As the owners of Ottawa's Murray Street Kitchen, chef Steve Mitton and operatorPaddy Whelan know how and where to get the best quality products. They've scouted dairies to find the best cheeses to serve at their restaurant, known for its emphasis on local ingredients and charcuterie. They know which farmers to go to for the best meat and produce. And they've found purveyors who can supply them with rare and specialty ingredients.
So when it came time to expand their business, the two decided they didn't want to launch yet another restaurant in the city's already competitive scene. They opened a food shop instead.
Their new Murray's Market, which opened kitty-corner to Murray Street Kitchen last month, sells cheeses, meats, produce and house-made foodstuffs, providing customers with many of the sameraw ingredients they use at their restaurant.
"Over the last three years, we got so many questions regarding our farmers and where we source [things]out …" Mr. Mitton says. "The market just came into our head right away."
Theirs is a model that many business owners are now adopting, merging restaurants with retail to tap into new revenue streams. Restaurateurs are finding that retail is a natural extension of the work they already do to source and produce food items. And curious diners, who want to know the provenance of what's on their plates, are driving that demand.
As Mr. Mitton explains, his restaurant and food shop play well off each other.
"People at the restaurant will be sending people over here" to the market, he says. Meanwhile, "we're over here selling meats retail and saying, 'Hey, you wanna know how to cook it? It's on special over at Murray Street right now.' "
So many retail-restaurant outlets have popped up lately that San Francisco-based hospitality consultant and food trend forecaster Andrew Freeman is predicting the mixed business model will become one of the top 10 restaurant trends for 2011. New York's Eataly food emporium, backed by celebrity chef Mario Batali, offers a prime, albeit magnified, example, he said. The 50,000-square-foot market hall includes restaurants, cafés, groceries and wine. (Eataly founder Oscar Farinetti told The Globe last fall that discussions were under way to open an outpost in Toronto.)
But even mom and pop restaurants are finding reasons to get into retail, Mr. Freeman said in an e-mail.
"Popular market items can actually drive traffic to the restaurant. If people really love a sauce or a bakery sandwich or pastry, they can assume that the restaurant behind it is very good," he said. "The converse is also true. The restaurant drives traffic to the retail outlets - if you love a restaurant, you'll probably love the treats for sale in their retail outlet."
He added that having a retail business also allows restaurateurs to access customers even when they don't want a sit-down meal.
That's partly what the owners of Toronto's Lakeview Diner had in mind when they opened their Lakeview Storehouse last month, a food shop next door to their restaurant that carries groceries, bulk foods, ready-made meals and take-away sandwiches.
"It's a really nice addition and people feel the continuation of the [Lakeview]theme and the customer service," co-owner Alex Sengupta says. "If you don't feel like dining but you want some ready-made food, like ready-made sandwiches or frozen lasagnas or limes and apples and bananas and carrots and potatoes, you can pick it up here."
Not only do they sell grocery items that they buy in large quantities for the diner, they also source specialty products such as bacon mayonnaise, bacon popcorn and smoked frankfurters in a jar - items that don't necessarily appear on the diner menu but reflect the type of food their customers enjoy.
The Storehouse also acts as a larder for the Lakeview Diner, Mr. Sengupta says. When he and co-owner Fadi Hakim opened the diner in 2008, they quickly ran up a tab with the convenience store that previously occupied the Storehouse space. Their staff would often buy eggs, juice and produce there when their own supplies ran out, Mr. Sengupta says. So when the convenience store owners decided to sell, Mr. Sengupta and Mr. Hakim jumped at the chance to revamp the space. "We thought about how much money we [were]spending at the store and … that it would be a wise investment."
Since opening, the Storehouse has been doing brisk business not only with residents and diner customers, but with local businesses as well, Mr. Sengupta says. Staff from nearby bars often run in to buy citrus fruits and paper towels, and restaurant chefs will drop in to buy cases of cream when their own supplies are short.
In Vancouver, Eric Pateman, president of Edible Canada, formerly Edible BC, is joining the trend in reverse, expanding his retail business by incorporating a restaurant. Having operated as a retail outlet that specializes in local food products at the Granville Island Public Market for nearly five years, his company is now relocating to a larger space on Granville Island that will also include a take-away food window and 150-seat bistro.
Staff at Edible Canada, which also offers guided tours of the public market, had noticed that visitors don't just want to purchase the various local products, they also want the opportunity to sit down and enjoy them, Mr. Pateman says. As he sees it, the new Edible Canada retail-restaurant, expected to open on June 28 or 29, will meet that demand.
"The synergies are amazing," he says. "You've got that opportunity now to try retail products in a setting where you can actually sample them. And from a retail perspective, you get that up-sell of people who are sitting in your restaurant or your bistro, going 'Oh my God, lobster oil. Where in the world do I get that?' "