February 21, 2024

Reap recurring revenue with subscription plans

New research indicates that restaurant subscriptions fit the bill for many Gen Z adults and millennials.

For a restaurant wine club, the differentiator is who you are as a sommelier and your point of view, according to the Third Place's Vivien Sin.

Subscription plans and memberships have become lucrative business models for streaming services, software companies and gyms. Some restaurants are following suit, and many consumers find the idea appetizing.

According to the National Restaurant Association’s 2024 State of the Restaurant Industry report, 81% of Gen Z adults, 79% of millennials, and 71% of Gen Xers say they would likely participate in a meal subscription program if it was offered.

“Predictable, recurring revenue is very powerful for a restaurant,” says Sam Bernstein, founder and CE0 of Table 22, a platform for restaurant subscriptions and memberships. Founded in 2020, Table 22 has expanded rapidly in the past four years, with nearly 1,000 restaurant locations. The company’s revenue has tripled in the last year alone. 

If you’re considering starting a subscription/membership service, start by determining whether the model is a good fit for your business. While subscriptions are popular with younger consumers, fewer than half (48%) of baby boomers say they would be interested. 

Next, define your goals. Are you trying to drive traffic to your restaurant? Are you looking to expand off-premises sales? Are you seeking to develop a sense of community? Do you want to promote a specific menu item?

Lean into your brand and create a plan that complements your restaurant’s essence. For inspiration, here’s a look at four subscription/membership models:

1. The beverage club. Whether it’s the Fresh Brew Club at the five-unit Fresh Baguette bakery and cafe in the Washington, D.C., area, or the Unlimited Sip Club at fast-casual giant Panera Bread, with over 2,100 locations, these plans offer a nearly unlimited stream of coffee and other included beverages. The beauty of this type of plan is that it spurs other purchases—like sandwiches and pastries. "We developed the Fresh Brew Club with the objective to grow sales by increasing visits to our bakeries,” says Fresh Baguette project manager François Marouby.  “We launched our coffee subscription pilot and within a few weeks we saw over 1,000 subscribers. This has led to increased transactions in all of our locations and contributed to a 20% lift in revenue. Although it can be an operational challenge, we are strongly convinced that it’s a key component of our future development.”

2. Combine and dine. “Meal packages are popular,” Table 22’s Bernstein says, with an emphasis on “heat and finish at home,” rather than “hot and ready.” This translates to increased revenue, without extra strain on the kitchen during core service hours. “A restaurant can prepare these meals during pre-shift hours. It’s not disruptive to restaurant operations,” he says. The price point is lower than a similar on-premises meal, giving customers a way to affordably experience your culinary creations more frequently. Many subscriptions feature exclusive menu items, giving subscribers a sense of belonging to the establishment’s inner circle. Be sure to include easy instructions for heating and assembling. Boost your sales by offering add-ons, like paired wine or a breakfast package for the next morning.

Don’t forget the pièce de résistance: a chef’s note detailing your dishes. Use storytelling to position your selections. “We’re finding that a lot of the value to consumers is hearing from the chef or sommelier about why certain products were selected,” Bernstein says. Vivien Sin, CEO and co-founder of The Third Place, which also offers a subscription platform, agrees. “You’re giving them your curation and your knowledge; that’s the real product that you are selling,” she says. ​​​​​

3. Wine wisdom. If your restaurant is known for its wine selections, a wine club could be a natural fit. Again, the key is to provide your team’s expertise. What region did the wine come from? What’s special about the winemaker? “There are so many anonymous commercial wine clubs out there,” says Sin. “The differentiator for a restaurant wine club is who you are as a sommelier and your point of view.” Sin has seen everything, from elegant explainer notes to simple emails to short videos. The important thing, she says, is to offer rich insights and a personal touch.  Some eateries, like Redfield, in Oakland, Calif., create a sense of community by hosting a “pickup party” on the day the selection is first available, giving wine aficionados an opportunity to connect and offering free tastings of the selected wines. If you plan on offering alcohol delivery, be sure to check local laws and regulations.

4. Prepaid perks. Some plans invite consumers to invest up front and reap savings in return. For $10 per month, fast casual Sweetgreen—with over 220 locations nationwide—offers its Sweetpass+, giving members $3 off a purchase each day. Another twist on the prepay-for-perks model is the inKind pass, which brings together over 1,250 restaurants nationwide. Consumers pay a $9.99 monthly fee, and in exchange earn a 20% credit reward when dining at any participating restaurant.

The National Restaurant Association’s 2024 State of the Restaurant Industry report is considered the authoritative source for restaurant industry sales projections and business trends. The report is free to members (a $349 value). Get the report today!
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