By Nancy Wood
If there’s one thing the pandemic did, it was send restaurateurs scrambling to look for new revenue opportunities. Although the industry overall has taken a big hit, some owners and operators are making a partial pivot by adding innovative market models in an effort to keep their businesses in business. The upshot has been a revolution in retail.
Most restaurateurs don’t have the facilities, conditions or packaging to fulfill retail orders – whether it’s a meal kit, a prepared item or a pantry staple. But last March, most owners and operators were forced to start doing business differently. There were fewer employees and guests and a huge spike in online ordering, to-go and delivery. So even though the direct-to-consumer model is completely different from normal restaurant operations, it’s not surprising that those who could add a retail element took the plunge.
Learning a New Business
Regardless of the type of restaurant, those with an entrepreneurial spirit have several things in common: a solid brand, unique offerings and a willingness to pool their existing resources to create new market models. According to some Atlanta-based restaurant owners who have ventured down this path, one of the keys to success in adding a retail element is understanding the fundamental difference between the two.
“It’s a whole different business platform,” says George McKerrow, CEO of Ted’s Montana Grill. “We almost hesitated to get into it.”
His hesitation didn’t last long. When Ted’s restaurants first closed in March, McKerrow had the proteins they’re famous for – bison and beef – sitting at their distribution center. “In order to avoid heavy losses of proteins, we decided to offer it for sale,” he says.
“There was a perfect storm,” he adds. “No one was going out, and proteins were hard to find at the grocery store.”
McKerrow’s solution? Launch Ted’s Butcher Shoppe to deliver fresh beef and bison directly to consumers. And he went big, creating a separate retail business and operating company and going nationwide from the start.
The operation is run out of the company’s training and test kitchen in downtown Atlanta, which already had the necessary equipment. Combined with manufacturing and distribution of the meat already in place for the restaurants, McKerrow also had the advantage of a built-in supply pipeline.
Like Ted’s Butcher Shoppe, The Buttery ATL (the retail brainchild of Chef Linton Hopkins and his wife Gina, founders of Hopkins & Co. Hospitality Group) is run out of an established commissary. The existing kitchen was already being used to produce items for their restaurants in Atlanta, including H&F Burger, Hop’s Chicken, C. Ellet’s Steakhouse and Holeman & Finch Public House, as well as for some other businesses.
When the pandemic hit Hopkins was confronted with inventory from all the company’s restaurants, and the idea for an online market started taking shape.
“Linton and I have opened each of our businesses based on what we personally wished we had in the community, and this is no different,” says Gina Hopkins.
Over the next few months, the culinary, operations and marketing teams for Hopkins & Company collaborated on every facet of The Buttery ATL, from creating the menu to making sure the website was easy for guests to use. According to Gina Hopkins, they wanted to make sure the e-commerce platform “supports our vision and is able to ebb and flow as we develop our business model. No platform is perfect,” she says, “but it should always be adaptable.”
Officially launched on August 23, The Buttery ATL offers a variety of made-to-order items, meal kits (including the locally popular H&F burger) – as well as baked goods, jams and jellies, and even pantry staples like butter, bacon and pancake mix. They even sell their famous bacon caramel popcorn– and cookie dough.
Seasonality is an important part of the mix, too. Recent online menu additions include pickled okra, apple butter and butternut squash pie among others.
Not All Retail Options Are the Same
For both Ted’s Butcher Shoppe and The Buttery ATL, having additional kitchens to work from and in-house staff to handle menu development and marketing was definitely a plus in launching new retail options. But for the owners of Atlanta-based Staplehouse, husband and wife Ryan Smith and Kara Hidinger, the road to a new market platform took a decidedly different path.
Staplehouse originally launched in 2015 as the for-profit subsidiary of the Giving Kitchen, the non-profit that supports foodservice workers in need. Over the past year, Smith and Hidinger had been negotiating to purchase the restaurant and were scheduled to close on March 17. On March 15, they had to shut the doors due to the pandemic and the sale was put on hold.
“Smith and I realized that when the pandemic set in, with our small space and open kitchen and dining room, we needed to shut the doors pretty quickly,” recalls Hidinger. With help from Staplehouse supporters and the community, Hidinger says they were able to support their staff until their only PPP loan came through.
“Our primary focus was protecting our staff and taking care of them,” she says. “They’re our family.” The result was opening the restaurant to feed them. “We transitioned into a soup kitchen and for 2 ½ months were able to feed service workers with free meals.” But even with donations like milk, coffee and bagels, Smith and Hidinger realized the need was greater than the resources they had to sustain it.
“We were at a crossroads,” says Hidinger. With no staff, an empty restaurant and two small children, the pair took a step back. “We tiptoed into the to-go waters,” she says, “and we had a nice response, but it wasn’t enough to sustain the business.”
For the elevated menu Staplehouse was known for, shifting to a ‘to-go’ menu didn’t translate. So from the middle of July to Labor Day weekend, the couple offered an abbreviated à la carte menu of items including brisket, heirloom tortillas and sides. They even offered Labor Day weekend meal kits.
“We tried to have some fun with it and still make it feel authentic to us and source responsibly,” she says, “but it wasn’t going to be viable long-term.”
