Restaurants pivot to selling groceries during COVID shutdown
Offering groceries means a new revenue stream for businesses
While grocery stores have spent the past few years bolstering their restaurant-style take-away meals, the pandemic lockdown has prompted restaurants to alter their business model and start selling groceries as a way to help them survive.
A number of local restaurants and food businesses have taken to selling hard-to-find staples such as flour, yeast and other goods they traditionally haven't retailed to the public.
It's a small movement that's seeing restaurants selling fresh fruit, vegetables and even hand sanitizer and toilet paper, along with the meal purchased online for either curbside pick-up or home delivery.
That includes national chain restaurants like St. Louis Bar and Grill and The Chopped Leaf, an outlet in north Waterloo that had dozens of grocery orders in a week.
Freshii, a chain selling fresh wraps, bowls and salads, now offers a "Freshii Essentials Bundle" of fruits and veggies (about a dozen items) for pick-up at the store or delivery within 24 hours.
Not just chains
Smaller, independent restaurants and food producers have found grocery offerings to be an additional revenue stream as they try to keep the lights on.
Ambrosia Corner Bakery, for instance, was an early adopter selling hard-to-find flour and yeast, as was Little Mushroom Catering.
"Some people come exclusively for the yeast," according to Stephanie Soulis of Little Mushroom. "It helps pay some of the bills."
While Café Pyrus has been selling its core-brand vegan dishes online, owner Tyson Reiser says he's seeing steady growth in grocery items.
"We're getting 20 to 25 orders per day, and I'd say 50 percent is grocery items that we normally wouldn't carry," Reiser said.
Food purveyors have been forced to adapt to shut-downs in other sectors, where their former customers were before the pandemic.
Usually serving local tech companies with fresh food, Waterloo caterer Quantum Greens shifted about five weeks ago when tech companies sent staff home to work.
While their meal kits have proven very popular, two weeks ago they started offering a half-a-dozen grocery box options of fresh fruit and vegetables. Quantum co-owner Erika Siegner is happy with the response.
"We've taken about 34 orders so far, and it's growing. We're seeing repeat customers," she said.
Restaurants already have supply lines through various food service companies, so adding online orders of food is relatively easy.
Cambridge Restaurant uses eggs, butter, milk and bread from local Azores bakery for restaurant dishes that customers order and pick up curbside.
Chef-owner Josh Hayward says that customers pre-order these same grocery items that the restaurant kitchen would ordinarily use and pay through email transfer.
"We put out our list online at the beginning of each week and bring in items from our various suppliers to sell," said Hayward.
"It's catching on," he added. "It makes for easy sales and a bonus on top or our menu items, baked goods and cook-at-home meals."
Trust factor built-in
The take-away ordering system with restaurants provides a sense of security, too.
At Old Marina Restaurant and Gift Shop, co-owner Joel Cook says some people are scared to venture out into grocery stores and are relieved to be able to buy from the restaurant.
"We've built a certain level of trust with our customers, and purchasing grocery items is easy since they're already ordering restaurant meals to take-out," Cook said.
Located in Cambridge, the restaurant sells a grocery box of about a dozen items including apples, broccoli, onions and potatoes for $25.
At Kitchener's Graffiti Market, new grocery store items – small and large produce boxes of 17 or 18 items and seafood and deli boxes – are a new addition to the restaurant's business platform, one prompted by the novel coronavirus outbreak.
"It's a first for us in terms of grocery, and we hadn't started our online platform at all prior to this," co-owner Ryan Craig-Lloyd said.
In Guelph, Sugo on Surrey, an Italian-Mediterranean restaurant, is open for curbside pickup of its menu items to connect with customers who want to maintain social distancing.
They're currently selling grocery boxes with fresh produce, eggs, milk and butter as well as hand sanitizer, toilet paper and cleaning supplies.
"It's free delivery, so people don't have to leave their homes," according to owner Alex Tami.
'Rookies in the takeout game'
The sudden pivot to food delivery can be a challenge for many restaurants if their business has been focused on dining room service – unlike, say, pizza places that have delivery embedded into their business model.
"We're rookies in the takeout game, but we're slowly coming up with bigger and better ideas to serve our community in a drastically different capacity," said Tami.
Fat Sparrow Group, including The Stone Crock, is now offering a range of local products – Wellesley Apple Butter and Eby Manor Milk, as well bread, deli and produce – through online order and curbside pick-up.
"We're not trying to be a grocery store but an online marketplace which people could use in between store visits. We're trying to fill that gap," said Nick Benninger of Fat Sparrow Group.
While it's not a restaurant, sauce-maker Phlippens collects local foods such as garlic, coffee, chicken stock, granola, nuoc cham, cheese and even charcoal. They're packaged into a "Phlippens Family Box."
Having taken over 300 orders in about eight days, owner Kris Phippen says he's filling a similar gap.
"It's an opportunity that won't happen again," Phippen said of the shift in his business. "And it's a way for consumers to try something new at this time."
Filling a gap is an understatement during a few weeks when restaurants have lost as much as 70 percent of their pre-COVID revenue.
However, they're surprised by the positive response and see the new revenue stream as having long-term potential, especially given the ups and downs of the restaurant business.
Phippen says he's "rolling the dice" on a long-term commitment to the family box, while Benninger says Fat Sparrow Group wants the online marketplace to be a big part of their business going forward.
Tami at Sugo on Surrey sees the pivot as inevitable given the precariousness of a restaurant's existence.
"Overall, every business has had to adapt with the change in demand," he said. "The restaurant industry is no different."