Alternative Revenue Streams
These are extraordinarily challenging times for small business, but the economic and social impact of COVID-19 is also lending itself to creative solutions for alternative revenue streams.
These are extraordinarily challenging times for small business, but the economic and social impact of COVID-19 is also lending itself to creative solutions for alternative revenue streams. Few of us could’ve imagined a time when community anchors such as restaurants, cafés, and local shops could no longer function as gathering places. Now that the new normal is staying home and relying on delivery and take-out for supplies and sustenance, it’s worth taking a step back to understand opportunities for brand expansion and revenue growth that fall outside of in-person experiences. If we’ve learned anything over the past month, it’s that taking your business beyond the limits of its physical space is a smart bet—not just for now, but for well into the future.
Let’s use restaurants as an example. Dine-in operations are extremely low-margin businesses; they juggle high labor and food costs while relying on a nightly influx of cash to keep their lights on. Some of the most renowned chefs and restaurateurs have grown their presence and profits by opening more restaurants. However, that move makes it difficult to maintain quality control and puts your brand in danger of dilution. Furthermore, if a crisis or disaster forces you to close your doors, your entire line of business is in deep water. Another more innovative way to build upon your brand while providing value to your customers would be to sell packaged goods or family meals to go. Below are three examples of restaurants that have made this leap.
Misipasta is a fresh pasta and sauce company created by chef Missy Robbins and her partner in Grovehouse Hospitality, Sean Feeney. The James Beard-award winning chef, who is known for the exceptional pasta dishes she serves at her two Brooklyn restaurants Lilia and Misi, always dreamed of having a pasta company one day—and so the two of them made it happen. Misipasta launched in February via Saturday “drops” where guests were required to line up outside of Misi to purchase a weekly bag that contained freshly made pasta and jarred sauce for four, plus instructions on how to cook it. Not only does Misipasta allow customers to enjoy the chef’s delicious food in the comfort of their own homes, but it also gives them a way to experience her cooking if they’re finding it tricky to nab a reservation at her popular restaurants. This is just the beginning for Misipasta; the duo expects to iterate and expand upon the offering in the coming months.
As eateries across the country have adapted to focus entirely on take-out and delivery, some businesses are innovating beyond their usual to-go offerings in order to meet customer needs. Augie’s Montréal Deli & Market in Berkeley, CA is one of them. Regulars who swing by for a curbside pick-up can still get their fix of brisket and poutine, but they can also grab quarts of smoked meat sauce and pasta shells, frozen matzo ball soup, eggs and produce by the pound, plus household items like toilet paper, paper towels, and spray cleaner. In essence, they’ve turned the deli into a neighborhood market. This allows locals to make easy, comforting meals at home while they can’t dine-in at the deli, but it also represents a new avenue for Augie’s that doesn’t have to go away once COVID-19 passes. Right now, the “Deli & Meal Kit” program functions as a lifeline for the business. In the future, it becomes an added revenue stream.
Even if you don’t live in New York and have never visited Frank Castronovo and Frank Facinelli’s restaurant, you might know about Frankies 457 Spuntino because of their 100% extra-virgin olive oil. The stuff is grown and harvested in Sicily every October, then bottled in dark green cylindrical liters and shipped off to gourmet grocery shops and online retailers all over the country. By branding and selling the olive oil they use in dishes like eggplant marinara and linguini with meyer lemon and pecorino, they empower every cook to make amazing Italian food at home and have cemented their legacy as an iconic food brand. With the entire country cooking at home more than ever before, we’d bet that Frankies’ olive oil sales are through the roof.
