Why every restaurant wants to be a CPG brand

Has UberEats quietly broken the traditional hospitality business model?

Everyone blames the pandemic for shrinking margins and empty tables. But even before lockdowns, the rise of food delivery platforms was squeezing restaurants dry - 30% fees, zero loyalty, and no control over customer experience.

Compound that with the fact that a revolving door of guys in motorcycle helmets rushing in and out kinda kills the restaurant experience - and you’ve got a perfect storm of an industry hunting for change.

Today’s episode is all about hospitality brands expanding out of their traditional model and into grocery. I’m calling it…

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Why restaurants are moving into retail

For restaurants, the appeal of consumer packaged goods is obvious.

Retail products unlock entirely new revenue streams - often in places where the brand has no physical presence. A sauce on a shelf can make money in Perth even if your only venue is in Sydney.

They also help to build mental availability. When a bottle of Nando’s peri-peri sauce lives in someone’s fridge, it keeps the brand top-of-mind every time they open the door, whether they’re thinking about chicken or not.

Retail also solves a problem of geography. Restaurants are limited by site location, labour and rent. Grocery products travel far further and scale faster. In the U.S., Nando’s operates just 50 or so restaurants, but its sauces are sold in 25,000 stores nationwide.

But beyond revenue, the smartest brands treat retail as media. Every sauce bottle, frozen slider, or spice blend becomes a brand impression. A shortcut to memory. A chance to reinforce what the restaurant stands for - with no paid ad budget required.

The three restaurant-to-retail playbooks

As this trend matures, a few clear playbooks have emerged. Different paths, same ambition: turn hospitality IP into packaged product revenue.

1. The Signature Sauce

This is the cleanest and most obvious brand stretch - bottle your most famous flavour and put it on shelf.

Chick‑fil‑A launched its sauces into grocery during COVID — and quickly turned it into a multi-million dollar channel. In one quarter alone, bottled sauces pulled in $38M in retail sales.

But what made the rollout really smart wasn’t just the sales. Chick‑fil‑A donated 100% of profits from bottled sauce sales to fund its employee scholarship program. That turned a shelf product into a PR story, a loyalty driver, and a reinforcement of brand values - all in one bottle.

2. The Iconic Format

Some restaurant brands are defined not by a flavour, but by a format. When that format works at scale, it can dominate retail.

White Castle, the U.S. slider chain, is a great example. Its frozen sliders now outperform many mainstream burger SKUs, and the product accounts for a full 25% of the company’s revenue.

3. The Full Shelf Takeover

Other brands go all in, launching full product lines across categories. These plays are bigger, riskier, and require serious operational scale.

TGI Fridays built a major grocery presence by licensing its brand to Kraft Heinz. You’ll now find everything from frozen appetisers to cocktail mixers under the Fridays name.

It’s been a commercial success - the range delivers strong sales and keeps the brand visible well beyond its shrinking restaurant footprint.

But it also highlights the trade-off that comes with licensing: scale without control. The products are recognisably “Fridays”, but they’re not necessarily driving diners back to restaurants or reinforcing what made the brand special to begin with.

What makes it work

The most successful restaurant-to-retail transitions tend to follow a few clear principles.

First, they launch with a hero product - something the brand is already known for. Nando’s didn’t try to sell chips or crackers. It started with the peri-peri sauce people already loved.

Second, they protect quality. The product still has to deliver.

Third, they choose the right model. Some, like Momofuku, start small with DTC, test the appetite, and then scale into retail. Others, like TGI Fridays, license their brand to food giants who can handle the distribution lift. Neither is better - but the fit needs to match the brand’s strengths.

And finally, they treat retail seriously. These are not passive side hustles. White Castle pushes its frozen sliders with full marketing weight.

Why this matters for CPG marketers

Here’s the tension: hospitality brands aren’t typical challengers. They come with built-in memory structures. People already know the colours, the logo, the taste. When they land on shelf, they don’t have to introduce themselves - they just have to show up recognisably.

That makes them dangerous competitors.

If you’re already in CPG, this trend forces three questions:

1. How do you defend against a hospitality brand suddenly launching a copycat SKU next to yours - and doing it with more fame?

2. What can you learn from how they use brand assets, flavour cues and nostalgia?

3. Could your own brand stretch the other way - into foodservice, into pop-ups, into experiences - to close the salience gap?

It’s not just a phase.

From burger joints to ramen bars to fried chicken chains, the smartest hospitality brands are building grocery businesses that reinforce their identity, grow their revenue, and expand their reach.

From Grill’d to groceries, the lines have blurred. Hospitality brands don’t just want to serve meals - they want to stock pantries.

The question isn’t whether more of them will make the jump.
It’s which ones will stay on shelf once they get there.

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