Bloomin’ Brands Struggles in Quarter, as Chain Restaurants Face New Chef-Inspired Concepts

November 9, 2015

Justine Griffin
© 2015 Tampa Bay Times
http://www.tampabay.com/news/business/retail/bloomin-brands-struggles-in-quarter-as-chain-restaurants-face-new/2252436

While the “anti-chain” movement across the U.S. isn’t new, it is slowing down sales at some of the best known restaurant brands, including Outback Steakhouse and Carrabba’s Italian Grill. Bloomin’ Brands, the Tampa parent of Outback and Carrabba’s, is the most muscular restaurant company in Tampa Bay with $4.4 billion in revenue last year and 1,500 restaurants worldwide. But it’s anything but local to consumers here.

The company on Tuesday reported disappointing sales for the third quarter for most of its brands. CEO Liz Smith said casual dining as a segment in the hospitality industry was down from July to September, not just at their in-house brands.
“We knew the trends would be challenged,” Smith said. “And our marketing didn’t break through as expected.”

Bonefish Grill, which was intended to be the engine powering new growth for Bloomin’ Brands’ restaurant portfolio this year, saw the steepest declines, with sales down 6.1 percent for the quarter and traffic down 8.5 percent. It’s the second quarter of decline for Bonefish, which is in a competitive class of “polished casual” chain restaurants, and tends to be more pricey than dining experiences like a TGI Fridays or Olive Garden. The menu quality is more on par with restaurants like Seasons 52 or Carmel Cafe.

Carrabba’s Italian Grill reported a decline in the quarter of 2 percent sales and Fleming’s Prime Steakhouse & Wine Bar saw a 0.6 percent drop.

Outback Steakhouse, which performed well in new international markets like Brazil, was the only brand to report modest growth, at 0.1 percent, this quarter.

Chain restaurants are struggling to meet the changing trends fueled by younger demographics in the U.S., said Darren Tristano, executive vice president with Technomic, a restaurant research firm in Chicago.

“These are the same issues that most casual dining restaurants face today,” Tristano said. “Bloomin’ is no different than Darden” — the Orlando parent of Olive Garden and several other chains — “and most others in this regard.”

Another blow landed this summer when Bloomin’ Brands lost a bid to open an Outback Steakhouse and a Bonefish Grill in Tampa International Airport after $953 million in terminal renovations. The aviation authority board sought to make the airport’s restaurants feel more local, and one board member noted the company’s widely located chains made it feel less so. The Carrabba’s in the main terminal, which opened in 2008, is slated to close next spring.

Millennials and generation X-ers look for value but tend to try locally owned or chef-inspired restaurants rather than a chain, so it’s difficult for the casual dining chain restaurant to stand out in what’s become a very competitive market, Tristano said.

“It’s hard for chains to add more regional flavors to a menu, like local craft beer or local food options that the independent restaurants can do so easily,” he said. “They need to be more innovative and focus on the strengths that they do have, which usually is price, to get the attention of this next generation customer.”

Outback Steakhouse will roll out a new mobile phone app next year, which the restaurant chain has been testing in Tampa Bay. Through the app, customers can add their names to the wait list before they arrive at a restaurant, place take out orders and use to pay at the table.

“We will continue to invest in this kind of innovative tech platforms,” Smith said during Tuesday’s earnings call.

Carrabba’s Italian Grill will debut a simpler menu next year. Fewer items will be available, but the chain will add a new small plates category for tapas-style sharing at the table. Bloomin’ also changed the menu at Bonefish Grill earlier this year, with the same “less is more” theme.

“Too much on the menu overwhelms the customer,” Tristano said.

It also keeps food costs down, said Brian Connors, with Connors Davis Hospitality, a restaurant consulting firm in South Florida.

“Chains are the safe choice. Customers know what they’re going to get there and the restaurants know what they’re good at,” Connors said.

Bloomin’ Brands plans to continue to expand aggressively in new international markets like Korea and China. Much of the company’s growth has come from international openings this year.

