Mobile Catering and Co-Branding: A Business Perspective

Introduction

Expanding a mobile catering business that complements a static retail operation is a complex yet rewarding endeavor. This article delves into various strategies to achieve this growth, focusing on the creation of strategic business units (SBUs), co-branding opportunities, and franchising.

The Frozen Dessert Industry: Challenges and Opportunities

Many independent operators in the frozen dessert industry face seasonal cycles and growth management challenges. Key questions include:

• Should a thriving retail business venture into wholesaling or franchising?
• Is diversifying the product line to include items like hotdogs, sandwiches, or grilled foods a viable option?
• Would co-branding or increasing the mobile catering aspect of the business be more beneficial?

Strategic Business Units (SBUs)

Creating separate SBUs for different business aspects allows for easier tracking of profit and loss, more effective fund allocation, and the ability to experiment with different marketing or sales techniques without significantly impacting other business areas.

Creating a Mobile Catering SBU

Assume you operate "ABC Ice Cream Store" as a fixed-base retail business. By establishing an SBU named "ABC Ice Cream Catering," you can track the catering arm's profit and loss independently. This approach allows for strategic marketing plans, such as using the mobile catering operation as a cost center to drive traffic to your retail store.

For example, placing an ice cream cart at a State Fair might incur significant costs. However, by selling products at cost and distributing "$1 off" coupons for your retail store, you can measure the event's effectiveness through coupon redemptions and increased store traffic.

Co-Branding Opportunities

Co-branding offers the chance to diversify your product line and smooth out seasonal business fluctuations. For instance, "ABC Ice Cream Store" could introduce hamburgers or sandwiches, or even open a coffee shop selling pies and cakes alongside ice cream.

Historical Context

Co-branding in the food service industry dates back to the early 1990s when Miami Subs Grill began selling Baskin Robbins ice cream in their sub shops. Today, Miami Subs Grill is owned by Nathan's Famous and co-brands with Kenny Rogers Roasters and Arthur Treacher's Fish & Chips.

Going Vertical

Selling products at a wholesale level to local hotels and restaurants can create a new revenue stream. Establishing an SBU for "ABC Ice Cream Wholesalers" allows for direct monitoring of profit and loss. Additionally, using branded ice cream carts at events hosted by wholesale customers can validate your product quality and enhance brand visibility.

Franchising

Creating a franchise necessitates a separate business unit to monitor franchisee activities and profit and loss. From a mobile catering perspective, providing franchisees with carts or setting guidelines for their purchase ensures brand consistency. However, franchising also means relinquishing some control over how franchisees present your brand to the public.

Conclusion

Expanding a mobile catering business as an extension of a static retail operation involves strategic planning and the creation of SBUs. By leveraging co-branding opportunities, exploring vertical markets, and considering franchising, businesses can effectively manage growth and drive revenue.

Interesting Stats

• The global mobile food services market is expected to grow from $2.74 billion in 2020 to $6.63 billion by 2027, at a CAGR of 13.5% (Source: Grand View Research).
• Co-branded food outlets have seen a 20% increase in sales compared to standalone outlets (Source: QSR Magazine).

By understanding these strategies and leveraging the right opportunities, businesses can navigate the complexities of growth and achieve long-term success.

Author: Paul Thornton, Carts and Grills, Inc.Website: www.cartsandgrills.com