Dive Brief:

• Ruby Tuesday is bringing Libby's BBQ, which was originally conceived as a delivery-only brand, to all of its locations. The brand will be available for dine-in, Ruby TueGo and delivery through September, according to a press release. 
• The menu, with entrees starting at $9.99, includes smoked beef brisket and pulled pork as a sandwich or entree and a barbecue trio that includes smoked brisket, pulled pork and smoked sausage in one dish. Various sides, such as coleslaw, baked beans, potato salad, fries or tots are available. 
• Ruby Tuesday appears to be among the first casual chains to offer a virtual brand for dine-in orders, as Applebee's Cosmic Wings and Bloomin' Brands' Tender Shack are currently only available via delivery. Brinker is now offering its virtual brand It's Just Wings for pickup at Chili's restaurants. 

Dive Insight:

After it emerged from bankruptcy in February, Ruby Tuesday said it would focus on developing virtual, delivery-only brands to leverage its growing off-premise business and support its long-term growth plans. 

Ruby Tuesday certainly has a lot of opportunities to bring on virtual brands. A managing partner of Ruby Tuesday's former parent company NRD Capital launched Franklin Junction, a host kitchen provider, last year. Franklin Junction has since grown to over 500 locations and over 20 partner brands. NRD bought Canadian seafood concept The Captain's Boil in April 2020 to the U.S., and through a partnership with Franklin Junction, expanded it across the Ruby Tuesday system, including locations in Connecticut, Virginia, Pennsylvania and West Virginia.

Libby's BBQ appears to be Ruby Tuesday's next virtual brand trial. While it will only be available on the menu for a few months, it also shows how a casual brand can use a virtual brand to test new items in-store without having to completely change the menu. It can also be used to attract new and lapsed customers back to the restaurant. 

Virtual brands can be a lucrative way to boost revenue without needing to build out infrastructure as they use existing kitchen space. Brinker estimates that its virtual brand It's Just Wings will generate $150 million in annual sales. Bloomin' Brands anticipates that its Tender Shack could reap $75 million in annualized sales. Applebee's Cosmic Wings' sales averaged about $330 per restaurant each week during Q1 2021. 

Libby's BBQ isn't the first virtual concept to expand beyond delivery. This week Dickey's announced it will open its first physical store for virtual brand Wing Boss later this year. 

Having both a dine-in and off-premise option can appeal to the differing preferences among consumers. A majority of fully vaccinated restaurant customers said they will continue to order online at least as much as they do now. At the same time, diners are returning to restaurants in droves and are more willing and comfortable to dine out compared to the early days of reopening.

Correction: A previous version misstated NRD Capital's relationship with Ruby Tuesday and Franklin Junction. Neither Ruby Tuesday nor Franklin Junction are backed by the private equity firm.