“They don’t have to reinvent the wheel this way,” Connors said. But in this country, he suggested, they’ll need to come up with something new to keep attracting diners.

“We’ve entered this new age of adventure eating. Food recipes is one of the highest pinned categories on Pinterest,” Connors said. “People are willing and wanting to try something new.”

Bloomin’s brands: Tough quarter for sales
U.S. sales in the last four quarters
BrandQ3Q2Q1Q4 (2014)
Outback Steakhouse0.1 %4%5%6.4%
Carrabba’s Italian Grill- 2%2%1.9%0.3%
Bonefish Grill- 6.1%-4.6%0.9%0.7%
Fleming’s Prime Steakhouse & Wine Bar- 0.6%3.2%3.0%3.4%
Source: Bloomin’ Brands


How 10 Food Trends for 2016 Will Transform Restaurants

November 2, 2015

2015 Forbes.com LLC™ All Rights Reserved
http://www.forbes.com/sites/darrentristano/2015/10/28/how-10-food-trends-for-2016-will-transform-restaurants/

At this point a couple years ago, if you asked a restaurant executive how she might user Uber to build sales, she might have guessed as a prefix for the name of her brand’s Oktoberfest-theme burger. But now, Uber and Postmates are just two of the sharing-economy apps rapidly transforming foodservice and shaking up consumers’ expectations everywhere.
Going into 2016, there are dozens of similar forces shifting the ground beneath restaurants, and most of them are far beyond what brands have the power to control. While they are hard to predict, even for a data-rich firm like Technomic, they are easy to identify and understand, because they all spring from evolving consumer demand. Major moves from the biggest restaurant companies—McDonald’s moving its food supply toward more cage-free eggs, for example—aren’t dictated solely by the bottom line. They’re dictated by what consumers need from foodservice brands.

Technomic just released its 10 major food trends for 2016 with this dynamic in mind. Because consumers are the impetus behind all the upheaval, take a look at each trend and see how many of them you’re driving with your own dining out preferences.

The Sriracha Effect: This hot sauce from Thailand will continue to grow in popularity, but the “effect” Technomic predicts is that chefs and chain restaurant executives will search for the next hot ethnic flavor to find lightning in a bottle again. Early indications are that this will drive more use of and consumer interest in ghost pepper from India, sambal from Southeast Asia, gochujang from Korea, and harissa, sumac and dukka from North Africa.

The Delivery Revolution: Popular apps that simplify online and mobile ordering making “dining in” even easier and, in some cases, “dining out” irrelevant. Delivery services like GrubHub are starting to proliferate far beyond urban centers, bringing the convenience of a restaurant meal home, where plenty of people are likely camping out in front of the TV to binge-watch a season or two on Netflix. Other services are muscling in, including the aforementioned Uber and Amazon, which is expanding its Prime Fresh memberships for grocery delivery.

One particular threat to restaurants could be app-only services like Munchery, which delivers restaurant-quality food from a commissary, cutting out brick-and-mortar restaurants completely.

Negative on GMOs: In some cases, consumers have made up their minds before scientists have reached consensus, but many restaurant customers are declaring genetically modified organisms to be nonstarters. Many diners will agree with calls for labels of GMOs on menus and food packaging; some will go further and gravitate toward restaurants that advertise a GMO-free menu. That will be a major issue for the nation’s food supply, since many crops—particularly soy fed to livestock and other animal feeds—have been modified to boost their yields and productivity.

Modernizing the Supply Chain: Speaking of the supply chain, it already has enough challenges to deal with, including climate destabilization, rising costs for transportation and shipping, and pests. These will cause frequent repeats of shortages similar to those witnessed in 2015, like the unseasonable freeze that decimated Florida’s orange crop or the egg shortage that resulted from avian flu. Those hurdles will proliferate while more and more consumers demand food that is “fresh,” “local,” or just free of additives and artificial ingredients. Every brand, from restaurants to grocery stores and convenience stores, will make big investments in supply chain management in 2016.

