While restaurants have always been a popular leisure destination, representing a $20 billion industry, a new trend is beginning to emerge in some more specialised corners of the market.

Known as restaurant-to-retail, this evolving business strategy sees restaurateurs complementing their establishment’s traditional offering with a retail twist.

The effort could involve anything from selling ingredients used to prepare the meals served in the restaurant, creating branded sauces that customers can take home to make their own copycat meals, to selling books for people to read with their coffee.

One such example is the upcoming Bistecca, a steak and wine restaurant from the Liquid & Larder group, whose previous ventures, such as Grandma’s Bar and The Wild Rover, have offered wildly different experiences for their customers

With Bistecca, the group hopes to bring a piece of Europe to Sydney’s CBD by introducing a wine shop, attached to the side of the dining area, which will stock the various drops that are available in the restaurant itself.

“We love that part of traveling through Europe where a lot of the enoteca you go into, you got up from your seat and went over to the wine racks, picked up a bottle of wine and got to touch it and look at it rather than just flick through the pages on a menu,” says James Bradley, co-owner of Liquid & Larder.

Staff at Bistecca can talk to customers over the course of an hour or two during dinner to get a feel for the type of wine they particularly like, as opposed to the few minutes you would typically get at a standalone bottle shop. This will enable customers to make a more informed purchasing experience.

By focusing on Italian wines Bradley hopes to corner a market he believes is yet untapped.

“Sydney has a number of bottle shops but…there’s not a lot of specialist boutique wine shops. We’ve found that the general understanding of Italian wine is not amazing…so being able to get up, touch it, see it, and talk to someone about it [can] help push [customers] in the right direction,” he says.

In an effort to expand the scope of the business, however, Liquid & Larder have had to make some concessions – specifically with the floorplan of the restaurant.

“We’ve reduced our [seating] capacity to fit in the wine shop, but it means we’ve got a better chance at making sure our venue is at capacity by having a different offering,” explains Bradley.

By doing so, Bistecca can also trade for longer and different hours than a traditional restaurant, while reaching a different customer base.

Beyond selling products

The Grounds at Alexandria, a popular dining experience for Sydney locals, has taken a different approach to the restaurant-to-retail model by leasing out the large, open spaces available on the property to local artisans to house a marketplace each weekend.

“It could be artists selling their artworks, whether that be actual graphic artworks, sculptural or wearable [art],” Dan Mylonas, brand manager at The Grounds, tells IRW.

“There’s people that do their own jams, honeys and peanut butters… it even goes into plants and pots as well, it’s quite diverse.”

While the revenue earned by the vendors stays with them – The Grounds does not charge a percentage fee on goods sold – they do charge vendors a set rate, required up front, to secure a stall for the week.

This strategy provides guaranteed income for The Grounds, as well as an opportunity to capture additional spending from customers who come to the markets, by providing a place to dine at one of the available restaurants or cafes. On the flip side, the markets provide entertainment for waiting diners.

“If someone is given a buzzer and told it’s going to be an hour wait, it isn’t a terrible experience,” Mylonas says, “here’s plenty for them to see and do. We can direct people toward our markets and can extend the experience even further.

“One of The Grounds’ core values is that it has got to be a memorable experience. The food we have is the foundational piece for everything else we do. People obviously come to have a meal, but they also come to see our animals [and] see other things, so the markets are just adding to that entire experience.

“It means our venue becomes not just [a place to go] out for half-an-hour for a meal, it becomes a half-day or a thing you can do together as a family.

“In the immediate future we’re actually expanding on that concept – we’re going to do a bit more masterclass-type stuff. Some of these artisan people will be doing workshops on certain things, like someone that sells plants giving a workshop on how to pot your cactus, or things like that.

“One thing that we are doing once a month is coffee workshops where people can learn to make coffee, on a home machine set up, and learn to do latte art as well.

“I guess the evolution of just selling products…is giving people more hands-on experiences and giving a more educational aspect.”

A strong brand and good platform

The trend is not limited to Sydney, of course, having gained traction in restaurants around Australia.

“The restaurant industry has grown significantly over the past five years,” says Kim Do, senior industry analyst at IBIS World.

“There’s an abundance of new players entering the industry, all offering different cuisines at different price ranges.

“In order to differentiate from these other players, many restaurants have started to sell the wines they have, or the ingredients that they use in their cooking.”

This is also, in part, due to changing consumer behaviour. Many restaurant-goers have begun avoiding higher-margin items such as entrees and desserts due to a slowdown in discretionary income growth, leaving more people with less money to spend.

Selling items to consumers in a retail context represents a way to bring back consumer spending on these higher-margin items.

The success of popular cooking TV shows, and Australia’s developing foodie culture, are expected to aid the restaurant-to-retail trend, according to Do.

“Consumers are now more interested in what is being used in their food,” she says.

“I think [restaurant-to-retail] is going to continue to develop,” adds Mylonas.

“If you’ve built a strong brand and a good platform, it makes sense to create new market opportunities for your business.

“As long as we’re creating experiences that echo our values, we can go outside of our [initial market].”