How Bob Evans Built a Successful Retail Grocery Business, Propelled by its Restaurant Brand
Taking a popular restaurant concept and translating it to a profitable retail grocery business is an alluring but tricky path for many brands. In our work, we have seen both successes and failures with these extensions. The market strategy case study of Bob Evans provides a good example of success.
In 1961, Bob Evans opened his first restaurant in the front yard of his family’s southeastern Ohio farm. Now operating 522 restaurants and offering products in grocery stores across the US, the brand returned to its “Farm Fresh” roots about five years ago. Let’s explore the origin of this market strategy and how it affects sales today.
Bob Evans Former VP of Marketing, Ms. Dee Hadley was a leader in the team that developed the Farm Fresh market strategy that the brand still uses today. She reflects on how her team leveraged consumer insights:
“The strategy began with meaningful consumer insights. We conducted a market segmentation study and brand equity study to really understand customer barriers, perceptions and beliefs. We learned consumers are looking for fresh food combined with convenience. And that’s where we could leverage our point of differentiation. Bob Evans brand started on an actual farm in Ohio—so we developed our Farm Fresh Campaign, highlighting Farm Fresh Food.”
The brand uses the Farm Fresh approach in this retail grocery commercial, while incorporating target consumer insights:
Another execution on this strategy from 2015 that makes the brand connection and promotes Bob Evans restaurants:
In Grocery, Farm Fresh Market Strategy Goes Beyond Advertising: Target, Packaging and Channel
Bob Evan’s consumer studies pointed to Young Families as the primary retail grocery target. Ms. Hadley elaborates:
“We described them as family first, 30-45. Often, they are working parents for whom convenience is key. Many of our target customers fall back on fast food as an easy solution, but they feel guilty about it. They have an inherent desire to feed their families something better.”
Along with marketing executions, Bob Evans implemented product, branding and channel strategies to appeal to this target..
The packaging was completely redesigned to eliminate associations with “typical frozen food,” and includes photographs of the farm. Also, the brand promotes that it offers America’s #1 Refrigerated Mashed Potato.
The channel strategy has been especially important. Bob Evans products have always been in the “Fresh Prepared” section, which is a desired area for growth within grocery stores. At first, Bob Evans was known for sausage. The product line expanded with the side dish offering to leverage existing relationships with grocery store buyers in the refrigerated section and to help grocery stores meet their “Fresh Prepared” targets.
Bob Evans anticipated overall growth in the “Fresh Prepared” segment and benefited from this trend. At retail grocery, this category grew almost 10% in four years. Consumers are spending more in this section, and paying more per pound.
While Bob Evans Restaurants are facing challenges in a competitive restaurant landscape, the retail grocery side is thriving. BEF Foods enjoyed sales in FY 2016 of $387 million, with a year-over-year increase of 17% for refrigerated side dishes and 11% for sausage products. Making the move to retail required insights-based business and branding strategies, and Bob Evans’ unified market strategy is a success story other brands looking to move across channels can learn from.