Year of the Worker: Restaurants will also contend with rising labor costs, because of new mandates to cover full-time staff with health insurance and because the minimum wage could increase sharply depending on the state or city where they’re located. Pressure groups will ratchet up their call for a $15-per-hour wage, and they could possibly succeed in more cities like they have in New York and Seattle. Don’t expect any changes to the federal wage floor of $7.25 per hour, because no cooperation between a Democratic White House and a Republican Congress is possible, especially in an election year.
How will restaurants respond? Most will raise their wages to either comply with a new law or to compete for the best staff—but that means menu prices are going up as well, everywhere from fast food to fine dining. Also, more brands will experiment with technology and automation in the kitchens and the dining rooms to do more with fewer employees.

Fast Food Refresh: Consumers gravitate to “better” quick-service restaurants, which has transformed the industry. That has created a subset of “QSR-Plus” concepts with fresher menus and more contemporary designs, which exploits a price threshold between fast food and fast casual. Culver’s, Chick-fil-A and In-N-Out Burger are examples of this. “Build-your-own” menus are springing up across the industry, and many quick-service brands are adding amenities like alcohol.
QSR-Plus also helps other restaurants clarify their positioning by giving up their attempt to go upscale in a piecemeal approach, and those chains instead are returning to their roots with simplified menus and lower prices.

Elevating Peasant Fare: The popularity of street foods and consumers’ demand for portability and affordability have put things like meatballs, sausages and even breads back in the spotlight. But this time, those meatballs might have a nouveau twist, such as a blend of fancier meats like duck or lamb. Multiethnic dumplings will also continue to grow in popularity, from Eastern European pierogi to Asian bao.

Trash to Treasure: Rising prices for proteins will raise the profile of underused cuts of meat, organ meats or “trash fish.” The “use it all” mindset has also moved beyond the center of the plate. Some restaurants will use carrot pulp from the juicer to make a veggie burger patty, and perhaps other chains will follow the lead of Sweetgreen, which last year partnered with celebrity chef Dan Barber to make the wastED Salad, an entrée that saves vegetable scraps like broccoli stalks and cabbage cores and combines them with upscale ingredients like shaved Parmesan and pesto vinaigrette.

Let them eat kale stems!

Burned: Smoke and fire are showing up everywhere on the menu—smoky is the new spicy. Look for more charred- or roasted-vegetable sides, desserts with charred fruits or burnt-sugar toppings, or cocktails featuring smoked salt, smoked ice or smoky syrups.

Bubbly: Effervescence makes light work of the trendiest beverages. Technomic expects rapid sales growth of Champagnes and Proseccos, Campari-and-soda aperitifs, and adults-only “hard” soft drinks like ginger ales and root beers. In the nonalcoholic space, sales will also increase for fruit-based artisanal soda and sparkling teas.


New TIA Restaurant Lineup Represents Wave of the Future

June 18, 2015

screen-shot-2015-06-08-at-12602-pm-750xx1143-643-0-0Eric Snider
© 2015 American City Business Journals, Inc. All rights reserved.
http://www.bizjournals.com/tampabay/news/2015/06/08/new-tia-restaurant-lineup-represents-wave-of-the.html

“We’re building an airport for tomorrow, not yesterday,” says Maryann Ferenc, who is part of a team that landed a food-and-beverage concessions contract at Tampa International Airport.

The TIA board recently finalized its sweeping Concessions Redevelopment Program, part of a $940 million facility expansion.

The airport of tomorrow relies heavily on homegrown restaurants and bars. That’s particularly true for TIA, whose exhaustive bid and selection process forged a brand mix that will be roughly half local and half national/international when it’s fully rolled out in 2017.

The days of major airports housing predominantly familiar chain restaurants are waning, say experts in the field.

“The consumer has become more interested in supporting independent restaurants, and younger consumers particularly align with smaller brands,” says Darren Tristano, executive vice president of Technomic, a Chicago-based food industry research firm. “In Chicago, when they got rid of chains and put a [local institution] Billy Goat Tavern in O’Hare, we heard nothing but positive response.”

Today’s travelers are increasingly interested in their destination’s sense of place, and that includes airports, which can serve as introductions to the larger community experience.

