Bottling a Brand with private labeling and licensing products

Pizzeria owners who want to package their signature sauce, dough or whole pies to sell in stores or online might find the process is not easy, but the extra exposure and revenue are a plus. That was especially true during the COVID-19 crisis when restaurants closed but some were able to sell their private label products. As businesses move to a post-pandemic model, licensing certain foods can help pizzerias stay on the minds of customers.

Here are some considerations before jumping into the private label business.

Differentiate the brand

Portland Pie Company opened its first location in Portland, Maine, in 1997. To differentiate itself from the competition, the restaurant serves pizza on house-made, flavored craft dough such as Basil, Beer, Garlic and Wheat. The business started selling the doughballs directly to customers from the shop so they could make their own pizza at home. “That just took off,” says Jeff Perkins, CEO and owner. “People loved the flavors and the taste and the demand continued to increase.”

In 2007, grocery stores sought to sell more locally-produced items in stores. Portland Pie Company jumped at the
opportunity, and eventually built a facility to produce the doughballs. Over the years, the retail sales have helped the pizzeria increase brand recognition, and even helped with consumer research. “Currently, our doughball sales have a larger footprint than our eight restaurants,” Perkins says. “So as we continue to expand our restaurant operations, we have the ability to look at how our doughballs sell in a specific market to see if we have strong brand recognition in the community.”

The only drawback is the retail side could take focus away from day-to-day restaurant operations, so Perkins says it’s vital to have a great working relationship with partners, the dough manufacturer and sales teams, and to have an open line of communication with the supermarket buyers. The company is looking at launching new flavors, organic products, and ready-to-heat pizzas.

Pivot quickly

Last year was a strong sales year for Lou Malnati’s Pizzeria, the deep-dish eatery with locations in Chicago and other cities. Even with restaurant closures, the restaurant was able to sell frozen pizzas and ship them overnight. The frozen pizza shipping began more than 25 years ago, when customers started ordering half-baked pizzas, loading them into coolers in their cars, then driving to visit relatives at Christmas. “It was a clumsy process,” says Marc Malnati, owner and Lou Malnati’s son. “My brother and I said, next Christmas, why don’t we do it for them.”

Today Lou Malnati’s Pizzeria sells frozen pizzas year-round, and ships the pies via FedEx to customers nationwide. In the early days, servers and hostesses at the restaurant would generate sales by telling customers about the service, and now most of the two million frozen pizzas sold each year are online orders. The business expanded to a USDA facility on the south side of Chicago, with more than 100 employees, plus a call center staff handling phone orders.

During the COVID-19 crisis, the business ran into a dry ice shortage. The manufacturing of dry ice involves the capture of carbon dioxide, a byproduct of ethanol production, which decreased when fewer people were driving during the pandemic. “We normally buy dry ice in blocks cut to our specification,” Marc Malnati says. “They could only ship us pellets, which are unwieldy and four times as labor consuming.” Still, 2020 sales were higher than average because people who couldn’t travel to Chicago ordered pies.

Embrace competition

Tony Gemignani is a chef, pizzeria owner, author and Master Instructor. When he started writing cookbooks in the days before online shopping, would-be home chefs couldn’t find ingredients such as type 00 flour in stores. So he started his own line, Tony Gemignani California Artisan Flour Blend Type 00 Flour. “It’s a great way to expand your brand,” he says.

Gemignani has used the flour in several of the pizza competitions that he has won, and students at the International School of Pizza in San Francisco, where he teaches, have used the flour. That gives the flour some credibility, so he makes sure the product is high quality. “I don’t want to grab somebody else’s flour and put my name on it,” he says. “Every line I have is specifically formulated.”

The flour is available in five-pound and two-pound bags for consumers, and 50-pound bags for restaurants. “Sometimes people say, ‘You are using your own flour and selling it to operators, why would you do that?’” Gemignani says. “I am not afraid of competition. I am for the independents.” When flour was scarce in grocery stores during the pandemic, staff opened the 50-pound bags, made two-pound bags, and sold those to home bakers.

There is also hot pepper oil, pasta and other products available online and in Giovanni Italian Specialties by Tony Gemignani, his general store in San Francisco. He predicts interest in the products will continue, because people built outdoor wood-fired ovens and bought other appliances during the pandemic, which hints at future demand for ingredients for home cooking.

Listen to customers

Cincinnati-based LaRosa’s Family Pizzeria sells jarred sauces, salad dressing, frozen meatballs, lasagna and other items in Kroger grocery stores and other large retailers locally. “We do it to keep the brand strong, and to keep our potential guests closer to the brand,” says Pete Buscani, LaRosa’s executive vice president of marketing. The label on the pasta sauce says “Original LaRosa’s Family Recipe,” while the restaurant signage says “LaRosa’s Family Pizzeria.”

The pasta sauce is available in 19.5-ounce cans and 24-ounce jars. “People swear up and down it’s better in a can, or it’s better in a jar, so we have both,” Buscani says. The sauce includes a spice combination known only to LaRosa family members.

Some products are not suited for private labeling. Garlic toast, popular at the 50-plus restaurants, was not a big hit in the supermarkets. Other products were a surprise: LaRosa’s hesitated to jar its pizza sauce, worried that sales would negatively affect pizza sales at the restaurants. They soon found that consumers buy pizza sauce to make snacks such as bagel bites, not restaurant quality pies. “These are two different occasions,” Buscani says. “We said ‘okay, let’s give it a try.’” Today the pizza sauce and the pasta sauce are the top sellers in dollar sales in the Cincinnati area for hometown partner Kroger.  

Nora Caley is a freelance writer who covers small business, finance and lifestyle topics.