More restaurants are trying subscription programs

Consumers are willing to pay monthly subscription fees for streaming services, pet food and even toilet paper. And now some restaurants are betting they will do the same for their favorite dishes.

Large chains like Panera and PF Chang’s as well as neighborhood hangouts are increasingly experimenting with the subscription model as a way to ensure stable revenue and customer visits. Some offer unlimited drinks or free delivery for a monthly fee; others will bring your favorite appetizer to each visit.

They’re following a trend: The average American juggled 6.7 subscriptions in 2022, up from 4.2 in 2019, according to Rocket Money, a personal finance app.

“It’s just another way for customers to provide a level of support, joy and love for our offerings,” said Matt Baker, the chef of Gravitas, a Michelin-starred restaurant in Washington.

For $130 a month, Gravitas Supper Club subscribers receive a three-course takeout meal for two. Baker said Gravitas switched to takeout during the pandemic, but saw demand plummet once its dining room reopened. The Supper Club, which serves about 60 guests per month, ensures the continuity of this income.

High-end Chinese chain PF Chang’s also saw an opportunity to boost takeout orders with its subscription plan, which launched in September. For $6.99 per month, members get free shipping, among other perks.

Other restaurants are experimenting with memberships, which allow diners to prepay for their visits.

El Lopo, a bar in San Francisco, has 26 members in its Take-Care-Of-Me club. They pay either $89 per month for $100 in dining credits, or $175 per month for $200 in credits. As the members walk in, El Lopo starts offering their favorite dishes. Every time they visit, they can offer a free drink to anyone in the bar.

El Lopo owner Daniel Azarkman established the club in March 2021 to encourage customers to return as the pandemic subsided. Now he’s hearing from restaurants across the country wanting to start similar programs.

“What it really does is get them in more often,” he said.

Rick Camac, executive director of industry relations at the Institute of Culinary Education, said he expects many more restaurants to offer memberships in the coming years. Consumers are used to it, he said, and the steady monthly income helps restaurants manage their cash flow.

But not all subscription programs have been successful. In 2021, On the Border Mexican Grill introduced its Queso Club, which offered free cheese dip for a year for $1. The program stopped taking new subscribers a year later.

Edithann Ramey, Marketing Director of On the Border, said more than 150,000 people have signed up for Queso Club and members visit seven times more often than the average guest. But the Dallas-based chain wasn’t earning enough to cover the cost of the drop.

On the Border is currently revamping the program and plans to reintroduce it later this year. It may charge more or switch to a monthly model, Ramey said, but the subscription element will remain.

“It’s becoming a hot trend and we want to remain a leading brand,” Ramey said.

Taco Bell is also tinkering with its $10 Taco Lover’s Pass, which allows subscribers to get a taco every day for a month. The pass was introduced in January 2022 and again in October; it generated buzz, but the chain is trying to find ways to make it more valuable to consumers, said Dane Mathews, Taco Bell’s chief digital officer. A subscription could promise faster service, for example, or unlock unique menu items.

Other restaurants have ditched subscriptions, saying they have their hands full to handle the kitchen.

In late 2020, SheWolf, an upscale Italian restaurant in Detroit, began sending subscribers a box of pasta, sauces and other treats for $80 a month. But when her dining room reopened six months later, it was too much work to assemble hundreds of boxes.

Still, SheWolf keeps a foothold in the subscription space. Dan Reinisch, the restaurant’s beverage manager, sends Italian wines to about 80 subscribers who pay $60 or more each month.

Other companies have had better luck. St. Louis-based Panera had nearly 40 million members in its loyalty program at the start of 2020, but it wanted to convince them to come more often. So he started a subscription program that offered unlimited coffee and tea for $8.99 a month. Customers started coming several times a week and about a third of the time they were buying food.

Last year, Panera expanded the subscription. Now, members can pay $11.99 per month or $119.99 per year for unlimited hot and cold beverages. Annual subscribers also get free shipping.

Eduardo Luz, Panera’s brand and concept director, won’t share exact numbers, but he said members now make up 25% of the chain’s transactions.

“It’s a huge traffic driver,” Luz said.

The idea quickly spread abroad. Pret A Manger, a sandwich chain owned by the same private company as Panera, launched its own coffee subscription in the UK in 2020. By November, it was being used 1.2 million times a week. Pret also offers subscriptions in France and the USA

Southern California communications consultant Chris Hosford joined Panera’s subscription plan a year ago. He passes four or five Paneras on his usual routes and often stops for a coffee and a bite to eat.

“That’s not a huge amount of savings for me — probably $5 to $10 a month on average,” Hosford said. “But I’m good with it.”

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