But some factions are concerned that too much emphasis on local brands might alienate hurried and harried travelers. Does a young family of four heading to the Midwest want to grab a nosh at Chili’s or take a chance on Tampa-founded Ducky’s Sports Lounge?

If revenue is the key objective, the naysayers contend, familiar offerings make more sense.

Bloomin’ Brands joined major airport concessionaire HMS Host in a bid to put an Outback Steakhouse and a Bonefish Grill at TIA. After ranking second to TPA Hospitality — led locally by Ferenc, who owns Mise en Place — HMS Host/Bloomin’ Brands filed an official protest to the airport.

As part of its argument, Bloomin’ told TBBJ of an anonymous, third-party survey it conducted. The results, said spokeswoman Elizabeth Watts, showed that travelers were 2.6 times more likely to visit Outback, Bonefish and Edison Food + Drink Lab (the third brand in the package, based in Tampa) than the roster posed by TPA Hospitality.

The TIA board rejected the protest, and the airport will get TPA’s all-local Rumfish Grill, Four Green Fields and The Café by Mise en Place.

The chain-vs.-local argument will play out most vividly in TIA’s Airside C. Exclusive to Southwest Airlines, it accounts for the highest passenger traffic of any airside: 35.3 percent of visitors, 6.1 million of them in fiscal year 2014. Currently, the Chili’s there — which will be phased out when the existing concessions contract ends this year — is the top-grossing restaurant at the airport.

When the new program is fully operational, Airside C will feature an almost exclusively local lineup:

Casual restaurants Cigar City Brewing, Rumfish Grill, PDQ, and Burger 21. A market concept that includes Bavaro’s, Louis Pappas Fresh Greek, Goody Goody burgers, Café Con Leche, Ulele Bar and Fitlife Foods. The only international brand is Starbucks Coffee.

Will that collection generate proportionately weaker sales than that of the main terminal, with its national/global brands Hard Rock Café, P.F. Chang’s, Qdoba Mexican Grill, Chick-Fil-A and Wendy’s?

We should have a fairly clear answer by 2020.

Big-picture thinkers contend that the TIA concessions program of the future should not solely be focused on the bottom line.

“The airport will be key in establishing Tampa Bay’s brand with visitors,” says Ferenc, who is a member of the federal Travel and Tourism Advisory Board. “When you think about where it puts us in drawing our share of the market that’s coming to Florida, it bolsters Tampa as an authentic place to go. Tourism-wise, our airport will be able to tell our story better than Orlando and Miami, and further define what Tampa is among Florida cities.”


The Brass Tap to Open a Microbrewery in Carrollwood Bar

June 16, 2015

0435873611_15361234_8colJustine Griffin
Copyright 2015 Times Publishing Company. All Rights Reserved.
http://www.tampabay.com/news/business/retail/the-brass-tap-to-open-a-microbrewery-in-carrollwood-bar/2232977

The Brass Tapknows its customers can go just about anywhere to find a good beer these days.

In an effort to offer a more authentic experience beyond sampling the hundreds of beers it sells on tap and in bottles, the chain is opening its own microbrewery inside its bar on N Dale Mabry Highway in Carrollwood. The move to brew its own beer comes about a year after the chain abruptly closed its downtown St. Petersburg bar next to Rococo Steak. Despite the closure, the chain is still expanding aggressively, with four franchise locations poised to open in Florida this year and five others in the works in Texas, North Carolina and California.

“If you’re going to be a part of the craft beer movement, you have to be a destination,” said Darren Tristano, executive vice president with Technomic, a Chicago-based restaurant research firm. “You have to be more exclusive. By brewing beer in-house, the Brass Tap is driving more credit to its brand.”

And with more competitors saturating the market, such as World of Beer and the Yard House craft beer and restaurant chain, you have to stand out.

“It’s amazing how many people want to open a brewery,” Tristano said.