So it was back to the drawing board for the couple. The question was, she says, “How do we prioritize our family, our restaurant, and build a life for ourselves so that we can stay involved in the Atlanta foodservice community?” The answer was Staplehouse Market, a hybrid operation offering provisions to be enjoyed on the property’s large outdoor patio and garden – or taken to-go.
In just a few weeks, Smith and Hidinger stripped back the layers of the restaurant systems and operations, and flipped the space within the 1906 building. Staplehouse Market officially opened on October 10, and the current menu includes brisket and pork, as well as homemade salamis and some favorite items from their original Staplehouse tasting menu, including a chicken liver tart. It also includes fresh pasta, empanadas and pastries.
“We’re still using the same farmers and the same ethos for sourcing and preparation and care and technique,” says Hidinger. As for their hybrid approach, she says, “It’s stylistically more approachable and can be enjoyed on the patio or travel to-go.”
Meeting the Challenges
Having a great idea for a market model shift is one thing. But executing it takes time, creativity, technology and packaging. For Ted’s Butcher Shoppe, from idea to execution took about six weeks. “I challenged the executive team with the idea, and everybody embraced it and came together,” says McKerrow. That meant researching user-friendly websites for the ordering process, working with FedEx for shipping, and finding the right packaging for overnight delivery of fresh proteins.
McKerrow says the IT piece was new, “but very doable.” Getting the packaging and shipping process in place was their biggest challenge. “We don’t want to ship a bunch of spoiled meat or disappoint customers with the quality,” he says. With their chef-driven mentality and reputation for cooking fresh food, it was critical to ship the meat fresh, not frozen.
Ted’s Butcher Shoppe currently sells beef and bison steaks, ground beef and ground bison, and all their proteins are aged for 14 to 28 days. Once an order arrives, the meat is hand-cut or ground the next morning and individually sealed with a Cryovac® machine and labeled. The order is then chilled and packaged in a vacuum-sealed food-safe storage bag with reusable gel cold packs, as well as instructions for cooking.
To accommodate overnight delivery, orders can only be placed before 11 a.m. EST Monday through Thursday. So far, says McKerrow, “Our meat is arriving in a very safe condition – even as far away as California,” he says. “The most unique thing is it’s next-day delivery of totally fresh hand-cut or fresh-ground proteins.”
At The Buttery ATL, orders can be placed 48 hours in advance for delivery or pick-up, and an option was recently added for certain items that can be picked up in one hour. Deliveries are only made within a 4-mile radius of their commissary from Tuesday to Saturday between 1 and 6 p.m., but contactless pick up is available Monday through Friday from 10 a.m. to 6 p.m. Packaging is important even with short delivery windows, and orders include proper labeling and instructions for reheating, or in the case of meal kits, more extensive instructions. The Buttery ATL also has a booth at the Peachtree Road Farmers Market each Saturday.
At Staplehouse Market, Hidinger says they took a playful and minimalistic approach to packaging. “We wanted it to be thoughtful and communicative and to relay the contents you’re about to enjoy.” As a single location operation, Hidinger says one challenge is “trying to navigate the communication of our brand and our ethos, and also the financial implications. It’s definitely something to be mindful of,” she says, particularly as new items are added to the menu that require different packaging. “There’s a cost associated with that,” she says.
To accommodate the new business, Hidinger and Smith switched to a new POS operating platform to better suit the hybrid retail market format and online ordering. “We hope to have delivery available as soon as we can,” she adds. Currently, Staplehouse Market is open from Wednesdays to Sundays from 11 a.m. to 7 p.m. Staplehouse also retained its covered and heated patio out back along with a fire pit in the garden, where guests can enjoy their purchases outside.
An Eye on the Future
Obviously, no one in the industry can predict what the future holds. And there’s every reason to think that the landscape of the restaurant business will be different for quite a while. The appetite for home-delivered food promises to make these new retail options grow and become permanent options for consumers who love good food and convenience.
“We think that the community will grow to love this type of shopping experience,” says Gina Hopkins. “It makes it easy, and we all need a little more easy.”
While McKerrow doesn’t know how much Ted’s Butcher Shoppe will expand, the business is profitable and sales are growing. “Right now,” he says, “we’re getting our arms around the business we have and trying to grow exponentially, but with caution.”
Plans include adding other classic items from Ted’s Montana Grill including meatloaf, short ribs, pot roast and possibly salmon. And he adds, “We hope to dramatically increase our sales in November and December around the holiday season.”
The Buttery ATL is looking toward the holiday season as well with plans for a pop-up market at their commissary location starting in November. Customers can shop in person for items, and there has been some discussion about a permanent location in the future.
At Staplehouse Market, Ryan Smith and Kara Hidinger are gearing up for the season, too. They will still offer outdoor and socially distanced seating and have the ability to adapt the space to the weather with a patio covering and space heaters.
“As we approach the holidays,” adds Hidinger, “we’ll be offering meal kits, too.” With their steady growth in the first few weeks of operation, Hidinger says, ”To breath new life into a space is such a gift. It’s exciting for the opportunities that lie ahead.”
When it comes to pivoting to new market models, McKerrow believes new ideas can coexist in the restaurant industry. “We need to be as innovative as we can possibly be at this point in time,” he says, “and continue to explore new opportunities to grow our revenue.”