Peapod’s scheme could boost independent restaurant sales

Restaurants, particularly independent restaurants, haven’t had much luck selling branded food items in grocery stores. But Internet grocer Peapod wants to change that, and Chicago powerhouse Lettuce Entertain You Enterprises (LEYE) is the first operator to give it a try. On offer so far: 45 items from LEYE’s Wildfire concept alone, plus dozens more from some of its other high-profile restaurants including Big Bowl, Café Ba-Ba-Reeba, Mon Ami Gabi, Osteria Via Stato and Wao Bao.

Peapod, a grocery delivery service for harried urban dwellers too busy to go to a supermarket for themselves, needs restaurant-caliber fare like LEYE can provide. The company is busy installing what it dubs “virtual grocery stores” at commuter rail stations in the big East Coast markets that provide the bulk of its business. Chicago is the only Midwest city to get this new service, and it’s the only place LEYE products are currently available.

To order, customers first use their iPhone, iPad or Android phone to scan a QR code and download a free app from the billboards Peapod has installed on train platforms. Customers then shop by scanning barcodes of products shown on the billboard display.
 
In Chicago, these virtual stores feature what Peapod dubs “Chicago’s Best” prepared foods, drawn from 30 of the city’s favorite restaurants and hometown brands. The list includes LEYE brands like Wildfire and Big Bowl plus items from Eli’s Cheesecake, Chicago Butter Cookies, Intelligentsia Coffee and Goose Island beer. Customers can also access the rest of Peapod’s 11,000-item assortment with the app. Items are delivered the next day.

“Getting your groceries on the way home from work just got a whole new meaning,” says Peapod c.e.o. Mike Brennan. “With schedules that are more demanding than ever and people spending 200-plus hours a year in transit, our hope is that consumers will take advantage of our virtual stores and mobile app while they’re on the go and enjoy the time saved when they’re at home.”

The impulse-buying-friendly purchasing method and local tie-in give LEYE a way to leverage its well-known brands and add incremental sales while someone else handles the marketing and delivery logistics. Items are stored at Peapod’s Chicago warehouse.

Restaurant brands have never made a big dent in the retail grocery market. They do okay in a handful of categories, and only then when either a celebrity chef or large national chain is involved. Both Wolfgang Puck and California Pizza Kitchen do well in the frozen pizza category. The freezer aisle is also home to entrée and snack items from Boston Market, P.F. Chang’s, T.G.I. Friday’s, Romano’s Macaroni Grill and a few others. Sauces and seasonings from well-known chefs keep their slots on grocery store shelves, but few of these products really knock it out of the park.

Amazingly, the Chi-Chi’s line of Mexican items keeps humming along, although the last Chi-Chi’s restaurant closed its doors in 2004. Hormel produces the line for grocery store sales.

If you look hard enough in the spaghetti sauce section of your local grocery store, you might find an offering from a local independent restaurant, or from New York City restaurants like Rao’s or Patsy’s. Phillips Seafood, which has both a large foodservice manufacturing business and a number of full-service restaurant operations, does well. But that’s it.

Now LEYE is showing local restaurants a new way to jump into the grocery store game. Among its offerings: egg rolls and pot stickers from Big Bowl; Café Ba-Ba-Reeba’s Plato de la Casa that feeds 4-6; bottles of chardonnay and pinot noir that bear the Mon Ami Gabi label; Osteria Via Stato’s olive medley; and three varieties of steamed buns from Wow Bao.

The Wildfire product list is much more comprehensive. There are starters like French onion soup and crab cakes with mustard sauce; entrees like Wild Mushroom Crusted Pork Chops, fully cooked baby back ribs in BBQ sauce and Southwest Shrimp Skewers; sides like Creamed Spinach, mashed redskin or sweet potatoes and stuffing; plus pastas, gravy, sauces, desserts and more. Some items are heat and serve and come frozen; others are ready to cook.

It’s an alluring lineup if you’re standing on a subway platform trying to figure out what to serve for dinner. We don’t know if Peapod’s system will pan out in the long run. But it looks like it could be a tremendous convenience for customers, and those customers will be eager to swipe the barcode of Wildfire fare and other LEYE items. It’s a clever way of getting restaurant brands into consumers’ hands; let’s hope something similar becomes available in your town, soon.