Microbreweries are sprouting in record numbers in Tampa Bay and across the country. The industry recorded a 127 percent spike in the number of breweries that opened in 2014 compared with 2012, according to the Brewers Association trade group. More than 600 breweries opened in the United States last year, including Coppertail Brewing Co. in Tampa. In St. Petersburg, 3 Daughters Brewing opened in December 2013, and a half dozen others, such as 7venth Sun Brewery in Dunedin and Big Storm Brewing Co. in Odessa, opened in 2012.

Rory Malloy, the Brass Tap’s new brewing operations manager, will brew beer from a two-barrel “nano” system in a small brewery marked off by a glass wall from the rest of the Carrollwood bar. The beer will be offered for sale at the bar, and customers can watch and ask questions while Malloy brews. He hopes to brew his first beer by the end of the month.

“We’ve always used this location to train franchisee owners and test new products,” said Chris Elliott, CEO of Beef ‘O’ Brady’s, which purchased the Brass Tap in 2012. “The microbrewery is a test for us. Our customers already love craft beer and many of them are interested in the process. Now they can learn more about it here in our bar.”

The concept has been in the works for nearly two years, Elliott said. The Brass Tap worked with Cigar City Brewing CEO Joey Redner on the concept. Cigar City will be among the first of many local breweries invited to brew a guest batch of beer at the Brass Tap microbrewery, Elliott said.

The chain hopes to partner with many of Tampa Bay’s local breweries, and some national ones too, such as Samuel Adams and Founders.

The idea isn’t to compete with breweries for customers. It’s to partner with them.

“There are so many breweries opening within a 5-mile radius of us,” Malloy said. “We can all share our resources.”

The Brass Tap may offer home-brewing courses at the microbrewery.

“The craft beer segment started getting hot in the ’90s, when a lot of guys were trying to do brewpubs that offered food and beer. The overhead was huge and the audience just wasn’t there,” said Brian Connors of Connors Davis Hospitality, a global food and beverage consulting firm based in Fort Lauderdale. “One of the best things to happen to the craft beer movement is the millennial generation. They’re willing to pay more for something of quality that’s made locally.”


For College Students, Healthy Food and Great Taste Matter Most

June 10, 2015

salad bar cafeteria

From Litehouse Foodservice.
http://www.foodservicedirector.com/sponsored-content/featured-content/articles/college-students-healthy-food-great-taste-matter-most

Fifty-eight percent of consumers say that eating healthy and knowing what they’re eating is important to them, according to recent research by Chicago-based research firm Technomic. But at the same time, Technomic also reports that the word “healthy” means different things to different age groups. Millennials, aged 22-37, associate the word healthy with lower calories and less processed and natural foods, whereas Gen Z, aged 21 and under, think it exemplifies foods that are organic, authentic and homemade.

But above all, says Darren Tristano, executive vice president at Technomic, flavor and taste matter most for 70 percent of consumers. This dichotomy is critical for foodservice directors responsible for feeding college students—who fall somewhere within Gen Z and the younger millennial category—because their menus must balance health and flavor in order to appeal to student desires.

What does healthy mean to Gen Z?

“The younger generation has a different definition of healthy. [Healthy] has to fall into the context of affordable, fresh and local, vegan and vegetarian,” says Tristano. He also says that younger consumers seek out menu items that are close to a food’s natural state, such as hand-cut French fries with the skin intact.

Additionally, college students want their food to be prepared in a transparent manner. “They’re used to seeing it and knowing what they’re getting,” says Tristano. “When the kitchen is open view it builds trust through visual recognition.” This is one reason why this group is drawn to build-your-own fast-casual concepts such as Chipotle and Blaze Pizza.

Responding to demand

Angel Alcantar, assistant director of culinary operations and executive chef at University of Wisconsin – Stevens Point, understands well what his student customers want. He oversees a foodservice program that includes a food court with seven different dining concepts, a traditional all-you-care-to-eat dining hall and a convenience/grill option, all of which are responsible for feeding 3,200 students.

Seven years ago, Alcantar’s department transitioned to a self-operated dining facility from a contracted one. After feedback from students indicated they wanted healthier choices, he established relationships with local farmers to provide seasonal produce and meats.

