Dive Brief:
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Moe’s Southwest Grill has teamed up with Kellogg's to launch a frozen range of breakfast bowls for sale in Walmart, Giant Eagle and Wegmans this month, according to the Charlotte Observer.
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The fast-casual burrito chain does not serve breakfast in its restaurants and, until now, has offered only limited retail extensions, such as guacamole in warehouse stores. The new single-serve breakfast bowls will be available in Chorizo & Eggs, Chorizo Benedict, Southwest Vegetarian, Chicken Chilaquiles and Huevos Rancheros varieties, with a recommended retail price of $4.49.
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In July, the bowls will expand to Kroger and H-E-B stores.
Dive Insight:
Moe’s partnership with Kellogg’s is just the latest in a series of joint product launches from restaurants and food manufacturers. Kraft Heinz partnered with Cracker Barrel last year to sell premium-positioned macaroni and cheese, TGI Friday’s teamed with Inventure Foods to sell baked snacks, and even McDonald’s started selling its Filet-O-Fish, Big Mac and McChicken sauces in Canadian grocery stores last year.
The opportunity for restaurants is to find other revenue sources beyond their products’ traditional point of sale. For food manufacturers, there is an opportunity to tap into the popularity of restaurant brands and thereby gain market share — so long as the restaurant-branded products are different enough from their mainstay retail items. With the Kraft Heinz-Cracker Barrel collaboration, for example, there was a risk that Kraft Heinz’s market-leading position in the mac-and-cheese category would lead to a loss of existing customers. However, its aim was to entice consumers who would normally buy mac-and-cheese from restaurants or the grocery cooler to try a shelf-stable version, bringing new customers to the category.
Kellogg’s already sells frozen breakfast sandwiches, so there is a risk that some buyers could switch to the Moe’s brand. But with the right positioning, the legacy company may be able to attract more consumers to the frozen breakfast aisle — and more frozen breakfast consumers to the Kellogg brand as a whole.
It will be interesting to see if more manufacturers pursue deals like this, and if consumers come to expect these kinds of premium partnerships. Even with the possibility of diverting existing customers to a competing product, these product launches can help create a feeling of excitement and top-line quality around a brand, capturing the interest of untapped consumer bases.