Grocery shops and c-stores used to comprise “the retail threat.” But now, CPG restaurants are ramping up. While the idea isn’t entirely new, 2016 saw three major CPG brands—Pepsi, Kellogg’s and Chobani—launch or expand restaurant concepts in New York City. Why now? Just like restaurant operators, retail brands are seeking new ways to improve consumer engagement. “Now more than ever, brands need to connect with customers in a way that’s different from traditional advertisement,” says Pepsi Marketing Director Aziel Rivers.
The three concepts highlight the strategies companies are using to engage. One major difference among the three is the branding; it’s no secret who’s behind Kellogg’s NYC and Chobani Cafe, but Pepsi took a more subtle approach with Kola House. Nowhere on the menu or in its branding is Pepsi mentioned, although the decor has subtle nods to the Pepsi logo.
Another difference is the execution: Chobani’s and Pepsi’s marketing departments run their concepts, while Kellogg’s took a more restaurant-forward approach, bringing on former Per Se General Manager Anthony Rudolf and former director of operations at Eleven Madison Park Sandra Di Capua to operate the concept and Milk Bar chef Christina Tosi to create the menu. “We’re really not marketers—we’re restaurant people,” Di Capua says. “So for us, the cafe is about creating meaningful and memorable hospitality experiences.”
Four years after Chobani Cafe debuted in NYC’s SoHo, the Greek yogurt brand opened a second cafe nearby in a Tribeca Target in October, and launched a third in a suburban Houston Wal-Mart in February. Chobani Chief Marketing and Brand Officer Peter McGuinness says the two retail locations were “opportunities we couldn’t pass up,” and that Chobani’s main purpose with its cafes is to promote the brand, not to enter the restaurant business. “Having said that, the SoHo [cafe] is very successful,” McGuinness adds, reporting that year-over-year sales growth for the flagship cafe have been “phenomenal.” The fast-casual concept capitalizes on consumer interest in healthful fare—in addition to sweet and savory yogurt bowls for all dayparts (ranging from $5.75 to $6.75), Chobani Cafes serve a range of foods featuring its yogurt, including Greek yogurt smoothies and salads topped with Greek yogurt dressing.
Kola House (Pepsi)
Pepsi chose to promote its key ingredient—the kola nut. It chose not to approach it as a branding opportunity, but as a way to give a nod to art, fashion and music, Rivers says. However, the subtle branding seems to confuse some—it has a five-star rating on Facebook, but a two-and-a-half-star rating on Yelp, with one reviewer thinking it was a Coca-Cola restaurant.
With a summer launch in Times Square, Kellogg’s NYC had the makings of a marketing gimmick with its fancy cereals. But with some well-known partners and a design that mixes nostalgia with modern touches, the cafe came across as less of a gimmick and more of, well, a cafe. Customers order at a counter and pick up their food inside cabinets built to recreate the feeling of eating cereal at home. The menu started out with cereals ($5 to $8) featuring toppings such as fruit, nuts, lemon zest and thyme, and has since expanded to include other Kellogg’s products, such as Eggo waffle sandwiches ($11) and Pop-Tart milkshakes ($13).