Olive Garden Big Catering Big Stumble

Sometimes chain restaurant companies reposition and wait for results, and sometimes those results are not exactly what you had hoped for; so you try something else according to Foodservice Solutions®  Grocerant Guru®.   Clearly the base customers that liked the all you can eat salad and bread sticks have been asked to step aside at Olive Garden so the kitchen can cater an outside party.

When Olive Garden began rolling out delivery service for orders exceeding $125 from all of its U.S. and Canadian restaurants the team at Foodservice Solutions® thought wow looks like they are trying a moon shot rather than a cakewalk after all this is the restaurant business not rocket science.  

Incremental sales be damned, why build off the base customer with new menu items, or LTO’s, lets shoot for the moon must have been the ideation behind the big fee based program that only an MBA accountant would have come up with according to our Grocerant Guru® opinion.  

The Olive Garden press release read more like an accounting text book focusing on opportunity fees rather than product value.  The PR said that “Catering delivery customers will be charged a 15 percent delivery fee on orders up to $500 and a 5 percent charge on every dollar exceeding that amount. The food is delivered hot. Extra fees are charged for chafing dishes, racks and heating fuel.”  

We ask when did fees drive customer migration within the restaurant sector?  Well there was the time of the LBO (leveraged buy-out) O’ that fee was for Wall Street bankers not customers.  Yes Darden has to many MBA’s on it board and we all know where this will lead them. 

After finding success with the grocerant Ready-2-Eat and Heat-N-Eat fresh prepared Dinner Today and Dinner Tomorrow promotion that edified customers to the brand all the while increasing share of stomach all too the dismay of competitors. Olive Garden has now chosen a different path.  Is this new path sustainable, in line with Olive Gardens brand promise? Are fees; the new brand promise at Olive Garden?

To be sure Olive Garden has not abandoned the grocerant niche.  The catering menu has “Catering Meal Combinations, featuring bundles of Olive Garden favorites with variety for every taste at an affordable value” all albeit delivered for $125 or more. Regular readers of this blog know that Mix and Match bundling are hallmarks of the grocerant niche and empowering for consumers.  

With more than $3.8 billion in sales and over 845 restaurants Olive Garden is not going far fast.  What is clear is that edifying a brand with a new menu item, new flavor profile, or competitive priced seasonal special drives trial, consumer buzz, top line sales, and bottom line profits.  

All things being equal, consumers like to have meals and meal components that are custom made just for them or allow for customization and personalization, we might suggest that Mix and Match meal bundling that expands brand value be consider as a next step at Olive Garden.

Visit: http://www.foodservicesolutions.us/ for more from the Grocerant Guru® who continually reminds us, that the consumer is dynamic not static. Is your brand driven by customers, accounts, or marketers?

Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization attracting Grocerant niche consumers?  Contact: Steve@FoodserviceSolutions.us for more.