Wahlburgers strikes accord with Hy-Vee
Actor Mark Wahlberg, right, appeared at the grand opening of the first Minnesota Wahlburgers, in which grocery chain Hy-Vee is the franchisee.
Everyone who’s been to a rock concert knows the feedback loop. One little sound can turn a collection of speakers, microphones and amps into an overwhelming screech.
It happens to sound a lot like Mark Wahlberg’s fans at the grand opening of the first Minnesota Wahlburgers.
The burger brand and 245-location grocery chain Hy-Vee entered into a development deal to build 26 freestanding locations. The grocery chain will also feature Wahlburgers menu items in its Market Grille restaurants inside grocery stores and it carries Wahlburgers-branded beef burgers. Like those microphones and speakers, each branded outlet serves to amplify the next in commercial cacophony.
“We know our customers are going to love Wahlburgers. We want to inspire them to be able to enjoy the same great beef they get in the restaurant in the comfort of their own home. Conversely, we hope that the great quality and taste of our in-store beef will encourage customers to visit Wahlburgers or a Hy-Vee location that will serve some of the same menu items,” said Hy-Vee CEO and President Randy Edeker.
Outgoing Wahlburgers CEO Rick Vanzura oversaw the collaboration, which he calls the first of its kind. And while he has stepped down as CEO, he said he would remain a shareholder committed to the success of the brand. Where he’ll land hasn’t been announced, but don’t be surprised if you see him at a local Hy-Vee after eating a burger—he’s become a big fan of the grocery store company.
“Over my now 30-plus years, with a lot of different stops, I’ve had a lot of great partners, but I can’t think of a better one than Hy-Vee,” said Vanzura. “Put four underlines under that. I’m just in awe at how big they’ve gotten acting like a family business.”
‘We don’t miss opening dates’
The first location in the deal (and the first Wahlburgers in Minnesota) opened May 22 and the grand opening on May 31 was mobbed by fans lining up to meet a few of the Wahlberg brothers and grab some burgers. The spot-on opening day was just one success that Vanzura saw with Hy-Vee.
“Construction schedules are extremely unpredictable, you never know when you’ll get a program delay or a subcontractor doesn’t show up. So Hy-Vee several months ago said, ‘We will open Mall of America on May 22,’” said Vanzura. “Nobody can call a day. But they’re Hy-Vee so we thought they’d get close. That store opened May 22. I was talking to an operations leader there, and he looked at me sort of stone-faced and he just said, ‘We don’t miss opening dates.’”
Now, Hy-Vee is working the Wahlburgers brand through the 113 Market Grille locations inside its grocery stores that will feature a slimmed-down menu focused on the Wahlberg brothers’ favorite burgers and will push the brand out to communities without a traditional Wahlburgers location.
As for those refrigerated burgers, sales are growing and buyer feedback is positive. The brand has added “a few thousand doors” since the consumer-packaged burgers launched at grocery stores across the country. It’s early but the burgers could be a big win for the brand at large, something that Vanzura has seen first hand.
“When I was at Panera, I handled retail there. It was interesting when we first launched soup, they were concerned that it would cannibalize soup in the restaurants. But in markets where we offered soup in the grocery sore compare to markets where we didn’t sales actually went up,” said Vanzura. “The quality was good. It was another reinforcement of the quality of the brand. Here I think that would be doubly so.”
So does this mean a wave of grocery-store partnerships for franchising? While Hy-Vee may be just the sophisticated operator so many franchisors are looking for, it’s not likely.
“This deal is the first of its kind ever. So it’s hard to know whether that could be a broad template going forward,” said Vanzura. “I’d take any Hy-Vee-like partner we could get. But there are only so many of them.”
The Midwest grocery chain also has a franchisee deal with Orangetheory Fitness to co-locate gyms next to grocery stores and Hy-Vee dieticians will work with Orangetheory members.