Diversifying the F&B revenue stream

Diversifying the F&B revenue stream


A successful business model is dependent on its ability to generate revenues from different streams throughout the various stages of its journey. While this definition applies to most businesses, the F&B industry appears to be trapped in the sales of food and beverage items, mostly to a limited target clientele. Manal Syriani, managing director, WAY Consultants, gives us a few options for diversifying along the way

Having a greater food culture and a popular concept may not be enough to sustain a long-term run, as survival in today’s economy requires out-of-the box thinking and the capacity to increase the average spend per customer. Diversifying sources of revenues in F&B usually requires creating satellite services and products that complement the concept that are not necessarily part of the dining experience.

When expanding your F&B business, consider the following strategies
• Items/new lines that could dilute the inherently high cost of food and improve your profit margins
• Services that could complement the experience of your target clients and urge them to increase their consumption from your brand, thereby increasing the average spend per customer
• Services that require no additional capital expenditures and that could be undertaken by your team at a current location
• The brand as a source for income generation and not only as the foundation for your marketing and communication operations

Explore these opportunities to achieve diversification:
Retail: the opportunity to sell retail items could help to achieve diversification by creating new revenue streams. Retail sales are a great marketing tool that reinforces your brand recognition for loyal clients. Take care to select items that are homogeneous with the identity of the concept and would be perceived as a part of the brand experience.
Catering: catering could be considered as an opportunity to launch the experience to customers in a different setting. Catering offers should be planned carefully to ensure they create a new demand from customers without affecting internal sales and attract a new segment of clientele that would not otherwise have engaged with your brand.
Cultural events: planning for special events while partnering with cultural or humanitarian causes could boost your brand perception, create new traffic to your outlet and increase awareness. Revenues generated from such events are usually associated with venue rental and commissions on sales of other products, in addition to revenues from the consumption of restaurant food during the event. Cultural events will have more impact when they are tailor-made to complement the brand identity and culture.
Franchising: franchising has great potential for generating a significant steady revenue stream with a relatively low cost to the concept. However, franchising a business is a strategic decision to be taken with careful consideration, since it shifts the core purpose of the business from selling food and beverage products to selling expertise and knowhow. Franchising will also require ongoing investment in research and development to maintain the brand growth internationally.

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Diversification in the F&B business is becoming a necessity as businesses are struggling to maintain ground in the face of shifting economies; however, meticulous planning is vital to avoid potential pitfalls.


Manal Syriani
Managing Director
Way Consultants

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