Tuesday, 25 February 2014

Cobranding: Will it work for fast casuals? - Rome Gregorio (Camille's Hand-Dipped Ice) + Brian Laliberte (Green Beans Coffee)

Cobranding is becoming more common these days, but some may find the decision of when to pair up and when to stay solo a little daunting. While some concepts are still weighing their options, other brands like Bruegger's Bagels are taking chances on cobranding.

The bagel shop, for example, has three cobranded units with Caribou Coffee and just recently announced a deal to develop five cobranded units with Jamba Juice. Another brand braving the cobranded world is Camille's Hand-Dipped Ice Cream Bars, which recently partnered with Green Beans Coffee Company to develop cobranded units.

We sat down with Arturo Zindel, partner at Great Service Restaurants, the developer of the five co-branded Bruegger's and Jamba Juices units in South Florida, Rome Gregorio, CEO and founder of Camille's, and Brian Laliberte, COO of Green Beans Coffee Company, to find out why they think cobranding is a good strategy for their brands.

Q: Why did you decide to cobrand?

Zindel: We've had previous experience operating combo stores in Mexico where we ran KFC and Pizza Hut stores side-by-side in mall food courts and we were very successful. We believe there are synergies with the brands plus additional operational efficiencies and economies of scale when you build stores that offer the two brands together. Additionally, in the case of Bruegger's Bagels and Jamba Juice, the dayparts are different plus both brands stand for high quality products and a top end customer experience in the stores, so we believe they will be a great fit offered under one roof.

Gregorio: Cobranding is very important because brands have the need to be "seeker-sensitive." Everyone is looking for convenience, and brands want to meet the needs of the customer. It's a win-win for everyone, and co-branding allows that.

Laliberte: It's all about combining with a partner so you can optimize your retail space to keep people in there from when you're open to when you close. Our busy times are their lulls, and vice versa. It just works perfectly.

Q: Will you continue to seek other partnerships?

Zindel: Our current agreement with Bruegger's Bagels is to develop five Bruegger's-Jamba Juice combo stores in the next five years. We will first see how it goes before making additional commitments, but are very excited about the opportunity to offer both brands to our customers. For the time being, GSR is not partnering with any other brands to develop combo stores.

Gregorio: Absolutely. The future stores give us better strength in our purchasing ability, the ability to look at larger locations which may not be conducive to a single-unit operation. Retailers are looking for us to provide more and we want to provide more for them. 

Laliberte: Yes. We're looking at airports and mall sites as well as other non-traditional venues. We want places with a long daypart.

Q: When you co-brand, does each brand still have a manager in the location or is one person in charge of both?

Zindel: The combo stores will have two distinctive ordering areas, each providing the individual brand image for its specific brand. Line employees will also be separate, but the combo store will share one general manager as well as certain back of the house areas and shared seating arrangements.

Gregorio: Cobranding calls for the manager to be in charge of both concepts, thus the importance of a good relationship between brands. Everything would be jointly put together for that purpose.

Q: When it comes to marketing, how do you split that up; do you both invest the same amount of money? Do you have special cobranded messaging, for example?

Zindel: Each brand has its own national and local store marketing requirements, so as a franchisee of both concepts, we will comply with each separately. There are no cobranding messages being considered currently, actually we will make sure we respect each brand identity in the store.

Gregorio: Cobranding is unique because depending on the finished product, you might have a circumstance where both parties share the same amount of space. Variations or hybrids exist, too. One dominant brand has chosen to offer select products from the other operator. Generally, both parties agree to a joint pool for a marketing budget. It depends on what sort of model you're looking at.

Laliberte: We're looking into splitting it based on sales. They're a premium brand, we're a premium brand; we're like two parts of a puzzle.