Tuesday, November 12, 2013

IKEA's Path to Selling 150 Million Meatballs

When IKEA decided to sell food, it chose to do it in much the same way it sells furniture: a few standardized staples, sold in large quantities. The result: 150 million meatballs.
Meatballs are on the menu at an IKEA in Stockholm, shown—and around the world. Ellen Emmerentze Jervell for The Wall Street Journal
 
That is the number IKEA estimates will be dished out in store cafeterias this year. Though the Swedish company is better known for its inexpensive, assembly-required furniture, its IKEA Food division is a behemoth, rivaling Panera Bread and Arby's, with nearly $2 billion in annual revenue. The company estimates about 700 million people this year will eat in one of the cafeterias that are located in 300 IKEA stores world-wide.
Sören Hullberg a former IKEA manager who was tasked with creating a menu, is part-owner of the Story Hotel brand. Story Hotels
 
The food push started nearly 30 years ago, when then-store manager Sören Hullberg drew the assignment to create a food department. IKEA's frugal founder, Ingvar Kamprad, was worried that too many shoppers were browsing the company's shelves on empty stomachs. IKEAs are huge, and visitors can get fatigued after walking the floor for hours at a time. Mr. Hullberg said he was told to come up with a plan that would be thoroughly Swedish and in line with the company's penny-pinching ways.
 
The solution? Salmon, roast beef, smoked reindeer steak and Sweden's beloved meatballs. Stores in each country were also allowed to choose one type of local fare to spice up the menu. (Swedes like their native söndagsteak or shrimp.) These basics were designed to be the bedrock ingredient of any dish IKEA served, whether a salad, a sandwich or a starter. The menu has evolved over the years, and individual stores can make some decisions, but generally, the offerings are tightly limited. Read More.

 

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