Cracker Barrel plans expansion into groceries with branded food products

NASHVILLE, Tenn. — Cracker Barrel Old Country Store is embarking on its third attempt to branch out from its chain of  Southern comfort food restaurants by expanding a lineup of branded food products to be offered at grocers and outside retail outlets.

"Our research shows that our guests would like to be able to purchase Cracker Barrel products in places other than just our restaurants and retail stores, and we believe that there is opportunity here to meet that desire," the company stated.

Cracker Barrel currently sells food products, including pancake and corn muffin mixes, under its name, but the items are available only at Cracker Barrel store and through its website. Under a new multiyear licensing agreement with John Morrell Food Group, a Smithfield Foods subsidiary, such products as ham, lunch meats and summer sausage will be available under the Cracker Barrel name and sold in grocers, mass merchandisers and other retail outlets — a first for the company.

The company has not announced when products will hit store shelves or how much revenue they expect the strategy to generate, although the company has stated that boosting the bottom line is not the initiative's primary goal. The expansion is part of a plan adopted by the company in 2012 under pressure from its largest shareholder to improve its financial performance.

"The Cracker Barrel brand can reach more consumers through supermarkets, which most American households must frequent, whereas not all of them will enter a Cracker Barrel store in the coming year," Sardar Biglari, who holds a 19.99% stake in Cracker Barrel, wrote in a 2011 letter to the company.

In a 2011 U.S. consumer study by Mintel, more than 3-out-of-4 respondents said they had bought restaurant-branded items. Families with household incomes of $75,000 or more were among the most frequent buyers.

As reported in The Tennesseean, this is Cracker Barrel's third attempt at expanding its business, following two failed ventures in the 1990s: a takeout business at several Cracker Barrel Corner Market locations throughout Tennessee, and a retail-only store called The Store in a Nashville-area mall.

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