How restaurants can benefit from launching DTC brands

Just to make it clear, when a restaurant launches a DTC (direct-to-consumer) brand, it entails the restaurant selling products associated with its own brand. A great example would be the Starbucks iced lattes or Pizza Express Dough Balls sold in supermarkets or Itsu rice crackers sold at train stations. Restaurant DTC products however, don’t always have to come from a chain restaurant. Currently, many hot spot New York restaurants have jumped on the bandwagon and many restaurant operators are increasingly relying on packaged goods to boost awareness and diversify revenue streams. 

Momofuku’s DTC arm, for instance, raised $17.5 million in a Series A funding round this month led by Siddhi Capital, which previously invested in DTC brands such as Magic Spoon cereal and Recess canned drinks. 

“It kind of feels like … everyone’s doing this,” said Chris Crowley, a senior editor at GrubStreet covering NYC’s restaurant industry. He described the phenomenon as a “gold rush” of “millennial restaurants” heading the DTC route. “Everyone who can either wants to do this or is doing this,” he said, adding that the trend has accelerated since 2021.

Another great example is Carbone sauce. Carbone is a legendary Italian-American restaurant in New York and launched Carbone Fine Food two years ago, according to Eric Skae, who is the brand’s CEO. “This wasn’t pandemic driven,” Skae explained, adding that he was in talks with the company well before 2020’s U.S. lockdowns began. The sauce is currently Carbone’s only product and can be found on grocery store shelves across the U.S. at places such as Whole Foods.

The primary goal of the sauces is to capitalise on the awareness Carbone has well beyond the city’s borders, said Tracy Garbowski, executive VP of marketing at Carbone Fine Food. After all, many of NYC’s most well-known eateries have positive reputations that extend far beyond the East River. 

In an era where local restaurants have the ability to be famous nationwide like never before, thanks to social media, there are several benefits behind restaurants launching a DTC brand. Take Momofuku, for instance. The restaurant group, which got its start with Momofuku Noodle Bar in Manhattan’s East Village neighbourhood, started hiring for its DTC arm (which sells some of its ingredients, including its seasonings and air-dried noodles) in 2019. Although the brand started out as DTC, its products are now sold in national retail locations such as Whole Foods, Target and Publix, according to Momofuku CEO Marguerite Mariscal. 

A stat that “really kicked off” the brand’s DTC efforts, Mariscal said, was that 90% of its social media followers didn’t live in cities where Momofuku operates restaurants. When Momofuku began the DTC business, it counted more than 2 million followers, stemming from its brand accounts and the social media following of celebrity chef founder David Chang.

Celebrity founders and followings also play a huge part in the marketing of the products. “Because of the success of the Carbone restaurant, we have greatly benefited from the celebrity and social influencer optimism, loyalty and favouritism towards the brand,” Garbowski said. Since Carbone Fine Foods rolled out with “little paid investment from a PR perspective,” the brand has generated 3 billion media impressions, according to Garbowski. Influencers such as Danielle Caminiti (17,000 Instagram followers) and Gabby Eniclerico (2.8 million TikTok followers) have posted about the brand. Actress Shay Mitchell even mentioned Carbone’s sauce in a video for Women’s Health magazine that generated more than 4,000 views on the Carbone Fine Foods Instagram account alone.  

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