Retail Minute: Fast casual chains build consumer relationships through CPGs
Hi, I’m Elizabeth Lafontaine, chief retail analyst at Retail Leader Pro, and welcome to this week’s Retail Minute.
After a drought of retailer and restaurant IPOs over the past year, we’re finally beginning to see some traction with businesses looking to go public. This week, Cava, a Mediterranean fast casual chain, announced its intention to file for an initial public offering. Cava’s rise as the darling in fast-casual dining has come at a time when rivals like Chipotle, Sweetgreen and Panera Bread have stumbled. Cava’s unique value proposition is bolstered by its specialty grocery presence, with its dips and spread available in grocers like Whole Foods Market.
Fast casual chains have long built a relationship with consumers through consumer packaged goods in grocery. Panera expanded into grocery with breads, soups and salad dressings, while the now shuttered La Brea Bakery moved solely into the wholesale bakery space. While they may represent a small portion of the businesses total revenue, grocery and CPG extensions of these restaurants drive brand awareness and create continuities for shoppers. Brands that are growing and headed for IPOS in the future must consider product lines in multiple channels to create that brand ecosystem for consumers to build loyalty.
Be sure to check out my Trend Watch this week, focusing on Magic Spoons expansion into grocery and how other CPG digitally native brands may build on their success.
From all of us here at Retail Leader, have a great weekend, and we will see you next week!