What does ubiquitous high street coffee shop group Starbucks have in common with stylish noodle bar chain Wagamama? Both have recently joined forces with manufacturers to put their products on UK supermarket shelves.
The ventures underline a growing trend among foodservice operators to leverage strong brands by extending into packaged grocery. It's not an easy move to pull off. So, what makes for a good launch?
Starbucks is partnering with Kraft Foods, with which it has had a similar relationship in the US since 1998. Product lines for UK retail have yet to be confirmed, but they are expected to hit shelves in the first quarter of 2007. The chain stresses it will be its own premium product, rather than coffee produced under licence by Kraft.
"Starbucks is always looking for ways to provide that great Starbucks experience for our customers," adds Starbucks global consumer products president Gerry Lopez.
Wagamama, by contrast, will debut in Sainsbury's in the middle of next month with an initial range of stir fry sauces, marinades and dips. Packaging is designed to be consistent with the 'cool' brand image of the chain.
Though both launches are attracting interest and are clearly innovative, it would be wrong to portray them as a new phenomenon. RHM's Lyons cake brand, which was launched into grocery in the 1950s, had its roots in the Lyons teashop chain that began in Piccadilly in 1894. While the teashops disappeared 25 years ago, the fmcg brand has remained.
However, over the past few years the number of foodservice brands making the leap has increased. Another coffee chain that recently signalled its intent is Pret a Manger, which announced on its flavoured water bottles that they would soon be available in supermarkets, though a spokesman insists that a move is not imminent.
That may be because a lot of transitions that sound good in theory are harder to pull off in practice, says Phil Lynas, managing director of The Grocery Company, which is involved in the Wagamama launch.
"You have to make sure the quality of the product lives up to the brand. People trust certain types of restaurant and we're bottling that experience. Our strategy is to put restaurant brands on supermarket shelves."
TGC began talking to Wagamama 18 months ago after it carved out a niche for itself as a specialist in taking foodservice brands into the grocery sector. Wagamama is its third launch, following product developed for Nando's chicken restaurants, which part-owns TGC, and vegetarian brand Cranks, which has enjoyed a sharp sales rise since distribution was increased in Waitrose (though like Lyons, Cranks has more or less outlived its restaurant chain roots, all bar one of its outlets having been closed).
A fourth foodservice brand, currently at "advanced tasting" stage, will be launched by TGC in 2007.
Lynas admits TGC is not as strong in the independents as in the multiples but says that Nando's has established a presence there and he expects to see that grow.
An intriguing question is whether retail availability cannibalises restaurant sales.
According to Lynas, research shows that about 70% of Nando's packaged product consumers do not eat at Nando's restaurants, so most grocery customers are in fact new to the brand. If any cannibalisation exists, claims Lynas, it is so marginal as not to be an issue.
It is a view shared by the restaurant chain. "We feel that diversifying a brand such as Nando's into a sector outside of the restaurant market adds to the brand presence and builds awareness," says Nando's chicken restaurants marketing director Louise Agran.
"Buying a Nando's sauce from a supermarket is a way of extending the experience and is not a threat to restaurant sales."
One of the most successful brand extensions in recent years was the launch in 2001 of Pizza Express products in Sainsbury's. The range is now stocked by most of the major multiples and generates £30m a year from retail sales. "Our market research shows that people are aware of the Pizza Express restaurants and that we have the same ingredients and eating quality in our grocery products," says Pizza Express head of grocery Simon Barnett. "The people who eat at Pizza Express are very brand loyal."
Geest manufactures the Pizza Express grocery range, which will shortly have refreshed packaging. The extension works, argues Geest business development manager Erica Morland, because the retail product is "handmade, handcrafted" and as a result close to what diners are served in the restaurants. Mirroring the limited edition specials that are sold for short periods in the restaurants also helps to keep the extension authentic.
Yet the authenticity of a restaurant or café experience is often very difficult to pull off in the medium of mass-produced packaged goods. Gareth Pugh, a consultant at brand development agency Dragon, compares it to the kids' game KerPlunk! The more you take away from what you started with, the greater the risk of collapse.
"If you sell a product that requires some finishing off by consumers, you are ceding some preparation control, and that's a risk," says Pugh, adding that Harry Ramsden's Traditional Taste Vegetable Oil, made by Anglia Oils, is "a rare case of brand selling you a little bit of the magic behind the kitchen doors".
There are parallels to be drawn between the migration of foodservice brands to retail and the rise of the celebrity chef, as exemplified by the slew of licensed product launches in recent years bearing names such as Gordon Ramsay and Jamie Oliver.
Dan Ross, MD of Victoria Foods, which manufacturers the Jane Asher cakes brand, believes that the two types of product have consumer familiarity in common, giving them an advantage over brands starting with a blank canvas. But he agrees the transition from foodservice to retail is challenging: "Just to try to replicate like for like takes something away from the foodservice brand. I'd be more worried if I was the brand manager at Starbucks than if I was the person involved at Kraft."
In short, there's a perilously thin line between a product that lacks affinity with its foodservice parent brand and a well-executed extension that is mutually beneficial to both retail and foodservice sales.Kitchen to Aisle
Wagamama Sauces, marinades and dips launching in Sainsbury's in November.
Starbucks Launching branded coffee next year through distribution partnership with Kraft Foods.
Pret a Manger Announced on some bottles that flavoured water drinks would be made available through grocery but is holding off until it resolves issues such as listing fees.
Nando's Launched in late 1990s and carried by most multiples. Range now expanded to 22 products.
Costa Cafetiere and filter variants of the Whitbread-owned coffee brand sold through Morrisons and Tesco. Repackaged earlier this year to help communicate its Italian heritage and premium nature.
Cranks Veggie brand had its debut in 2002, with Waitrose the major stockist of its sandwiches, bread and pasta sauces.
Bombay Brasserie A range, made by Noon Products under a licensing agreement with the restaurant, has been sold in Sainsbury's since 2002.
Pizza Express - Sainsbury's was first to list the brand, which now chalks up £30m a year at retail.