Dive Brief:
- GoTo Foods — the recently-renamed Focus Brands — announced Monday that McAlister’s Deli was the first of its brands to hit $1 billion in annual sales.
- The brand, which grew to 500 units in late 2021, has built up its sales in recent years by using new touchpoints like “digital ordering, pickup windows, tableside service, to-go, and catering innovation,” according to the press release.
- McAlister’s is continuing to scale its system, according to the press release, including through multi-unit franchising. In one recent deal, a pair of franchisees “signed a 10-unit agreement to open the brand's first locations in Minnesota,” though McAlister’s did not share the timeline for these openings.
Dive Insight:
GoTo Foods credited the longevity of McAlister’s management team with creating a foundation for a steady growth rate, which yielded unit volumes of $1.9 million in 2022. The deli chain’s chief brand officer, VP of operations and VP of marketing have all been with McAlister’s for over a decade, according to the press release.
To keep its growth going, McAlister’s is “modernizing its current menu, creating new menu categories, simplifying operations, and increasing profitability... exploring adding new hot side options, shareable dips, flatbreads, and bowl options.” Since completing its 500th unit three years ago, McAlister’s has continued to grow, reaching over 530 units by the end of 2023.
The recent addition of breakfast catering helped boost sales too, though GoTo claimed the “new daypart did not add any additional SKUs, which helps keep operating costs down.”
Focus Brands renamed itself GoTo Foods last month in an effort to highlight the strength of its franchising value proposition. Over the last year, that included streamlining its supply chain, which resulted in the elimination of hundreds of SKUs.
