Dive Brief:

• Bloomin' Brands has rolled out its virtual brand, Tender Shack, nationwide through a partnership with DoorDash, according to a press release emailed to Restaurant Dive.
• The brand is available across 725 locations, primarily in Carrabba's and Outback Steakhouse restaurants, and the company's goal is to reach $75 million in incremental sales on an annual basis, Bloomin' Brands CEO David Deno said during an earnings call on Thursday. 
• Bloomin' began testing the brand, which offers hand-breaded chicken tenders, sandwiches, fries, cookies and drinks, in September in Tampa, Florida, according to the press release. The company found that it exceeded sales, profit, guests and operating metrics, Deno said on the earnings call.

Dive Insight:

Tender Shack will be a key part of the company's growing off-premise channel, which currently makes up 37% of its revenue, Deno said, adding that the company is maintaining high off-premise volumes even as dining rooms reopen. Bloomin' plans to maintain and improve service levels so it can continue to grow this channel, he said.  

Bloomin' isn't relying only on virtual brands to grow off-premise sales, however. The company previously added family bundles to its Carrabba's menu, providing a meal for five starting at $34.99, and the company expects off-premise to be an important part of Carrabba's growth going forward, Deno said. Off-premise business made up 46% of sales for that brand during Q4, Chris Meyer, executive vice president and chief financial officer at Bloomin', said.

"We are always looking at different asset types to deliver product to our customers. We will continue to examine delivery-only restaurants or different asset configurations in our sit-down restaurants or the virtual brand opportunity with Tender Shack," Deno said. "All those things are part of our overall asset portfolio."

The virtual brand is also bringing in new customers, with 80% of Tender Shack diners never having ordered from any Bloomin’ brand previously, Deno said. Even though the company hasn't advertised the concept much, restaurants are achieving $1,500 in sales from the brand per week, Deno said. 

"We believe this business can certainly stand on its own and we can grow it from there," Deno said. 

The company is testing its other virtual brand, Aussie Grill, in Brazil and Hong Kong, growing to 19 virtual locations in Brazil with plans to reach 50, Deno said. Bloomin' is piloting a virtual Aussie Grill in New York to see if a broader menu is better received than Tender Shack, Deno said. The company has a handful of physical Aussie Grills around the globe, with some opening up in Hong Kong and Saudi Arabia and plans to launch up to four more in the Tampa Bay area, Deno said. 

Bloomin's Tender Shack expansion joins a growing list of chains turning to virtual brands to increase off-premise revenue. Brinker is on track for It's Just Wings, which launched in 2020, to become a $150 million brand while Applebee's just rolled out its Cheetos-inspired Cosmic Wings virtual brand nationwide on Wednesday. 

Correction: A previous version of the article misstated when Tender Shack would be available. It is now available across 725 locations nationwide.