Virtual Victories: Three Restaurants Share The Secret Sauce Behind Their Virtual Brands
Three thought leaders behind some of the industry’s leading virtual brands took to the MURTEC stage to share their triumphs, their challenges, and to share what's next in this red-hot segment of the restaurant industry.
Andre Vener, Founding Partner, Dog Haus Worldwide; Aaron Noveshen, Founder & CEO, Starbird Chicken; and Sherri Landry, Chief Marketing Officer, CEC Entertainment, shared their very different and very successful approaches to virtual brands at MURTEC.
Best known for its Chuck E. Cheese brand, CEC launched its virtual brand, Pasqually’s Pizza and Wings back in 2020. “We quickly knew that a brand like Chuck E. Cheese needed to do something different,” explained Landry. “We had considered a virtual brand and how do we fully leverage our operational infrastructure for some time; the pandemic just made it happen faster.”
The restaurant operator was already considering a virtual brand to leverage its existing operational infrastructure; Chuck E. Cheese and the Peter Piper Pizza brands have offered pizza for almost 50 years, the challenge was taking it to the next level and delivering pizza. To appeal to more mature palates, the flavor profile and ingredients were elevated, Landry explained.
75% of consumers prefer to order delivery direct from the restaurant, according to HT's 2021 Customer Engagement Technology Study.
About five years ago, Starbird Chicken, a super-premium, fast-food restaurant, opened its first location in Silicon Valley and has expanded to five brands under the Starbird banner to include salad, wings, garden and bowls.
Leveraging Third-Party Marketplaces
“We got into the virtual brand business really by looking at what opportunities there were, how to reach more customers, how to get digital real estate,” explained Noveshen.” … How can we show up on five screens on a versus just one DoorDash screen? And how do we optimize our search engine?” Noveshen stressed the importance of proper packaging for off-prem orders, packaging that also maximizes the opportunity to leverage the brand name.
Also setting out to leverage the third-party marketplaces and how consumers order from them, Dog Haus launched virtual brands in 2019.
“When you go into a Dog Haus brick-and-mortar, you see our menu with five different categories: dogs, sausage, burgers, chicken, plant-based. But when you are ordering on the third-party delivery, you could only have a couple of search words,” Vener explained.
Unlike Starbird’s house of brands, Dog Haus’ five different virtual brands are positioned under the Absolute Brands’ banner and represent its menu and different dayparts: The Impossible Shop for plant-based items, Bad Mutha Clucka for Nashville Hot Chicken, Bad Ass Breakfast, etc.
“We created these virtual brands only to be in a ghost kitchen. And then the pandemic happened,” explained Vener. Dog Haus then asked its franchises if they wanted to launch these virtual brands from their kitchens. “Everybody did it, and within two months, our same store sales were back to normal,” Vener said. “It was the lifeline for our brand during the pandemic. And in 2021 we were up 34 percent, and that's only because The Absolute Brands carried it.”
Peter Piper Pizza Rolls Out Off-Prem Concept
Adapting the Brick-and-Mortar Format
Seeing sustained demand for off-premises dining, CEC and Dog Haus are eyeing smaller footprints for their brick-and-mortar stores.
In March, Peter Piper Pizza introduced its new Express prototype that’s exclusively for to-go orders. At 1,400 square-feet, it’s a fraction of its 10,000 square foot traditional locations. Off-premises sales now account for more than 40% of sales at its corporate-owned full-service locations.
Dog Haus would like 1,800-square-foot locations, but depending on space available, he location may be 2,200 and 2,500 square feet. “You have to adapt,” said Vener.
At Dog Haus, 55% of its sales are from off-premises orders, 18% are from alcohol. Dog Haus is excited to go back into the bar business. “It looks like there might be a great opportunity for the brand to not only continue to develop on the virtual side, but also to go back to what we were known for,” Vener said. This is reflected in the new store design. “We're actually making a bigger footprint of a bar, little less tables on the outside and having a second line for the kitchen in the back. Because the advantage of having the virtual brands is that you can toggle them on and off.”
Off premises and dine-in will coexist, agrees Landry. Agreeing with Vener, “You’ve got two parts of the business growing. And so we believe that we have an opportunity to fill in the gaps where we already are,” said Landry.
Additional MURTEC 22 coverage, including Jon Taffer's rousing keynote address, can be found here.
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