Brand Tactics: Bridging the Generation Gap
Fifty-year-old HoneyBaked Ham is using its cafe concept to expand its brand’s demographic reach.
By Margaret Littman, Contributing Editor -- Chain Leader, 7/1/2007
 The HoneyBaked Ham Cafe is sandwich shop meets retail store, emphasizing the heritage of the 50-year-old brand.
|
In much of the country, the HoneyBaked ham is a classic, a 50-year-old tradition for holidays and special events. For the descendents of founder Harry J. Hoenselaar, that legacy is both a source of pride and a quandary.
While today’s families may still appreciate HoneyBaked as the center of a Christmas or Easter dinner, they’re less likely to have a ham-worthy, sit-down meal on an average weeknight than the previous generation. In response, the company developed a growth strategy—through both acquisition and franchising—that fuses the strengths of the traditional take-home brand with the more 21st-century approach to eating out.
Management launched HoneyBaked Ham Cafe in 1998 to widen the brand’s awareness while still respecting its history. To celebrate its 50th anniversary and promote expansion of the cafe concept, HoneyBaked relaunched the cafe this year.
The cafes are sandwich shop meets retail store, emphasizing "the heritage of the brand," says Director of Franchise Development Jim Squire. A wall of pictures illustrates HoneyBaked’s history, showing how the brand became synonymous with ham and turkey for the holidays. The stores still offer to-go services for the meats, as well as specialty side dishes. But, in addition, the cafes offer to-go catering to local businesses and a menu of 17 made-to-order sandwiches in a space with lunch-time seating for at least 20.
The cafes are designed to compete with more traditional sandwich shops like Panera Bread, with wood floors, brick accents and a warm, open atmosphere, according to Squire. The 1,600-square-foot units are located in high-traffic retail centers such as endcaps in strip malls.
Casting a Wider Net
Historically the brand has appealed to 35- to 54-year-old women. "I think the cafe element has changed that. Now the demographic is anybody who eats lunch or companies that bring lunch in," says Ken Caldwell, vice president of franchise for the Atlanta-based firm.
"The cafe gives them a lot more selling opportunities to expand from retail," agrees Darren Tristano, executive vice president at Technomic Inc., a Chicago-based foodservice consultancy. "But it is like a convenience store trying to sell sandwiches. It is a much different strategy."
Tristano says that in many cases brands expanding into the restaurant business can expect to attract younger customers by attracting them as part of the labor force.
But many franchisees, including Grady and Nancy Love, who own the Rock Hill, S.C., cafe, say they also have attracted older employees who like the grease-free aspect of this QSR and the store’s reasonable hours: Monday to Saturday, 10 a.m. to 6 p.m.
Because HoneyBaked typically franchises only one store per market, the typical franchisee is different than the multiunit franchisee other chains court. Squire says most franchisees are owner-operators who have been HoneyBaked customers and may have retired from a traditional corporate career.
In addition to attracting a new demographic, the expansion into cafes helps HoneyBaked weather increased competition on the specialty food side of the business including Internet and mail-order food clubs, Squire says.
Fragmented Family Tree
The brand itself has a complicated, decentralized ownership. When Hoenselaar died in 1974, he passed on his business to five family members, each of whom expanded the brand differently in different regions of the country. In some areas, including Georgia and the south, the owners were aggressive, acquiring competitors such as Hickory Baked Ham and Heavenly Ham, and exploring growth via franchising. Several years ago, the family members who owned the Michigan- and Ohio-based territories banded together with the Georgia contingent to create one entity that would franchise HoneyBaked Ham Cafes in 39 states. HoneyBaked Ham retail stores in California and on the East Coast are separate entities and not part of the expanding cafe concept.
The franchise concept has 108 cafes in 25 states, with systemwide sales of $58 million. The aim is to have 200 cafes in 39 states by 2010. The firm is well on its way, with 21 new stores scheduled to open in 2007, including in Wausau, Wis., Newport News, Va., and Puyallup, Wash. Expansion will continue at a pace of 20 to 25 units annually in these smaller and midsized markets.
To build the cafe awareness, franchisees pay 2 percent of sales into an ad fund, which is used for seasonal promotions on radio and in print in local media.
Adds Squire: "Brand-wise we are really dedicated to having the very best ham you can get anywhere. We think we will see that translate to passing on the tradition to the younger generations today."
View All Blogs