“We have relationships with 12 to 15 farmers to provide all our greens, tomatoes and meats for the deli, including grass-fed beef,” says Alcantar. “Our students care about healthy eating and sustainability, so as we move into the growing season, we use more fresh and local farm products.

Personalized salads

One of the university’s most popular dining concepts is Fresh Cuts, where students can choose from a variety of greens and proteins, seeds, cheeses, beans and other vegetables, which are chopped, tossed with dressing in a bowl, and then served in a fresh crepe shell and stuffed into a cone to go. Fresh Cuts appeals to all diners, including vegans and vegetarians, says Alcantar.

And to appeal even more to students seeking health and flavor, all of the salad dressings used for Fresh Cuts and throughout campus are Litehouse Foods brands. “The nutrition facts are right on the bottle,” says Alcantar. “We have confidence in the ingredients; there’s no MSG, no trans-fats, lower sodium and the students think they’re comparable to homemade. The dressings fall into the overall concept of health on our campus.”

Students can also choose how much dressing they want on their salads, which allows for flexible portion sizes—something that’s very important to them, according to Tristano. “Being involved and having a say in how much is added or included is appealing to this generation,” he says.

Flavor matters most

At first, explains Alcantar, his staff was making dressings in-house, but students wanted more variety, and it was difficult for his staff to keep up. “When we looked at Litehouse, we said, ‘why recreate the wheel?’ This is something proven. Our students are the ones who make the choice, and they gave rave reviews of the Litehouse products,” he says.

As much as they care about the nutritional impact, though, Alcantar points out that taste and variety remain top priorities for the college crowd. “It’s about flavor,” he says. “That generates the volume we have at certain concepts. When they have selections that look appealing and have good flavors, then they will eat it.”


First Watch Evolves to Attract Younger Customers

June 9, 2015

By Justine Griffinbilde

http://www.heraldtribune.com/article/20150527/article/150529734?p=2&tc=pg

Like nearly all other industries, the restaurant business has metamorphosed through the years.

Some national and regional chains are feeling the push to compete with small businesses, as millennials and Generation X consumers flock to support hole-in-the-wall eateries within their communities that reach a younger customer through robust social media presence and online apps.

First Watch Restaurants, the Manatee County-based chain of breakfast, brunch and lunch cafes, also has evolved through the years to meet the demands of these new customers.

This year, First Watch introduced a new urban layout in restaurants across the country, including two sites in Florida: Largo and Estero.

The “urban farm” design is bright, colorful and modern. The build-out looks like something you’d see on a busy street in a bigger metro area than Sarasota.

“The new concept is more in line with the customer First Watch is targeting,” said Darren Tristano, executive vice president of Technomic, a food research firm based in Chicago. “It’s not fancier, but it plays on freshness and the importance of being local.”

First Watch has expanded into more urban areas in recent months — such as Denver and the Washington D.C. metropolitan area — where reaching a younger demographic is key.

Inside the new restaurant, the dining room has funky light fixtures and exposed brick walls. An array of blackboards make up the host and check-in counter, where messages can change daily.

One wall is devoted to old wooden crates that once would have shipped fresh eggs and other goods that the restaurant might use inside.

“Breakfast and the farm naturally go together,” said Richard Renninger, First Watch’s chief development officer, who helped come up with the new design. “But it has an urban look that makes customers feel like they’re still in the hustle bustle of their community.”

It took some time, and a lot of tweaking, to come up with a design that fit the needs of the aging baby boomer demographic and the millennial and Generation Xers, Renninger said.

“It was important for us to create a new space that is comfortable for all our customers, but still somewhere where millennials would want to hang out,” he said.

This is the third redesign of the restaurant that First Watch has implemented since the chain began in the 1980s.

The restaurants in Sarasota County showcase both older looks. The company plans to renovate some properties in Florida next year.

“First Watch is making all the right moves. They’re following millennial and Generation X dining habits — which tend to be more health conscious for themselves and their young families,” said Brian Connors, a consultant with Miami’s Davis Connors Hospitality.

