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Queso, please? Virtual brands go niche as they mature

What started early in the pandemic as a cheap, easy way to sell more wings and burgers is morphing into more-targeted digital menu offerings like melty cheese and loaded potatoes.
Qdoba Pure Gold
Photo courtesy Qdoba

Virtual brands exploded during the pandemic, selling mainstream comfort food like burgers and wings from restaurant kitchens looking to make some extra dough during a trying time.

Today, however, it appears virtual brands are getting a bit more niche. Recent virtual kitchen concepts have centered on menu items like queso, loaded potatoes and sushi. They’re all comfort foods, to be sure, but with a slightly narrower focus than those earlier entrants.

Burrito chain Qdoba this week announced the launch of a queso-focused virtual concept called Pure Gold by Qdoba.

It’s the 740-unit fast casual’s first virtual brand and it’s currently available in about 300 restaurants in select markets, including Denver, Michigan and Indianapolis, “with the potential for future expansion,” the San Diego-based chain said in a press release.

Qdoba tested the virtual brand last October before expanding the pilot in April. The chain declined to share any performance metrics about the delivery-only concept.

“Qdoba is known for our signature, three-cheese queso,” the chain said via an email interview. “Pure Gold gave us a platform to create exclusive, indulgent and unique queso-inspired items available via third party only.”

The virtual brand’s menu includes Loaded Gold Quesos (cheesy dips topped with honey chicken or pork verde), 24-Karat Quesadillas (flour tortillas filled with a choice of protein, shredded cheese, pico de gallo and queso), and Gold Rush Tacos (queso layered between two flour or corn tortillas, filled with steak or chicken and toppings.)

Pure Gold uses existing Qdoba ingredients, requiring no new SKUs other than a branded packaging sticker, the company said.

“Qdoba is always looking for additional revenue streams and delivery has continued to grow over the years,” the chain said via email. “This virtual brand allows us to leverage our second makelines and existing ingredients to create a one-of-a-kind, exclusive queso menu.”

Jason’s Deli, which has 248 locations in 28 states, debuted its Boise Bill’s stuffed potato virtual brand in 11 locations last August. It is now available at 49 locations, with plans to add more, Brandy Butler, the chain’s director of marketing, said via email.

Boise Bill's stuffed potato

Photo courtesy Jason's Deli.

Delivery business has more than doubled at Jason’s since 2019, with third-party platforms accounting for a “significant portion” of that growth, Butler said.

“We chose the Boise Bill’s concept because we saw a specific gap in the market and, since we have a long history of serving loaded, oversized, stuffed potatoes, we knew it was something that Jason’s Deli could execute exceptionally well,” she said, adding that the virtual brand did not require the fast-casual to add any ingredients to its kitchens.

Jason’s also introduced a second virtual brand, Stack’s Sandwich Shop.

“Since we haven’t added new SKUs or additional labor to service this business, it has been a very successful way for us to add incremental revenue,” Butler said.

Casual-dining stalwart TGI Friday’s is not a chain traditionally known for sushi. But that changed with the brand’s partnership with virtual kitchen platform C3. Last August, Friday’s parent TriArtisan Capital invested $10 million in C3.

C3 operates more than 40 virtual restaurant brands, including Krispy Rice. The concept sells sushi boxes that include handrolls, maki cut rolls, nigiri and chef-curated combinations, according to a press release.

TGI Fridays began selling Krispy Rice menu items from some of its restaurants last fall, noting in a statement at the time that “sales have been impressive, nearly doubling from the first week and continuing to grow.”

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