Sponsored by Private Label Specialties
Beverages have an 80-95 percent profit margin according to a recent study by Bloom Intelligence. However, soda sales have begun trending down, which has cut into profits for restaurants. Private labeling, within the restaurant industry, is an often overlooked advertising tool that may be part of the solution for restaurants to increase beverage sales again.
Branding is a complicated process that can work against a restaurant if not done correctly. This is why finding a company that has a proven track record of supporting restaurants’ branding efforts is vital to success.
Ray Duhaime, owner of Private Label, knows better than most the power of branding. “Why would you advertise for anybody else?” Duhaime asks. “Why wouldn’t you advertise for yourself? Our company gives pizzerias, and small businesses, the opportunity to advertise, market, and brand themselves.”
Duhaime has created a unique recipe for various soft drinks and offers the soft drinks to restaurants as their own branded sodas. “I take my root beer, my recipes, my ingredients, my flavorings, and then I private label it to operators’ establishments,” Duhaime says. “So, instead of selling Ray’s Root Beer at Joe’s Pizzeria, we sell our root beer to Joe’s Pizzeria as Joe’s Pizzeria Root Beer so they benefit from the branding—not us.”
While root beer was the original soda and is Private Label best seller they offer unique flavors like raspberry lime, strawberry, birch beer, vanilla cream, and blue raspberry. “We have customers tell us your root beer brings back memories and your raspberry lime is incredible,” Duhaime recalls a client telling him when he ran out of their private label sodas that a customer wanted, that customer chose to leave rather than order anything else.
“‘If a customer thinks they can only get a soda from one specific pizzeria, any time they’re craving that specific soda—especially if it’s a unique flavor—they’re only going to go to that pizzeria,” Duhaime says. “That creates loyalty, which creates repeat business.”
The idea Duhaime is describing is known as anchoring, and it is an important consideration for restaurant operators when planning branding and advertising. “When someone is hungry and is eating a good meal and they have the root beer bottle in front of them that anchors the great meal with the name of the restaurant,” Duhaime says. “So the next time they get hungry, it reminds them of the anchor—their pizzeria.”
What Duhaime is referring to is an advertising tactic known as private labeling. While private labeling is not a new brand awareness tool it is often under-used within the restaurant industry. Private labeling drinks, in particular, is an innovative way to use private labels because beverages have a huge profit margin and make up a large portion of restaurant sales.
“Think of it this way, operators would be doing something that they are already doing—selling beverages— but with Private Label, restaurants make more money and have customers pay for the branding,” Duhaime says.
By taking this approach, Duhaime offers operators the chance to link a uniquely flavored soda to their own restaurant’s brand, with small batch, specially crafted, sodas. This way, when a consumer enjoys a soda, they will associate it directly with the pizzeria or restaurant.
The connection between pizza and root beer is self-evident for Duhaime, who has been offering private-label root beer and other beverages for over 32 years, to thousands of customers across the United States. “Pizzerias are one of our biggest segments, pizzas just taste better with the root beer,” Duhaime explains. Pizzerias like the famous Pizzeria Regina in Boston have been loyal customers for more than 20 years.
While the enjoyment of pizza and sodas like root beer is not revolutionary, Duhaime’s unique recipe stands out. “The beverage recipes are mine,” Duhaime says. “I adjusted the flavorings, the carbonation, and the sugar until it got to the point where it was perfect.”
However, it is not just the unique flavor of the sodas that makes Private Label’s small-batch beverages stand out. The glass bottles are another key to the process. “Our product does come in a glass bottle, which, is important because glass packaging always has a higher perceived value,” Duhaime says.
Finally, there is an unmistakable nostalgia for glass-bottled root beer. “Root beer is nostalgic to begin with, so it appeals to the older clientele who remember root beer and the younger clientele because it’s got a glass bottle,” Duhaime says. “If the kids know that their favorite pizzeria has that root beer, they might end up being the decision maker for the next dinner out.”
While there are many benefits associated with the glass bottle and unique formulation of Private Label sodas, the biggest benefit can still be found in the unique approach to branding that Private Label offers.
Private Label’s innovative approach to branding and private-label sodas has demonstrated its potential to transform the restaurant industry. “We’ve been doing this for over 32 years, growing every year,” Duhaime says. “That has to stand for something or we wouldn’t be around, this works.”
Private Label has provided restaurants with small-batch, uniquely flavored sodas under their own branding, Duhaime has been giving small businesses access to advertising and brand recognition tools they may not otherwise have. “We can do as little as one case to trailer loads,” Duhaime says. “While the most common is by the pallet.” The use of a restaurant’s brand on beverages allows for no lost money through refills, and the ability to command a higher price for a more unique product and better profit margins.
“The soda labels become a little billboard on that bottle when it goes out the door,” Duhaime says. “When people go back to their office or go home and they bring that product and it’s sitting on the table in front of them, it’s a marketing tool and an advertising tool at that point, which brands their pizzeria’s name. And the customer paid the pizza shop for the advertising.”
For more information on private label small-batch beverages visit Private Label Specialities website.