To attract more younger customers, First Watch also debuted a new smartphone app service at its restaurants this year through “NoWait.”

NoWait is a free app that allows users to compare restaurant wait times within a 30-mile radius of wherever they are.

Users can then add their name and the size of their party to a wait list. The app notifies users when they are close to being seated.

“It’s sort of like they’ve found the Holy Grail,” Connors said. “It’s the perfect concept that doesn’t discriminate against the baby boomers either — it’s the type of restaurant my parents would go to and feel like they’re a part of their local community.”


GrubMarket Aims to Bring Farmers Markets Straight to Your Door

January 7, 2015

chi-grubmarket-mike-xu-bsi-20150102-001By Amina Elahi

Copyright © 2015, Chicago Tribune

There’s not much growing around Chicago these days. That means farmers markets are on hold and even the most persistent locavores are forced to shop at conventional grocery stores.

A young San Francisco company called GrubMarket hopes it can keep consumers connected to local food suppliers with an ecommerce platform that lets farmers and small food businesses sell their goods, even in mid-winter. The company expanded operations to Chicago in December in its first push beyond the west coast.

“I am a big fan of local food and supporting local farms,” said founder and CEO Mike Xu.

GrubMarket is a member of of the San Francisco accelerator Y Combinator’s current class. Xu said the company has raised $2 million from the program and other investors since launching in February. The platform includes 280 vendors who sell to the Chicago and San Francisco markets, Xu said. The majority of those are in the Bay Area.

Chicago is GrubMarket’s first expansion market because of Xu’s connection to the Midwest — he went to the University of Wisconsin at Madison — and due to the number of farms and farmers markets here.

The vendors GrubMarket works with may not be big enough or even willing to sell their goods through retail channels. Xu said his company can help those who want an easier way to sell directly to customers. He’s set on creating software to automate the inventory process, for example.

“We need to manage the logistics and communication with vendors, local small farms,” Xu said. “They need a lot of coordination with us and the buyers.”

Xu said GrubMarket has sold $400,000 worth of food, including fresh produce, cheeses, nuts, condiments, meats and more. GrubMarket contracts with drivers to offer free delivery of goods, though vendors have the option of charging customers for direct shipping. The site indicates when products will be available for delivery, so customers know if an item won’t be available until the following week, for example.

Sharon Seleb, the company’s general manager for Chicago and the Midwest, said Chicago customers can buy goods from vendors in Illinois, Indiana, Wisconsin and Michigan. She said she works with vendors and helps them market their goods with free photography. Since GrubMarket takes a negotiated percentage of vendors’ gross revenue, Seleb said it’s in the company’s interest to promote their goods.

Customers also have the option of ordering Grub Boxes, pre-selected cases of goods with themes such as fruits or meats to be delivered at regular intervals. The prices depend on size and contents. GrubMarket’s California Fruit Bounty box costs $45 for a regular box and $65 for the large version.

“Our customer is more educated, and they would understand the purpose of getting a certified organic apple versus the apple for 50 cents,” Seleb said. “In terms of price point, our prices will be more on par with a Whole Foods or a farmers market. They’re not cheap.”

The service thereby is unlikely to replace the grocery habits of most Chicagoans, said Darren Tristano, executive vice president at Chicago-based food and foodservice consulting firm Technomic. He expects Millennials or more affluent consumers — those who likely frequent farmers markets — to take interest in GrubMarket.

Tristano said the local food movement is driven by shoppers’ desire to make purchases they see as supportive of their communities or eco-friendly because products don’t need to be shipped as far. All of this has contributed to a change in these consumers’ values.

“Traditionally it’s been around price and quantity, but the new consumer equation seems to be around where does it come from, how does it connect to my lifestyle, can I connect to this brand?” Tristano said. “Those things are all driving value to a Millennial consumer and to those who can quite frankly afford it.”

Tristano also pointed to restaurants’ role in the success of farmers markets. In many places, he said, chefs seek out fresh goods from local markets. He suggested that some may turn to GrubMarket for similar reasons.