, the 10 flavors of dips and spreads—from harissa to Crazy Feta—are shelved in a walk-in refrigerator that rivals the size of most studio apartments in D.C.
The Cava team expects nearly 2 million containers of dips to come through this facility this year. In 2012, it was 1.2 million. The retail company now employs more than 60 people, who, with the help of five refrigerated trucks, deliver the dips to more than 120 stores in eight states plus the District. Among those is Whole Foods, through which Cava Mezze has risen to become the top seller of dips and spreads in the mid-Atlantic region. In the not-too-distant future, the retail operation will surpass the revenue that the three locations of Cava Mezze restaurants in Rockville, Clarendon, and Capitol Hill are able to bring in.
It’s not just Cava with its eyes on the aisles. Quite a few local restaurants are seeing the potential in retail, hoping to replicate success like Cava’s with new products of their own. The biggest local one so far is José Andrés Foods, a line of Spanish food products from Jaleo’s celebrity chef that launched in July and will make its Whole Foods debut on Oct. 14. But it’s not only Mario Batali and Rick Bayless types showing up on grocery store shelves. Smaller businesses—from Soupergirl to Dolcezza—are now in Whole Foods, too.
Meanwhile, some restaurants have built their own markets, like Society Fair and Cork Market. Others now have shelves or refrigerated cases in their restaurants displaying bottled goods for sale: DGS Delicatessen sells containers of mustard and schmaltz; Sweetgreen has a line of cold-pressed organic juices called Sweetpress; and just-opened Duke’s Grocery sandwich shop in Dupont features a “farm table” that will soon showcase housemade pickles and jams.
Why all the retail business lately? Well, it’s no secret food shopping is going local. Small, locally owned, locally stocked neighborhood operations like Glen’s Garden Market, Smucker Farms, and Each Peach Market are popping up nearly as fast as burger joints, and even the big chains are catching on. Geoff Maites, one of the founders of Cava Mezze Foods, says he’s seen the trend really blow up in the last year: “It’s almost like Giant finally realized—and some of these conventional grocery stores finally realized—‘Oh, shoot, people are really interested in local, we need to do it too.’” All this means more opportunities for very small food producers to branch into retail.
Whole Foods remains what many makers of artisan gelato and seasonal soups aspire to, because it’s the biggest “feel-good” grocery chain out there. And fortunately for would-be food moguls, the chain makes it relatively easy to get local products placed. Each store has its own buyer, in addition to regional buyers (for, say, the mid-Atlantic), who looks for local products to introduce to individual stores. So if the buyer for the P Street Whole Foods tries and loves a brand of gluten-free kimchi, he or she can help make it available in that store. (Other grocery stores have a more centralized top-down approach, assigning products to stores.)
Whole Foods Mid-Atlantic grocery buyer AnaMaria Friede says the company launches between 100 to 200 new products every month in the region. (That also means just as many products are discontinued if they don’t prove successful.) But at least there’s a shot: “I think we approve more than we reject,” Friede says.
For restaurants, the appeal of bottling or boxing up their foodstuffs often comes down to profit potential. “We’re known at this point as a pretty fast-growing company,” says Think Food Group co-founder Rob Wilder. “But compared to the non-restaurant world, we’re sort of glacial. It takes a lot of time, a lot of money, a lot of effort to get a place open.” But retail? It’s not quite as glacial. If you have a successful product, it’s much easier to expand into new markets and become a national brand.
Restaurants are always looking for new streams of revenue, whether it’s catering or delivery or grocery, says Cava Mezze co-founder Ted Xenohristos. And with the restaurant scene growing at such a fast clip and becoming even more competitive, he’s seeing more businesses looking to diversify.
Cakelove owner Warren Brown was selling cupcakes long before the sugary dough craze made cupcake shop owners worthy of their own reality TV shows. “It’s a very crowded market. Extreeemly crowded market,” Brown says. “I would wager that there’s over 50 places that have opened since 2008 that sell cupcakes in the DMV area.” So now, he’s trying something different.
For a while, Brown had been thinking of ways to get his products onto grocery store shelves. Customers had begged him to sell tubs of cream cheese icing, but eventually the idea morphed into Cakebites, layered cake and frosting in plastic jars. This, not Cakelove shops, is where Brown wants to take the future of his business. Right now, Brown sells Cakebites in his shops and is working to get them placed at the Whole Foods in Friendship Heights.
“You want to go where the customers are, and if they’re not necessarily coming into your shop in the same numbers they used to, you’ve got to go where they are. And they’re going to the grocery store on a regular basis,” Brown says.
But the grocery market is just as competitive as the restaurant business, if not more so. And the pressure doesn’t ease once a product gets on the shelves: There’s also placement. “You have to fight for shelf space,” says Cava’s Xenohristos. “You have to go in there and keep hounding them. It’s really a battle. It really was overwhelming for us in the beginning, because we weren’t in the grocery business.”
Restaurants require a dedicated staff for retail if they decide to dive into it seriously. The owners of Cava restaurant partnered with the Maites family after the father-and-two-sons team, who were regulars at the Rockville eatery, pitched them a plan for manufacturing and distributing the dips.
Likewise, José Andrés Foods only became possible once Think Food Group found the right partners, Wilder says. Many of the products, which range from olive oils to paella kits to sea urchin caviar, come from producers Andrés met while creating the PBS show Made in Spain. Most weren’t previously available in the U.S., and Andrés wanted a way to help bring them here. But the retail line only began to take shape three years ago, when Andrés and Wilder began discussions with Spanish entrepreneur Enric Padró, who had worked with other companies to bring Spanish products to other parts of Europe.
José Andrés Foods is its own importer, but unlike Cava, which produces and distributes everything itself, the company partners with Spanish producers and works with a logistics company with a warehouse in Baltimore to “actually do all the work,” Wilder says. “They know the customs and the shipping and all the regulations and paperwork, as well as the actual business and have connections with great distributors.”
One of the distributors helped the company connect with Whole Foods. Wilder says talks with the grocery chain went on for about a year before they finalized a deal that will put their products in 20 locations throughout D.C., Maryland, and Virginia. At one point, they invited the Whole Foods team to a tasting at Minibar, where chef Ruben Garcia prepared a number of dishes showcasing the products. “I think that was pretty powerful,” Wilder says.
The official Whole Foods launch is still a couple weeks away, but like many who cross into the retail world, Andrés’ group has already got lofty goals of building the brand to be just as big, if not bigger, than the restaurant business.
“We’d love to be somewhat of a household name,” Wilder says.
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Photo by Darrow Montgomery