The pandemic devastated a lot of restaurant chains. But it also had an odd way of taking certain concepts with momentum and adding rocket fuel.
Take Baskin-Robbins, for instance. The ice cream chain known for its 31 flavors (actually more than 1,400) had some real momentum in 2019, with steadily improving same-store sales.
The pandemic then helped that alone. When people emerged from quarantine, they decided to go out for ice cream, which helped many concepts in the sector. Average unit volumes rose 4.1% last year in the U.S. despite that pandemic, according to Restaurant Business sister company Technomic.
“Before the pandemic started, we had a couple of record quarters,” Baskin-Robbins President Jason Maceda said in an interview. “During the pandemic we had a short period in which we were down. But overall we were positive in 2020.”
But this year has been another story altogether. Sales have taken off this year, including same-store sales of 25% last quarter, Maceda said.
It’s important to note that lots of restaurants have done well this year, thanks to post-pandemic pent-up demand. But the pre-pandemic momentum gives Maceda plenty of reason to be confident that the company can keep it going.
Also, Baskin-Robbins now has a new owner. “Now we have the power of being part of Inspire Brands, which we hope can accelerate growth,” Maceda said.
Baskin-Robbins was the smaller part of Dunkin’ Brands, which was sold last year to Inspire, the owner of Arby’s, Buffalo Wild Wings and Sonic, in the largest restaurant deal in at least six years. Baskin-Robbins is a 7,700-unit chain, with more than 5,300 of those locations outside the U.S.
One of the points of Inspire Brands was to consolidate the power of multiple concepts under one roof to gain buying power and share resources to be more competitive as a group than any of them would be individually—which will be more important in an era in which the industry is spending big and fast to implement new technology into their restaurants.
That’s huge for Baskin, which is now among the smallest concepts in the Inspire portfolio. “The biggest thing we have access to is resources that we wouldn’t have as a standalone company,” Maceda said. He noted that during the first month Inspire consolidated its media buying, which saved Baskin a “significant amount of money” that it was able to invest into incremental media buying. “There were benefits right off the bat,”’ he said.
The company also gets potential access to franchisees. Another goal for many of these multi-unit companies is to use one another’s operators as potential sales targets. Franchise brands are aggressively looking to sell stores to new operators. The Inspire deal gives Baskin potentially easier access to a group of ready-made franchisees.
“There’s a whole new realm of franchisees out there who may be thinking of franchises to grow with, but many are saturated with their existing brand,” Maceda said. “They have two options. One is to go to another territory or stay where they are and find another brand. There are big opportunities with Inspire Brands.”
To be sure, Baskin-Robbins has plenty of its own reasons for enthusiasm. The company made a big business of do-it-yourself sundae kits during the pandemic and promoted its cake business. It also pushed delivery, which has gone from less than 2% of sales before the pandemic to 6% now.
The company focused on guest satisfaction, too. Customers “can get ice cream in a lot of different places,” Maceda said. “We put a big focus on guest service, serving the customer, putting smiles on people’s faces. During the pandemic we were successful.”
And the chain has a new prototype, which it calls its “Moments” design. It is more open and displays its products in a more premium manner, with cases and lighting that are “kind-of like you’re in a high-end jewelry store.”
Cakes can also be displayed outside of their boxes. “Our cake decorators are nothing short of artists,” Maceda said. “They sell themselves.”
The first Moments store opened three years ago. The company delayed remodels and new openings during the pandemic, but operators have picked it back up again with the help of some incentives from the company in the form of reduced royalties and help paying for certain equipment—like those display cases. The company expects to have 100 locations in the new prototype by the end of the year.
“Many of my franchisees are small business owners,” Maceda said. “They have one or two stores. Some prefer cash as help building the store as opposed to reduced future royalties.”